Steel Times International April 2018

FUTURE STEEL FORUM 2018

CONFERENCE REPORT

CONTINUOUS CASTING

PLANT SAFETY

Industry 4.0 and steel – go directly to page 71, do not pass Go!

CRU’s North American Steel Conference, Hans Mueller reports

Articles from Fives Group and Primetals Technologies

Steel Safety Day 2018 – a report by worldsteel’s Andrew Purvis

www.steeltimesint.com April 2018 - Vol.42 No3

STEEL TIMES INTERNATIONAL – April 2018 – Vol.42 No.3

TRUMP’S STEEL TARIFFS –THE COATESVILLE PERSPECTIVE STI Cover APRIL.indd 1

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19.03.18 14:15

CONTENTS - April 2018

FUTURE STEEL FORUM 2018

CONFERENCE REPORT

CONTINUOUS CASTING

PLANT SAFETY

Industry 4.0 and steel – go directly to page 71, do not pass Go!

CRU’s North American Steel Conference, Hans Mueller reports

Articles from Fives Group and Primetals Technologies

Steel Safety Day 2018 – a report by worldsteel’s Andrew Purvis

1

www.steeltimesint.com April 2018 - Vol.42 No3

STEEL TIMES INTERNATIONAL – April 2018 – Vol.42 No.3

TRUMP’S STEEL TARIFFS –THE COATESVILLE PERSPECTIVE STI Cover APRIL.indd 1

Picture courtesy of: Midrex Pictured: LGOK HBI-2 and LGOK HBI-3 MIDREX® Plants in Gubkin, Russia, with a combined capacity of 3.2 Mt/yr. The two direct reduced ironmaking plants produce quality hot briquetted iron (HBI) for merchant market.

2 Leader

By Matthew Moggridge, editor, Steel Times International.

31 Conference report: CRU’s North American Steel

4 News Astounding facts and figures, industry news and diary dates.

Continuous casting 37 Predictive control for the right quality 49 Smart casting

7 Innovations The latest new products.

59 Plant safety Zero harm is our goal – worldsteel’s Steel Safety Day

11/04/2018 15:54:29

EDITORIAL Editor Matthew Moggridge Tel: +44 (0) 1737 855151 matthewmoggridge@quartzltd.com Consultant Editor Dr. Tim Smith PhD, CEng, MIM Production Editor Annie Baker Advertisement Production Martin Lawrence SALES International Sales Manager Paul Rossage paulrossage@quartzltd.com Tel: +44 (0) 1737 855116 Sales Director Ken Clark kenclark@quartzltd.com Tel: +44 (0) 1737 855117 Managing Director Steve Diprose stevediprose@quartzltd.com Tel: +44 (0) 1737 855164 Chief Executive Officer Paul Michael SUBSCRIPTION Elizabeth Barford Tel +44 (0) 1737 855028 Fax +44 (0) 1737 855034 Email subscriptions@quartzltd.com Steel Times International is published eight times a year and is available on subscription. Annual subscription: UK £182.00 Other countries: £258.00

Tariffs 12 Tariffs – the Coatesville perspective 18 US steel tariffs – initial responses 21 Trump’s tariffs – a view from Europe

64 Environment Stainless steel stops leaks

25 Latin America update Colombia’s good prospects

67 Electric steelmaking The benefits of EAF shell exchange 74 Perspectives: Quintic Keeping busy

28 USA update China retaliates against US tariffs

76 History Remembering Corby’s hot metal past

2 years subscription: UK £324.00 Other countries: £460.00 ) Single copy (inc postage): £41.00 Email: steel@quartzltd.com Published by: Quartz Business Media Ltd, Quartz House, 20 Clarendon Road, Redhill, Surrey, RH1 1QX, England.

Tel: +44 (0)1737 855000 Fax: +44 (0)1737 855034 www.steeltimesint.com Steel Times International (USPS No: 020-958) is published monthly except Feb, May, July, Dec by Quartz Business Media Ltd and distributed in the US by DSW, 75 Aberdeen Road, Emigsville, PA 17318-0437. Periodicals postage paid at Emigsville, PA. POSTMASTER send address changes to Steel Times International c/o PO Box 437, Emigsville, PA 17318-0437.

Printed in England by: Pensord, Tram Road, Pontlanfraith, Blackwood, Gwent NP12 2YA, UK ©Quartz Business Media Ltd 2018

IF YOU WOULD LIKE TO ATTEND THIS YEAR’S EVENT (JUNE 6-7 2018) GET IN TOUCH VIA THE WEBSITE

ISSN0143-7798

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April 2018

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2

LEADER

AISTech and Future Steel Forum – don’t miss out!

Matthew Moggridge Editor matthewmoggridge@quartzltd.com

April 2018

Leader.indd 1

You know what? I was going to drone on about ‘the Donald’ and the imposition of 25% tariffs on steel exported to the USA, but with World War lll just around the corner, I thought I’d stick to something a little more upbeat. I also remembered that this issue contains not one but three articles – four if you include Manik’s USA Update – on the subject of tariffs, and I figured readers would be more than a little jaded if I pursued the issue any further for this leader article.

So, what to talk about? Well, there’s a lot going on in the world at present, but outside of tariffs, they don’t really have much of a connection with global steel production. It’s probably best, therefore, to look at a couple of top-draw events that are on the immediate horizon, one being next month’s AISTech, which this year will be held in Philadelphia (7-10 May).

It’s always a good event and avid readers will know that I love it and look forward to meeting people like Philip K Bell, the president of the Steel Manufacturers Association, and Ron Ashburn, executive director of the AIST, and hearing what they and others have to say about the American steel industry; so make a date in your diary

and, who knows, we might bump into one another in one of the exhibition halls or at the President’s Breakfast or Town Hall Forum – it’s all good, and Steel Times International has a booth so come on over.

I must also mention the Future Steel Forum, Steel Times International’s premier technology event (6-7 June, Sheraton Warsaw, Poland) which is focused entirely on applying the principles of Industry 4.0 to steel manufacturing. Last year’s inaugural event proved to be an outstanding success all round and this year it is looking even better with a cutting edge conference programme featuring leading steelmakers, ground-breaking research and academic organisations, forward-thinking technology providers, keen exhibitors and some interesting delegates, all coming together to discuss one of the hottest topics of the moment: smart manufacturing.

Last year I probably said ‘be there or be square’ so I won’t say it again, but the Future Steel Forum is an important and unique event for the global steel industry and it would be foolhardy to miss it.

For further details, see page 71 of this issue or visit www.futuresteelforum.com

www.steeltimesint.com

12/04/2018 09:39:26

PIONEERS AT HEART

Imagination is as important as experience. Curiosity brings us to ever new places. There is still so much to discover. So many unanswered questions.

We love the heat and we love the cold. We love the glow and we love the dust. We love the quantum leaps and the small steps. We love to learn and to run. We even love the wind that blows in our face. We love metals and we will change the way you produce it.

We are pioneers at heart.

contact@primetals.com

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22.03.2018 06:36:28

4 NEWS IN BRIEF

INDUSTRY NEWS

Japanese steelmaker to invest in automotive The Japanese steelmaker Kobe Steel is planning to make capital investments of roughly 50 billion yen at its Kakogawa Works in Japan. The company claims that the main thrust will be a new continuous annealing line for steel sheet in response to growing demand for automotive ultra high-strength steel (UHSS).The new facility will be started up in February 2021.

Georgetown steelworkers clock on in South Carolina On 3 April 20 workers clocked on for duty at the Liberty Steel Georgetown mill in South Carolina for the first time in over two years. They will be joined on 16 April by a further 20 workers to carry out repairs and plant maintenance.The mill, which is scheduled to open very soon, was acquired by Sanjeev Gupta's GFG Alliance in December last year.

JSW Steel submits binding bid for Essar Steel Leading Indian steelmaker JSW Steel is to expand its capacities through brownfield expansions and is evaluating opportunities for 'inorganic growth'. The company, which has an installed capacity of 18 Mt/yr,has joined Nu Metal & Steel Pvt in submitting a binding bid for Essar Steel, which is currently under the corporate insolvency resolution process as per the provisions of Insolvency Bankruptcy Code 2016.

Tata's Anand Sen named Steelmaker of the Year Anand Sen, president, Total Quality Management and Steel Business of Tata Steel, will be named Steelmaker of the Year at AISTech 2018 (to be held in Philadelphia, USA, early next month).

The Steelmaker of the Year award is presented annually by AIST to recognise notable leaders for their impact on the industry.

Mr Sen is being recognised for his visionary leadership and strategic planning, which is driving decisive changes within Tata Steel.

For more global steel news, log on to our news website, www.steeltimesint.com

Crude steel production up 3.5% World crude steel production for the 64 countries reporting to the World Steel Association (worldsteel) was 131.8Mt in February 2018, up 3.5% when compared with February last year.

China’s crude steel production for February 2018 was up 5.9% to 64.9 Mt, and India produced 8.4 Mt of crude steel, up 3.4% on the previous year. In Japan 8.3 Mt of crude steel was produced in February 2018, down 0.5% when compared with 2017 fig-

ures, while South Korea produced 5.4Mt of crude steel, down 2.1%.

In the European Union, Italy’s crude steel production for February 2018 was up by 4.5% to 2.1Mt while the French produced 1.3 Mt, an increase of just 1% compared to February 2017 figures. Spain produced 1.1 Mt of crude steel, an increase of 0.4% on February figures.

Turkey produced 3Mt of crude steel in February, up 8.7% on last year.

Promote pipe says ALLPA The American Line Pipe Producers Association (ALPPA) has written to the US Secretary of Commerce, Wilbur Ross, urging him to take immediate steps to promote the use of domestically produced line pipe and structural pipe in new, retrofitted, repaired, or expanded pipelines and in various infrastructure and other construction projects in the USA. “This is critical for the survival of our manufacturing companies and the jobs of our thousands of workers, and for the overall health of the steel industry and American manufacturing,” the ALPPA said in the letter dated 3 April 2018.

In the letter, which was signed by leading figures of the United States’ steel industry, including John Ferriola, chairman, CEO and president of Nucor Corporation; and Daniel Mull, executive vice president of ArcelorMittal USA, the signatories highlighted the fact that many US pipe mills have been forced to operate well below capacity, arguing that ‘this also harms US steel manufacturers, because domestic pipe producers buy American-made steel to manufacture their products. “The harm to domestic pipe producers has spread throughout their supply chains to other US steel producers and the many related industries that depend on US steel and pipe manufacturing,” the letter stated,

adding that “although many pipeline and construction projects are privately funded, there are various options for maximising the use of domestic pipe, such as through US government permitting and approval processes for pipelines.”

The ALPPA claimed in the letter that US pipe producers are continuing to lose huge and important projects to unfairly traded imports of steel pipe despite Section 232 relief and current anti-dumping and countervailing duty investigations.

The letter ended by showing its appreciation of Secretary Ross and President Trump’s work so far on protecting the US steel industry and concluded: “We urge Commerce and the President to do all that is possible to promote the use of domestically produced line pipe and structural pipe, which will bring economic growth and new jobs to America’s manufacturing sector”.

The United States produced 6.4 Mt of crude steel in February 2018, a 0.4% increase on last year.

In Brazil, crude steel production for February 2018 totalled 2.7 Mt, up 5.5% on February 2017.

The crude steel capacity utilisation ratio of the 64 countries reporting to worldsteel in February 2018 was 73.3%. This is 1.8 percentage points higher than in February 2017. Compared to January 2018, it is 0.5 percentage points higher.

US imports surge by 42% Based on the US Commerce Department's most recent Steel Import Monitoring and Analysis (SIMA) data, the American Iron and Steel Institute reports that steel import permit applications for the month of March 2018 totalled 3.4 Mt (net tons). This was an increase of 41.6% when compared with the February figure of 2.4 Mt (permit tons) and an increase of 47.3% compared with February's preliminary imports of 2.3 Mt (net tons).

Import permit tonnage for finished steel in March was 2.5Mt (net tons), up 32.1% from the preliminary imports total of 1.9Mt in February.

For the first three months of 2018 (including March SIMA permits and February preliminary data) total and finished steel imports were 8.72Mt (net tons) and 6.7Mt (net tons), down 2.6% and 2.2% from the same period in 2017.

The estimated finished steel import market share in March was 26% and is 25% YTD. According to the AISI, the largest finished steel import permit applications came from South Korea (up 31%); Turkey (up 233%); Japan (up 67%); Russia (up 135%); and Taiwan (up 18%). Through the first three months of 2018 South Korea topped the chart.

April 2018

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DIARY OF EVENTS

INDUSTRY NEWS

Astounding Facts and Figures...

• China was the 10th largest supplier of US steel product imports in May 2017.

Source: Reuters

Each tonne of scrap recycled saves 1.5 tonnes of CO2, 1.4 tonnes of iron ore and 740g of coal? It’s true.

Source: CELSA Steel UK

• ArcelorMittal, the world's largest steel producer, controls 47% of steel output in Europe and 37% in the Americas.

• The price of ‘old’ scrap, used in EAF mills producing long products, is lower in the US than in Europe and Asia. But prices of prime scrap, used in flat products, now command a 40% premium.

Source: CRU.

Source: CRU.

Most imports to the US come in the form of finished steel, but around 20% are semifinished slabs from Brazil, Russia, Mexico and Japan that are converted into the products and then sold to carmakers, construction companies and other customers.

The latest Audi A8 has shifted away from heavy use of aluminium to a mix of steel, aluminium, magnesium and carbon fibre, following the lead of Tesla, which has moved away from ‘the miracle metal’ and back to steel. Steel is also the metal of choice for the Nissan Leaf and the Volkswagen e-Golf.

Source: S&P Global Platts

Source: autoblog.com

• The automotive sector accounts for 25% of Tata UK’s sales. The company supplies almost half of UK carmakers’ steel requirements, from body panels and chassis to engine components and wheels.

Source: Financial Times

• While China is the world’s largest producer of steel, and has emerged as a major exporter in recent years, very little of its output reaches the USA. Source: Reuters

• With limited investment into nickel projects, the big question is whether the electric vehicles revolution could be halted by a supply shortage of nickel.

Source: WalesOnline

• Austrian steelmaker voestalpine runs the world’s largest direct reduction plant in the world. The Voestalpine Texas plant is located at Corpus Christi and produces high quality hot briquetted iron (HBI) at its target capacity of 2.4Mt/yr. Source: CRU

5

April 2018 16-19 IEEE PES T&D Conference & Exposition, Denver, Colorado, USA. Organised by IEEE. A conference focused on the power and energy industry.

For further information, log on to www.ieeet-d.org 16-20 Tube Dusseldorf, Dusseldorf Fairgrounds, Germany. Organised by Messe Dusseldorf.

Steel tubes of all types and sizes and also plants and machinery for the production and processing of tubes will be the focal point of this event.

For further information, log on to www.tube.de 24-26 EuroCoke 2018, Radisson Blu Scandinavia Hotel, Dusseldorf, Germany An annual event focused on the world of coke and cokemaking that provides a unique opportunity for senior decision makers from the global coke, coal and steel markets to hear the latest market trends, as well as technical and operational developments within the industry.

For further information, log on to www.metcokemarkets.com

May 2018 06-08 Steel Orbis & IREPAS Conference 2018, Hilton, Warsaw, Poland Billed as the essential gathering point for top executives in the global markets for long steel products, this event (last held in Athens in 2017) is described as the world's number one event for long steel products.

Delegates will get the chance to meet the world's major long steel producers.

For further details, log on to www.steelorbis.com 7-10 AISTech 2018, Pennyslyvania Convention Centre, Philadelphia, USA Want to know what's going on in the US steel market? Go to AISTech, which is THE conference and exhibition if you want to hear what the big players have to say about the US steel industry's present and future.

For further information, log on to www.aist.org April 2018

Industry news.indd 2

12/04/2018 11:52:14

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DRIVING INGENUITY

2/19/18 12:01 PM

7

Primetals’ EAFs for Chinese steelmaker Chinese steelmaker Henan Yaxin Steel Group (Henan Yaxin) has ordered two EAF Quantum electric arc furnaces with a maximum tapping weight of 120 metric tons each.

The new production plant, into which Henan Yaxin will integrate these EAFs, will speed up a transition from the existing induction furnace production and converter steelmaking to a more environmentally-compatible electrosteel process. The new furnaces consume considerably less electricity energy than the current set-up, which contributes to a reduction in both operating costs and CO2 emissions. Commissioning of both new furnaces is scheduled for Q1 2019.

Privately-owned Henan Yaxin operates integrated and compact steelmaking plants in five provinces and cities in China, and can produce more than10Mmt of steel each year.

Primetals Technologies will supply the entire mechanical and electrical process equipment for both new EAFs. “Balance of plant” equipment and services will be provided by a local design institute.

The EAF Quantum was developed by Primetals Technologies and combines the proven elements of shaft furnace technology with an innovative scrap feeding process, efficient pre-heating system, new tipping concept for the lower shell, and an optimised tap system in order to attain significantly reduced tap-to-tap times. The electrical energy requirement is considerably less than that of a conventional electric arc furnace.

In conjunction with reduced consumption of electrodes and oxygen, a cumulative benefit of around 20% is achieved for respective conversion costs. Overall, reductions of up to 30% of CO2 emissions per metric ton of crude steel can be attained when compared with conventional arc furnaces.

For further information, log on to www.primetals.com

www.steeltimesint.com

innovations 7 8.indd 1

April 2018

11/04/2018 16:32:09

8

Chinese steelmaker orders section mill from SMS group Chinese steelmaker Ma Steel (Maanshan Iron and Steel) has commissioned SMS group to supply a new 800kt/yr section mill for heavy and super-heavy beams, known also as jumbo beams.

