August 22, 2008

Venezuelan briquette producers hit by pellet shortages

BNamericas cited Mr Alberto Hassan president of the worldwide Hot Briquetted Iron Association as saying that Venezuelan briquette producers have declared severe problems in obtaining pellets due to a shortage on the international market.

He explained that Venezuelan briquette producers like Comsigua, Venprecar, Matesi and Opco are affected because the Ferrominera Orinoco pellet plant is not operating at capacity. Mr Hassan said with the shortage faced, Venezuelan briquette producers are waiting for the government to authorize the import of more pellets. The situation has been very complicated for producers.

An Ferrominera Orinoco executive told BNamericas that the plant is not operating at installed capacity because of recent remodeling works underway throughout the factory. He added that the plant is in the process of being upgraded. There are more alterations on the way but it's something that was scheduled. The plant is expected to resume normal production in the mid term. FMO's pellet plant has production capacity of 3.3 million tonnes of pellets destined for direct reduction or blast furnaces.

Briquette producer Orinoco Iron, controlled by International Briquettes Holding has been less affected since it uses iron ore fines in its processes. The plant uses Finmet technology to produce briquettes with iron ore fines rather than lump ore and pellets, which are more expensive and harder to obtain. IBH is a subsidiary of local steel maker Sivensa, which also controls the Venprecar plant.

According to previous reports Venezuela's briquette production is currently close to 6,000 tonnes per day but the average should register at 12,000 tonnes per day.