Turkish mill seeks Chinese blast furnace builder

27 February 2015

Argus reported that Turkish steelmaker Icdas is looking for offers from Chinese construction companies to build a 2,800 cubic meter blast furnace in Cannakale, Turkey. The plant would have a nameplate capacity of 2 million tonne per year of hot metal.

Icdas is still seeking a construction firm for the turnkey project. It has recently asked Turkey's environment ministry to extend the consultation period, having initially sought planning permission from the ministry in December 2013.

Market participants said that the pig iron from the plant will reduce Icdas's demand for merchant pig iron and its demand for ferrous scrap. Icdas's current crude steel output will be unaffected.

Alongside the blast furnace, Icdas is planning to build a 3 million tonne per year sinter plant, a 500,000 tonne per year pelletising plant and a 1 million tonne per year capacity coke oven.

The blast furnace project includes a power plant utilising captured offgas, according to an environmental impact assessment document sent by Icdas to the environment ministry. The construction period will last two years, and is set to cost TRL 2 billion.

The plan envisages raw material consumption of up to 4 million tonne per year of iron ore, 1.5 million tonne per year of coking coal, 1 million tonne per year of petroleum coke and 400,000 tonne per year of anthracite.

Several other integrated production projects are also being considered by other Turkish steelmakers. A number of strategic factors are influencing the investment decisions. Large Turkish steel mills require substantial volumes of scrap as feedstock.

Turkish producers have become increasingly reliant on ferrous scrap supplies from Europe, the Baltics and North America, despite government-sponsored attempts to boost domestic scrap generation.

Meanwhile, short sea ferrous scrap supply from the Balkans, Russia and Ukraine has been steadily declining since the middle of the last decade, increasing Turkish producers' exposure to domestic EU and US scrap price movements.