FUTURE STEEL FORUM 2018
CONFERENCE REPORT
TUBE, WIRE ROD AND PIPE
PERSPECTIVES
Industry 4.0 and the steel industry – go to page 50 now!
Digitalisation under the microscope at Danieli’s Innovaction conference
The latest developments in the tube, wire rod and steel pipe markets
Edgar Rayner of LTI-Metaltech answers our questions
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STEEL TIMES INTERNATIONAL – March 2018 – Vol.42 No.2
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CONTENTS - March 2018 FUTURE STEEL FORUM 2018
CONFERENCE REPORT
TUBE, WIRE ROD AND PIPE
PERSPECTIVES
Industry 4.0 and the steel industry – go to page 38 now!
Digitalisation under the microscope at Danieli’s Innovaction conference
The latest developments in the tube, wire rod and steel pipe markets
Edgar Rayner of LTI-Metaltech answers our questions
1
www.steeltimesint.com March 2018 - Vol.42 No2
STEEL TIMES INTERNATIONAL – March 2018 – Vol.42 No.2
Picture courtesy of: Siempelkamp Maschinen- und Anlagenbau GmbH
BUSINESS ETHICS 4.0 @STEEL INDUSTRY STI Cover march.indd 1
07/03/2018 12:06:40
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
2 Leader By Matthew Moggridge, editor, Steel Times International. 4 News Astounding facts and figures, industry news and diary dates. 7 Innovations The latest new products. 10 Charles Hatchett Award Winning Paper 2017 Niobium’s enhancement role 15 USA update ‘America First’ or ‘America Alone’?
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
17 Latin America update Uncertainties ahead.
20 Iron ore Pilbara Blend capacity expanded. 22 Future shock Business Ethics 4.0 @ Steel Industry. 29 Continuous casting The game changer steelmakers choose to ignore. 34 Tube, wire rod and pipe Latest developments in the market. 41 Conference report Managing the digital revolution. 47 Perspectives: LTI-Metaltech “Innovation is on the move.” 52 History British industry between the wars.
subscription. Annual subscription: UK £182.00 Other countries: £258.00 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
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Contents.indd 1
March 2018
07/03/2018 12:08:44
2
LEADER
“I’m the bad guy?”
Matthew Moggridge Editor matthewmoggridge@quartzltd.com
You have to hand it to US President Donald Trump. He said he would help the USA’s ailing indigenous steel industry and towards the end of last month he did just that – by announcing plans to slap 25% tariffs on imported steel. We all know that the USA’s main gripe in this respect is with China, the global steel industry’s ‘big bad wolf’, but let’s face facts and say that while the global steel industry has protested about cheap Chinese steel, only the Americans have been proactive with both anti-dumping tariffs and countervailing duties. And now they’ve upped the ante with Section 232, claiming, some would argue spuriously, that steel imports from China and elsewhere, are likely to compromise US national security. Some disagree and blame ‘more complex issues’ for the US steel industry’s demise, but Philip K Bell, president of the Steel Manufacturers Association, an organisation representing electric steelmakers, who account for 67% of total US steel production, told me in a recent interview that it isn’t just a military procurement exercise. “It is also to do with your energy grid, with critical infrastructure such as sea ports, airports and military
bases. It’s to do with water distribution systems, highways and bridges’. In this sense, argues Bell, there’s no doubt that untethered steel imports, from China and elsewhere, pose a threat to US national security. Industry observers are rightly concerned about a potential trade war if Trump goes ahead and imposes tariffs on steel imports; although some say Trump’s recent pronouncement is just hot air. But he’s lit the blue touch paper and he’s readying himself for the fireworks. What the wider industry needs to understand, according to Philip K Bell, is that when the USA is fighting on these issues, it is trying to ensure ‘that companies and countries obey our laws and that they follow rules-based trade’. At the end of the movie Falling Down, Michael Douglas asks “I’m the bad guy?” before he is shot by Robert Duval. As criticism mounts over Trump’s action there is a real risk that he will be branded the ‘bad guy’, when the real villains of the piece, it is argued, are those countries, China included, who are not playing by the rules and dumping unfairly traded steel on the president’s doorstep.
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4 NEWS IN BRIEF Concern over potential US trade action Nippon Steel & Sumitomo Metal Corporation, Japan’s largest steelmaker, is concerned that potential US trade action to cut steel imports will flood Asia with unwanted steel products. A report by Hellenic Shipping News claims that Trump has been advised by the US Department of Commerce ‘to impose steep curbs on steel and aluminium imports from China and other countries’. Toshiharu Sakae, Nippon’s executive vice president, said that steel flooding into Asia would prove negative for the company and carmakers, especially considering the recent surge of the Yen.
A strange hum is being blamed on US Steel Residents of Windsor, Ontario, have been complaining about a strange hum that might emanate from a restricted US Steel plant located on the mysterious Zug Island. The plant rests on a Native American burial ground – which is very spooky and might, therefore, be a case for Mulder and Scully. The UK-based Guardian newspaper claims that US Steel won’t let anybody investigate the site and won’t event discuss what the plant is for. Strange hums have been reported around the world but they’re not all US Steel’s fault.
Tata frontrunner in possible Bhushan deals Tata Steel has emerged as frontrunner for acquiring Bhushan Steel and Bhushan Power & Steel, according to MoneyControl.com. The Indian steelmaker will add 8Mt of capacity if the deals go through, bringing total capacity to 21Mt/yr, making Tata the biggest steelmaker in India, ahead of JSW, which currently holds the title. Both JSW and Tata are in the bidding for Bhushan Steel and Bhushan Power & Steel. UK-based Liberty House’s bid for the latter has been rejected. It is widely believed that N Chandrasekaran, chairman of Tata Sons, is heavily involved in Tata Steel’s acquisition strategy, which is focused upon acquiring ‘distressed’ steel companies.
INDUSTRY NEWS
New CEO for Primetals Technologies Satoru Iijima has been appointed as CEO and chairman of Primetals Technologies, effective 1 April. He succeeds current CEO and chairman, Yasukuni Yamasaki, who will continue to serve as a director of the board. “This is the perfect time for Satoru Iijima to become Primetals Technologies’ next Chief Executive Officer. We've chosen a very strong leader after we have grown together as one company,” said outgoing CEO Yasukuni Yamasaki. “Our new CEO needs to ensure that the company can thrive in a highly dynamic environment, to be capable of accelerating what we have started and further develop what is working well already. Mr. Iijima will translate our vision and strategy into world-class execution and drive results.” Mr Iijima said he was honoured to have been chosen to lead
'this exciting company' in its next growth phase. “I look forward to further developing the positive progress made by Primetals to date, and will work to leverage the expertise and passion of our worldwide employees to achieve sustainable growth.” Iijima began his career with Mitsubishi Corporation in 1986 in the heavy machinery department in Tokyo. From 1990 to 2014, he held project development, export business and machinery systems management positions at the company’s headquarters in Tokyo, Japan, Dusseldorf, Germany and Chicago, United States. In 2015 he served as president and CEO of Primetals Technologies USA, a group company of Primetals Technologies. He is a native of Kanagawa Prefecture and holds a master’s degree in mechanical engineering from Waseda University in Tokyo.
Topy Industries choose Danieli spooler tech Danieli K-Spool technology has been chosen by Topy Industries to produce hot-rolled, high-quality compact coils to serve a demanding downstream market. The company, which was founded in 1934 and specialises primarily in automotive parts, will be the first Japanese steelmaker to operate spooler technology, claims Danieli. The line, to be installed at Topy’s Toyohashi Rolling Mill, Aichi Prefecture, will produce 240kt/yr of spooled bar coils weighing from 1 to 3.5 tons at a maximum coiling speed of 35 m/s. “Perfectly shaped, no-twist spooled bars will be wound into compact coils by two K-Spool stations independently served by
separate lifting forks, by means of two Danieli horizontal spooler stations,” said Danieli. Danieli Automation will provide automation and control systems, while strapping and labelling equipment will be manufactured by Sund Birsta of Sweden, part of the Danieli Group. Additionally, a two-pass fast finishing block supplied along with a Hi-Profile measuring system and a Danieli QTS-quenching and tempering system will upgrade Topy’s existing finishing mill. The project will be co-ordinated by Danieli Engineering Japan in Yokohama. The line is planned to start production with D10, D13 and D16 bar products in Summer 2018.
• There are over 3,500 different grades of steel and approximately 75% of modern steels have been developed over the past 20 years. Source: worldsteel
• Unless something is done to stop its degradation, there will be no Lake Victoria in 50 years from now, according to Kenyan Professor Anyang Nyong’o. US research has shown that the lake is ‘dying from its basin’ due to deposited toxic effluents.