The mill will enable Ma Steel to respond to high demand in China for heavy steel beams and sheet piles. Hot commissioning is scheduled for mid-2019.

The mill will be equipped with two state-ofthe-art breakdown stands and the latest-generation compact cartridge stand (CCS) universal

as well as off-site, training will be provided for the steelmaker’s workforce.

Ma Steel has been operating a heavy section mill from SMS group since 1998. The fact that the German steel production technology company has erected 14 other universal section mills in China, helped swing the decision in favour of SMS group.

mill stands in a tandem reversing arrangement, featuring hydraulic adjustment systems and automatic programme changes. A new CRS roller straightening machine will be the largest of its kind and fitted with hydraulic adjustment systems to guarantee both minimal programme change times and maximum product quality.

SMS is supplying all hot and cold separating equipment and all technology and engineering for the plant. Site erection and commissioning will be supervised by SMS personnel and on-site,

For further information, log on to www.sms-group.com

New colour coating line for Severstal Late last year the Russian steel division of Severstal, one of the world’s leading steel and steel-related mining companies, officially inaugurated its high-performance colour coating line (CCL) which was supplied and installed by CMI Industry, a division of the CMI Group.

The Cherepovets Metallurgy Combinat, which is said to be among the world’s largest vertically integrated steel mills, selected CMI for engineering, procurement and construction of a new CCL and Continuous Galvanising Line (CGL) – key equipment for producing coated steel strip at its new complex.

The new high-capacity CCL produces 200kt/yr and the CGL has an annual capacity of 400kt of coated steel strip. The lines are designed to reach process speeds of 120 m/min and 180 m/min

innovations 7 8.indd 2

respectively.

Both lines are designed for high level operating efficiency and eco-friendliness and feature the full spectrum of CMI’s process technologies: Multi-stage cleaning sections and ultra-low emission furnaces.

The CGL line also features a CMI patented jet cooling system with energy recovery, Air-Knife and APC Blowstab low vibration cooling system, as well as an Inline skin pass mill and tension leveller, chemical roll-coat post treatment, and rotary exit shear.

With the line up and running, Severstal will be able to produce galvanised steel up to 3 mm thick.

Other essential components of the CCL line are its four coaters: a chemcoater, a prime coater,

and two finish coaters, as well as the latest generation of strip loopers, which guarantee smooth strip travel, says CMI. While the new CCL is currently able to produce 22 different tints, the line will also produce chromium-free coatings, as well as apply decorative films, and hot lamination.

As a direct result of the two new lines, Severstal has significantly increased its output of higher added value products, destined for the construction and white goods industries, but also its share of Russia’s apparent steel consumption.

For further information, log on to www.btu-bridle.de

11/04/2018 16:32:12

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10

INNOVATIONS

Steelmaker avoids downtime with DPF-free heavy lifting Outokumpu is a global leader in stainless steel production with a crude capacity of 3.1 Mt and a history stretching back a century to the origins of the highly durable metal alloy. Production facilities cover all continents and are located in Finland, Germany, Mexico, Sweden, the UK and USA, giving rise to sales of 5.9 billion Euros in 2016.

In Sheffield, UK, the company manufactures stainless steel rod coil, which is used in major infrastructure projects across the world, providing longevity to multi-billion pound investments such as skyscrapers, motorways and bridges.

At the ASR mill on Stevenson Road, just a mile

April 2018

innovations 10 11.indd 1

from the company’s foundry, huge one-tonne coils of stainless steel rod are produced and managed through a process that balances the requirements of both the rolling mill, with its tight schedule for manufacturing particular sizes and grades, and the finishing cycle where optimum use of acids depend on careful sequencing of rod sizes and grades. The result is a constant need for storing and retrieving heavy coils of metal throughout the production cycle.

Robust and reliable Handling large loads in such a punishing environment and to a demanding schedule calls for a robust and reliable forklift truck fleet. Failure to

perform at any point can have a significant impact on the production cycle, affecting customer orders and tight time-lines.

“Any forklift truck downtime can be critical for us,” says Phil Sowerby, engineering manager at Outokumpu. “We are on a constrained site, so we have to use forklift trucks to move coils between processes – whether it’s annealing, to get the properties we want, or descaling products. Then, of course, we use trucks to bundle up particular products for an order – customers order various sizes, shapes and grades of stainless steel rod, so we also need reliable trucks to load lorries for despatch.”

www.steeltimesint.com

11/04/2018 16:35:16

INNOVATIONS

Realising that the time was coming to renew the fleet, a particular concern for Sowerby was the industry-wide use of diesel particulate filters (DPFs) on new diesel forklift trucks – needed by most manufacturers to comply with EU emission standards. Such filters require a regeneration cycle to be performed every 25 hours or so, significantly increasing downtime and fuel costs and negatively impacting on-site performance.

After many years of running a mixed fleet, consisting of Doosan trucks and others, Outokumpu took a strategic decision to source a fleet of new forklift trucks from a single supplier. As there was

a long-established service and support relationship with Ability Handling, Doosan’s local dealer, Sowerby was introduced to Doosan’s latest 5.5 tonne capacity D55 Diesel counterbalance truck – which comes complete with the Doosan-designed “DPF free” G2 diesel engine as standard.

Clever design of the combustion chambers and piston heads, coupled with a fuel injection system, is claimed to result in a cleaner burn with Doosan’s G2 engine, producing much less soot.

Critically, the need for a DPF has been engineered out.

“For us, a major requirement was that we didn’t want a truck with a DPF as we knew we would have to take the truck out of service every shift and do a regeneration cycle for 20 minutes or more,” he says.

After extensive on-site trials and consultation with the drivers, Outokumpu placed an order with Ability Handling for nine new Doosan D55 diesel powered forklifts – complementing two smaller Doosan diesel counterbalance trucks already on site; a D33 and a D35, used for lighter duties.

11

Functional design Sowerby commented: “We had experience of Doosans in our mixed fleet and we knew they were really reliable, they performed well and the drivers liked them. We were also taken with the Doosan design, it was straightforward and functional – it wasn’t unnecessarily complicated.

And the oil-sealed brakes offered protection from dust and grit.

“We operate an industrial site where we’re moving around 1,000 tonnes per week, so we wanted a truck that was easy to maintain in the field and that wasn’t going let us down.”

The trucks supplied to Outokumpu were standard models but with hardened steel under pans fitted to offer protection from steel wire off-cuts, and forward and reversing projected warning signals, in addition to a white noise system, for extra pedestrian safety. Other features were speed limiters, weatherguard cabs with PVC doors, and accumulators to dampen load handling – all under a five-year Doosan warranty package. The specification included the use of a special 2.5 m long plastic-coated pole attachment for coil handling, making careful calculation of load centres and lifting capacity of vital importance.

Service support and parts back-up were critical factors in the decision to single-source the fleet from a local dealer, as Sowerby explains. “Having had a mixed fleet we could compare service levels, responsiveness and how long it takes to get parts. Ability Handling has always performed well, and we have a good relationship with them.

So with our positive experience of Doosan too, this gave us the confidence to go with them.

“Co-ordinating the movement of coils through production and finishing, and ensuring customer orders are collated and loaded for despatch involves constant heavy work. We have timed collections, so we know who’s coming every day and we know what they want – that’s why it’s essential that our forklift fleet works reliably. We can’t afford downtime.”

For further information, log on to www.doosanforklifts.co.uk

www.steeltimesint.com

innovations 10 11.indd 2

April 2018

11/04/2018 16:35:25

12

TARIFFS

Coatesville, a city in Chester County, Pennsylvania, USA, is home to an ArcelorMittal steel plant that produced steel plate and custom, flame-cut parts used to construct the One World Trade Centre in New York. So what’s the view on the ground about President Trump’s recently introduced 25% steel tariffs?

Richard McDonough* finds out.

ON March 23, 2018, the United States added a 25% tariff to many imported steel products. In some cases, this new tariff will be in addition to other tariffs already in place on certain imported steel products.

One of the stated goals of these tariffs is to even the playing field among steel producers, both within the United States and those firms that export steel products into the United States.

Coatesville, a city in Chester County in the American state of Pennsylvania, is likely to be one of the areas impacted by the new steel tariff. Coatesville is home to an ArcelorMittal steel plant. Steel has been produced in Coatesville for generations.

Though the ownership of the mill has changed through the years from the Lukens Family to Bethlehem Steel to International Steel Group to ArcelorMittal, all of the owners looked outward to sell quality products produced by Chester County workers.

Workers at ArcelorMittal in Coatesville produced steel plates and custom, flamecut parts that were used to construct One World Trade Center in the City of New York.

This structure is the tallest building in the United States and rises 1,776 feet.

One can travel from Long Beach, California, to Montreal, Quebec, on bridges built with steel from Coatesville. You can see the sights of New York City from buildings constructed of steel manufactured in Coatesville. Those serving in the United States military have seen first-hand how steel from Coatesville has protected their vessels both undersea as submarines as well as in ships plowing the oceans.

Tariffs – the Coatesville perspective Workers at ArcelorMittal in Coatesville produced steel plates and custom, flame-cut parts that were used to construct the One World Trade Centre in the City of New York. This structure is the tallest.

The photo of the World Trade Centre is courtesy of the National Iron & Steel Heritage Museum.

The economy of Coatesville is intertwined with both the national economy and the global marketplace.

Actions and reactions to the new steel tariff will impact individuals and families throughout Chester County and beyond.

Specifically what those impacts will be is not certain at this time. The steel tariff may help stabilise employment levels at the mill.

It may make it more economical to produce more steel at the Coatesville plant which may mean more employment opportunities for steelworkers.

The decision by the United States to implement an additional steel tariff is based on findings that certain countries are exporting steel products into the United States at prices below production costs through the use of subsidies, government ownership, and other activities.

This new steel tariff is explicitly based on the finding by the Federal Government that the steel industry is a critical component in the nation’s defense structure. That military

preparedness requires the ready availability of steel products needed by the armed forces. In case of military actions, steel products from other nations may not be readily available when needed by the armed forces of the United States.

To remedy the situation, the United States is implementing this new tariff to encourage stability and growth prospects within the domestic steel industry.

A similar tariff – this one in the amount of 10% - is being added to imported aluminium products.

Not all imported steel and aluminium products will be affected by these new tariffs. Steel and aluminium products imported into the United States from Canada and Mexico, for example, have been explicitly exempted. Both countries have strong economic ties with the United States through the North American Free Trade Agreement. Canada also has extremely close ties with the United States in the area of mutual defence.

* US-based freelance journalist April 2018

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Through the years, steel tariffs have been one of those policy issues that cross political lines. These new tariffs being issued by the Federal Government are no different.

Bob Casey, Jr. strongly supports the new steel tariff. The Democrat representing Pennsylvania in the United States Senate issued a statement on 1 March 2018, commending the President for his decision.

“I urge the Administration to follow through and to take aggressive measures to ensure our workers can compete on a level playing field,” stated Senator Casey. “When the playing field is level, Pennsylvania workers will outcompete any in the world.”

The other individual representing Pennsylvanians in the United States Senate, Pat Toomey, does not support the new steel tariff. Senator Toomey, a Republican, stated that “The administration invoking national security to impose tariffs on imported steel and aluminium is a big mistake that will increase costs on American consumers, weaken our economy, and invite retaliation from other countries on other products.”

One of the elected leaders in the House of Representatives supporting the efforts of President Donald Trump is Pete Visclosky of the American state of Indiana. A Democrat, he represents a House district in the northwest part of that state. Burns Harbour is one of the communities in his district.

Like Coatesville, Burns Harbour includes a steel plant operated by ArcelorMittal.

Regarding President Trump implementing this new steel tariff: “I appreciate his action,” stated Representative Visclosky.

This member of Congress recently wrote an opinion piece further outlining his views on the issue. Among his key points regarding the steel industry: “Without American steel, the Department of Defense would be forced to rely on foreign imports, which would be unacceptable during a national emergency or military conflict.”

The Representative indicated that the United States Commerce Department has “212 current anti-dumping and countervailing duty orders in place on steel and steel-related products from [more than] 30 countries.” He also indicated that 27 additional investigations involving steel and steel-related products are currently in process.

Part of the underlying problem, according to the Congressman, is excess steel-making capacity globally. In other words, more steel capacity exists than is needed to meet the needs of the users of steel within the www.steeltimesint.com

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The Verrazano-Narrows Bridge was built with steel products manufactured in Coatesville. The bridge connects Brooklyn and Staten Island in the City of New York.

The photo of the Verrazano-Narrows Bridge is courtesy of the National Iron & Steel Heritage Museum.

global marketplace. Congressman Visclosky quotes the Organisation for Economic Co-operation and Development (OECD) in stating that excess steel capacity was 700 million metric tons globally in 2017; that excess capacity is more than eight times the output of all American steel producers, according to the Congressman.

Representative Visclosky states that other countries employ a variety of techniques to utilise that excess capacity and move the finished products to the United States.

“Some countries are also very adept at masking the country of origin of a product and evading United States duty orders by simply routing their products through other countries.”

Will the actions of President Trump start a trade war?

There are some leaders who have indicated that that is a very likely outcome of these additional tariffs on steel and aluminium. Others, though, have a different take. Congressman Visclosky concludes that “The evidence … shows we are already well into one.”

Leaders of American steel manufacturers strongly support the new steel tariff.

Among those firms is the company that operates the steel mill in Coatesville, ArcelorMittal USA. “As the largest producer of steel plate for armoured vehicles and naval vessels, we are proud of the contributions we make to the national defense,” John Brett, president and CEO of ArcelorMittal USA, stated at a hearing of the Congressional Steel Caucus on 21March 2018.

“ArcelorMittal USA will be looking for opportunities to maximise our steel production and potentially undertake new investments to meet the needs of our customers. Our customers need our support, and your support, because these measures won’t work if foreign steel just gets imported in a different form. But, with time, these measures should encourage US investment, strengthen employment opportunities and improve the sustainability of the US industry.”

Beyond support from individual steel firms, the American Iron and Steel Institute (AISI) also supports the tariff being imposed by order of President Trump. This organisation represents 75% of the steel capacity within the United States as well as within North America.

“We are grateful to the President for his continued commitment to the steel industry and to ensuring the country’s national security interests are defended by combating the flood of imports that have been eroding America’s steel industry over the past several decades,” stated Thomas Gibson, president and CEO of the AISI. “His recent proclamation imposing a 25% tariff on steel imports is key to doing that and putting steel workers back to work. We look forward to working with the administration to ensure that negotiations for exemptions or exclusions include provisions that will preserve the effectiveness of the remedy.”

While businesses that manufacture steel and aluminium strongly support the imposition of the new tariffs on April 2018

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most imported products, a number of businesses that make consumer products are adamantly opposed to the new tariffs. These businesses generally cite an increase in costs for the production of their consumer products which force higher prices that then result in lower sales.

One of the groups opposed to the new steel and aluminium tariffs is the Precision Metalforming Association (PMA).

According to Roy Hardy, president of the PMA, the new tariffs will likely cause customers of the metalforming industry to purchase finished products – that do not include the new tariffs – from other countries. “Our members went through this in 2002,” explained Hardy. “When the US government imposed tariffs on steel imports, [there was a] loss of 19% of all metal forming manufacturers in the United States.” The Association indicated that

occurred within the American economy because of these tariffs.

The Bureau of Labour Statistics of the United States Department of Commerce shows that there has been a substantial decrease in the number of workers employed in the Durable Goods – Primary Metal Manufacturing Industries (including steel production). This is the case both nationally and in Pennsylvania. (Separate statistics are not readily available for Chester County alone.)

In January of 1990, the Bureau of Labour Statistics indicated that 73,700 individuals worked in these industries in Pennsylvania.

In February of 1994, the number of individuals working in these industries was below 60,000 workers for the first time in recent history in Pennsylvania. In January of 2002, employment dipped below 50,000 workers in these industries for the first time

Steel trees were manufactured in Coatesville and utilised in the construction of the World Trade Centre.

The photo of the World Trade Centre is courtesy of the National Iron & Steel Heritage Museum.

this loss was “due to high steel prices and business lost to overseas competitors.”

In 2003, the then-head of the PMA, Jon Jenson, was chairman of the Consuming Industries Trade Action Coalition. A study founded by this organisation detailed how 200,000 Americans lost their jobs when President George W. Bush imposed tariffs on a variety of steel products. Tariffs placed on imported steel products ranged from 8% for stainless steel wire products to 15% for products like rebar to 30% for such products as steel plates.

The report, entitled The Unintended Consequences of U.S. Steel Import Tariffs: A Quantification of the Impact During 2002, highlighted major problems that April 2018

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in recent history in Pennsylvania. Seven years later, in January of 2009, less than 40,000 individuals were employed in these industries in Pennsylvania. By May of 2009, it was less than 35,000 workers. Since then, the number of workers has varied from 34,600 to 40,000 individuals. In January of 2018, the number employed in these industries was 35,100 individuals in Pennsylvania.

From January of 1990 through January of 2018, the decrease in employment in Durable Goods – Primary Metal Manufacturing Industries (including steel production) was more than 50% in Pennsylvania.

Vonie Long has seen this change in

employment levels in the steel industry in Chester County. He is currently the President of Local 1165 of the United Steelworkers Union. The members of this union local work not only at the ArcelorMittal steel plant in Coatesville but also at such Chester County businesses as Coatesville Scrap, Johnson Matthey, and Exton Nissan.

Long has worked as an electrician in the shipping and finishing department at the steel mill in Coatesville for 24 years.

Through those years, he has maintained a variety of equipment at the production facility for a number of corporate owners.

“As a veteran of the United States Navy, I served aboard the USS Nimitz,” explained Long. “I am proud to have a minor role in supplying armour for our carrier fleet.”

