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MONTREAL — The U.S. war with Iran is not only shaking global oil markets. Canada’s steel supply chain is also feeling the impact as disruptions in the Persian Gulf threaten a key raw material used in steel production.
Strategic Resources Inc., a Montreal-based mining development company, said Thursday the conflict is highlighting the risks of relying on iron ore pellet supplies produced in geopolitically sensitive regions.
Iron ore pellets, a high-grade feedstock used by steelmakers, are a critical component in direct-reduced iron production and lower-carbon steelmaking.
The Middle East and Gulf region have become an important hub for pellet production over the past decade, supplying a significant share of global seaborne trade to steel producers in Europe, Asia and the Middle East.
But attacks on shipping routes and energy infrastructure linked to the conflict with Iran are tightening supplies and adding volatility to already constrained markets.
“The conflict in the Gulf is a clear reminder that concentrating a large portion of the world’s iron ore pellet supply in one geopolitically sensitive region creates real risk for steel producers and their customers,” Strategic Resources chief executive Sean Cleary said in a statement.
The company says the situation underscores the need to expand pellet production capacity in North America, where supplies could be sourced from more stable jurisdictions.
Strategic Resources is advancing the BlackRock Project at the Port of Saguenay in Quebec, which it says could produce about four million tonnes of iron ore pellets annually during its first phase.
The project is currently moving through provincial environmental approval processes.
Cleary said developing new capacity in Canada could help steelmakers reduce reliance on vulnerable overseas supply routes while supporting the industry’s shift toward lower-carbon production methods.
Iron ore pellets are increasingly important to steelmakers pursuing cleaner technologies because they allow for more efficient and lower-emission steel production compared with traditional blast furnace processes.
The company said expanding pellet production in Canada and the United States could strengthen supply security for steel producers while supporting demand for materials used in low-carbon manufacturing.
Global commodity markets have been volatile since the conflict with Iran escalated earlier this month, with oil prices surging and shipping routes across the Gulf facing disruption.
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