• In addition to being the largest steelmaker in the world, ArcelorMittal is also the world’s biggest recycler of scrap steel. Source: ArcelorMittal. • In 1997 an estimated 33.68Mt of finished steel was consumed by the USA’s socalled ‘critical industries’. That figure is now 54Mt, according to the US Department of Commerce.
For more global steel news, log on to our news website, www.steeltimesint.com March 2018
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DIARY OF EVENTS
INDUSTRY NEWS
Astounding Facts and Figures...
• The United States is the world’s largest importer of steel. Its imports are nearly four times greater than its exports.
• Six basic oxygen furnaces and four electric furnaces in the USA have closed since 2000 and employment has dropped by 35% since 1998. • World steelmaking capacity is 2.4 billion metric tons, up 127% from 2000, while steel demand grew at a slower rate.
• On an average month, China produces nearly as much steel as the US does in a year. For certain types of steel, such as for electrical transformers, only one US producer remains.
• As of February 15, 2018, the US had 169 anti-dumping and countervailing duty orders in place on steel, of which 29 are against China, and there are 25 on-going investigations.
• Apple has its own ‘secret police’ called the Worldwide Loyalty Team that makes sure no employees leak something. • Sixty per cent of the ArcelorMittal Orbit in London is made of recycled steel, produced by ArcelorMittal’s steel plant in Esch Belval, Luxembourg. Source: ArcelorMittal.
• The recent global excess capacity is 700Mt, almost seven times the annual total of US steel consumption. China is by far the largest producer and exporter of steel, and the largest source of excess steel capacity. Their excess capacity alone exceeds the total US steel-making capacity.
• Since Earth Day in 1970, the steel companies in North America have invested more than US$7.5 billion in capital equipment for the control of water and air pollution and the treatment of solid waste. • 60% of Tata Steel UK’s production is sold to UK manufacturers. 25% is exported to Europe and the remaining 15% to the rest of the world. Source: WalesOnline.
5
March 2018 19-20 Metals in the Future conference, Hilton London Paddington. Organised by CRU. A new conference exploring the long-term impact of green technology on metals supply and demand. The conference covers steel, aluminium, base metals, minor metals and ferroalloys. For further information, log on to www.crugroup.com
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 7-10 AISTech 2018, Pennyslyvania Convention Centre, Philadelphia, PA, USA If you want to know what's going on in the US steel market then you need to be in Philadelphia in May. AISTech is THE conference and exhibition if you want to hear what the big players have to say about the industry's present and future. For further information, log on to www.aist.org
March 2018
Industry news.indd 2
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INNOVATIVE TECHNOLOGIES
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Safety assistance for lift trucks Konecranes Work Zone is the latest addition to Smart Connected Lift Trucks. Work Zone is a suite of location-based services designed to improve the safety of lift truck operations, especially in busy, high-traffic environments. It includes different applications of ‘geofencing’ and is a big step for the lift truck industry, according to Konecranes. It also shows the future of Smart Connected Lift Trucks, says the company. Geofencing is described as a new safety and
yard efficiency product, which uses GPS technology to create virtual fences around real-world areas. “These areas can then be used to trigger user-defined alerts,” said Konecranes. “This can be information about height limitations, speed limits or other safety matters.” Alerts can be displayed on the driver’s display or by SMS or email to chosen recipients. In addition to increasing safety, Work Zone can also be used to reduce and monitor downtime and it offers the user the possibility of managing
a fleet of lift trucks on a computer. Such management and operations integration opens brand new possibilities for monitoring and controlling a fleet of Konecranes lift trucks, says the company. Konecranes Work Zone is available for all customers using Smart Connected Lift Trucks. Further features to enhance operational efficiency are under development. For further information,log on to www.konecranes.com
Transalloys orders CLU converter from UHT Swedish technology supplier Uvan Hagfors Teknologi AB (UHT) has supplied its fifth CLU converter to FeMn producer Transalloys. The converter will be commissioned in early 2019 and produce medium carbon FeMn. According to UHT, the supply of its fifth converter will ‘bring back CLU to the city of eMalahleni, which is where ferroalloy refining through the CLU route first started. UHT claims that the CLU process is cost-effective and ideal for MC and LC FeMn production because of its ‘excellent temperature control without alloy dilution’. “Super-heated steam which is utilised as one of the process gases acts as coolant by controlling the temperature in the metal bath through the endothermic reaction that occurs when the steam is split into oxygen and hydrogen after injection,” UHT explained, adding that by balancing the temperature, the need for cooling material decreases and the Mn yield is enhanced. For further information, log on to www.uht.se www.steeltimesint.com
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INNOVATIONS
Modulift spreader beams for Argentine port An Argentine port is using two Modulift spreader beams to enable two steel coils to be lifted simultaneously and thereby enhance productivity at the port side. The Ingeniero Buitrago Port in Argentina commissioned Rosario-based Ortiz Fischer, to develop and design a rig for loading finished steel products. The solution was a combination of Modulift’s MOD 24 and MOD 34 spreader beams combined in a narrow rig with slings and other rigging equipment above and below to lift two 12t coils simultaneously, halving the time taken to complete loading operations at the port, which serves a steel plant now owned by Siderar. The MOD 24 offers up to 24t at 5m and up to 8m at a lower capacity; the MOD 34 offers up to 34t at 6m and up to 10m at a lower capacity. Ortiz Fischer also provided grade 10 chains, wire rope slings, and Green Pin shackles. Santiago Ortiz, general manager at Ortiz Fischer, said: “We had 30t of capacity with the on-site crane and wanted to design a rigging solution that accelerated loading of the coils. Combining the beams we could rig slings through the centre of each coil and load them
onto the awaiting vessel at twice the speed of alternative methods loading one at a time.” Sue Spencer, Modulift’s technical director, said: “Using two spreader beams in this type of rig configuration is not that common; however, it is a great idea for lifting steel coils in this way to speed up loading time.” She added: “The steel coils keep the beams spaced apart, and it is a good idea if there is the headroom available to have very long slings for this type of rig to minimise the horizontal forces being transferred to the load being lifted due to having angled slings. The coils themselves are more than strong enough to withstand these horizontal ‘crushing’ forces.” The port consists of two sections: Berth A (southern quay) is used for discharge of iron ore and coal, plus loading of coke breeze; Berth B (northern quay) serves as the commercial berth for the loading of finished steel products, where Ortiz Fischer completed its latest scope of work. On the northern quay, which is 320m long and 30m wide, the 30t safe working load (SWL) crane is joined by two 15t SWL cranes. Both quays are constructed of reinforced concrete and lie at an angle of about 230 degrees to each other.
Slings were passed through the centre of each coil before they were loaded onto an awaiting vessel.
Ortiz Fischer’s Santiago added: “We were responsible for providing a solution for the customer to lift the coils from the dockside to the bottom of the vessel. While speed was of the essence, safety was the number one priority so we could make no sacrifices with the rig. We had complete faith in the Modulift below-the-hook equipment, based on previous experiences where it has complemented our extensive range of premium lifting gear.” Ortiz Fischer’s below-the-hook solution was utilised by a team of 10 people onsite—four in the vessel, four on the dockside, a crane operator, and a supervisor. For further information, log on to www.modulift.com
Danieli receives order for Basra steel plant Italian steel production technology specialist Danieli has received an order for a new steelmaking plant in Basra, Iraq. The contract is from United Brothers Holding, a company with its core business in Kurdistan in the oil and gas sector. The new steel plant will be located in the industrial area of Khor Al Zubair, which is close
to Basra and will have a production capacity of 500kt/yr of billets, according to Danieli. When completed, the new steel plant will consist of a 70-tonne ladle furnace equipped with a ladle lifting system and a material handling system serving the plant’s electric arc furnace and ladle furnace with ferroalloys and additives. The deal includes a fume dedusting plant and a
9-metre, four-strand continuous casting machine producing 150 x 150mm square billets. Danieli Automation is providing L1 and L2 automation systems and an erection and plant start-up advisory service. For further information, log on to www.danieli.com
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CHARLES HATCHETT AWARD WINNING PAPER 2017
How niobium improves creep resistance The Charles Hatchett Award is presented annually by the Institute of Materials Minerals and Mining (IOM3) and is sponsored by Companhia Brasileira de Metalurgia e Mineração (CBMM), the world’s leading supplier of niobium and niobium technology. The Award is judged by a panel of international experts and is presented to the authors of the best published paper on the metallurgy of niobium and alloys containing niobium. The 2017 Award was given to a paper produced by a Japanese group of researchers led by Dr Jun Takahashi for a paper entitled “Direct Observation of Niobium Segregation to Dislocations in Steel”. This demonstrates a previously unknown mechanism by which niobium enhances high temperature properties in steels. By Peter Morris*
NIOBIUM is widely used as an alloying addition in steels. Its principal application is in High Strength Low Alloy (HSLA) steels where it inhibits austenite recrystallisation during hot rolling allowing, by careful control of rolling schedules, significant refinement of the ferrite grain size and improved strength and toughness. This has been attributed to niobium’s role in the inhibition of grain boundary movement by both solute drag and precipitation. Since about 1950, the use of controlled rolling has allowed the strengths of pipeline steels to increase from X42 to X80 and beyond resulting in reductions in material tonnages and allowing transmission at higher pressures. A further important beneficial effect of niobium is in improving high temperature strength in both austenitic (Type 347) and ferritic stainless steels. This is often attributed to solid solution strengthening which inhibits dislocation movement and hence reduces deformation rates due to high temperature creep. However, the work presented in the 2017 Charles Hatchett Award winning paper provides evidence for a completely new mechanism by which niobium contributes to improvements in high temperature properties. Calculations from first principles have suggested a strong interaction between dislocation cores and niobium atoms, which would influence dislocation mobility in a way similar to the effect of interstitial carbon at
Needle-shaped specimen Tip radius 20-100mm Cooled to 20-100k Efield ~10-50V/nm
Position-sensitive detector
Local-electrode XD,YD, +
N
Field evaporated ion
HV dc (2-20kV)
HV pulse
Laser or voltage pulsing to initiate field evaporation from the tip surface
Time-of-flight and position data
Fig 1. Schematic of the Atom Probe Tomography technique (http://atomprobe.materials.ox.ac.uk/uploads/images/APT.png)
low temperatures. In order to test this proposition, the winning authors studied the positions of individual solute niobium atoms in a ferritic stainless steel used in automotive exhaust manifolds. Unless otherwise referenced, all data in this article are from the winning paper. The composition of the material studied is shown in Table 1. The steel contains sufficient titanium and niobium to tie up carbon and nitrogen. The material was heated to 1250 °C for one hour before rolling with a finishing temperature of 875 °C. It was then spray cooled to the coiling temperature of 520 °C. The positions of the niobium atoms still in solid solution were studied using Atom Probe Tomography (APT).