One of the items mentioned by Long that many people would not notice is that the steel mill in Coatesville is actually one of the largest recycling facilities in the region. A steel mill may not be the first thing most people think of when discussing a green economy, but it’s an accurate description, according to Long. “We take in a variety of scrap metal and recycle that unneeded material into products that help build the infrastructure of our country and defend our shores,” he said.

The use of a steel tariff to help enhance national security is something strongly supported by Local 1165. “This type of issue – competition with foreign nations – is and has always been a non-partisan policy issue for our union and for many political leaders. We work together to try to create a level playing field for all. Treat us fairly and we can compete,” he said.

“I’m an advocate for my members and for my industry to employ more people like me,” said Longo.

He brought up a point that goes to the heart of the issue of tariffs in the steel industry: Do steel tariffs increase the cost of consumer products?

Long acknowledges that costs will likely increase marginally for certain products made from steel and that there will likely be job losses within certain industries. But he argues that having a stable, healthy steel industry is critical to the national defense of the United States and to our overall economy.

He noted that when steel prices were lower in previous years, he had not seen consumer product companies highlight price reductions for consumer products www.steeltimesint.com

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TARIFFS

made with steel.

“If steel tariffs increase consumer prices,” Long asked, “then why doesn’t the removal of steel tariffs decrease consumer prices?”

Leo Gerard, the international president of the United Steelworkers Union agreed with Long. “Let’s remember that many of the consumer [product companies] did nothing to reduce prices to their customers when steel and aluminium prices dropped,” he stated in testimony at a hearing of the Steel Caucus of the House of Representatives on 21 March 2018. “They want to have it all – preserve profits when steel prices decline and get someone else to pay the costs if prices reach market-clearing levels.”

Previous steel tariffs imposed by order of President Bush helped stabilise the steel industry, according to Gerard and Long.

“We still saw cutbacks, but capacity and employment levels became more stable in the years after the steel tariffs were implemented in 2002,” stated Long.

“Unfortunately, those tariffs ended earlier than initially planned so their impact on our industry was not as beneficial as we believe the steel tariffs could have been.”

Gerard noted that “The measure [by the Bush Administration] stabilised the industry and provided the relief needed to spur new investment in plants, equipment and people. Unfortunately, the World Trade Organisation ruled against the United States and relief was terminated early.”

Technology and productivity advances have reduced some of the need for labour at steel plants, Long acknowledges.

However, “you still need human beings on the shop floor. Steel workers will always be needed to operate a safe and efficient factory.”

Long is hopeful that the new steel tariff implemented by President Trump will result in greater investment in the facilities in Coatesville and result in more employment opportunities for people in the area.

“If we can get more sales on a level playing field,” Long stated, “We have the ability to produce more product here at Coatesville.”

An area of concern for both the national union and the local involves foreign steel producers moving product into countries that may earn waivers from the new steel tariff.

“We’re concerned that one country that is faced with the steel tariff will move its product into a country that does not www.steeltimesint.com

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17

The USS Ohio is one of many naval submarines and ships built with steel manufactured in Coatesville.

The photo of the USS Ohio is courtesy of the National Iron & Steel Heritage Museum.

face the steel tariff,” explained Long. “We might see a few of the bad actors attempt to circumvent the new steel tariff. We’re hopeful that the Trump Administration will stop such activity as it may take place.”

Waivers where necessary Gerard acknowledges that there may be times “where there is truly a product that is unavailable here in the United States [that

Traffic is seen here crossing the first span of the new Governor Mario M. Cuomo Bridge in 2017. Eventually, a second span will be built parallel to this first span over the Hudson River. Steel plate manufactured in Coatesville is being used in both of the two news spans. This new bridge is designed to replace the two spans of the Tappan Zee Bridge, seen to the left in this photo. Overall, according to the New York State Thruway Authority, a total of 220 million pounds of steel is being utilised to build this bridge.

The photo of the Governor Mario M. Cuomo Bridge is courtesy of the New York State Thruway Authority, November of 2017.

is] needed by a steel user, [where] we would support time-limited waivers of the tariffs that are subject to renewal.”

“The goal must be to promote our national security so products that are presently not made here but are needed will be produced domestically in the future,” continued Gerard. “Our producers should have time to restart facilities and product lines, or invest in new ones, to meet these demands. In the interim, certain imports might be allowed.”

One of the difficulties facing the steel industry is how society has changed in its views of work. “I’m a fourth-generation steel worker,” Long explained. “But many younger people don’t seem to want to enter this type of work. If the company needs you to work a late shift or on the weekend, my generation saw it as an opportunity to earn more money to support our families. For many younger people, they don’t necessarily see it the same way.

They may want to spend their nights or weekends doing other things.”

For someone with a high school education, opportunities exist in places like Coatesville that may not exist in other communities.

“Our wage scale is about $21.00 an hour to start and tops out at about $28.00 an hour,” explained Long. “There’s a training wage for people starting out at the plant. A worker can earn up to a 20% premium based on production incentives.

We have good benefits – not as good as they historically were, but good benefits nonetheless.”

“I’m hopeful that younger people will see steelworking as a job that can help provide them with a decent living.” � April 2018

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US steel tariffs – initial responses Since US President Donald Trump lit the blue touch paper on 25% tariffs on all imported steel into the USA, there have been mixed emotions from the global steel industry. Matthew Moggridge* reports IT goes without saying that the US steel industry and its leading trade associations, the Steel Manufacturers Association (SMA) and the American Iron & Steel Institutef (AISI), are fully supportive of the action taken by President Donald Trump. Elsewhere in the world it’s a different story.

Philip K Bell, president of the SMA, North America’s largest steel industry trade association, and the primary lobbying vehicle for electric arc furnace steelmakers, commented: “We are optimistic that these tariffs will adjust imports to provide a level playing field and ensure that the steel industry in our country is able to serve our national security needs.”

According to Bell, “We look forward to the measures being in effect for a period of sufficient duration for companies to reinvest in the steel industry. We also support limited exceptions for key allies, including Mexico and Canada, well-regulated exclusions for products not available from US producers, and mechanisms to avoid transhipment and circumvention of the tariffs. Effective measures will allow the domestic industry to preserve and strengthen its national defense industrial base.”

Relentless flow of imports Bell goes on to say that US producers have

faced a ‘relentless inflow of imports’ due to global excess capacity created by foreign government subsidies and unfair practices, arguing that China has rapidly expanded capacity and shifted exports onto global markets.

US imports of steel increased 15% in 2017 when compared to the previous year and accounted for more than a quarter of US steel consumption. US capacity utilisation averaged 75% in 2017, an operating rate deemed far below the 85% necessary for a healthy industry.

Bell describes Trump’s tariff announcement as ‘decisive action necessary for US steel producers to survive and thrive’.

Thomas Gibson, president and CEO of the AISI, was equally triumphant, claiming that Donald Trump’s action was ‘key in stemming the tide of unfair foreign imports and putting steel workers back to work.

Gibson cited US Steel’s Granite City, Illinois, steel plant as an example of how Trump’s decision was starting to make good sense. One of the plant’s blast furnaces will be restarted having been idle since December 2015. “The [US] steel industry can be on track to maintain our essential contributions to national security and critical infrastructure like transportation, public health and safety, energy and the power grid – all of which rely heavily on

steel,” he said.

But elsewhere in the world, it’s a different story.

Damaging and counterproductive The European Union (EU), which includes the UK until March next year, has described the tariffs imposed by the USA as ‘damaging and counterproductive’ for both the US and EU economies. The EU and Canada are the largest exporters of steel to the USA so it’s understandable that EUROFER’s director-general, Axel Eggert, is more than a little miffed.

“The US measure baselessly includes EU producers, who will suffer significantly from the loss of one of its major export markets,” Eggert said, adding that the national security justification used by Trump was ‘an absurdity’.

Eggert has two major concerns: one is the loss of exports to the US; and the other is the expected massive import surge in the EU that could cost ‘tens of thousands of jobs’ in the EU steel industry and its related sectors. “Ironically,” he said, “estimates also show that the US could also suffer a net loss of jobs as a result of the measure.”.

It goes without saying that the EU will respond in kind in order to defend its own steel industry and this could quite easily be the beginning of a global trade war. “We

* Editor, Steel Times International April 2018

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19 can’t sit idly by while the US lights a match under the global trading system,” said Eggert.

EUROFER asserts that the EU has been a long-term, fair and reliable supplier of high quality steels to the US market and that European trade in steel is neither dumping, nor a threat to US national security ‘by any stretch’.

Protectionism In the UK, Gareth Stace, director of UK Steel, said he had hoped for a more targeted and focussed approach to tariffs.

“Regrettably today’s announcement confirms our fears that the default position is for tariffs to apply across the board outside of NAFTA,” he said, adding that such tariffs would have a profound and detrimental impact on the US steel sector.

UK steel manufacturers exported 350kt to the USA in 2017, representing 7% of total exports.

“Imposing such measures on US allies in the name of national security is difficult to comprehend,” Stace argued. “It is clear the underlying motivation is instead one of economic protectionism for US producers, in response to a global issue of overcapacity in the steel sector.”

Stace is encouraged by the US administration’s hint of flexibility and that exemptions might be granted and, he said, it was vital that the EU and UK authorities do all they can to deliver this.

He called for ‘swift action’ from the EU Commission to combat the indirect effects of the planned tariffs and added: “We must ensure our market is not now destabilised by millions of tonnes of steel diverted away from the US to the EU,” he said, adding that he hoped for support from the UK Government.

Roy Rickhuss, general secretary of Community, the UK steelworkers’ union expressed disappointment at the news that the UK will not be initially exempt from new US tariffs on steel. He referred to Trump’s strategy as short-sighted and argued that the USA should not be attacking its allies when it should

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be working in unison with the UK and EU on tackling ‘the problems of global overcapacity’.

Rickhuss called on Prime Minister Theresa May and International Trade Secretary Liam Fox to use every bit of influence they have left to protect the jobs of British steelworkers.

Fox is in the process of planning a trip to Washington to discuss the new duties and will seek an exemption on both steel and aluminium exports to the USA. He believes there are other ways to deal with the global overcapacity issue.

Criticism of Theresa May Stephen Kinnock, MP for Aberavon, home of Tata Steel UK’s Port Talbot integrated steelworks, criticised the UK Prime Minister Theresa May, claiming that the British Government has been found wanting on the steel issue.

“Theresa May has, again, let down British steelworkers. Ever since Trump first announced punitive tariffs on steel and aluminum last week, the British steel industry, unions and steel MPs have been calling on her to make the case against these tariffs and for a UK exemption.

Tonight we learnt that she has abjectly failed in that task,” he said.

Kinnock continued his onslaught on the Prime Minister: “She was quick to hold Trump’s hand in the White House last year, but she has shown that she hasn’t got what it takes to force his hand on steel tariffs or do what is required to protect and support the British steel industry,” he said.

The Swedish perspective Meanwhile, in Scandinavia, Swedish steelmaker SSAB’s CEO Martin Lindqvist claims that the company’s Americas division, which has a production capacity of 2.4Mt at two plants in Iowa and Alabama, will have ‘these volumes’ excluded from Trump’s tariffs.

“However, our US steel production is supplemented with special, high-strength products from Sweden and Finland that are not produced on our North American

product lines,” Lindqvist said, explaining how exports to the US from these plants will be subjected to the new tariffs. “We will investigate the impact to our business and discuss with our customers the best way to go forward given yesterday’s announcement,” Lindqvist said.

SSAB claims that its Nordic US exports are traded fairly, following established international rules of trade. Lindqvist claims that the company has enjoyed a positive trade relationship for many years and will engage with US government officials ‘to advocate for the preservation of this important US-Nordic trade relationship.’

Lindquist said he would continue to evaluate SSAB’s American business – from pricing and investments to logistics and operations –‘to ensure our business remains profitable and best poised for future growth’.

Worldwide condemnation There has been worldwide condemnation of Trump’s 25% steel tariffs. In Japan they are saying it will have a ‘big impact’ on the two countries’ close bilateral ties, while the South Koreans are considering filing a complaint to the World Trade Organisation.

China claims it will review the situation and ‘firmly defend its legitimate rights and interests’, according to the Chinese Ministry of Commerce.

Shares in South Korean steelmaker POSCO dipped more than 2%, but Nippon Steel & Sumitomo Metal’s shares were slightly up.

In addition to the European Union seeking exemptions, so will Brazil and Argentina and Japan.

But all is not lost. Trump is planning to issue waivers to nations he regards as ‘real friends’ of the USA and has already exempted Canada and Mexico, fellow members of the North Atlantic Free Trade Agreement (NAFTA).

This really is one of those ‘only time will tell’ situations as, just like in Stingray, a children’s television adventure series from the 1960s, ‘anything can happen in the next half hour’. �

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Trump’s tariffs a view from Europe

21

If Donald Trump is to secure a second term he needs to keep voters in the so-called ‘rust belt’ states happy. But would it really be feasible for a post-tariffs US steel industry to start reinvesting in idled or moth-balled

steel plants? Or should the investments be made further south in forward-thinking, hitech mini and micromills rather than in the prehistoric integrated plants of old? By Mick Steeper*

I quite enjoy listening to Springsteen on a long drive. Anyone with a background in steel can relate to the imagery of a song like “Youngstown”, but for many of us the passing of years has diluted the politics. In my own ageing mind, laments about an industrial wasteland in Ohio and Pennsylvania were gradually reduced to wistful folk-song. The demand for action that they originally articulated could no longer ever be satisfied, least of all by a Republican White House.

A century ago, it was American Steel that taught the world its lesson about the power of free trade. While the old countries

of Europe were still stuck with the idea of steel as the material of warfare, America transformed it into the fabric of consumer products and of the transport networks to distribute them. Then as the Millennium drew to a close and the economics of the global steel industry turned against the established US model, American Steel reinvented itself for a second time as the birthplace of the mini-mill. Over in Europe, we marvelled at an economy flexible enough to reshape its bulk industries to exploit changing opportunities in raw materials and energy, and we envied a political system open-minded enough to let

it happen. Of course there were some prices to pay, and the blue-collar workers of the Rust Belt were the most conspicuous losers, but the overall outcome was a new lease of life for the US industry.

Trump’s election even brought talk of a further level of regeneration, of steel production bolstered by a national infrastructure drive. It seemed audacious but plausible, a now-or-never idea befitting a dynamic and courageous new administration. The breadth of US steel industry support for Trump today, therefore, comes as no surprise to Europeans. Nor is it any cause for disappointment in most

* Steel industry commentator. Mick Steeper has recently retired from the Chair of the Iron and Steel Society in the UK. www.steeltimesint.com

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European steel quarters. Whenever and wherever national politicians recognise and emphasise the importance of steel to their domestic economy, there is a benefit to the steel industry worldwide.

Having said all this, Europe is sceptical about the depth and robustness of the apparent US consensus around Trump’s steel tariffs. The mention of Springsteen was intended to highlight the most fundamental inconsistency. The Boss’ steel references map roughly on to the 2016 swing states, and a formerly Democraticleaning constituency that Trump surely needs to maintain if he is to secure a second term. It follows that the President needs the US steel industry to reinvest around places like Cleveland and Pittsburgh.

But are those really the places where the industry and its investors would choose to put their money?

Looking at this question more deeply, there are other factors that seem to point to a divergence of interest between the White House and the steel business. Most of the idle steel plants in OH and PA are apparently derelict rather than simply moth-balled. It would need high levels of expenditure to restore them to competitive operation, realistically not very different from the capital cost of building entirely new plants elsewhere. Inland integrated plant with a general carbon steel product at high economic volume is arguably a doubtful proposition anywhere, but of course that is the operational model on which the Rust Belt was founded. The proven recent model for successful steel investment is meanwhile very different: EAFbased, smaller in capacity, market-focused and generally some way to the south.

The proposition of tariffs presupposes that the US steel industry will take up the difference between the national demand for steel and its domestic supply. Taking the latest Steel Industry Executive Summary (US Department of Commerce, February 2018) as a basis, imports of semis in 2017 April 2018

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averaged 2.5 Mt/month while domestic output averaged 6.5 Mt at 74% utilisation.

At feasible levels of utilisation, this suggests that increased domestic production from the existing plant base could replace about half of the prevailing import volume.

Local market expertise would be needed to analyse this position rigorously, but this does not look (at least to an outsider) like a scenario for new investment in capacity

by US steel businesses. Global overcapacity remains rife, and so a combination of increasing existing asset utilisation while redressing margins (ie correcting the erosion attributable to dumping, rather than an opportunistic price-hike) seems like both a safe and lucrative alternative course.

New capacity is unlikely without domestic demand growth, and it is probable that the US steel industry’s message to the White House is that new jobs in steel will follow, but only as soon as the promised infrastructure programmes materialise.

Protectionist measures are meanwhile the legitimate recourse of any country that sees its economy undermined by unfair trade practices. In other words, “levelling the playing field” is entirely reasonable: the danger, of course, lies in the erosion of competitiveness through trade isolation, resulting in a national team that loses on a field with no slope. In this case, China’s export practices need to be carefully and dispassionately considered by the US authorities, and perhaps it needs to be conceded that an uncritical accusation of dumping is a dangerous oversimplification.

For example, what constitutes unfair practices in ore procurement when the nation concerned enjoys the buying power of the producer of almost half the world’s iron?

There might also be alternatives to tariffs.

It could be possible, for example, to oblige companies manufacturing in the US to use a minimum proportion of American steel in their overall procurement. The outcomes of such a policy might be more predictable than those from tariffs, and

might also be more capable of calibration.

At least as important, going that way might also reduce the risk of external tariff countermeasures in other economic sectors.

Policy options of this type were apparently absent from the range of proposals offered to the President by the Department of Commerce, however, suggesting that US business authorities may be more frightened of spooking inward investors than they are of antagonising countries harbouring the exporters of goods.

