Glencore Strikes Offtake Agreement for Steel Input From #Oman - Bloomberg

Glencore Strikes Offtake Agreement for Steel Input From Oman - Bloomberg

Glencore Plc has agreed to buy at least 500,000 tons a year of hot briquetted iron from a planned Oman-based plant, securing supply of the low-carbon steelmaking input from 2030.

Glencore has committed to purchasing between 500,000 and 1.25 million tons a year of HBI under an offtake agreement with Meranti Green Steel, the project’s developer said. Meranti has also struck offtake deals with INTERFER Global Steel Trading and INTERFER Austria, and thyssenkrupp Materials Services is in talks to secure supply from the plant, the company said.

The project is expected to produce 2.5 million tons of HBI a year once operational. HBI are dense, high-purity iron blocks that are easier to ship than iron ore and are used alongside scrap as a feedstock for electric arc furnaces.

“Many of the electric arc furnace operations will need between 10% and 30% of virgin iron just to meet quality requirements on the steel side,” Meranti Chief Executive Officer Sebastian Langendorf said in an interview. “And trading companies are ideally positioned to deliver that distribution and value proposition also to smaller mills.”

About two-thirds of the plant’s output will supply European steel mills, Langendorf said, with the bloc’s new carbon border levy on imports a key catalyst for the project. The plant in Oman is expected to begin construction in late 2026, following a final investment decision, and will use a mix of natural gas and green hydrogen in production.

“We expect HBI to play an important role in the transformation of the steel market going forward,” a spokesperson for thyssenkrupp Materials Services said. “The project with Meranti Green Steel is one of several and, in our view, one of the most promising projects in the Middle East region.”

A spokesperson from Glencore declined to comment. INTERFER didn’t immediately respond to a request for comment.