APT allows both 3D imaging and chemical composition measurements at the atomic scale. The sample is prepared in the form of a needle with a very sharp tip. The cooled tip is biased at high DC voltage (3-15 kV). The very small radius of the tip and the high voltage induce an extremely strong electrostatic field at the tip surface. Under laser or high voltage pulsing, one or more atoms are evaporated from the surface and projected on to a Position Sensitive Detector (PSD) with a high detection efficiency, Fig. 1. The detector simultaneously measures: • the Time-of-flight of the ions: measuring the time between the laser or voltage pulse and the arrival on the PSD which makes it possible to determine the m/q ratio (mass over charge ratio);
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12
CHARLES HATCHETT AWARD WINNING PAPER 2017
C Si Mn P Cr Mo Cu Ti Nb N
B
Mass%
0.008
0.21
1.02
0.025
16.95
0.31
1.25
0.12
0.53
0.013
0.0008
Atom%
0.037
0.42
1.04
0.045
18.20
0.18
1.10
0.14
0.32
0.052
0.0041
Table 1. Composition of ferritic stainless exhaust manifold steel
[121]
[101] [111]
Nb
(a)
(b)
(b)
Fig 2. APT data from a grain interior – dark regions contain >1.2 at%Nb.
Fig 3. Segregation of niobium atoms to dislocations at grain boundaries (a). The centre (b) and
(Box size 45 nm x 47 nm x 57 nm)
right (c) figures are rotated versions of the same region. (Box size 40 nm x 42 nm x 74 nm)
Mo
B
P Mn
(a)
(b)
(c)
(a)
(b)
(c)
Fig 4. Segregation of boron and phosphorus atoms to dislocations at grain boundaries.
Fig 5. No discernable segregation of molybdenum and nickel to dislocations at grain
(b and c rotated as in Figure 3)
boundaries. (b and c rotated as in Fig. 3)
• the (X,Y) position of the ion impact on the detector and the order of arrival of ions which makes it possible to reconstruct the original position and type of the atoms on the tip. Atoms are progressively removed from the tip, and a 3D image of the material can be reconstructed at the atomic scale. Data were collected for five million atoms for a specimen at a temperature of 40-60 K with a probe voltage of 8-15 kV, pulse fraction of 20% and a pulse frequency of 20 kHz. Data for niobium from the interior of a grain are shown in Fig. 2. The dark regions show segregation of niobium to dislocations and contain more than 1.2 at%Nb compared with the bulk level of 0.32 at%. No carbon or nitrogen was associated with these regions confirming that they were not precipitates but the segregation of solute niobium atoms to dislocations. Fig. 3 shows APT data for niobium at a low-angle tilt grain boundary. The March 2018
CH WINNING.indd 2
segregation of niobium is clearly shown and is made up of linear regions separated by about 12 nm. Fig. 4 shows data for boron and phosphorus from the same region as Fig. 3. Again, segregation is evidently made up of similar linear features found for niobium; however, it is far less intense than for niobium. Fig. 5 shows data for molybdenum and manganese. The distributions of these elements are uniform with no evidence of segregation at the boundaries. Thus, it appears that the segregated niobium atoms condense on the core of the dislocation. This is analogous to the formation of Cottrell atmospheres in low carbon steels, whereby carbon and nitrogen atoms segregate to dislocations, Fig. 6, pinning them and resulting in an increase in the yield strength. However, unlike Cottrell atmospheres, for which the strain field extends beyond the dislocation core, the segregated niobium atoms produce a
strain field concentrated on the dislocation core. The authors call the new phenomenon Niobium-Cottrell atmospheres. Further work using the atom probe data was carried out to determine the precise locations of the segregated niobium atoms with respect to the dislocation core. A magnified region (8 nm x 8 nm x 10 nm) is shown in Fig. 7, which indicates that the niobium atoms are contained within a circle 2-3 nm in diameter. In Fig. 7, the dislocation line runs into the paper for a depth of 10 nm and the clustering of the niobium atoms close to the dislocation core is clearly shown. The authors explain the formation of these atmospheres in terms of the difference in atomic size between iron and niobium. The latter being the larger atom is attracted to the dislocation owing to the regions with expansive strain found there. They demonstrated that sufficient sites of this type exist along the dislocation to accommodate the excess niobium atoms www.steeltimesint.com
07/03/2018 11:12:17
13
CHARLES HATCHETT AWARD WINNING PAPER 2017
Dislocation
Carbon interstitial
Iron atoms
Fig 7. Distribution of niobium atoms close to the Fig 6. Cottrell atmosphere in a low carbon ferritic steel (https://en.wikipedia.org/wiki/Cottrell_atmosphere)
found by the atom probe work. These Niobium-Cottrell atmospheres would only be able to form at elevated temperatures where the niobium atoms have sufficient mobility to migrate to the dislocations. This is either during hot processing or during exposure at elevated temperatures in service. The atmospheres inhibit dislocation motion and hence increase the creep strength. This is in addition to the beneficial effect of niobium arising from conventional solid solution
strengthening. No evidence was found for the formation of atmospheres by other substitutional elements such as manganese, chromium and nickel. This is attributed to the smaller difference in atomic size between these elements and iron than for niobium, which makes the formation of atmospheres by them less energetically favourable. The authors have used Atom Probe Tomography to confirm the hypothesis that niobium atoms do segregate strongly
dislocation core. (Box size 8 nm x 8 nm x 10 nm)
to dislocations and they have termed the phenomenon Niobium-Cottrell atmospheres. This mechanism has not been observed with other substitutional atoms such as molybdenum and manganese. The work broadens our understanding of how niobium atoms improve high temperature properties in ferritic stainless steels and may inform future alloy design in these materials.�
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USA UPDATE
15
‘America First’ or ‘America Alone’? Japan joins the fray following the US Commerce Department’s tariff recommendations on steel imports. By Manik Mehta* THE penchant for loud populist slogans may appeal to the gallery at home, but it can also generate considerable antipathy abroad – both among friends and foes – and this is exactly what US President Donald Trump’s “America First” is doing: it is creating an “America Alone” situation abroad. Proposals sent on 16 February by the Commerce Department to President Trump, recommending curbs on steel imports which, supposedly, impact national security in terms of Section 232 of the Trade Expansion Act of 1962, have only fuelled this antipathy. The Commerce Department called for restrictions – ranging from global and country-specific tariffs to broad import quotas – on steel and aluminium imports from China and other supplying countries. Japanese anger Even the usually phlegmatic Japanese joined the fray and expressed their anger over Commerce’s proposals. In a statement, Kosei Shindo, the chairman of the Japan Iron and Steel Federation, criticised the proposals as a violation of free trade, and urged Trump to “make a careful and appropriate judgement”. Yasuji Komiyama, director of the metal industries division in Japan’s Ministry of Economic Affairs, Trade and Industry, while noting that a final decision by the US President was still awaited, maintained that Japanese exports of steel and aluminium – mainly steel tubes for piping and rails for mining railways – did not threaten US national security, as portrayed by the Commerce Department. Japanese steel companies fear that a tough protectionist policy would be put in place. At home, US lawmakers and steel
consumers recommended caution in taking any actions that could result in disruptions or soaring raw-material prices. Commerce Secretary Wilbur Ross released reports on the US Department of Commerce’s investigations into the impact on our national security from imports of steel mill products and from imports of wrought and unwrought aluminium, in terms of Section 232 of the Trade Expansion Act of 1962, suggesting that steel and aluminium imports “threaten to impair the national security” under Section 232. The President, who has yet to take a final decision, is required to make a decision on Commerce’s steel recommendations by 11 April 2018, and on the aluminium recommendations by 19 April 2018. Commerce’s Steel Report noted that US steel imports are nearly four times its exports; six basic oxygen furnaces and four electric arc furnaces have closed since 2000 while employment has dropped by 35% since 1998. World steelmaking capacity is 2.4 billion metric tons, up 127% from 2000, while steel demand grew at a slower rate. China the culprit Commerce’s report maintains that global excess capacity is 700Mt, almost seven times the annual total of US steel consumption. China is by far the largest producer and exporter of steel, and also the largest source of excess steel capacity which alone exceeds the total US steelmaking capacity. On an average month, China produces nearly as much steel as the US does in a year. As of 15 February 2018, the US had 169 anti-dumping and countervailing duty orders in place on steel, of which 29 are against China, with 25 ongoing investigations.
