Understanding the demand for Green Steel, page-400

Page 52 Green Steel 2.0 Report by Morgan Stanley




# More high quality iron ore is needed to curb steelmakingemissions – in particular the highest quality ore suitablefor direct reduction steelmaking
.# However, iron ore miners cannot easily adjust theirproduct mix, and the quality of iron ore has been trendinglower for many years.
# We estimate that today only around 4% (or c.70Mt) ofthe seaborne iron ore market comes close to DRstandards
.# Upgrading 'swing' quality iron ore is needed to meet thedemand growth we expect for DR-grade ore – but this willrequire investment in processing

To curb steelmaking emissions, more high quality iron ore is needed – in particular the highest quality ore suitable for directreduction steelmaking. Although there are several routes to pro-ducing green(er) steel, we believe it is likely that a large share of thiswill be produced through the direct reduction (DR) of iron ore, even-tually using green hydrogen. This appears to be one of the mostadvanced green steel pathways currently, given today's technical lim-itations, although this could change as technology evolves.




Morgan Stanley Research estimates, MidrexWe see DR-based iron production in markets that are reliant onimported/seaborne iron ore expanding from about 30Mt in 2022 to125Mt by 2034 ( Exhibit 90 ) – the year that the EU's free carbonallowances will be fully withdrawn. Most of this growth will bedriven by Europe, where we assume that 80% of the current 92Mtof integrated (BF-BOF) crude steel production will be replaced bydirect reduction iron and the remaining 20% by steel scrap. This willhave major implications for the iron ore market, as direct iron reduc-tion requires ore of significantly higher quality/lower impurities thantraditional blast furnaces

Page 53 gets better.... An oldie but a goodie!