Perhaps America retains a tendency to venerate the commodities upon which its wealth and global economic power were founded – steel and oil being the mineral examples. Such reverence can never be allowed to go as far as defying the global market price of a commodity raw material, however. Breaking that rule has an inevitable disastrous consequence, of degrading the international competitiveness of downstream manufacturing industry, which is after all where most national economic value is really added. A corollary is that no country’s steel industry can reasonably expect its government to defend the manufacturers of semis in preference to the manufacturers of finished goods.

The steel industry, much as we all cherish it, is therefore not the most obvious sector to defend. Europe’s response to Chinese steel imports, for example, has broadly been to police quality rather than prices.

Variable steel quality compromises its customers’ products, whereas low raw materials prices ultimately help their sales.

European steelmakers swap rumours about their national governments sacrificing steel in negotiations with Beijing, in return for IP assurances in high-tech sectors or inward investment promises, among other things.

And we should not forget that, wherever we are in the West, it is China that owns a high fraction of our debt.

President Trump, at heart a businessman, is presumably receptive to these ultimate realities. This suggests that any apparent divergence of interests between White House and Steel Industry is manageable, and that the new climate of optimism around American steel will prove to be justified. It might also mean that the very specific hopes of some swing voters in Ohio and Pennsylvania will be drawn out long enough to burn through 2020, before being doused forever not long afterwards.

The strains of “Youngstown” on a European motorway will be even more wistful then. � www.steeltimesint.com

12/04/2018 10:40:15

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LATIN AMERICA UPDATE 25

Columbia’s good prospects The Pacific Trade Alliance (PTA) is a Latin American trade bloc with a combined population of roughly 230 million people. The Pacific Alliance’s share of crude steel production and apparent steel consumption, was 36.8% and 53.7% respectively according to preliminary figures released by the Latin American Steel Association (Alacero). Germano Mendes de Paula* outlines the importance of the alliance.

THE Pacific Trade Alliance is a Latin American trade bloc, officially established in April 2011 by four countries (Chile, Colombia, Mexico and Peru), which all border the Pacific Ocean. These nations have come together to form an area of integration with the goal of ensuring a complete freedom of movement for goods, services, capital, and people. Together, these four countries have a combined population of roughly 230 million people (or 36% of Latin America). The relative importance of the combined four countries as a proportion of Latin America accounts for 38% of the region’s GDP, 45% of the foreign direct investment inflows and some 50% of international trade The Pacific Alliance’s share of crude steel production and apparent steel consumption, respectively achieved 36.8% of Latin American crude steel production and even 53.7% of apparent steel consumption in 2017, based on preliminary figures released by the Latin American Steel Association (Alacero). The previous Latin American updates analysed the current situation and perspectives of the Peruvian

and Mexican steel markets. This time the focus is on Colombia and the next will examine Chile, in order to review the four country-members of the Pacific Alliance.

Political and macroeconomic situation Presidential elections will be held in Colombia on 27 May 2018. If no candidate receives a majority of the vote, a second round will be held on 17 June. Incumbent Colombian President Juan Manuel Santos is ineligible for re-election, having already served two terms.

It is important to mention that the congressional and primary elections, which took place in early March, were the first test in the election calendar. According to a Barclays Bank report: “In Colombia, the coalition of the right led the legislative elections. However, no single block won a majority. Of 102 seats in the Senate, Centro Democratico (former President Alvaro Uribe’s party) obtained the largest number of seats with a total of 19. The centre candidates, who were probably waiting for the second round to build alliances, are under pressure now to reach

Fig.1: Colombia’s GDP growth, 2010-2020 (%). Source: International Monetary Fund

agreement before the first round. Without any alliances, it is likely to be difficult for the centre to overtake [Ivan] Duque and leftist candidate Gustavo Petro in the first round, which would result in a race between two highly opposed candidates. We maintain the view that the wide gap between Petro’s economic stance and that of the median Colombian voter and his association with [the] current government of Venezuela makes a victory for him in the second round very challenging”.

In Columbia, GDP expanded only 1.8% in 2017, which was the lowest growth since 2009. The poor performance is attributed to consumption and investment decisions brought forward into Q4 2016, before tax reforms came into effect. A recovery is expected for 2018-2020, supported by monetary stimulus and public works. Higher oil prices could also be encouraging for investment in the sector. The International Monetary Fund (IMF) forecasts that Colombian GDP will enlarge by 2.9% in 2018 and by 3.4% in 2019-2020 (Fig.1).

According to Colombian bank Davivenda, the construction industry’s GDP is expected

Fig.2: Colombia’s crude steel and hot rolled steel production, 2010-2017 (kt).

Source: worldsteel, Alacero

* Professor in Economics, Federal University of Uberlândia, Brazil. E-mail: germano@ufu.br www.steeltimesint.com

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LATIN AMERICA UPDATE

to increase 2.6% in 2017, 3.9% in 2018, 7.1% in 2019 and 7.4% in 2020. Considering that construction is responsible for roughly 70% of the country’s steel consumption, the prospects for the steel market seem attractive.

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Steel market Colombian crude steel production has been relatively stable around the 1.2-1.3Mt plateau over the period 2000-2017.

Meanwhile, hot rolled steel products amplified from 1.62Mt in 2010 to 1.90Mt in 2017 (Fig. 2). There are five companies that produced longs in Colombia: Acerías Paz del Rio (APDR), Gerdau Diaco, Ternium, Siderurgica del Occidente (Sidoc) and Sidenal.

In the flats, the players are Acesco and Corpacero. Tenaris TuboCaribe is the only seamless tube producer.

Long steel production and imports reached 2.2Mt in 2017, of which 64% was rebar, 20% wire rod, 8% light section and 8% other products. It is a relatively small market, disputed by five companies. It is worth remembering that Sidoc purchased a 156kt/yr mill, located in Yumbo, from Gerdau Diaco in December 2016 and resumed its operations in June 2017. In March 2017, Gerdau announced the sale of 50% of its Colombian subsidiary to Putney Capital Management, which is already a partner in its Dominican Republic operations. In September 2017, Ternium unveiled the enlargement of its long steel mill in Colombia. At a cost of $90M, a 520kt/yr bar mill will amplify its rebar production capacity to 720kt/yr. The new mill will be completed by the H2 2019.

Vicente Noero, president of APDR, a subsidiary of the Brazilian conglomerate Votorantim, delivered a presentation at the 58th Alacero Conference, which was held in early November last year in Cancún, México. In it he highlighted some hurdles that negatively affected Columbian steel consumption. For instance, the business climate has deteriorated in comparison with previous years. In addition, construction was impacted by weakening consumer confidence caused by low GDP growth, tax reform, political polarisation and cases of corruption. In the same direction, high interest rates discouraged house buying.

Despite the aforementioned problems, Colombian steel consumption rose from 2.8Mt in 2010 to 4.0Mt in 2015, declining partially to 3.6Mt in 2017. Long steel demand improved from 1.5Mt in 2000 to 2.2Mt in 2013 and has stagnated since then. It should be stressed that longs’ share in total consumption expanded from 54% to 62% along the analysed years. The remaining volume was distributed between flats (34%) and seamless tubes (4%) in 2017. Noero observed that the import penetration ratio for longs in Colombia amplified to 22% in 2010 to 43% in 2016. Preliminary figures for 2017 show a partial diminution to 37%.

Considering the GDP recovery and, mainly, the strong performance expected from the construction industry over the coming years, it seems reasonable to expect a considerable expansion of steel demand in Colombia. Alacero forecasts that it will amplify 5.0% in 2018 and 5.4% in 2019. The key issue is if this additional consumption will be brought about by local players or by imports. �

www.steeltimesint.com

11/04/2018 16:04:39

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28

USA UPDATE

China retaliates against US tariffs Even before President Donald Trump imposed a 25% tariff on steel and 10% on aluminium imports entering the United States, experts and analysts scrambled to draw up the battle lines in what many feared was an ensuing trade war. By Manik Mehta* THE gloom of a trade war, with all its implications for US exports, has descended on the economy. The stock markets, unnerved by such a prospect, tumbled as China announced its retaliatory tariffs on imports of 128 US products, including pork and seamless steel pipes.

Big corporate names such as General Electric, Goldman Sachs and others rushed to make their feelings known to the White House, reminding that tariffs will hit exports, and deny American companies access to one of the world’s most lucrative markets.

It is speculated that Trump could announce tariffs on more Chinese imports, including hi-tech products such as semiconductors and cheap electronics and other goods purchased by American consumers.

Voices opposing this move are becoming increasingly vocal, with Josh Kallmer, the senior VP (Global Policy) of the Information Technology Industry Council, reminding that while his group supports the White House in its efforts to deter China’s unfair trade practices, it would not support tariffs as the only means of remedy. Kallmer explained that such an approach would end up as a tax on consumers – the very people the Council was trying to help.

The White House, however, insists that it has broad support from the industries hit by the Chinese business practices. But critics argue that the continuation of the tariffs on Chinese steel and aluminium exports would only heighten the problems of US companies which already face difficulties doing business in a country that is notorious for its barriers. US companies complained, even before the Trump administration imposed tariffs, that

China denied them access to its market, particularly in sectors such as technology, media and finance, thus violating the commitment it gave upon joining the World Trade Organisation in 2001. A major irritant is China’s requirement that US companies share their technology with their Chinese joint venture partners, if they want access to Chinese consumers. US authorities also complain that the Chinese steal vital US technology through cyber warfare.

The American metals industry has frequently vented its frustration over the continuing onslaught of cheap metal from China, which now accounts for roughly half of the world’s steel and aluminium capacity. With past efforts to get China to reduce overcapacity having failed, the US metal industry wants to build up strong international pressure against Chinese behaviour.

Scott N. Paul, who heads the Alliance for American Manufacturing and supports tariffs, said other major steel-producing countries could take a tougher stand on China’s transshipment strategy aimed at circumventing tariffs. This would put pressure on China to reduce overcapacity and unfair practices. The European Union (EU), he said, was undertaking a safeguard investigation in the matter.

The US industry is not united in its approach against China, with some US companies even making a turnaround and saying that the administration’s tariff imposition, purporting to help them, could actually do irreparable damage to the supply chains they have built over many years, and be cut off from China’s growing market.

The Trump administration’s tariffs have unnerved US metal fabrication, construction

and other industries which fear rising steel prices. Indeed, any industry that uses steel or aluminium, such as construction firms, farm equipment manufacturers, brewers using aluminium cans for packaging and so on, could be affected by higher prices.

Construction companies will find it difficult to accurately bid on projects that involve a lot of steel; increases in raw material costs will drive up construction costs.

Technology companies fear that this could dramatically raise American manufacturing costs, thus making their companies less competitive globally. The agricultural industry has joined the chorus of protests, arguing that they could lose valuable export opportunities.

China’s 25% retaliatory tariff on pork would not go down well in regions such as Iowa, North Carolina and Indiana that supported President Trump but now want him to withdraw the tariffs. US farmers exported more than a billion dollars’ worth of pork to China, one of the world’s biggest markets.

US officials, including Treasury Secretary Steven Mnuchin and the United States trade representative, Robert Lighthizer, have been discussing with Chinese counterparts on ways to resolve their differences. The US side is trying to extract concessions, like getting China to reduce tariffs on American cars, open up its market for financial services and crack down on intellectual property violations.

Further US tariffs on other Chinese products could lead to more retaliatory action from China against other American exports such as soybeans, besides hurting Apple and other companies that rely heavily on Chinese consumers.

* US correspondent April 2018

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www.steeltimesint.com

11/04/2018 16:05:58

29

Meanwhile, the US administration has toned down its tariffs, under Section 232, on other steel-exporting nations to the US, and has temporarily exempted its NAFTA partners, Canada and Mexico, the EU, Brazil, Argentina, Australia, and South Korea, until 1 May 2018, in exchange for meeting certain conditions, including quotas on exports to the US. Experts estimate that the exemptions granted so far represent about half of all steel imports into the United States.

According to the US Department of Commerce, the USA is the world’s largest importer of steel, importing 34.6Mt in 2017. Canada was the top exporter (17%). followed by Brazil and South Korea; about half of the steel imported into the US is used for construction of buildings and infrastructure.

While tariffs would provide some relief to local steelmakers from foreign competition,

leading to modest job creation – the US steel industry employed some 143,000 people nationwide and earned more than $2.8 billion last year – a trade war could have serious repercussions. Trade is, after all, a net contributor to productivity and economic growth. Thus, the Trump administration needs to carefully weigh the benefits of tariffs against their overall negative effects on the US economy.

It’s not just the Chinese China is not the only country to slap retaliatory tariffs on US products; the EU has also threatened to impose import tariffs on several American products, including jeans, bourbon and Harley Davidson motorcycles.

German Chancellor Angela Merkel, speaking to journalists in Munich, recently warned that “nobody would win” a global trade war triggered by Trump’s tariffs

on steel and aluminium imports, and hinted that Germany would join the EU in imposing tariffs on US products.

Lessons can be learnt from past actions.

President George W Bush had imposed tariffs on steel imports in 2002 to protect the domestic industry. A 2003 report of the US International Trade Commission concluded that the majority of firms surveyed had reported a substantial rise in steel prices, with 49% of steel-consuming companies finding it difficult to source the metal; 32% of the manufacturers suffered delays in production, and only 19% managed to pass on the price hike to their customers.

Many German experts contend that more foreign competition, not less, can revive the American steel industry. Without competition, the industry will have no incentives to make the right investments that could lead to higher productivity. �

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CONFERENCE REPORT

Highly instructive CRU’s 11th North American steel conference, held in Chicago held 1-3 October last year, was a wellrounded and well-organised event, according to Hans Mueller*

CHICAGO, called by some the ‘windy city’, welcomed delegates of CRU’s 11th North American steel conference with mild and sunny weather. CRU is a British company specialising in global market research, including the pricing of steel products and materials. In its prospectus the company promised ‘robust forecasts’ for steel products and raw materials as well as information about China's capability to manufacture value-added products.

The conference opened with remarks

by Chris Houlden, leader of an 18-strong international research team with experience in Latin American and Asian markets. He briefly outlined the history of recent events and opened the first session, which bore the ambitious title of ‘creating success out of uncertainty.’

David Cheney of Bedrock Industries – a metals, mining and natural resources

company – talked about the ability of companies to provide training for the new skills called for by changing product demand. Roy Berlin, a service centre executive, added that the workforce must be well enough prepared that, whenever it is required, the CEO could delegate responsibility down the line. However, when the interests of customers are on the line, none other than the top executive should take the case.

Growth of the US economy In a panel discussion concerning the influence of policy on domestic demand, CRU consultant Lisa Morrison investigated the question whether the US economy was able to grow at a 3% annual rate.

Upon laying out the ‘building blocks’ of US economic growth, she concluded that the 3% rate was within reach if employment

growth reached 1.4%. Adjustments for a plausible annual productivity increase of 1.7% would then move GDP growth to 3.1%. Brian Habacivch of Constellation Energy described in glowing terms the big US energy ‘revolution’ that began 10 years ago with the development of a technology to extract large quantities of oil and natural gas from shale rock. The result was the country’s transformation into one of the world’s oil and gas-producing giants and the world’s largest exporter of both liquified natural gas (LNG) and refined petroleum products.

A discussion of ‘a new trade environment’ immediately focused on China which, upon building excessive steelmaking capacity, had moved large quantities of steel into the markets of other nations, thus depressing global steel prices. The arguments for trade intervention made by Philip K Bell of the US

* North America correspondent www.steeltimesint.com

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CONFERENCE REPORT

Steel Manufacturers Association and Alan Price of the law firm Wiley Rein, therefore, had some justification, even though – as Richard Chriss of the American Institute for International Steel pointed out – caution was advised to keep from harming the business interests of the large US steelusing sector. [President Donald Trump has since announced tariffs of 25% on all US steel imports].

Risk management tools According to Tim Stevenson of Metal Edge Partners, the relative stability of iron ore and metcoal prices before the turn of the century dispensed with the need for risk-management tools. An opportunity for hedging arose when, in the new century, the prices of those materials, as well as those for scrap and steel, became highly unstable. As Mr. Stevenson explained, hedging can remove some of the uncertainty resulting from such volatility.

CME Group's Young-Jin Chang showed US HRC index futures for nearly 10 years as well as index futures forward curves, adding that both the volume and the number of participants increased during this period. In addition, she provided details about futures contract specifications for ferrous scrap traded in the US Midwest and CFR Turkey.

Lynn Lupori of CRU had been assigned the topic ‘Nafta & Global Trade Flows.’

However, the first question she formulated – about China’s impact on global trade flows – left no doubt of the direction her talk would take. She expected that in future China would allow market forces to work more freely and that the steel overcapacity issue would be resolved. Furthermore, efforts would be made to improve the investment efficiency of state-owned enterprises and to move industries into April 2018

Conference report Chicago.indd 2

more service or technology-related activities.

Among the industries selected by China as models for 2025 were those in the hightech and information sectors. Supply-side reforms would seek to improve utilisation rates and profits, encourage growth in Western China to offset any slowdown in the East, and generally tend to reduce the incentive to export. Protectionist policies by other nations, especially the USA, would remain a problem. For instance, of the 416 trade cases filed by US industries, 52% were aimed at products imported from China.

But Ms. Lupori assured the audience that niche items and specialised steel products would continue to find markets in the USA. Chris Houlden, CRU member and global steel market expert, talked about recent changes in the Chinese steel market, like the shedding of excess capacity, rising prices, and steelmakers boosting production by charging more scrap into their BOFs. A special fund had been set up to assist in the retraining of workers while persons reporting illegal steelmaking operations to government bureaus received rewards.

Some capacity cuts were the result of environmental rules ordering the closure of BOF and EAF vessels holding a melt of less than 30t. High public debts slowed infrastructure expenditures and many outages occurring in the Chinese industry contributed to keeping steel prices high.