Secretary Ross’ recommendations to the President include the following to check the excess imports: • a global flat tariff of at least 24% on all steel imports from all countries, or • a tariff of at least 53% on all steel imports from 12 countries (Brazil, China, Costa Rica, Egypt, India, Malaysia, Republic of Korea, Russia, South Africa, Thailand, Turkey and Vietnam) with a quota by product on steel imports from all other countries equal to 100% of their 2017 exports to the United States, or • a quota on all steel products from all countries equal to 63% of each country’s 2017 exports to the United States. Increasing domestic production Each of these remedial measures, applicable to all countries and all steel products, purports to increase domestic steel production from its present 73% of capacity to an approximately 80% operating rate, the minimum rate needed for the industry’s long-term viability. In the past, the president’s rhetoric on steel was focused on China. Since starting his run for office, Trump has been highlighting China’s exports of excess cheap steel to the global market, thus making it impossible for American steel companies to compete and this was also destroying American jobs. The U.S. imports most of its steel, about 16%, from Canada. It imports 13% from Brazil, 10% from South Korea, 9% from Mexico and 9% from Russia, according to a Commerce Department report from December 2017. Thus, a flat 24% tariff on steel imports from all countries – one of the proposals on the table – would also have a major impact across the globe.
* North America correspondent www.steeltimesint.com
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USA UPDATE
If Trump took that route, even US allies like Canada, South Korea and Mexico, would be forced to retaliate, imposing their own tariffs on US exports like agricultural products, or picking non-US goods – like Airbus planes over Boeing models. China would still feel the pain from US tariffs. A lot of China's steel also makes its way to the United States indirectly after being processed in third countries. As expected, China quickly warned that it would take action if “the United States’ final decision affects China's interests.” Even if Trump does not decide to impose a flat global tariff, the other options put to him will resonate globally, particularly action taken under Section 232 on the grounds that imports hurt national security. Critics dismiss this rationale as frivolous, arguing that it would not be able to hold under the rules established by the World Trade Organisation, also warning that such a step could invite retaliatory action from other countries. Foreign competition fixation The underlying problem with the US steel
March 2018
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industry is that it is fixated on foreign competition while ignoring or playing down the domestic industry’s shortcomings. The administration also needs to iron out a policy that looks beyond foreign competition. Opponents of tariffs also warn that broad-based restrictions would, invariably, lead to a price surge, disrupt global markets, and attract retaliatory action unleashing a trade war. Besides China, Japan and other suppliers, that have threatened retaliation, the Trump administration should also expect retaliatory measures from the European Union which could, for example, impose tariffs or restrictions on US orange juice, Kentucky bourbon whiskey and other popular items made in the USA. The German media, particularly the centrist daily Frankfurter Allgemeine Zeitung, have warned of such retaliatory action. Meanwhile, the chairman of the American Institute for International Steel, John Foster, responding to Commerce’s Section 232 investigation, described Commerce’s recommendations as
“excessive and unnecessary”, adding that if implemented, the recommendations would have a “significant negative impact” on US economic growth. In a statement, Foster said that the steel sector was “already the most-protected in the country and whatever problems it has have not been caused by steel produced elsewhere”. The attempt to argue for the recommended tariffs and quotas, using national security as the reason, was “simply an unfortunate attempt to circumvent normally applicable WTO rules”. “If the United States chooses to abandon longstanding principles of free trade that we have helped establish, and that have contributed so much to our national prosperity (the) Pandora’s Box will be opened, and other countries will be sure to use ‘national security’ reasons for protecting many other politically sensitive products from export competition. The retaliatory measures that will follow will drive up manufacturing costs, inflate prices, shrink high-value US exports, and push the United States and the world toward recession,” the statement warned. �
www.steeltimesint.com
07/03/2018 09:57:09
LATIN AMERICA UPDATE 17
Uncertainties
ahead
Things are looking good for Mexico, according to the Mexican Iron and Steel Industry Chamber (Canacero), but July elections, NAFTA and US immigration policy might upset the applecart. By Germano Mendes de Paula* Canacero also disclosed that crude THE Mexican steel market registered a good steel production achieved 20Mt in 2017 performance last year. According to the (Fig 1), implying a 6.2% enlargement Mexican Iron and Steel Industry Chamber when compared to the previous year. (Canacero), apparent steel consumption Rolled products output remained almost reached 29.7Mt, or 4.4% above 2016. Of unchanged, with a marginal growth the total consumed, semi-finished products of 0.1%. By segment, seamless tube rose 11% year-on-year, while rolled production jumped 16%, while longs products amplified by 5% (in comparison increased by 0.5% and flats decreased by with 3.8% verified in Latin America). The 1.6%. Semi-finished steel output (for sales) demand growth by segment was quite rose by around 500kt (or 32%), while diverse; it varied from a 12% increase for transformed steel products gained roughly seamless tubes, 8% for flats and null for 250kt (or 4.3%). longs. In addition, demand for transformed Mexico’s installed capacity is estimated steel products grew 7%. at 29.5 Mt/yr. The capacity utilisation Canacero highlighted that although the ratio enhanced from 64% in 2016 to 68% consumption expanded at a good annual in 2017, but still below the 76% level rate, during the second half of 2017 a observed in 2010 (Graph 2), when the rated deceleration trend was evident. In the latest capacity was equivalent to 22.2 Mt/yr. Short-Term Outlook, released by worldsteel Imports of steel products reached 14.9Mt in October 2017, for Mexico, it was in 2017, resulting in a 7.3% growth in forecasted a 5.7% apparent consumption comparison with 2016. The respective improvement in 2017 (ratifying the figures for exports were 5.2Mt and 15.4%. mentioned slowing) and additional 3% As a consequence, net imports amplified by growth in 2018. In this way, it can be Capacity Utilisation about to 9.7Mt. It is worth knowing concluded that the Mexican steel2010 market is 2011 2012 300kt2013 Production (Mt) Production 16,870 18,110 18,242 Capacity and (Mt) exported that 18,073 Mexico imported 3.1Mt performing well. 21
85
20
80
19
75
18
70
17
65
16
2010
2011
2012
2013
2014
2015
2016
2017
Fig 1. Mexico’s crude steel production, 2010-2017 (Mt). Source: worldsteel, Canacero
60
2010
2011
1.8Mt to the USA in 2017, generating a net import of 1.3Mt. Many hurdles can put pressure on the Mexican steel industry this year. The factors can be characterised as political, macroeconomic, geopolitical and sectorial. In July 2018, Mexico will elect a new President, Congress, and local authorities, in a single-round contest. According to a report recently published by Barclays, market concern is straight on the leading candidate, Andrés Manuel López Obrador (AMLO), a leftist: “His proposals, including a revision of the reform effort, increasing social spending that could risk fiscal discipline, import substitution, and a nationalistic rhetoric, could represent a shift away from the current stable macroeconomic framework, openness to trade, and foreign investment. It could also make US-Mexico relations more complicated and increase the likelihood of negative NAFTA outcomes, should the 2010 2011 2012 2013 negotiations continue”. 76 82 79 76 Regarding macroeconomic issues, 16,870 18,110 18,073 18,242 24,100 22,200 22,200 22,800 Barclays expects the Mexican economy to
2012
2013
2014
2015
2016
2017
Fig 2. Mexico’s steel capacity utilisation, 2010-2017 (%). Source: Canacero
* Professor in Economics, Federal University of Uberlândia, Brazil. E-mail: germano@ufu.br www.steeltimesint.com
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LATIN AMERICA UPDATE
expand 2.4% in 2018 and 1.9% in 2019, as a result of a resilient domestic economy and robust external demand. It also emphasised that the labour market continues to be tight, with a 3.4% unemployment rate in seasonally adjusted terms in January 2018, which can help sustain domestic consumption. However, the creation of new employment has been concentrated in low-pay jobs. Moreover, the consumer inflation index (CPI) stood at 6.8% in 2017, the highest annual rate since the year 2000, when a 8.7% variation was observed. Not surprisingly, the Central Bank has been increasing the basic interest rate, aiming to converge inflation to the target. Concerning geopolitical features, the most important refers to renegotiations of NAFTA and US immigration policy. The trade agreement negotiations appear to be at an impasse, as large gaps remain between the USA and its partners. According to Barclays: “The lack of progress and status quo suits Canada and Mexico but the question remains whether the US will attempt to force the issue. A complicating factor in the NAFTA
