North China mills using more pellet, lump: Rio Tinto

Environmental restrictions on sintering have pushed north China-based mills to increase the use of direct-charge material in the furnace burden, said Anglo-Australian mining company Rio Tinto.

Direct-charge material currently makes up around 25-30pc of the furnace burden in north China compared with 20-25pc in south China. The furnace burden in north China is typically around 20pc pellet and 8pc lump, while in south China it is around 9pc pellet and 15pc lump.

Sintering restrictions have been imposed frequently in north China's largest steel producing city Tangshan, with the latest order to reduce sintering between 50-100pc of total capacity expiring yesterday. Such orders are imposed for a few days whenever pollution levels rise.

But access to higher Fe grades of domestic pellet feed concentrate and domestic pellet allow north China-based mills to use a higher proportion of lower Fe grade sintered fines compared with south China-based mills.

North China has the largest concentration of steel production in China, although the country's largest steel producer Baowu has most of its capacity in south China.

North China mills typically have around 25pc of its furnace burden as 62pc Fe sintered fines compared with 31pc for south China mills. Domestic sintered concentrate accounts for around 11pc of the burden in north China and only 4pc in south China. The proportion of 58pc fines in the furnace burden is 15pc in north China and 11pc in south China.

North China mills also show a bigger gain in productivity of between 2-2.5pc for a percentage increase of average Fe content in the burden compared with 1.5-2pc in south China, said Rio Tinto.

More Chinese steel capacity is shifting to south China and coastal regions to relieve environmental pressure in polluted areas, with larger and more environmentally-friendly blast furnaces replacing smaller ones, which will increase the use of higher grade ores.

Rio Tinto forecasts global iron ore supplies to expand by 2mn t this year. Australian bank ANZ previously forecast a net surplus of 30mn t of iron ore, while Brazilian mining company Vale predicted 20mn t of net additional supplies this year.

Major mining companies will add 39mn t of supplies this year compared with 42mn t last year, with the largest addition by Vale and smaller additions by Rio Tinto, BHP and Roy Hill. Mining suspensions such as the operations at Anglo-American's Minas Rio mine in Brazil and in west India's Goa state and the exit of Atlas Iron and Tonkolili iron ore projects will take out 37mn t of supplies this year, said Rio Tinto.