The company is able to continue producing HBI because it manufactures uses iron ore fines and does not require pellets from state-owned mining company CVG Ferrominera Orinoco (FMO) or Sidor, in contrast with the country’s other producers, Metal Bulletin understands.
Although, Orinoco Iron is operating at a capacity utilization rate of just 25%, its installed HBI capacity is 2.2 million tonnes per year.
Venprecar, which is able to produce 900,000 tpy of HBI, was due to restart production at the end of last week.
“[Venpercar] has an agreement with Sidor to supply it with around 90,000 tonnes of pellets in late July-August,” a source told Metal Bulletin.
According to the agreement, the company will produce two shiploads of HBI - one for itself, and another for Sidor.
And Venpercar is expected to be in a position to offer material to the market, most likely Europe, later in July.
However, in September Venpercar will have a planned shutdown lasting 45 days.
Metal Bulletin’s weekly price assessment for Venezuelan HBI exports was $295-300 per tonne fob on Friday July 13, widening downward from $300 per tonne a week earlier.
The import price assessment for HBI in Italy, the key consumer in Europe, was $320-330 per tonne cfr in July. The assessment is based on the latest HBI bookings from Russia, Venezuela’s only competitor in the HBI export market.
The import market for hot-briquetted iron (HBI) in Italy was flat during the week to Thursday July 5 on low demand, according to sources.
The freight rate for HBI from Venezuela to Italy is around $42-45 per tonne, sources estimate. Thus, on cfr basis price for HBI from Venezuela would be close to $337-345 per tonne.