negotiations are the Mexican presidential elections, with the leading candidate, Andrés Manuel López Obrador (AMLO), well known for advocating policies that involve import substitution. The possibility of reaching a more amicable end to NAFTA talks may diminish following the July elections”. Another conflict between Mexico and the USA involves President Trump’s immigration policy. However, despite all the emerged turbulences, up to now, the flow of remittances remains resilient and expanding. Remittances continue to be important for a large part of the population. The Mexican-USA relationship can be also impacted by the adoption of measures by President Trump based on national security risk (as under Section 232). The Department of Commerce (DoC) recommended one of the following remedies to the US President: a) a global tariff of at least 24% on all steel imports from all countries; b) a tariff of at least 53% on all steel imports from 12 countries (Brazil, China, Costa Rica, Egypt, India, Malaysia, Republic of Korea, Russia,
South Africa, Thailand, Turkey and Vietnam) with a quota by product on steel imports from all other countries equal to 100% of their 2017 exports to the USA; c) a quota on all steel products from all countries equal to 63% of each country’s 2017 exports to the USA. [President Trump has announced that the USA is planning to slap tariffs of 25% on imported steel]. According to Credit Suisse, the largest exporters of carbon steel products to the USA in 2017 were: Canada (5.6 Mt), Brazil (4.6 Mt), Korea (3.3 Mt), Mexico (3.1 Mt) and Russia (2.9 Mt). Canacero stated that Mexico must not be included in Section 232, because the USA exported $9.8bn of steel products to Mexico and imported $6.4bn in 2017. Therefore, the USA obtained a $3.4bn sectorial trade surplus with Mexico last year. Summing up, there are various factors that can affect the performance of the Mexican economy in general and the country’s steel market in particular in 2018. Instability is not so rare in Latin American countries, but this time Mexico seems to have overdone the Tequila. �
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24.01.18 09:55
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IRON ORE
Pilbara Blend capacity expanded
Rio Tinto’s wholly-owned Silvergrass iron ore mine in Western Australia (WA) was officially opened on 30 August and is set to concentrate on mining low-phosphorus iron ore under Pilbara Blend specifications, which means a blend of Marra Mamba and (higher phosphorus) Brockman ores from over a dozen mines. By Michael Schwartz* COSTING A$338 million (Rio Tinto has invested A$20 billion in WA over the last decade), Silvergrass features several costsavings, notably a 9 km conveyor system which obviates the need for road transport of the mineral to its processing plant at Nammuldi. In fact, Silvergrass is a satellite deposit not only adjacent to Nammuldi, but also part of the Greater Nammuldi precinct; its ore, after processing, will be blended into the Pilbara Blend. The new mine will add 10 Mt/yr to company capacity. During construction, Silvergrass generated 500 jobs and US$180 million worth of contracts, including those for modular buildings, gantry cranes and a wastewater treatment plant. Completion of the final sections, which allowed the mine to open, comprised a satellite crusher and the aforementioned overland conveyor. Over the last seven years, Rio Tinto has invested A$57 billion in WA. Silvergrass comprises a brownfield expansion offering attractive returns, notably with an expected internal rate of return for this investment well in excess of 100% and a payback of less than three years. This factor forms a key element in maintaining Rio Tinto’s premium Pilbara Blend, and also delivers incremental tonnage and lower unit costs. Rio Tinto’s broader economic strategy is a commitment to generate A$5 billion of additional free cash-flow in the five years to 2021, precisely through the productivity
drive announced in 2016. Under this plan, the company intends to raise productivity across its asset portfolio worth A$50 billion not only through the A$5 billion but also through a A$2 billion cash-cost reduction target for 2016-2017. As of August 2017, Rio Tinto had achieved A$2.1 billion of pre-tax sustainable operating cash cost improvements in 2016 and H12017, meeting its A$2 billion target six months ahead of schedule. Nammuldi has now witnessed three stages. In 2014, approval was given to Nammuldi stage one, commissioned in Q415 and contributing an initial extra 5Mt/ yr to the mine output. Further approval came in 2015 with Nammuldi stage two, once again contributing 5Mt/yr after commissioning in Q416. The present Silvergrass development will generate the 10 Mt/yr previously mentioned. Ore from Silvergrass will be blended with ore from other mines to create the required blend at the port. The ore is then shipped to a number of clients in Asia, where China is the largest destination. On a broader scale, Rio Tinto’s Silvergrass mine plus two others at West Angeles and Yandocoogina, have resulted in over 1,000 construction jobs in WA, Silvergrass being Rio Tinto’s 16th mine at Pilbara; to put the Pilbara into context, Rio Tinto last year shipped its five billionth tonne of iron ore after 50 years of operations there. Total Silvergrass reserves at the end of 2016 were
17 Mt @ 61.3% iron. Silvergrass is the latest (and 16th) mine in Rio Tinto’s Pilbara network of mines, railways and ports. A company spokesman confirmed that it has been working to support the people and the environment of the region since its first mine opened in 1966. The spokesman also stated that Silvergrass is located in the land of the Eastern Guruma People, with whom it has had relations going back 50 years. Since 2002, it has had a formal Indigenous Land Use Agreement in place. In addition, Silvergrass is one of the largest private sector employers of Aboriginal and Torres Strait Islander people in Australia, employing more than 1,600 indigenous people across the country, with almost 1,000 employed directly by Rio Tinto’s iron ore business in Western Australia. Support is being offered to Pilbara’s aboriginal businesses so that they may thrive and develop, together with a new local procurement programme that puts local businesses at the front of the queue when making procurement decisions. Training and support are also being advanced. As an indicator of the importance of Silvergrass to Rio Tinto globally, it and two other mines, Amrun (bauxite in Queensland) and Oyu Tolgoi (copper and gold in Mongolia) have been singled out as high-growth projects. �
* Mining correspondent March 2018
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FUTURE SHOCK
Business Ethics 4.0 @ Steel Industry The steel industry is a traditional business. In the past, contracts could get signed on a napkin or sealed by a handshake. Even if these times have passed, personal trust and experience remain the backbone for longterm success. By Patrick Henz*
TODAY, new generations of managers have introduced Industry 4.0. We are in a continuous technological revolution. Different experts predict that by 2025, 30% of today’s jobs will be performed by robots, including white collar positions in all departments. This creative disruption will also, on the other hand, require that completely new job positions be created. Following computer-aided automation, Industry 4.0 puts its focus on the smart workplace. Intelligent machines should understand human employees and adapt to them, not the other way around as before. Voice-based recognition devices will especially become the employee’s standard method of controlling the different machines. Even if not all job positions will work like this, steel mills in the future will become high tech workplaces, for both blue and white collar employees. Beyond this positive vision, the development will create new ethics and compliance challenges, which have to be managed in order not to jeopardise the company’s future. Today, the focus is on the US Foreign Corrupt Practices Act from 1977 , which enables the US Department of Justice to prosecute companies for global corruption and bribery cases. The situation changes as more and more countries create similar new anti-corruption laws, like the UK Bribery Act or the Brazilian Clean Company Act. In addition to this, the different
responsible governmental departments began to co-operate in the investigations. Today’s compliance systems are tasked with protecting the company against corruption, antitrust, data privacy, and money laundering cases. Furthermore, these systems demonstrate how the company respects not only clients, but also its own employees, providers, partners and
society. Besides clear processes, principles guide employees where new scenarios are not defined by guidelines anymore. The compliance risk assessment identifies different risk factors to develop protection measures; such as workshops, effective processes and related controls. Imperative is an adequate “tone from the top” to ensure that no one is above the guidelines. Besides numerous opportunities, Industry 4.0 will also add new risks to the steel industry. Processing of information Economic and technical environments have become more complicated and “information” is the critical resource. This is also valid for compliance departments. The team’s goal is to ensure adequate behaviour and sustainability of the business. Behaviour is based on the perception of information and its correct processing. Based on this idea, the compliance department is responsible for the protection, gaining and usage of information. Transparency minimises the cost to gain information. To ensure compliance with guidelines and laws, employees receive information from their employers; such as mission, vision, principles, values and business conduct guidelines. Furthermore, employees have access to a vast amount of external information, which may or may not be accurate. In a worst-case scenario, employees live in “information bubbles.”