EBITDA margins were negative from 2013 to January 2017, then showed a steep increase. Capacity utilisation rose from 70% in 2014 to 85% in 2017 and was expected to reach 90% by 2020.

Regional forecasts Josh Spoores of CRU, Curt Woodworth of CreditSuisse, and Alexander Hacking of Citi Research compared regional steel

market forecasts. Average sheet prices increased unsteadily in the markets of the US, Germany, and China. Also revealed on this occasion was that US Midwest prices were considerably above those in Germany. In mid-2017 zinc prices began to rise at a steep rate, driving up the prices of galvanised material. In comparison, rebar prices have moved along a steady course.

EBITDA is likely to rise between 2017 and 2021. The gap of cold rolled coil (CRC) over hot rolled coil (HRC) prices, which had averaged $114 since 1980, contracted to $88 from 2004 to 2007, expanded to $116 from 2011 to 2015 and will probably be at $120 by the year 2020. Over the next two years, spot sheet prices are seen to rise above monthly and quarterly prices.

Janice Bolen, of consulting company Hatch, noted that company size is not necessarily related to profitability, that at this time US integrated mills beat scrapbased EAF operators in raw material costs, and that due to global influences US pricing insufficiently reflected NAFTA's plentiful endowment with high-quality scrap. She was critical of the US industry's overall cost structure and a lacking availability of low-priced “alternative iron ore units” in the Great Lakes region. Moreover, in her view, many steelmakers were in need of downstream equipment upgrades in order to produce more differentiated products.

Raw materials and costs The last session of this conference listed a discussion by several experts of the topic “raw materials and steelmaking costs – what is needed for success?” Sarah Macnaughton of CRU mentioned important changes in major raw-material markets like the doubling of global prices since late 2015, a rise in mining costs, increased www.steeltimesint.com

11/04/2018 16:06:51

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CONFERENCE REPORT

“A discussion of a ‘new trade environment’focused on China which, upon building excessive steelmaking capacity, had moved large quantities of steel into the markets of other

”

nations, thus depressing global steel prices.

Chinese imports following the restructuring of capacity, and the threat of supply disruptions at Australian mines – dominant suppliers of both iron ore and metcoal – due to thin staffing, a lack of experienced employees and severe weather. Price increases of another material, scrap, have been supported by the widening global adoption of the EAF steelmaking method.

These prices have increased more rapidly internationally than in the US, an advantage for domestic mills. The price of ‘old’ scrap, used in EAF mills producing long products, is lower in the US than in Europe and Asia. But prices of prime scrap, used in flat products, now command a 40% premium.

Being less exposed to global ore and coal prices, US producers – except for EAF sheet mills – have watched their international competitive position improve to a moderate degree.

There is one other change that has jolted the production cost of steel, EAF steel in particular. The closure of a large Chinese producer has led to a disruption in the supply of electrodes and – probably near-term

April 2018

Conference report Chicago.indd 3

– a tenfold increase in their market prices.

According to CRU estimates, over the next 12 months EAF costs could rise as much as $40-90/ton and BOF costs $7/ton, generating risks that are likely to spill over into the scrap and iron ore markets.

Dr. Joseph Poveromo covered prices of the same materials, but with greater emphasis on costs and their effects on the competitive position of steelmakers. With respect to iron ore, he suggested that in a competitive market the present oversupply of sintering ore fines should gradually lower prices. However, the presence of three large producers in the global ore market (Vale of Brazil and two Australian companies, Rio Tinto and BHPB) has made it possible to defend a common price floor with an appropriate control of shipments. Average ore prices range from $50 to $70 per ton, with pellets and lump ores available at a premium.

Cyril Martinand of CRU provided some detail about ArcelorMittal, the world's largest steel producer, which controls 47% of steel output in Europe and 37% in the Americas. The company is also involved in the mining sector, operating two iron-

ore mines in Minnesota, another two in Canada, plus a coalmine in West Virginia.

Kevin Crary described the various activities of his company, Scrap Metal Services, which include cutting, blending, bulk shipping and trading. The company is among the top scrap suppliers to steel companies in North America.

Stefan Einfalt, of Voestalpine Texas, runs what according to CRU is the world's largest direct reduction plant. It is located in Corpus Christi (not far from a large Nucor works built at the same time). The plant came on stream a year ago and has since been producing a high-quality product, HBI (hot-briquetted iron), at its target capacity of 2.4mt/yr. There is a demand for such “virgin iron units,” especially for the purpose of extenuating the impact of impurities brought into EAF melts with lower-grade scrap.

Overall, the 11th CRU North American Steel conference can be judged as having been well organised, with most of the selected topics being highly instructive and all of the speakers well informed, some even talented. �

www.steeltimesint.com

11/04/2018 16:06:53

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CONTINUOUS CASTING

Predictive control for the right quality In a continuous processing line, steel makers face a challenge to control annealing temperature to reach the right steel quality. Model predictive control (MPC) enables them to enhance productivity, in particular during transition phases. By Cedric Perottet* CURRENTLY, most furnaces are regulated

by PDI controllers. As far as the furnace is a highly non-linear and delayed system, the pragmatism of automation operators often pushes them to invent a more sophisticated control – with prepositioning, multiple conditions control, chains of PDI and so on. But the method used on one furnace depends on its size and its usage, and thus is not very reproducible. Some steelmakers have a good knowledge of their furnaces and PDI control is acceptable. But it is not a robust method, and it is far from an optimised solution. Model predictive control uses a comprehensive model, which is proactive rather than reactive based on good knowledge of the control applied effect.

account furnace capacity. The latest version of Virtuo aims to increase control reliability during transitions. Indeed, the annealing temperature is highly dependent on the state of the furnace (radiant tubes, walls and rolls temperature, process speed).

Control management requires an advanced control system during a transition in speed and/or product (change in format, steel grade or target temperature). The evolution of computation capacities has widened the horizon of applicable optimised control methods. Among those, Model Predictive

Control (MPC) is suitable for non-linear and delayed systems. The method relies on three main steps: 1) Build a comprehensive time dependent on the physical model of the furnace.

2) Develop a state observer that will rebuild the furnace state online from a range of past measurements.

3) Generate command sequences in the control horizon. The two last steps require optimisation methods and the corresponding algorithms have to be efficient enough to be solved online.

Box 1

Optimised control methods In response to growing demand for maximising process efficiency, Fives has developed the VirtuoÂŽ thermal solution for the furnace Level 2 based on physical models and sophisticated control strategies.

Virtuo optimises the process, based on the requirements of the strip thermal cycle and metallurgical tolerances, taking into * Cedric Perottet, process engineer, fluids design, Fives Stein (Fives Group). Email: steel@fivesgroup.com www.steeltimesint.com

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CONTINUOUS CASTING

Box 2

Box 3

Box 4

Fig 1. Mesh convergence study

average understood as Box 5 Box 6

According to the expected results, the MPC can achieve an enhanced productivity by a quicker and smoother furnace response, in particular during transition. The real-time calculation based on a furnace inertia model, goes much further than any static-based model. The regulation proved to minimise average strip temperature consistency within campaign and avoid non-compliant materials due to thermal cycle. An upcoming measurement campaign will quantify more accurately consumption and productivity gains. It is expected that MPC does not use more combustible material than necessary due to a reliable control. The main elements of the model developed, based on Fives’ experience of continuous annealing lines, are presented in this paper. In a second part, the method and results of a state observer and model predictive control application to continuous annealing lines are detailed.

Radiant tube furnace model In order to use model predictive control, the first step is to develop a reliable dynamic model of a radiant tube furnace. The main elements of the unsteady strip temperature model (USTM) developed by Fives are listed below. After a rigorous study, the following assumptions are made: • Transfer mode: Convection is negligible compared to radiation • No diffusion in other direction than

the strip width • Diffusion is instantaneous in the

strip width (radiative Biot number is

smaller than 1) April 2018

FIVES process control.indd 2

Fig 2. Radiation calculation zone

• Method of incident fluxes applicable (see box 1) Heat balance on an infinitesimal strip element In order to solve this partial differential equation (PDE) numerically, one has to ‘discretise’ it. Discretisation is made with the Lax-Wendroff numerical scheme to lower numerical diffusion (see box 2).

Once the equations are implemented, it is important that the strip mesh is chosen fine enough to ensure the desired precision, but as coarse as possible to limit the computational burden. This is done by a mesh convergence study: using a very fine mesh as a reference, we compute the distance of the solution to this reference when the mesh gets coarser and we keep the mesh size that ensures the desired precision.

Radiation calculation zone In the previous section, we described how the strip temperature evolves in the furnace (see Fig.2, Fig.3 and Fig.4). In this section the way the different fluxes applied to the strip are calculated is explained.

The calculation zone is divided into several elements that are considered to be uniform surfaces (in temperature and flux).

For each configuration and strip width, the view factors are computed using the Monte-Carlo method (relying on repeated random ray generation).

The strip temperature is taken from the strip mesh values and averaged as follows, because the radiative exchanges are dependent on εT4 (see box 3).

Tube temperature is fed with the corrected temperature according to the “Tube temperature correction” paragraph.

The wall temperature comes from the previous wall state. When the radiosity matrix is solved, we get a radiative flux (positive or negative) applied on each element. Those fluxes will be used to compute the temperature evolution of those elements.

Conduction through walls is solved in time. Boundary conditions are taken as follows: • Imposed flux on the inner side of the wall, from the radiosity matrix inversion • Imposed flux on the outer side of the wall, calculated from the outside temperature, the surface temperature of the wall and forced convection at a given speed, or natural convection.

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12/04/2018 10:51:02

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Re h e a t in g f u r n ace s § Pi c k l i ng § A c i d R eg enera ti o n § C o l d Rol l i ng St r ip Pr oce ssi n g (m e ch a ni c a l , c hem i c a l & ther m a l ) § A utom a ti on DESIGN

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ENGINEERING

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COMMISSIONING

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TECHNICAL

A S S I S TA N C E

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CONTINUOUS CASTING

Tube temperature on15/04/2016

940

Temperature (deg C)

930 920 910 900 890 880 870

0

2000

8000

4000 6000 Tube length in (mm)

Fig 3. Temperature variation along instrumented tube length

Fig 4. 3D view of a radiant tube

Tube temperature on15/04/2016

50

820

Temp Max - Temp Avg (C°)

800

40

790

35

780 770

30

760 25

750

20

740

15

820

860

900

940

980

Temperature strip exit rtf

810

45

730

Tube length in (mm) Fig 5. Relationship between max temp and max temp minus ave. temp in instrumented

Fig 6a (top). Annealing temperature over 24 hour period. Blue = annealing temperature

tube

measured, black = measure uncertainty range, red = annealing temperature modelled without state observer, green = annealing temperature modelled with state observer.

Figure 6b (Bottom). Variation of strip thickness and line speed over 24 hour period.

Blue = line speed, green = strip thickness

Rolls are considered to be 0D in temperature. The mass considered is the hollow cylinder in contact with the strip, it is thus dependent on the strip width. They exchange heat with the strip by contact conduction, and the thermal resistance Rc is estimated knowing the pressure contact (see box 4).

Tube temperature correction Tube temperature is measured at the hottest spot on the radiant tube. For that reason, the temperature measured doesn’t represent well the exchanges between the radiant tubes and their environment. An instrumented radiant tube made it possible to correct this temperature and to create an average temperature law, which was found to be mainly dependent on the tube temperature measurement, and the April 2018

FIVES process control.indd 3

temperature of the strip surrounding (see Fig.3, Fig.4, Fig.5).

An empirical correlation makes it possible to find the average tube temperature (see box 6). This correction is exponentially removed when the column is off, with a time constant based on measurements.

Parameter identification Once the Virtuo® is configured and the main parameters are set, parameter identification has to be run to fit a measurement. For this, the data of one day of production including significant strip temperature variations, width and speed variations, are needed.

The parameters that are considered are: • Walls thermal conductivity • Walls density • Walls emissivity (inner side)

• Contact thermal resistance at rolls • Rolls density • Tube temperature correction • Strip emissivity at low and high temperature State observer A prior requirement to MPC is to use a state observer. Its role is to provide the feedback loop to the use of MPC detailed later. Instead of acting directly on control levers as a PDI controller would do, a state observer adjusts model parameters to fit the measure. Doing so prevents unforecastable perturbations and corrects the model defaults. As a starting point of the forecast control horizon, the state of the furnace has to be known. The state of the system is partially measured, but many state variables are not. A state observer is an algorithm www.steeltimesint.com

12/04/2018 10:51:04

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CONTINUOUS CASTING

that recreates the whole system state from available measurements (in this application, the annealing temperature mainly). It consists of a minimisation of the distance of the model outputs to the measured variables. One of the main difficulties is that this state observer has to be used online and thus has to be optimised to limit the computation time. Figures 6a and 6b show the estimation with and without using a state observer.

Model predictive control MPC is a control method using a predictive model. Three main steps can be outlined: 1. Define an objective function – Most of the time a strip temp target profile.

Can be adapted for specific requirements such as product priority or minimisation of modification of the set points.

2. Find corresponding optimum furnace control sequence using the model. The response of the radiant tubes has to be taken into account.

Fig 7.

April 2018

FIVES process control.indd 4

3. Apply the first set point of the control sequence and repeat the process for the next sample. For response time reasons, the set point is not aimed at the temperature after 10s but a few minutes in the future.

This leaves time for the burners to react efficiently.

MPC for vertical continuous galvanising lines The method was successfully applied to continuous galvanising lines (CGL) designed and supplied by Fives. The control presented here assumes that the speed is not controlled; the only possible actions are made on the power of the radiant tubes.

Speed degree as a freedom for the control is considered in section 2/, when applying the method on a direct-fired furnace (DFF) or non-oxidising furnace (NOF), because it was not possible to control the speed at the current stage of the commissioning.

Temperature control: The model only uses measured tube temperatures to compute

the exchanges between the tube and its environment. The combustion, exchanges between fumes and the tube, and heat diffusion through the thickness of the radiant tube are not solved. The first reason for this is because the power radiated by the tube to the outer environment is equal to the exchanges between fumes and the tube only if the tube temperature is constant, which is theoretically true after an infinite time, but not in transition periods – when the control has to be reactive.

The second reason is that in industrial operation, many factors may alter the theoretical conditions used to compute the energy exchanges inside the radiant tube.

For example, the exact gas composition is often unknown, burner tuning may vary, recuperator efficiency and recirculation rates are very uncertain, particularly in unsteady conditions. Controlling tube temperature with the power hides the defaults of the open loop transfer function, here the combustion step! The power of a column is

Fig 8.

www.steeltimesint.com

12/04/2018 10:51:10

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CONTINUOUS CASTING

Fig 9.

the consequence of a PID controller on the tube temperature. If the tube temperature is off target, the controller will fully open the power, which is more than the targeted power to exchange, because the energy extracted from combustion is used to heat the radiant tube. When equilibrium between inner combustion and outer radiation is reached, the tube temperature becomes steady.

In order to get a reliable forecast, at each time step the tube temperatures within the control horizon forecast start at the measurement value of the tube temperature. If the tube has to increase its temperature to reach the desired heat exchange, a maximum heating speed is considered. The tube heating rate is determined by on-site measurements.

Because of this limitation, the control is optimistic (it takes the hypothesis that the radiant tube response is instantaneous and reaches the maximum heating rate measured in operation), but this limitation makes the forecasted annealing temperature realistic. For example, when an April 2018

FIVES process control.indd 5

Fig 10.

operator suddenly increases the speed, the forecasted temperature drop in the control horizon will be slightly underestimated because the tube temperatures used in the control horizon won’t be reached as fast as assumed to be in the control horizon. The control is still correct, because the power setpoint of the radiant heated tube will be 100%, and the slow answer of the tubes is taken into account as time goes by.

Large speed drop Similar behaviour is obtained when tubes have to be cooled, except that in that case, the tube temperature drop is modeled.

This is illustrated in Fig.7 and Fig.8. In Fig.7a the annealing temperature is plotted showing: measured value, set point, model estimation and forecast temperature at 2, 4, 6 and 8 minutes supposing the optimum control path is applied. Fig 7b shows the line speed. The event we are interested in is the large speed drop that happened around 15:40 hrs, and the power demand reaction with MPC. In Fig.7c the global power demand of the furnace is plotted.

Fig.8 shows the forecast annealing temperature within the control horizon right after the speed drop at around 15:40 hrs. The green cross highlights the link between Figs 7a and 8. At this moment, right after the speed drop, temperature is forecasted to rise to 770°C. In reality, the tube temperature drop is slower than the temperature drop used in the control horizon and the temperature actually rises up to 780°C. The control takes into account the actual tube temperature evolution by recalculating periodically the annealing temperature in the control horizon using the tube temperature measured as a starting point.

The predicted annealing temperature becomes closer to reality when the tube temperature set points are close to the measured temperature (and thus, the tube temperature in the control horizon will be close to the one actually applied).

So thanks to the model, Virtuo is able to predict accurately the strip temperature evolution and apply strong control actions safely. www.steeltimesint.com

12/04/2018 10:51:16

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CONTINUOUS CASTING

47

very slowly in order for the furnace to build up power reacting to the annealing temperature change. MPC, by knowing the consequences of a changing speed, can adjust furnace power accordingly, allowing more severe speed ramps.

Fig 11.

MPC for direct-fired or non-oxidising furnaces The same principle was applied to a directfired furnace as a revamping of a CGL. The customer had trouble correctly managing transitions and needed to apply strong speed and gas flow variations to react to strong changes in steel emissivity. The MPC method made this possible and the quantity of steel out of tolerances was approximately divided by 2. Speed was used as a lever to react to an unpredictable perturbation such as a strong emissivity variation. Format transitions were managed in a smoother way than PDI regulation. MPC makes it possible to tune the control to each annealing line. The relative importance of a product can be used to prioritise some over others, so that steelmakers can choose to focus on the end of the coil or the beginning of the next one, or compromise between the two.

