Posted on 08 Sep 2025
Part of the upstream steelmaking chain will relocate to regions with cost-competitive energy, says Vale, with "mega hubs" in these regions set to host the iron ore concentration, briquetting and reduction phases before shipping to steelmaker customers in Europe and Asia.
Tradtionally, iron ore mining and pelletising takes place in Brazil, for shipping to blast furnaces and direct reduced iron plants in Europe and Asia for iron production, Vale says in a recent institutional presentation seen by Kallanish.
Vale has signed agreements to study establishing mega hubs in Oman, Saudi Arabia, United Arab Emirates, the US and Brazil, with a view to locking in 30 million tonnes of DR feed demand in the next decade. Its proposed business model is partnerships using a tolling model for 4.5m t/year capacity concentration plants, partnerships with customers for 3.75m t/y briquetting plants, and customer investments into 2.5m t/y DRI/HBI plants.
Global production of pellets and briquettes should grow to 60-70m t/y in 2030 versus 37mt in 2024.
Seaborne iron ore demand should meanwhile fall to 1.545 billion tonnes in 2030 versus 1.555 billion t in 2024, as Chinese demand softens slightly amid a gradual rise in scrap use, and is offset by higher Southeast Asia demand amid new blast furnaces. The Middle East and North Africa will see growing demand for direct reduction feed and agglomerates, while India will register a slight increase in seaborne demand.
Seaborne supply will reduce to 1.495 billion t – versus 1.6 billion t in 2024 – on account of 320mt of reserve depletion and 150mt of operations with costs in excess of $90/tonne exiting the market. Around 365mt of supply will be added by projects with an incentive price below $90/t.
Source:Kallanish