* PTUS Head of Governance & Compliance, Primetals USA; Regional Compliance Officer Americas March 2018
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Based on culture and experience, or diversity in general, individuals perceive information differently and process it based on learned examples. Correct and clear information, including its perception, is imperative to understand: • laws and guidelines, • the cost of corruption (developing empathy for its victims) and • the consequences of potential violations. Artificial intelligence What is true for individuals is even more important for Artificial Intelligence (AI). Such software is already capable of beating humans at chess, poker and Ms.Pac Man. But, for adequate predictions and decisions, it requires a correct input of information. This is a risk factor, as hackers no longer have to hack the organisation itself. Instead, damage can be done by manipulating the stream of incoming information so that the company’s AI makes wrong decisions based on incorrect data. Even if AI is capable of autonomous learning, its base and perception depend on the algorithms that were coded by the human software designers. Due to this, the algorithms may be flawed because of different human biases. That is why these employees become a new focus group for ethics and compliance departments. Steel producers have to be certain that the programmers are an integrated part of the company, and that they share its vision and values. Software designers share the same “must win” pressure as sales employees, as deadlines are often tight. A risk example for this group would be forgotten “temporary fixes” written into software. These can lead to big problems if they are not replaced before the project is handed over to another person or team. Autonomous learning includes two steps: 1) Programmed algorithms make decisions based on received information. 2) Based on the monitored results, the AI adds experience to the algorithms and, based on this, adapts the decision-making process. After his famous “Three Laws of www.steeltimesint.com
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Robotics”, Isaac Asimov added a Law 0: “A robot may not harm humanity, or, by inaction, allow humanity to come to harm.” As corruption is not a faceless crime and there is a real cost of corruption for the victims, an intelligent machine or robot would have to avoid any kind of corruption. The use of AI inside a company leads to an interesting question: Who inside the organisation will be responsible for ensuring that intelligent self-learning software will act according to laws and regulations? Thinking about AI and automation, we have to dismiss the romantic concepts about robots. Such machines are not individuals, but similar to apps, are connected to the Cloud and act as one big system. Furthermore, there is no classic self-awareness. Rather, AI acts based on a programmed morality. With a focus on programmers, but also directly controlling AI behaviour; intelligent software will be included into the compliance system. This is a logical consequence, as the department is already responsible for fostering adequate
Mission vision
human behaviour. Because AI learns on its own, it is difficult, if not impossible, to understand its compliance by analysing the software’s code or archives. It is essential, therefore, to monitor the intelligent software and test its behaviour and decisions in different scenarios. At the next level, AI could even learn compliance and ethics via an AI coach. Expressed in mathematical formulas, transparent business maximises long-term success, even if less-than-ideal results are achieved in the short-term. If the AI analyses different scenarios, it will come to the conclusion: “Compliance is a sales-advantage!” In this example, ethics and mathematics combine to create job-enrichment for the next generation of compliance officers. Liability also has to be considered. Can the company that sold the AI to the client be held liable for what the AI does? Or does liability belong to the company that used the AI? You may tend to believe the latter, as intelligent software learns inside its environment. The exception would be, if the software included an algorithm with a bias in perception or processing of information. This concept is similar for dog breeders and owners. If a dog attacks someone, the liability is not with the breeder, but the owner. The dog itself has no liability, but may face the consequences of being put to sleep. Furthermore, even if the breeder has no direct liability, legal decrees may prohibit the sale of certain dog breeds if the legislature identifies them as a public risk.
Unit “Grey box”
values BCGs guidelines
Processing
comm.
Compliance
Perception
Forecast Behaviour
Information
March 2018
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Cognitive hacking The world is not black and white. There is no clear line between humans and AI. We have practically outsourced parts of our memory to the Internet. Scientists found out that humans today take less time than in the past to try and answer a question from memory. Instead, the tendency is to give up more quickly and rely on smart phones to find the answer in Google or on the Wikipedia-app. Even if we don’t have hardware directly integrated into our bodies, we have practically become cyborgs in a sense, vulnerable to the manipulation of stored information or the use of biased online portals. The term “cyborg” was first coined in 1960 by the scientists Manfred Clynes and Nathan Kline. It describes a human individual with artificial parts in order to replace missing ones or to achieve enhanced abilities. Hackers today are not the cliché nerd sitting at a desk with tons of empty pizza boxes around. Anybody can be a hacker. The weakest brick in the firewall is often the employee. For this, the most dangerous attacks are not autonomous, but cognitive hacks. With highly personalised phishing emails (for example, an email in the name of a superior manager or a provider) employees can be provoked to open an attachment or send transfers to a fake bank account. Names and job-titles can easily be found on social media or inside the company’s communication system. Creating an effective attack on the human brain requires less computer skills, but more knowledge about different psychological biases. Hackers can use the effects of time or authority pressure on these biases to influence inadequate behaviour. In one case, they used human curiosity by leaving infected USB drives throughout a corporate parking lot. Such an attack is not limited to the transfer of money or deletion of information. If hackers have internal knowledge, it is possible to stop automated processes and shut off machines. One such attack led to physical damage at a steel mill. Anybody can fall victim to psychological pressures and cognitive hacking. The best protection is to create awareness and present different scenarios in workshops. March 2018
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Such an event is similar to a vaccination. Normally the employees will not need it. But, if they experience a similar situation, they can remember the scenarios and execute the recommended behaviour, such as ‘do not open suspicious attachments’ and ‘always confirm changes of vendor information’. As cognitive hacking is more a human risk than an IT one, it makes sense that the Compliance department takes responsibility to prepare the employees. Antitrust Remote administration of equipment in a steel mill is a logical next step. It requires a solid agreement regarding who owns information and/or has the rights to use it. AI can learn from the continuous flow of information. One example is knowing the best time to replace a spare part, and synchronising the change with planned down times to minimise costs. The AI learns such patterns by analysing information coming from the steel mill. Based on this,
equipment run times can be optimised. The quality of learning can improve, if the AI not only analyses the information from this particular mill, but also from others with similar machinery – including competitor mills. With improved AI and a more exact forecast, all mills with access to the AI become more efficient. This could be a competitive advantage for mills that participate. Even if local laws allow for such co-operation, it is a fine line as the AI may analyse patterns in machine usage and predict strategies. Such co-operation may be seen as an illegal cartel, and subject to anti-trust laws. Today, antitrust laws target the misbehaviour and conspiracy of human employees. This may soon change as, for example, the European Parliament has started a discussion about whether AI and robots should be considered “electronic persons” with civil rights. As a consequence, existing anti-trust laws would apply to them. Data privacy The connection of all kinds of machines, called the Internet of Things, creates Big Data. This should not be confused with Smart Data. Data itself is a collection of information without any kind of intelligence. Only the connection of data with statistical methods and logical theories, to predict future behaviour or situations, makes it smart. Digitalisation plays an important part in Industry 4.0. Production and test facilities, as well as office infrastructure, can be simulated inside the computer. These virtual structures can run in parallel to real-world locations. As the “digital twin” receives continuous information from its counterpart, the simulation gets highly precise. www.steeltimesint.com
07/03/2018 10:02:34
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The digital twin is used to analyse the efficiency of the complex system, especially to predict how it reacts to changes. This is an essential tool to synchronise maintenance and updates with the mill. Employees are part of the system. So changes to hardware and software will not only determine the output, but also how employees switch between different positions based on skills and experience. Similar to athletes, corporate employees do not consistently work at their highest levels, but are influenced by mood, distraction, health and other factors. For this, companies may not only include longterm skills into the digital twin, but also the actual performance of the employee, including medical leaves and results from their last performance evaluation. Voiced-based interfaces are expected to become standard for employees to control machines. Further uses for these gadgets will pop up all over organisations, like monitoring when an individual walks through the door in the morning, for example. As all information will eventually be stored in the cloud, it is an ideal source to make predictions about employee development, including the development of digital twins. As long as information exists, there will always be a temptation to use it. If a company has sensible information, it is difficult to prevent an organisation from using it. This may potentially lead to a better understanding of the employees. This could be used to establish a more efficient communication with them. Or, it could even be used to manipulate them. The compliance department has to ensure that the different local data privacy laws, such as the 2018 EU General Data Protection Regulation, are obeyed. In doing so, not only is the physical location of the server March 2018
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relevant, but also the country of the client and the nationality of the individuals. Big Data + Statistical Methods + Logical Theories = Smart Data. If the data is related to individuals, data privacy may limit smart data or at least require robust controls to avoid leaks or questionable statistic connections. A company should regularly review which information should be stored and which could be eliminated. Data that is not stored anymore cannot get stolen and misused. It is important to remember that 60% of all data attacks have been carried out by company insiders. Such attacks can be on a high- or low-risk level; entering a virus from inside the system or just downloading the relevant information to an USB-stick. It is important to note that damage can not only be caused by theft. Data manipulation may also lead to non-efficient processes – a relevant disadvantage in a competitive situation. Conclusion Industry 4.0 will disrupt and evolve the steel industry. As with all new technologies, it offers opportunities and pitfalls. The key to a successful implementation is building up the required trust levels with internal and external stakeholders, as the risks are known. As a non-tangible good, AI requires a high level of trust between technology suppliers and steel producers. It is up to all partners to respectfully manage Industry 4.0 by implementing an adequate business