Fig 9,10,11 are plotted from top to bottom: annealing temperature/coil width and thickness/total gas flow/speed. The following steps can be taken: 1/Speed reduction in anticipation and gas reduction www.steeltimesint.com

FIVES process control.indd 6

consequently, allowing no over-heating.

2/ Speed change during transition. 3/ Acceleration to the optimal speed for the product (calculated or provided by the customer). The combined gas flow/speed step prevents temperature from dropping while doing so.

Fig.10 shows a format transition in addition to a cycle change. The same steps can be outlined.

Fig.11 shows how the speed was used to correct an unexpected emissivity drop between two coils. The format of the two coils is the same and an emissivity drop makes the temperature drop. In addition to a rise in gas flow, the speed is used as a lever to correct this temperature drop quickly (1/).

The speed is then raised again to optimal speed (2/).

Increased productivity In addition to reducing out of tolerance, MPC allows for increased productivity during speed ramps.

Indeed, the reactive control PDI controllers increase or decrease speed

Greater performance sought The MPC has shown its potential to enhance the control of annealing lines. The following steps have been dealt with for the implementation of MPC: 1. Develop a reliable model. Optimum control implies optimum model, the more accurate the model, the better the control.

The furnace models (RTF and NOF) proved themselves reliable.

2. Feedback loop. The feedback loop used in MPC is more sophisticated than a simple retroaction loop as used in a PDI controller.

It encompasses unmeasurable perturbations and model imperfections. A state observer is solved online by using emissivity as an adaptation parameter to rebuild the furnace state.

3. ‘Parameterisation of the control. When one wants to apply MPC, it is not possible to act on too high a number of degrees of liberty. ‘Parameterisation’ was limited to two dimensions in the furnace control.

4. Find a cost function that meets the producer’s needs. MPC is based on optimisation, and depending on the definition of the function to minimise, the control will be different.

What is important for the producer can be integrated into this cost function – product prioritisation, limit of refractory temperatures, gas flow, and all the different process constraints.

5. Online optimisation. Solving the optimisation problem online requires the use of an efficient algorithm and ‘parallelisation’ of the calculation.

An intelligent plant Applying the method to an industrial furnace requires specific reflexion at all levels. The solutions found have been included and tested in Virtuo level 2.

The method applied to RTF and NOF is very promising and tangible amelioration has been measured. This development represents a step further towards an intelligent plant.

It can take into account multiple process requirements, minimise reject rates due to temperature off limits, and increase productivity. � April 2018

12/04/2018 10:51:19

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CONTINUOUS CASTING

49

Smart casting Changing market situations demand sustainable usage of new available technologies to support steel producers with highly flexible plant configurations and tools. Investments are focused on optimising production costs and product quality. One important recent development has been the integration of process parameters across the entire production line, starting with iron making and ending with finishing processes. This article offers an overview on new developments in continuous casting including the influence of Industry 4.0 on continuous caster process modelling. By Johann Penn*, Paul Pennestorfer and Andreas Jungbauer ANALYSING the success factors of companies highlights many differences, yet relatively few similarities. A single common denominator, however, is found in all cases – the focus on innovation in products and processes. In most cases the key factor has not been revolutionary change, but the implementation of a well-established strategy and a consequent implementation.

In an open, global market no company can afford to lag behind its competitors.

This phenomenon has been termed the ‘innovation spiral’ and it is characterised by even shorter product life cycles. Under these circumstances the responsible management must be aware of the technological trends and must continually innovate their business sectors.

With a shorter life cycle, implementation of a non-suitable plant configuration will result in critical situations for a production company, clearly indicating that innovation is not only taking place considerably faster, but that there are also far greater risks involved. Knowing these realities, Primetals Technologies has decided to provide steel producers with dedicated support from the early stages of investment/innovation planning until the end of the production lifecycle using Casting Technology Consulting (CTC). The aim is to use CTC to secure success for each investment in a new casting technology, upgrade solution or optimisation of the casting process. A chief goal of Primetals Technologies is to develop long-term strategies that support customers in order for them to remain competitive and successful. The company’s comprehensive

MODEL SUITE DynaPhase Calculation of temperature dependent material properties Dynacs 3D Dynamic secondary cooling system with 3-dimensional temperature profile DynaGap Soft Reduction 3D Fast thickness change for improved quality

Fig 1. DynaPhase, Dynacs 3D and DynaGap Soft Reduction

portfolio of technologies covers the entire lifecycle of a continuous casting plant.

Continuous caster – Industry 4.0 Primetals Technologies has pioneered numerous future-oriented developments and innovations in the field of continuous casting to enable producers to remain competitive. Application of modular technological and mechatronic packages have been included in casting configurations for the last 20 years, which proved to be an excellent starting point for going further in the transition to digital intelligent production, also known as Industry 4.0 [or ‘smart manufacturing’].

Comprehensive proven technological caster

packages, therefore, have been further developed over the past three years to be ready for current and upcoming digital production needs.

High performance slab casting Today continuous casting is considered to be a mature process and technology.

But the ever-greater demands for quality and the ongoing development of steel grades mean that the quality level at every stage of the casting process will continue to grow in importance in the future. The focus on innovation planning is, therefore, to optimise the parameters for setting the process models and modifying the design and configuration of casters with new

* Johann Penn, Primetals Technologies GmbH, 4031 Linz, Austria. Email: johann.penn@primetals.com www.steeltimesint.com

casting PRIMETALS.indd 1

April 2018

12/04/2018 10:52:41

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CONTINUOUS CASTING

upcoming challenges in continuous casting.

The combination of moveable spray nozzles (3D Sprays), the latest nozzle generation DynaJet Flex and the DynaTac secondary cooling package yields unprecedented quality results.

The results of the Dynacs 3D model are a necessary input for the DynaGap Soft Reduction system, which optimises the inner quality of the cast strand.

Fig 3. Visualisation of the centre temperature

functions. The models described have been developed for slab casting machines, but in recent years widely used for bloom and billet casters too.

The caster as a cyber-physical system Model-based process automation control means linking the real plant with the virtual plant (digital twin) in a so-called ‘CyberPhysical System and this is achieved by modelling and simulation of the casting process. The models are not only used online for the optimisation of the casting process, but also for offline-simulation to develop new strategies. The models can also be used for the design of the casting machine.

A set of models considering all aspects of the solidification process have been developed and all of them have been put together in the Continuous Casting Model Suite (Fig.1).

The new model suite takes precision and control possibilities to the next dimension allowing completely new philosophies for secondary cooling and soft reduction.

from the slab surface resulting from radiation, heat transfer to the rolls, natural convection and spray water. Furthermore, it can be applied for both spray cooling and air-mist cooling. It takes into account the spray-distribution pattern of the nozzles and spray water temperature to ensure that an accurate spray-cooling heat transfer prediction is made, which results in an even more precise determination of the strand surface-temperature profile and the final point of strand solidification (Fig.2).

Based on precise temperature calculations, the Dynacs 3D model can specify the desired surface temperature not only along the strand length, but also across the strand width. Even individual control of the water flow and positioning of each cooling nozzle is possible. The control algorithms of Dynacs 3D calculate the water-flow set-points to achieve the target strand-surface temperature values.

Application of Dynacs 3D allows development of completely new philosophies to set up cooling practices for

DynaGap Soft Reduction The DynaGap Soft Reduction package is based on a combination of Smart Segments and the Dynacs 3D thermal tracking module. It dynamically adjusts the roll-gap profile even in transient casting conditions.

Flexibility in soft reduction Twenty years ago former Voest Alpine Industrieanlagenbau introduced the ASTC system as the benchmark in dynamic soft reduction technology. Since this time, dynamic soft reduction has been regarded as a fundamental method in improving the internal quality of slabs, in particular, reducing centre segregation and porosities to a minimum. With DynaGap Soft Reduction technology, the advanced secondary cooling model Dynacs 3D and the proven Smart Segment design, steel producers remained on the cutting edge of continuous casting technology for years.

Even though process models have improved significantly over recent years, the efficiency of dynamic soft reduction was always limited by the ‘discretisation’ error, which occurs if segment rollers cannot be positioned individually. The discretisation error increases with the Fig 3. Single Roll DynaGap strand guide segment

DynaPhase – calculation of material properties The DynaPhase software model calculates all thermo-physical data used by Dynacs 3D and is available as an online tool to determine the material properties for the current steel grade analysis. This is a unique feature that makes it stand out from the competition.

Using offline simulations of DynaPhase together with Dynacs 3D allows metallurgical development of new steel grades.

Dynacs 3D – secondary cooling system Dynacs 3D accurately assesses heat transfer

www.steeltimesint.com

casting PRIMETALS.indd 2

2

3

4

1

Individual roller units

2

Holding frame

3

Supporting columns

4

Proven design of outer bow frame

5

Star roller

6

Standard segment fixation and automatic water connections

1 5

April 2018

12/04/2018 10:52:42

52

CONTINUOUS CASTING

Slab surface temperature (°C)

1100 1080 1060 1040 1020

DynaTac

1000

Fig 4. Temperature increase by DynaTac

980 960 940 920 900

Conventional cooling (very soft) 0

5

10

15

20

25

30

35

45

40

Strand length (m)

Temperature performance package High-temperature casting, or so-called dry casting, will be used to a much greater extent in the latest casting machines for the production of surface crack-sensitive steel grades such as medium micro-alloyed grades and advanced high-strength steels. To achieve this goal, the caster can operate with or without minimal external spray cooling in the bow and straightener area; the objective is to keep the surface temperature above ductility toughness during unbending in the straightening zone (Fig.4).

To prepare for this upcoming requirement, a package has been created which can be installed on new as well as on existing machines for high-temperature casting that covers everything starting from metallurgical process modelling to heat resistance and reliable strand-guide structure.

DynaJet Flex Today, secondary cooling of continuous casting machines typically involves airmist nozzles to guarantee a wide turn down ratio (typically 1:9), which is the highest to lowest water flow without jeopardising spray pattern uniformity.

To prevent corner cracks the zones are April 2018

casting PRIMETALS.indd 3

additionally split into centre and margin strips across the casting direction. DynaJet Flex is the new cooling system, which takes the discretisation of cooling zones at casting machines to the next level. By using water-only nozzles, which are driven with a pulse width modulated signal, it is possible to increase the turn-down ratio from the air mist limit from 1:9 to 1:15 and higher to reduce operating costs by 70% through reduced air consumption.

The system can be installed on a segment during a planned maintenance cycle. After reinserting the segment into the machine, DynaJet Flex is immediately activated. From then on the segment is ready to operate and provides drastically refined cooling control for an optimal slab temperature, both longitudinally and transversely. The DynaJet Flex nozzle has a robust standard flange, which can be fixed to the existing piping system (Fig.5). Every available nozzle tip can be mounted on the nozzle head to deliver the required spray pattern.

High speed long product casting In billet casting, the DiaMold mold tube also features a tapered mold tube that compensates for billet shrinkage during Water

High quality long product casting Large bloom sections are required when final steel products of the highest purity and internal quality for high-end applications in the automotive industry are being produced. The new continuous bloom caster, installed at Hyundai Steel is equipped with the state-of-the-art features required for achieving superb quality in the cast product. The main features include: dynamic soft reduction (DynaGap 3D), 3D dynamic secondary cooling system (Dynacs 3D), on-line DynaPhase model, air-mist spray cooling, high temperature casting (DynaTac), Mold Expert, mold EMS, final EMS and others. All of these features are necessary to produce cast material for drive shafts, crank shafts as well as bearing grades.

In other cases, an increase of productivity

Control air Fig 5. Functional chart (a) and example (b) of the nozzle

Nozzle

decreasing length of the mushy zone and disadvantageous positioning of the point of final solidification right in the middle of one segment.

The recently developed Smart Single Roll DynaGap (SRD) segment type allowed for a fully dynamic alignment of individual rollers and, therefore, an optimum gap alignment within the mushy zone by avoiding any discretisation deviation from the optimum gap (Fig.3).

cooling and chamfered mold-end corners.

Billet casting speeds of 6.2 m/min were achieved at EGE Celik in Turkey for 130 x 130 mm billet casting sections.

High-speed casting, of course, is only possible when mold oscillation, moldheat extraction, secondary cooling, and integrated process control and monitoring systems are fully co-ordinated to ensure safe and long-term high-speed casting processes.

Considering this experience the WinLink process was developed as a 1, 2 and 3-strand solution.

In a recent plant example the 3-strand WinLink caster is linked with one-strand directly to the rolling mill to feed the product in endless mode (Fig.6). In the semi-endless configuration the 3-strand WinLink caster feeds the rolling mill with cut billets, which are produced on 2 strands. A conventional operation is also possible, where the three strands produce billets to be cooled on a cooling bed.

Ca

g stin

ion

ect

dir

(b)

(a)

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CONTINUOUS CASTING

and further improvement of internal and surface quality of the billets and blooms are required on existing machines.

A proven revamping solution is a new machine head, including DiaMold mold tubes and retractable DynaFlex hydraulic oscillators featuring inline stroke adjustment, non-sinusoidal and inverse oscillation and a newly designed secondary cooling system. This system allows the mold to be exchanged on the strand without interrupting the casting process, which increases the productivity and flexibility of the caster. Such revamps are performed within a short downtime of only one month.

Fig 6. WinLink high speed billet caster

Special steel casting New generations of flexible casting machines capable of efficiently casting varying product mixes of new steel grades and product sections will be introduced.

These include tailor made heavy section casters, vertical casters, and highly economical casters that will better meet the requirements of critical product applications and niche markets as well as low volume markets.

Heavy section bloom vertical casting Vertical slab and bloom casters with specially designed roller drive units enable a wide range of highly critical steel grades to be continuously cast that would otherwise be impossible to produce using conventional bow-type casters. This solution provides access to specialised niche markets with highly attractive profit margins.

An example is the development for Zhongyuan Specialty Steel of a new generation of heavy section round caster which substitutes the current ingot casting

Continuous slab caster from Primetals Technologies

(Fig.7).

The key element in this type of caster is the multi-roller drive unit, which provides

excellent internal bloom quality and low tensile stress over the entire cross-section.

In addition to lower CAPEX – thanks to

Production capacity: 370,000 tpy Heat size: 60 t Metallurgical length: 23 m Bloom dimensions: Ø400, Ø600, Ø800mm Max. casting speed: 0.55 m/min Cut length: 2.5-6m Strand centre distance: 3,500 mm Steel grades: - Tool and die steel - Stainless steel (non-magnetic, dual phase, forging) - Heat resistant steel, Ni-based alloys - Structural steel - Bearing steel - Ultra-high strength steel

Fig 8. Plant layout of a semi-continuous caster

Fig 7. 2-Strand vertical round caster for Zhongyuan Specialty Steel, China

April 2018

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CONTINUOUS CASTING

55

the reduced height of the caster resulting from implementing the patented multi-roller drives, a significantly reduced OPEX is also expected compared to current ingot production.

5.2. Semi-continuous casting The new semi-continuous casting technology can be seen as a combination of ingot casting and conventional continuous casting for production of single blooms, especially rounds from ø 300 mm up to ø 1500 mm at a length of up to 12m. The process is split into two steps: • Step 1 - Casting: Quick casting and formation of a strand shell as at continuous casting machines. The casting speed is determined and limited by achieving a self-carrying strand shell to withstand inner ferrostatic pressure.

• Step 2 - Final cooling: Slow solidification of the inner strand by controlled cooling. This keeps the inner strand liquid for a longer time and performs an inner structure similar to ingot casting.

The process can be realised in a special machine, which needs an investment somewhere between that of ingot and continuous casting machinery and is capable of producing single blooms, especially round blooms from 300 mm to 1500 mm at a length of up to 12 m. Closed casting can be done with a tundish or directly from the ladle into the mold if just one strand is fed. The machine consists of conventional continuous casting floor equipment, a machine head with copper mold, hydraulic oscillator and a short secondary cooling zone. Mold and strand stirrers enable homogenisation of the solidification structure. A special withdrawal unit with rack rail or spindle drive, depending on stroke and bloom size, moves the strand downwards into a tertiary cooling zone where the final solidification takes place. The final solidification time can be influenced and lengthened by static or dynamic heat shields for radiation control. The full range of automation tools, especially those that determine quality, like the DynaPhase online material model and Dynacs 3D cooling control – both proven continuous casting technology – are available.

The machine concept is rather flexible. Depending on production quantity, bloom sizes, steel grades and the up- and downstream arranged facilities, the casting floor equipment, the machine head with mold, oscillator and secondary cooling can be designed as portable or stationary (Fig.8).

Outlook The steel industry has witnessed some interesting times of late.

Years of impressive growth in certain regions of the world have led to a state of over-saturation, if not partial paralysis. Everywhere in the world, producers are looking into potential upgrading measures for their facilities. Under current conditions, one of the few recipes left for success is to target high-end steel grades through modernisation and to look for distinct market niches.

Primetals Technologies is focused on supporting steel producers with ongoing further development of their continuous casting technology from a processing and automation perspective as described in this article. �

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References [1] Penn, J. and Aschauer, D., What’s next for continuous casting?, Proceedings, European Continuous Casting Conference, Graz, Austria, (2014).

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SAFETY

Zero harm is our goal The World Steel Association (worldsteel) and its member companies believe that nothing is more important than the safety and health of the people who work in the steel industry. This might sound like an imposition, but it’s not, or rather it doesn’t have to be. A safe plant is a well-managed plant, a wellmanaged plant is under control, and workers in a safe plant are engaged and committed. The discipline required to operate safely will also deliver improved quality, reliability, yield, delivery and cost reduction.

