Algerian steelmaker AQS has received its second Supramax cargo of direct reduced pellets ahead of launching a 2.5mn t/yr direct reduced iron (DRI) unit by the end of 2019 and a switch to electric arc furnace (EAF)-based steel production.
AQS is procuring pellets from Brazil and Canada, and received its first shipment in September. It is only buying pellets on a spot basis at present, so the exact proportion from each supplier is variable, a market participant said.
The steelmaker — which operates three rolling mills — has been producing long steel products by using imported billet as feedstock. But it is now cutting back on billet imports and preparing to launch two EAF-based production units, which will be partly supplied from the DRI unit.
The first EAF will be commissioned next week and the second in January. They will have combined crude steel production capacity of 2.2mn t/yr, and use domestically-sourced scrap.
At present, AQS has capacity to produce up to 1.5mn t/yr of rebar and 500,000 t/yr of wire rod, with the primary aim of meeting domestic demand and reducing Algeria's imports of these products. In the longer term, it aims to boost finished steel production capacity to over 4mn t/yr.
By Sara Warden and Ellie Saklatvala