culture as well as the required controls and processes. To that end, legal concerns and ethics have to be addressed right from the beginning in the R&D phase and not when AI solutions are available to the market. Personal trust and experience remain the foundation for long-term success, as steel is and can be used for robots, self-driving cars and spaceships to colonise Mars. Properly handled, intelligent processes will ensure tomorrow’s relevance of the steel industry. �
Bibliography Deming, William Edwards (2000): “The New Economics for Industry, Governance, Education” EUGDPR.org (fetched 28.08.2017) FCPAmericas Blog (2015): “Highlight of Brazil’s Regulation on the Clean Company Act”: http://fcpamericas.com/english/anticorruption-compliance/highlights-brazilsregulation-clean-companies-act/# Elkins, Kathleen (2015): “Experts predict robots will take over 30% of our jobs by 2025 — and white-collar jobs aren’t immune, http://www.businessinsider.com/ experts-predict-that-one-third-of-jobs-willbe-replaced-by-robots-2015-5 Emerging Technology from arXiv (2014): “Do we Need Asimov’s Laws?”: https:// www.technologyreview.com/s/527336/dowe-need-asimovs-laws/ The United States Department of Justice (2017): Foreign Corrupt Practices Act ,https://www.justice.gov/criminal-fraud/ foreign-corrupt-practices-act UK Legislation (2010): “Bribery Act”, (http:// www.legislation.gov.uk/ukpga/2010/23/ contents www.steeltimesint.com
07/03/2018 10:02:38
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The game changer steelmakers ignore Hot charging saves time and energy, but most steel manufacturers have yet to adopt it to narrow the gap between continuous casting and hot rolling. The complexity it adds to the production process has always been a hindrance – until now. By Marcus Malinen* IN the competitive and resource-hungry environment of steel manufacturing, optimising the path between steel casting and hot rolling to minimise the cooling of slabs can mean the difference between getting by and getting ahead. The ‘hot process’ idea has been around since the 1973 oil crisis forced steel companies to look into reducing reheating costs. While oil prices are currently ticking upwards from their recent low in early 2016, another trend has risen to further necessitate the move towards optimising hot charging across the industry: The growing importance of environmentally sustainable practices. Although hot charging is simple in theory,
it’s an immensely difficult scheduling effort as different steel qualities require different cooling times for the slabs between the casting and rolling processes. Furthermore, different line schedules, constraints and KPIs need to be aligned to maximise hot charging opportunities and make a decent schedule. Despite these difficulties, hot charging is still a hot topic as it promises significant cost-savings and productivity, as well as being in line with increasingly strict guidelines on energy efficiency. Less energy and time are needed to reheat the slabs to the temperature required for hot rolling, which also leads to reduced CO2 emissions. Having fewer slabs in inventory also reduces
working capital tied to them. The value of hot charging The steel industry is the largest industrial emitter of carbon dioxide. With the growing impact of global warming, it is looking to hot charging and direct rolling to help reduce the emission of greenhouse gases. It’s not just the environment that wins with hot charging – steel manufacturers stand to reap tangible benefits too. With the duration for cooling down of slabs between casting and hot rolling running up to a few days, there is significant costsavings potential. Depending on the production volume of
* Vice President of Europe, Middle East, Africa and Russia, Quintiq, a Dassault Systèmes brand www.steeltimesint.com
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the steel plant and the achieved increase in hot charging rate, benefits can be hundreds of thousands, or even millions of dollars per year. Hot charging slabs at an elevated temperature will also improve material quality, reduce material losses, enhance productivity and reduce slab stocking. A direct rolling ratio of 100% and a yield of 100% are the future trends with the development of precision control in the hot rolling process. This means that there is no delay between casting and rolling and defect-free products. The result? Better quality products, less wastage and improved on-time in-full delivery rates. Why hasnâ&#x20AC;&#x2122;t the industry moved forward with hot charging? Though the clear benefits of hot charging make it a goal that steel manufacturers have aspired to, many have not managed to optimise the process. What is it that makes optimal hot charging such a difficult goal to reach? Itâ&#x20AC;&#x2122;s a fallacy to assume that hot charging is something that you only need to implement once. Trends in the steel industry such as growing product portfolios and smaller order sizes are actually making hot charging even more difficult, and some steel producers are reaching lower rates of hot charging today than they have in the past. Steelmaking, casting and hot rolling are all complex processes, and different exceptions and disruptions in each process are common. This creates a need for frequent rescheduling: It is not enough to create a single schedule that optimises the hot charging rate, because soon enough something is bound to happen
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in production which will require a change in the schedule. Most steel companies do not have the scheduling support that would enable them to cope with those changes while also maximising the hot charging rate. For example, if some of the slabs need unplanned surface conditioning after they have been cast, the planner has to be able to reroute them to appropriate conditioning resources and reschedule them in the hot mill sequence. When the hot rolling mill has an unplanned stop of a few hours, the system should support the planner in adjusting the casting schedule so that the slabs are still arriving hot when the rolling mill is back up and running. This may involve storing slabs temporarily under heat-retaining hoods, but these also typically have a limited capacity which has to be taken into account. Casting and hot rolling often operate independently of each other: They are based in different departments, have different managers and planners, and sometimes even different KPIs. End-to-end visibility over the whole process is lacking. Even in an integrated steel plant, the lack of a scheduling system capable of managing the complexities and uncertainties of steelmaking is often a hindrance to achieving the goal of hot charging. Getting the exact chemical composition right in steel casting is a highly complex process. So is combining orders into a casting sequence. Each customer order comes with slightly different
chemical requirements and the challenge is to improve efficiency by combining the orders into the same casting sequence to increase the sequence length. It is critical to get everything right as products that are off-spec will need to be scrapped, re-cycled or sold off as a lesser quality product. Some slabs require grinding to improve surface quality before hot rolling and this needs to be taken into account in the schedule. In some cases, this is known only when the slab has been cast and inspected. Also adding complexity to the scheduling effort is the limited capacity of heat-retaining hoods or warm-keeping pits that slow down the cooling process. Some steel grades need to be kept warm for technical reasons. Disruptions, big and small, will throw any planned schedule into disarray. For example, unplanned maintenance work on a hot rolling mill can potentially stop tasks on that mill for six hours â&#x20AC;&#x201C; which in turn delays subsequent processes for six hours in a knock-on effect. Besides unplanned disruptions, there are also planned breaks that the schedule needs
07/03/2018 10:04:08
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to take into account. When a disruption occurs, the system must be able to revise the schedule quickly while ensuring that set KPIs are met. Creating schedules for hot charging is a constant challenge as typical methods or systems cannot keep up with the changes or react fast enough to disruptions. The planning puzzle, therefore, is how to update schedules while maintaining the high hot charging rate. What steel manufacturers need is a scheduling solution that can promise efficiency and – above all – precision. Precise scheduling: The key to solving the hot charging puzzle Guesswork has no place in steel production. Every material, process and decision has to be accurate. The cost of getting it wrong is simply too high. Precisely planning steel hot mill schedules based on available resources and pending orders is a tough task even for the most experienced planning team. Each schedule must take into consideration what slabs can be slotted in to extend the schedule and minimise the waiting time between casting and hot rolling. Should a disruption happen – for example, when a heat of steel does not reach its target composition and needs to be re-cast – processes have to be rapidly rescheduled to ensure that orders are not delayed. An integrated and advanced planning solution will enable planners to have the support they need to build plans that are as flexible as they are exacting. With visibility over operations, agility in the face of disruptions and robustness in even the most challenging conditions, high efficiency and productivity in steel manufacturing operations is assured. The scheduling solution should have the following capabilities to fully leverage the potential of hot charging. A single system to plan them all A single system that provides planners with end-to-end visibility of hot rolling resources and the multiple production steps of: Slab reservation, casting sequence planning, scheduling of casting, grinding and hot rolling. With visibility, planners can intervene when disruptions and bottlenecks occur, and take action to mitigate issues before it is too late. Planners can adjust the schedules as needed in the event of a www.steeltimesint.com
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machine breakdown, resource shortage or incoming rush order. Visibility also allows for collaborative scheduling between planners of different processes, such as the casting planner and hot mill planner. Optimised scheduling A powerful optimiser can swiftly determine the optimal balance between casting and hot rolling while taking all sequencing constraints into account. This gives planners immediate insight into how casting and hot rolling sequences affect the hot charging KPIs. It highlights constraint violations, proposes the best heat sequences and optimises the combined hot rolling and casting schedules. When disruptions happen, the optimiser rearranges the sequence of tasks to generate the best schedule. KPI-based planning The opportunity to measure KPIs and drive improvements in the critical ones. It should empower planners with immediate KPI-based feedback on the quality of a plan before it is implemented. Monitor as many KPIs as you like and predict the impact of decisions, with up-to-the-minute information and planning options at your fingertips. With this, planners can see the consequences of each action in terms of KPIs such as delivery times, throughput, inventory levels and capacity utilisation. Dynamic sequencing capabilities A diverse product mix increases the complexity of scheduling for hot charging and may affect delivery performance. Dynamic sequencing capabilities, coupled with input from experienced planners, are necessary to keep process disruptions to a minimum and help ensure on-time delivery. Powerful sequencing capabilities let planners visualise different production scenarios to create an optimised, demanddriven schedule. Such a solution should take into account any set of inputs and rules such as specific set-up times, transition rules and quality considerations. It cannot stop there. The right solution must be able to plan material flow, combine orders and create batches to generate an optimal production sequence for better delivery performance.