By Andrew Purvis* WORLDSTEEL and its members follow a zero-tolerance approach towards reporting and eliminating the underlying causes of serious safety incidents. This approach has contributed to significant decreases in injuries and serious safety incidents in the steel industry over the past few years.

Through relentless leadership efforts, the steel industry has achieved significant improvements in safety and health. This year the average lost time injury frequency rate (LTIFR) across reporting steel businesses has fallen to very close to 1. While we still have a long way to go to achieve a zero harm steel industry, this represents a significant step in the right direction.

One of the most important initiatives taken by the industry in recent years was the establishment of Steel Safety Day in 2014. Steel Safety Day reinforces awareness of the most common causes of safety incidents and creates a safer working environment across the entire steel industry worldwide.

Steel Safety Day is always held on 28 April to be aligned with the International Labour Organisation’s World Day for Safety and Health at Work, and worldsteel and its member companies encourage the entire steel industry to perform site-wide safety audits during the months and weeks leading up to the day itself. Participation in Steel Safety Day supports the elimination of serious incidents and injuries across our industry.

The purpose of Steel Safety Day is to reduce the risks associated with the most common causes of serious injuries within

Lost time injury frequency rate (LTIFR) 2004-2016 (including fatalities, per million hours worked) 6 5 4 3

2 1 0

2004

2005

2006 2007 2008 2009 Employees

2010 2011 2012 2013 2014 Contractors Total

2015

2016

Fig 1. The Steel industry is a safety place to work than ever before

* Director, safety, health and environment, worldsteel. Email: Purvis@worldsteel.org www.steeltimesint.com

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SAFETY

HOW DO WE REDUCE THE 5 MAIN CAUSES OF INJURY

Identify potential process safety hazards that could cause explosions

Isolate, lock or pin all energy sources before any machinery is accessed

or fires and take adequate precautions Ensure all on-site traffic road, rail, pedestrian - operates

Provide regular

safety and remove all unnecessary traffic

training, appropriate

Ensure regular

harnessing equipment

checks are in place to

and ensure checks are

remove or secure objects in risk areas

in place when working at heights

Fig 1. The five main causes of serious safety incidents within the iron and steel industry Fig 2. The potential for serious accidents caused by interaction between people and industrial traffic is high

Road • Induction procedures should include clear instructions about the traffic code • Entrance control must ensure only authorised or escorted vehicles come onto the site

PROCEDURES

• A register of authorised company and private vehicles and licensed drivers should be maintained • Routine medicals for all drivers to include sight and hearing checks • Always wear a seatbelt • Never use a mobile phone while driving • Separation is key to safe interactions between pedestrians and many types of mobile

Rail • Safe working practices should be established and maintained for all relevant aspects of railway operations • Designated pedestrian crossing should have predetermined design criteria and guidelines specifying when they are required • Design and location of level crossings are to be risk assessed to determine the level of protection required • Procedures for rail traffic regarding approach and parking adjacent to crossings must be followed • Specific clearance distances must be set regarding distance between road and rail lines (except for crossings) • Track isolation is mandatory for any work being undertaken on road/rail crossings

equipment, especially forklifts.

• Areas in which bicycles and motorbikes can be used must be carefully considered

STANDARDS

and controlled • Designated pedestrian walkways must be built • All signage and road markings have to be clear and easily visible • An audit to ensure integrity of road infrastructure must be integrated into maintenance • Procedures dealing with abnormal weather conditions should exist

• High visibility PPE around railway tracks is defined • Rolling stock should be highly visible with lights and warning devices on all locomotives • Procedures must exist for minimum distances from tracks • A separate risk assessment must be undertaken for all molten metal routes • Procedures must exist regarding isolations of track for maintenance

• Adequate and sufficient parking areas must be made available

Table 1. Key issues to consider when auditing road and rail

April 2018

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SAFETY

the iron and steel industry. The day is a symbolic time when the steel industry pauses, takes stock and a long hard look at its working practices and conditions. The big question is: “is this safe?... and if not what needs to change to make it safe?”

Steel Safety Day audits focus on the five main causes of serious injuries and cover all company operations, engaging every employee, contractor and service provider.

In 2017, participation records were broken, with 440,000 people from over 1,000 sites worldwide taking part. Nearly one million employees and contractors work at sites involved in the audit. Auditors included contractors and employees, shop floor operators, cleaners, managers and CEOs. Steel Safety Day is an industry-wide initiative designed to identify and manage the areas of hazards and risks associated with the top five causes of serious safety incidents in the steel industry: moving machinery, falling from heights, falling objects, on-site traffic and process safety incidents, with the ultimate target for the industry being the 'zero' goal: an injury-free and healthy workplace.

During Steel Safety Day we encourage audits covering these critical areas, and each year, one of the five causes is highlighted and special attention given to raising awareness of how to prevent associated risks.

A typical steel plant makes several million tonnes of finished steel. To achieve this, vast quantities of raw materials must be brought onto the site, and equally staggering amounts of byproducts and finished steel must be moved off site and delivered to customers.

To provide some numbers – in a typical day a small to mid-size steel plant making around 3Mt/yr of steel, one would expect to receive around 7kt April 2018

world steel association.indd 3

of coal, along with 11kt of iron ore. At the same time around 3kt of slag and 8kt of steel are taken away.

This material is moved around by conveyor, but also by rail, heavy road and off-road transportation, often through congested sites that have evolved rather than been designed. At the same time a regiment of people move on to and off site at every change of shift, while contractors and other service providers come and go throughout the day and night.

The potential, therefore, for serious accidents caused by interaction between people and industrial traffic is high, and this year worldsteel will be highlighting the importance of auditing risks and hazards associated with on-site traffic.

During Steel Safety Day we encourage audits covering these critical areas, and each year, one of the five causes is highlighted and special attention is given to raising awareness of how to prevent associated risks.

There are a number of key areas to consider when auditing risks associated with on-site traffic, these should include both the standards and procedures for the design, construction and operation of onsite road, off-road and rail infrastructure, but also risk associated with interactions between different modes of transport and between light and heavy equipment and employees.

Loading and unloading of both road and rail transport are also high-risk operations and must be carefully considered and executed. All loading and unloading procedures should have a heavy emphasis on separation and removing personnel from the area of activity.

The steel industry in 2018 is a more dynamic and safer place to work than it has ever been, but we have yet to deliver our goal of zero harm. Worldsteel stands ready to support the steel industry and can deliver a bigger, more engaging and more effective Steel Safety Day in 2018. �

www.steeltimesint.com

12/04/2018 11:50:23

Please visit us at METEC on 28.06-02.07.2011

64

ENVIRONMENT

Stainless steel stops leaks Repair sleeves are found in the tool box of virtually every water utility. They allow quick repair of leaking water pipes without replacing them. Often fabricated from molybdenum-grade Type 316 stainless steel, they reduce water wastage and are yet another way that molybdenum helps sustain Earth’s resources.

By Curtis Kovach* IN 97 CE, Emperor Nerva Augustus appointed Sextus Julius Frontinus curator acquarum (water commissioner) of the city of Rome. The city was founded over 800 years before, and by then had a highlyrefined water system. Nine aqueducts carried water to the city from the Tiber River and other sources, and wells within the city supplied additional water.

Archaeologists estimate these sources delivered between 500,000 and 1 million cubic metres of water each day. A system of clay tile, lead pipes, and free-flow channels interconnected with tanks, basins, and reservoirs, distributed water to the city, which at its height reached over 1 million people. As a comparison, Tokyo’s water authority today serves some 12.5 million people delivering just over 4 million cubic metres per day.

According to his treatise ‘De aquaeductu

urbis Romae’, Frontinus was concerned with a potential shortage of water for a variety of reasons. They included periods of drought, city growth, the demands of Rome’s many fountains and baths, leaky old pipes and, most importantly, the loss of taxes by theft. The problems of water loss and potential shortages remain the same today as Rome is facing a drought and reportedly is losing 44% of its water to leakage and theft.

Of course these issues concern not only this ancient city but municipalities around the world.

Technicians are reviewing the steps required to install the

“Mock” installation of a custom-fabricated Type 316 stainless steel repair sleeve. The technicians are practicing the under-

sleeve correctly. © Charleston Commissioners of Public Works

water installation on a piece of pipe in the dry. © Charleston Commissioners of Public Works

Water loss in municipal distribution systems The American Water Works Association (AWWA) sets a standard for leakage in new pipes, which applies at the time of installation and testing. The allowable

leakage is based on the pipe diameter and length, the number of joints, and the water pressure. As time passes, the ground moves, pipes deflect and corrode, and gaskets deteriorate, all of which increase

* IMOA consultant April 2018

Water environment.indd 1

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ENVIRONMENT

65

A leak in a water main can lose a large amount of water in a short time. © iStockphoto/Giorez

a need to repair, replace or newly install some 21,000 kilometres of pipe each year.

Most of this is in diameters of 100–500 millimetres, used for smaller mains and distribution piping.

Type 316 stainless steel repair clamps are used to stop pipe leaks without replacing lengths of pipe. © JCM Industries, Inc.

leakage. Many municipalities have programmes to manage pipe leakage and replacement. Pipes are typically considered for replacement after 30 to 50 years of service. However, the best management plans can be turned upsidedown by Mother Nature. While pipes with low corrosion rates in stable soil have been known to last more than 100 years with little or no leakage, pipes in less stable conditions might need replacement after only 25 years of service.

Older systems are typically plagued with higher water losses. For example, Washington, DC, which has a 100-year-old water system, loses some 35% of its water on the way to customers. Meanwhile, its neighbour to the south, the growing and affluent Fairfax County, loses less than 3% of its water because the pipes are quite new and the county has the resources to support a strong maintenance programme.

United States municipal water systems are estimated to have about 1.6 million kilometres of distribution piping. There is www.steeltimesint.com

Water environment.indd 2

The ‘Repair Sleeve’ solution When a leak occurs, it is not easy to replace a length of pipe because the pipe is buried and it is tied into a pressurised water distribution network. A cost-effective solution is to repair the portion of pipe where the leak is located.

Stainless steel has long played an important role in repairing leaking pipes without having to replace a section or dig up an entire length of pipe.

The method employs a ‘collar’ fastened around the leaking pipe instead of welding or threading a replacement section.

It is like a bandage wrapped around one’s finger. Here, a 304 or 316 stainless steel band with an attached rubber gasket is fastened around the pipe, over the damage. Tightening the clamp, or sleeve, applies more sealing pressure on the exterior of the pipe than is on the interior, stopping the leak.

These sleeves are widely used and are readily available for almost any pipe size, although mostly for pipes greater than 300 mm in diameter. They can also be used to add branching tees and to make general repairs. They have even been used to add a tee to reinforced concrete pipe; here the device strengthens the pipe that has had its reinforcing bar cut to make the tap. One municipality has used them with concrete pipe having diameters as large as 1200 mm. The overriding advantages of repair sleeves are their ready availability, low cost, durability and cost-effective installation.

Molybdenum completes the seal The sleeve’s metal component is almost

always stainless steel, most commonly Type 304 because it is compatible with many soils. However, when soil corrosion is a concern, molybdenum-containing Type 316 is specified because it is very resistant to both general corrosion and pitting. Recently, some manufacturers have been offering molybdenum-containing 2205 duplex stainless steel as a superior alternative to Type 316. Duplex 2205 has more than double the strength and is resistant to stress-corrosion cracking and general corrosion. High strength is important because the outer metal sleeve is subjected to considerable stress as it is tightened to seal the rubber sleeve.

Adaptability for special needs Some manufacturers provide engineering and fabrication services for custom-made sleeves for critical applications. One supplier, for example, undertook a very difficult underwater repair of a failed 610 mm diameter HDPE plastic pipe for the city of Charleston, South Carolina. This 4.8-bar water main failed at a fusion joint on the harbour bed under 7.5 m of water.

Initially, the Charleston Commissioners of Public Works made a repair using a stock Type 304 sleeve and coated carbon steel restrainer. However, for a permanent solution, the authority desired a more robust sleeve that would support high stresses on the pipe and assure good longterm performance.

They asked the fabricator to engineer and build a new sleeve to completely encapsulate the repair sleeve, and to build a restrainer to relieve stresses on the extending plastic pipe. In addition to designing and fabricating the new Type 316 sleeve, the project specification included a dry run to test the anticipated difficult installation under 7.5 m of water. The new sleeve was installed in 2004 and has performed very well, with no problems reported to date.

Stainless steel repair sleeves have been used for decades to repair municipal water pipes at the point of leakage. As water scarcity becomes more pronounced, water authorities increase their efforts to reduce water loss. Simultaneously, the need for repairs increases with the aging water infrastructure and the lack of funding for wholesale replacement. Repair sleeves will, therefore, become even more important in the future. � April 2018

11/04/2018 16:20:13

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Benefits of EAF shell exchange in refractory consumption

The advantages of relining an EAF off-line by exchanging the shell rather than re-lining in situ are greater safety for personnel, increased productivity and lower refractory consumption. A comparison of four plants using shell exchange show exchange times varying from 1.33 to five hours depending on shell size, only half the time required for in-situ relining. By F Memoli*, S A Guzmán*, M Manzoni**, A Grasselli**, M Pozzer** and M Pustorino** BECAUSE of the continually growing competitiveness within the steel industry, Electric Arc Furnace (EAF) refractory linings are not only required to last longer, but also to require only minimal repairs during a campaign to minimise interruptions in production. The refractory lining wears out due to different types of loads: Two are the load stresses caused by the weight of the metal on the refractory and the thermal load, both of which cause plastic and elastic deformations of the lining[1]. Two other wear mechanisms are the mechanical and chemical erosion of the lining by the slag and metal[2].

The wear rate depends on a number of factors: The geometry of the EAF and that of the refractory lining; the refractory materials; the metallic raw materials charged and the EAF operating process adopted,[3] as well as the grade of steel being made. The refractory wear starts at the slag line – where it is more affected by

erosion and chemical attack – and then on to the rest of the lining.

Typically, an EAF lining can last between one week to four weeks before it has to undergo a general reline, depending on the residual thickness on the refractory wall.

The type of EAF refractory maintenance procedure can be divided into two categories: • In-situ EAF refractory maintenance – Stationary shell • Off-line EAF refractory maintenance – Interchangeable shell Due to the harsh environment and the need to perform the refractory repair quickly to allow production to restart, insitu maintenance does not assure that the relining is always completed properly.

Also, due to that reason, once restarted, the EAF is constantly monitored heat after heat to see how rapidly the lining is wearing out.

If a particular area of the lining is wearing

out too fast, production is interrupted and the maintenance crew proceeds with gunning that area to reshape the lining.

Classic gunning maintenance work involves very hard manual labour to manipulate a lance in front of a hot furnace. This requires at least two operatives[4].

Today laser scanning and gunning robots are being employed to resolve the safety concerns and operational effectiveness of the gunning practice, but they do not resolve the issue of needing people to control the relining work in a harsh environment.

In the case of off-line maintenance, the steel plant has two interchangeable EAF shells, so that when one of the shells is in operation, the other is undergoing relining.

In this way, the refractory relining is performed on a completely cold furnace shell, enabling people to work under better conditions, and with sufficient time to properly repair damaged areas.

*Tenova Inc, 100 Corporate Centre Drive, Coraopolis, PA, USA, 15108 +1 (412) 262-2240 francesco.memoli@tenova.com; sergio.guzman@tenova.com **Tenova S.p.A. Via Gerenzano, 58, 21053 Castellanza VA, Italy +39 (0331) 444-111 marco.manzoni@tenova.com; andrea.grasselli@tenova.com; mauro.pozzer@tenova.com; michele.pustorino@tenova.com www.steeltimesint.com

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68

ELECTRIC STEELMAKING

Fig 1 Crane lifting EAF shell in plant 1

EAF shell change The interchange of EAF shells is a structured and codified maintenance operation that is planned in detail by the plant maintenance manager using the following criteria: • Safety at all times of personnel involved directly and indirectly in the operation; • Efficiency in the sequence of operation to minimise maintenance time and associated risks; • Effectiveness of the performance of each maintenance crew member.

Maintenance personnel undergo strict safety and operational training before being involved in the operation.

Based on observations at four plants studied, 15 main operations are performed during an EAF shell change.

1. Cooling-down of the furnace shell prior to commencement of maintenance; 2. Disconnection of electrical power and opening the circuit breaker; 3. Disconnection of hydraulic power and switch off the hydraulic station; 4. Close the main gas valves (oxygen, natural gas, nitrogen, argon); 5. Switch the furnace controls into ‘shell change mode’; 6. Disconnect the hoses for water; lime; carbon; oxygen; natural gas; hydraulic; argon/nitrogen; 7. Mechanical disconnection of the shell from the furnace tilting platform; 8. Connect the shell to the overhead crane; 9. Move the EAF shell from the tilting platform to the ground or to a transfer car; 10. Clean the furnace tilting platform while the shell is removed; April 2018

Tenova.indd 2

Fig 2 Upper shell being removed from the platform

11. Move the replacement EAF shell from the ground or transfer car to the tilting platform; 12. Connect the EAF shell to the platform; 13. Re-connection of all hoses; 14. Power up the hydraulic system; 15. Connect electrical power by closing the circuit breaker.

Shell change for plant 1 This company produces reinforcing bars (rebar) and has annual sales of about 3Mt. A large portion of this company’s steel is made in two conventional 90t Tenova AC EBT EAFs, each producing about 600kt/yr of liquid steel.

This plant requires a minimum of 60 minutes after the last tap to cool before anyone can approach the furnace for maintenance. While hoses are being disconnected from the furnace, some platform cleaning can be carried out around it. Disconnection of hoses take about 30 minutes. At the same time the shell is disconnected from the platform. At that point the crane is attached to the shell at four points and it is lifted off the platform.

This plant has a crane capable of lifting the full weight of the upper and lower shell combined so a full shell replacement can be performed using only one crane (Fig 1).

While the shell is being moved from the platform to the maintenance bay, additional cleaning of the platform using pressurised water takes place to remove slag debris and scrap. Then the crane moves to pick up the replacement refractory lined shell and places it on the tilting platform where it is secured. All hoses are then reconnected and the power restored. The EAF is ready to start. The total time for the entire shell

change, from power-off to power-on takes about three hours 45 minutes.

Shell change for plant 2 The second company specialises in hot rolled engineering steel grades and cold drawn bars, peeled bars, lathe turned bars and other products. They operate a Tenova 85t Consteel® EAF, with an annual production of 700kt/y.

The EAF shell is cooled down for a minimum of 100 minutes before starting the shell-change. Due to the weight of the EAF shell and the limited capacity of the hot-metal crane, two cranes are required to lift the entire shell without splitting it in two. The use of two cranes in simultaneous mode for the interchange of shells is a challenging task, but well accomplished by experienced crane operators.

The shell is lifted onto a transfer car and transported to another building for relining.

The total time for the entire shell change operation, from power-off to power-on takes about four hours.

Shell change for plant 3 The third company is one of the main steel producers in Europe, specialising in steel for construction. They run a Tenova conventional 105t EBT AC EAF, which produces more than 1Mt/yr.

The difference between Plant 3 and Plant 2 is that due to the total weight of the furnace, the cranes cannot lift the entire weight of the EAF shell, so the upper and lower shell segments have to be split for shell interchange. Two cranes are used simultaneously to lift and move the segments (Fig 2). This adds complexity and time to the operation, yet the shell exchange practice is preferred to relining www.steeltimesint.com

12/04/2018 08:43:13

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70

ELECTRIC STEELMAKING

Fig 3 Positioning of the relined bottom shell

the EAF in-situ on the platform.

The upper and lower shell segments are moved to a transfer car which transports them to the maintenance area. Meanwhile, the relined bottom and the new upper shell are collected from the furnace aisle and moved onto the furnace platform (Figs 3 and 4).

It takes about 100 minutes to remove the used shell and replace it with a relined shell. This takes longer than in the previous two cases because of the need to split the shell. Splitting also requires additional in-situ refractory work to be carried out once the upper shell is connected to the bottom shell. Certain areas of the refractory lining cannot be completed until panels are placed on top of the bottom shell. In addition to that time, the tilting platform undergoes a full cleaning procedure, which takes 40 minutes. The total time for the procedure of shell change is about 5 hours,

Fig 4 Positioning of the new upper shell

although being the longest time, is still within range of the others.

Shell change for plant 4 The fourth company offers special quality steel as carburised steels, austempering, surface tempering, boron steels, steels for springs, and for various other applications.

It runs a 95t OBT furnace and produces a little over 700kt/yr. The EAF, LF and caster are all in the same bay and the EAF can be reached by the hot metal crane.

The plant typically carries out the shell change during the morning shift, however, because the shell change requires the caster hot metal crane, exchange has to wait until the last ladle has been taken to the CCM turret. In the mean-time, all the hoses except for one water inlet and one outlet jumbo hose are disconnected and the furnace is left to cool down. Cleaning of the slag pot area is performed during this wait.

PLANT DATA SUMMARY

Plant#4

Plant#1

The shell change operation is extremely efficient and quick, it averages a little more than 90 minutes although there have been several times in which the entire turnaround from power off to power on took less than 40 minutes (Fig 5). The personnel employed in this task are extremely well prepared, and plant logistics are good.

Not only does this plant have the fastest old shell to new shell turnaround time, but also employs the smallest crew to do that just 10 people. The total time for the shell change procedure is about 1.66 hours.

Benefits of shell change versus in-situ Safety, productivity and consumption of refractory all benefit from shell exchange rather than re-lining in situ.

Safety There are many operational benefits when it comes to performing a complete shell

Plant#3

Plant#2

Campaign duration

2 weeks

2 weeks

2 weeks

3-4 weeks

Shell interchange method

Full shell

Full shell

Split shell

Full shell

EAF tapping size (metric)

95 t

90 t

105 t

85 t

EAF Shell change timing (minutes)

Plant#4

Plant#1

Plant#3

Plant#2

Minimum cooling down time required

20

60

60

104

Electrical/hydraulic power disconnection

5

30

30

10

Hoses disconnection

20

30

30

12

Mechanical disconnection of the shell from the platform (hidden time)

0

0

0

0

Shell connection to the overhead crane

2

10

5

9

Movement of the EAF shell from the platform to the ground/transfer car

5

20

35

18

Tilting platform cleaning operations

10

30

40

30

Movement of the EAF shell from the ground/transfer car to the platform

8

20

60

30

Connection of the shell to the platform

2

5

15

10

Hoses reconnection

25

15

20

20

Minimum time required for powering up the electrical and hydraulics

5

5

5

5

102

225

300

248

Total time for the maintenance sequence

Table 1 compares the four plants shell exchange times.

April 2018

Tenova.indd 3

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12/04/2018 08:43:14

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72

ELECTRIC STEELMAKING

Minimum shell change crew

Plant#4

Plant#1

Plant#3

Plant#2

Mechanical personnel

2

7

4

6

Electrical personnel

2

2

2

1

General cleaning personnel

4

4

4

4

Crane operators

2

1

2

2

10

14

12

13

Plant#4

Plant#1

Plant#3

Plant#2

Water hoses

4

2

5

26

Lime hoses

6

0

2

0

Carbon hoses

3

3

2

2

Oxygen hoses

10

8

8

4

Natural gas hoses

7

4

4

2

Hydraulic hoses

2

5

2

4

Lubrication hoses

0

0

0

0

Argon/Nitrogen hoses

0

4

3

3

Total number of hoses

32

26

26

41

Plant#4

Plant#1

Plant#3

Plant#2

Number of connection points between the shell and the lifting frame

4

4

4

4

Number of cranes needed to lift and move the EAF shell

1

1

2

2

TOTAL Shell Change Crew Number of hoses to disconnect/connect

Cranes and connection to the EAF

Table 2 summarises the personnel and activities required to exchange shells

Fig 5 Relined EAF shell being moved onto the platform

Fig 6 shows a graphical comparison of time for each part of the operation between the four plants.

Plant 4

350 300 250 200 150 100 50 0 Cool

Open

down

breaker

Shell to Hoses Shell on tion crane nnecti nnec o c is disco d

interchange rather than re-lining in-situ, but above all, performing the re-line offline enables the tilting platform of the furnace to be completely cooled down which increases the level of safety and makes the working environment for the maintenance personnel much less arduous.

The additional safety that this technique brings to the plant alone justifies adopting April 2018

Tenova.indd 4

Plant 3

Plant 1

Plant 2

Shell

Platform

New

out

cleaning

shell in

s Close Shell Hose n o tion breaker ti c e e n nn c o c recon e r

the shell interchange method.

Productivity One of the most interesting differences between plants adopting shell exchange versus in-situ relining is the total time needed to keep the furnace off-line. In the case of the shell exchange the time varies between 1 to 5 hours approximately. In the

case of the in-situ re-line the furnace has to cool down completely to allow workers to carry out the necessary refractory rebuild, which takes the furnace off-line for a considerable amount of time, at least double that of shell exchange.

Refractory Consumption Typically the amount of gunning material consumed in plants that perform shell interchange is much less than in other plants. This is because of the ability to perform a careful refractory reline in a spare shell, while in the in-situ case the pressure to restart operation sometimes results in lower accuracy of work and so the need to correct during a campaign with further gunning temporarily halting operations. ďż˝

References 1. Charles A Schacht, Thermomechanical Design of EAF Refractory Linings, 1999 Electric Furnace Conference Proceedings, pp 361-365.

2. BorovskĂ˝, Kijac, Domovec, Analysis of the Slag and Metal Influence on the Life of Electric Arc Furnace Hearth Refractory Lining, Acta Metallurgica Slovaca, 15, 2009, pp 77 - 85 3. Ashraf Hanna, Karl-Michael Zettl, Electric Arc Furnace Process Improvements and Lining Concepts, 2014 AISTech Conference Proceedings.

4. R Gerling, B Stallmann, D Blissenbach, Automatic EAF refractory maintenance, Millennium Steel, 2005, pp 124-129. www.steeltimesint.com

12/04/2018 08:43:14

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74

PERSPECTIVES: QUINTIQ

Keeping busy Quintiq claims it has been performing well in the global steel market. The company is very busy in Asia as well as in Europe and is pleased to report several major new contracts, according to Markus Malinen* Q: How are things going at Quintiq?

Is the steel industry keeping you busy?

The industry has indeed been keeping us busy, especially in regions like Asia where steel producers are adding additional capacity. In general, activity has mainly focused on working with trusted partners across Europe, Russia and Asia to replace old style MES and planning solutions.

On that note, European and Asian markets have been markedly different in their business priorities. Asia has been largely accelerating their production and also going after more marginal, high-end products. EU markets are responding to a huge oversupply of Chinese steel and are, therefore, seeking safer, cleaner production that attempts to reduce costs, increase accuracy and the satisfaction of their customers. As a result, we’ve been kept very busy addressing the very different market conditions that exist from region to region.

More generally, we’re pleased to report several major new contracts with leading producers in both China and Russia. In the case of the Russian producer, we demonstrated how we were able to bring more value than any of the competing products that they were considering. We showed them both how we could increase productivity, and why that would result in higher ROI. By using the producer’s own data, we were able to deliver a proof of concept, including a comparison with another vendor that showed the superiority of our approach to organisational efficiency and optimisation.

Q: Where in the world is Quintiq busiest at the moment?

We are very busy in Russia and across Asia, China and Japan in particular, which are big growth markets for us. This growth opportunity is fuelled in part by the large new companies that have emerged over the past few decades. As a result of this growth, our steel market penetration is on

the same trajectory as aluminium, which we started with earlier.

Looking at our traditional EMEA market, our share is already very large – well over 50% of the steel market in Europe.

As such, there is no room in the industry for inefficiencies – firms increasingly require planning across the whole supply chain, from precise estimation of demand, through inbound supply and production, to outbound supply delivery. This is driving replacement of older style silo planning and scheduling tools with technologies like those provided by Quintiq.

Q: Who or what (and why) is responsible for the current global oversupply of steel?

Chinese steel production has grown quite tremendously in the last decade or so, while other markets have failed to keep up. We are also seeing a greater reliance on Chinese manufacturers for their R&D. They are experimenting with their solutions and building advanced production lines to meet their research. This in turn drives demand for modernised scheduling and MES capabilities that legacy IT technologies cannot easily meet.

Q: What is your view of the current state of the steel industry?

The steel industry faces a big challenge in the current state of oversupply – Chinese steel production has grown tremendously in the last decade or so while other markets have failed to keep up. Today, this sees global capacity stabilised around 1.5 billion tonnes, while the global demand is maintaining at around 1 billion tonnes.

As a result, many steel companies are presented with profitability issues and an unpredictable market.

What’s the impact of this change? We see companies continuing to add capacity to increase profitability, intensifying competition between the most efficient producers, and ultimately pushing some players out of the market. This competition will manifest itself in firms needing to keep costs as low as possible while simultaneously competing on the quality of the end product – a significant challenge.

Q: In what sector of the steel industry does Quintiq mostly conduct its business?

At Quintiq, we work in both upstream as well as downstream production. However, to be more precise, we cover both steel and stainless steel, with a big share of our customers in production of rolled and long products. We’re fairly unique in our ability to address all of these different areas, in particular when it comes to more complicated areas like specialised long steel production.

Specifically, our having a single integrated platform to cover the whole supply chain, starting from iron and steel production all the way through to finishing operations, is a big differentiator. Ultimately, we’re able to address long-term strategic aspects of the steel industry, while also covering the day-to-day of operations in steel production itself – a considerable competitive advantage.

* Vice president of Europe, Middle East, Africa and Russia April 2018

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11/04/2018 16:23:53

PERSPECTIVES: QUINTIQ

75

Q: In your dealings with steel producers, are you finding that they are looking to companies like Quintiq to offer them solutions in terms of energy efficiency and sustainability? If so, what can you offer them?

The cost of energy, cost of input materials, cost of equipment, and cost of workforce form the lion’s share of expenditure for steel manufacturers.

Optimisation tools, like those offered

by Quintiq, improve utilisation of the machines and production lines and allow precise sequencing of orders to reduce energy consumption in the process of heating and cooling steel to desired temperatures as it moves through various stages of processing. That was not easily accomplished with legacy planning and scheduling tools. The side-effect of this is better utilisation of the plant and equipment and also a better utilisation of the workforce that operates it, as well producing less waste.

Q. How important is digital manufacturing to the steel industry and what role is Quintiq playing in the world of Industry 4.0 – or ‘smart manufacturing’ as it is known in the USA? We see more and more that customers are thinking about how they could actually use M2M or the Internet of Things (IoT) to steer their production in a better way, but not many people are actually doing it yet. We currently have some installations and these are growing.

Q. Where do you see most innovation in terms of production technologies – primary, secondary or more downstream?

Mostly in secondary, as there is more room for advanced automation, robotics, IoT and data-driven optimisation leading to more added value and, therefore, making themselves more competitive in terms of pricing and production. �

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Perspectives - SPREAD.indd 2

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11/04/2018 16:23:58

76

HISTORY

A bucket from one of the draglines used to move overburden removed by long jib excavators

How to find East Carlton: The Country Park lies just west of Corby town off the A427 Market Harboro – Corby road. LE 16 8YF Tel +44 (0)1536 770977 www.corby.gov.uk/eastcarlton

7 ton ingot and mould and narrow strip mill stand

Remembering Corby’s hot metal past Northamptonshire, a county in the East Midlands of Britain, has a long history of ironmaking based on its immense reserves of stratified ironstone. From the far past, Roman and Medieval bloomery furnaces have been excavated, but it was in the 19th century that ironmaking really took off and continued into the 20th. By Tim Smith* BETWEEN 1857 and 1980 a total of 12 iron works operated in Northamptonshire.

Half ceased production in the 19th century but 11.6Mt of iron had been produced by 1920. Those that survived into the 20th century were: Irthlingborough (1866 – 1929), Hunsbury Hill (1873 – 1936), Islip (1871 – 1945), Cransley of Kettering (1875 – 1956), Wellingborough (1885 – 1961) and Corby (1910 – 1980). This latter works still operates today, no longer making steel but continuing to produce tube as part of Tata Steel Europe.

Corby steelworks traces its origins to 1880 when Lloyds Ironstone Co. commenced mining ore in the area to supply its Albion works, East Midlands.

Most of the ore is in a narrow band up to 2m thick beneath a barren overburden. This was originally removed by hand and the ore wheelbarrowed out. On completion of the Manchester Ship Canal in 1894, one of the steam excavators was purchased by the company and put to work in the ore pits.

Two blast furnaces were built in 1910.

Lloyds merged with A & J Stewarts and Menzies of Glasgow in 1930 to become Stewarts & Lloyds Ltd. In 1932 the company moved production to Corby, building two replacement blast furnaces, a coke oven and sinter plant as well as a Bessemer steel shop, rolling mill and tube-making plant.

Many of the workforce from Scotland re-located to Corby. A third blast furnace

was commissioned in 1935 and a fourth in 1936. A new sinter plant and coke oven battery were constructed in 1937 along with a second Bessemer steel shop. In 1941, two EAFs were added to produce billet for S&L Bilston, West Midlands.

An open-hearth steel shop was commissioned in 1949 and the coke ovens extended to 141 in 1953 and again in 1961.

As demand for local ore grew, Stewarts & Lloyds commissioned the ‘Great Jib’, which, at the time of its completion in 1951, was the world’s largest walking dragline excavator.

In 1955 the four blast furnaces together produced 1.7Mt of iron.

Oxygen enrichment of the Bessemer blast was trialled, but Bessemer converters were replaced with three basic oxygen steelmaking converters in 1965. On closure, the Bessemer shop had made close to 18Mt of steel since 1934.

On nationalisation of the UK’s steel industry in 1967 Corby became part of the British Steel Corporation.

By this date, ironworks were beginning to demand the much richer haematite ores, available from Australia and Brazil, for which a coastal location was necessary. The high cost and low quality of Corby’s iron ore (30% Fe) could no longer compete and iron and steel production ceased in May 1980 with the loss of 10,000 jobs, but tube

making survived using brought-in billet.

In 1999 Corby became a division of Corus Tubes and in 2007 was sold to Tata Steel.

Today, Corby produces around 250kt/yr of tube with a workforce of around 500.

Remembering hot metal To its credit, Corby Borough Council has preserved some of the steelwork’s history as artefacts at the East Carlton Country Park. Here, ingots, moulds, a stand from a narrow strip mill with turning guide, a ladle and a drag line excavator bucket are on display outside, along with a saddle tank locomotive which pulled the wagons in the vast open-pit excavations.

Inside, a large model of Corby steelworks is fixed to a wall and a full-size blast furnace tuyere and tap-hole are modelled. Also displayed is a tube from one of Corby’s greatest achievements, PLUTO (Pipe Line Under the Ocean) – the manufacture of 1000 miles of 4-inch (100mm) tubing, laid overnight in continuous lengths, between the Isle of Wight and Cherbourg and from Dungeness to Calais, to supply fuel for the Normandy landings in June 1944.

Information boards complete the picture and a video loop plays extracts from four videos: the building of the then world’s largest drag line, the PLUTO project, Iron ores in Britain, and Double Harvest – how land was restored for farming after ore removal. �

* Consulting editor Steel Times International April 2018

History.indd 1

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