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Real-time disruption management When disruptions such as machine malfunction happen, the solution must March 2018
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quickly calculate the consequences of the current conditions and offer an alternative optimized production schedule based on the new constraints. This capability will allow action to be taken quickly to maintain efficient production. In control Above all, with the right planning and optimisation solution for hot charging, planners are always in control – not being controlled. Having the support of such a system gives planners freedom from excessively worrying about the tiny details, thus empowering them to use their extensive knowledge and experience to make the decisions that truly contribute to your business. Hot charging can improve profitability, throughput, and quality, while reducing energy consumption and the impact of carbon emissions on the environment. For those steel manufacturers that are embracing the complexity of hot charging with an advanced planning solution, it truly is a game changer. �
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TUBE AND WIRE
Tube, wire rod and pipe Wire rod and steel tubular and pipe products represent a high profile and some would say ‘controversial’ sector of steel manufacturing; the former is used extensively by the automotive sector as well as for more mundane uses, such as motorcycle wheels and bed springs, while the latter, if steel pipe is included, is equally ubiquitous and heavily used by the construction and energy industries. This article runs through some of the latest developments in the marketplace.
BRAZILIAN steelmaker Gerdau is selling its Beaumont, Texas, wire rod mill and two downstream facilities to Optimus for US$92.5 million and should finalise the deal by the end of this year. The Gerdau/Optimus deal embraces the Beaumont mill in Texas plus two downstream locations – Beaumont Wire Products and Carrollton Wire Products. The Beaumont mill has a meltshop capacity of 700kt and, in addition to producing wire rod, can also manufacture coiled rebar, says Gerdau. Gustavo Werneck, CEO of Gerdau commented: “The strategy in North America, a key market for us, is to improve our profitability, focus on more value-added products and better serve our customers, positioning Gerdau as one of the most innovative steel companies worldwide.” The company is committed to strengthening its position in the USA over the next few years and continues to see great growth potential in its established markets. March 2018
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According to Gerdau, wire rod is used to produce more than 100,000 finished products including automotive fasteners, barbed wire, nails, galvanised wire, prestressed concrete strand, tie wire, ground rods, chains, fencing, bed springs and many more everyday items, such as coat hangers, bolts and concrete reinforcing mesh. All of Gerdau’s wire rod is manufactured with high levels of recycled scrap. Optimus Steel is a newly formed company affiliated with Wire Mesh Corp (WMC) of Jacksonville, Florida. While Optimus and WMC are separate entitites, they are also affiliates, according to an online report by Global Legal Chronicle, which further states that WMC will operate the downstream facilities while Optimus will run the Beaumont rod mill. In fact, talking of bed springs, Leeds UKbased luxury bed maker, Harrison Spinks, has demonstrated its commitment to British manufacturing by investing £1.8million in a new wire drawing facility on British Steel’s
site in Scunthorpe, which will lead to 22 new jobs. Harrison Spinks already employs over 600 people at its facilities in Leeds. The bed maker – which was founded in 1840 and is one of Great Britain’s most established and innovative bed and mattress manufacturers – will utilise a 40,000 sq ft British Steel building to house two wire drawing lines, set to be installed at the end of April 2018. These lines will draw the ultra-fine wire used to manufacture Harrison Spinks’ world-leading pocket springs, using steel rod from British Steel. The investment will initially create nine jobs with 13 more to follow when the bed maker installs a further six wire drawing lines at the facility. These will produce approximately 400 tonnes of fine wire for its springs each week. Liberty House Group ArcelorMittal, the world’s biggest steelmaker, has sold its Georgetown steelworks to Liberty House Group, part of www.steeltimesint.com
08/03/2018 10:55:18
TUBE AND WIRE
the GFG Alliance. The deal marks the first of a series of what Liberty calls ‘strategic North American acquisitions’. At Georgetown in South Carolina, the plan is to re-hire the plant’s 125 former employees and increase the workforce to 250 over the medium term. The plant was closed down in 2015, but had played a pivotal role in the state’s industrial infrastructure for the past 70 years. Demand for wire rod in the USA is expected to grow substantially and Liberty wants to target a major share of the US home-produced wire rod marketplace. ArcelorMittal is also investing heavily in wire rod mills at its Contrecoeur steelplant. The company’s Long Products Canada division will spend US$70 million on two reheating furnaces at its East and West wire rod mills at a cost of US$30 million and US$32 million respectively, increasing rolling capacity by 100kt/yr and reducing energy consumption and GHG emissions. The work will be completed by 2020. The world’s largest steelmaker is reported to be in the final stages of a joint venture deal with Steel Authority of India Ltd (SAIL) to build a new auto steel plant in India. SAIL has already entered a strategic agreement with Korean steelmaker POSCO to provide ‘wide-ranging technical services’ at SAIL’s Burnpur steel plant. According to one online report, the South Korean steelmaker will provide technical advice and know-how for coke-making, iron and steelmaking, and wire rod mills. SAIL is also converting defective and rejected rails into high carbon wire rods, according to a recent online report by The Pioneer (dailypioneer.com). Wire rod mill in China Jianlong Beiman Special Steel Company, based in Qiqihar, China, has awarded SMS group a contract to supply core components for a high-speed wire rod mill for quality steel. The centrepiece of the new wire rod mill, which has an annual capacity of 500kt, is the 10-stand wire rod finishing block. To comply with the high metallurgical requirements of the finished products, the wire rod mill has been designed for lowtemperature rolling. This is achieved by installing a cooling and equalising loop upstream of the block. The rolling schedule includes wire rod with www.steeltimesint.com
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diameters from 5.5 to 25 mm, and rebar with diameters ranging from 6 to 16 mm, which are finish-rolled at speeds of up to 115 m/second. In addition to the wire rod finishing block, the scope of supply also includes two cantilever compact roughing stands, the group of shears upstream of the block, and the loop laying head including pinch roll unit. SMS group is also supplying the design for a Loop Cooling Conveyor (LCC) with three-fan technology, as well as the coil handling system. Commissioning takes place in spring 2019. The importance of ‘locally sourced’ The automotive sector is a big user of wire rod; the product is used to make spare parts. In Japan, for example, the Sango Corporation, a spare parts producer, has agreed to use the products of state-owned steelmaker Krakatau Steel in a drive to increase local content in its products. A deal has been struck whereby Krakatau Steel will process raw materials imported by Sango to become wire rods that Sango will then use to produce spare parts. Krakatau will produce 40kt of wire rod annually and will commence production early in 2018. Located in Cilegon, Banten, Indonesia, PT Krakatau Steel is the country’s largest steelmaker, employing over 7,000 people. The company’s wire rod is made from billet steel and is categorised as bar product to distinguish it from hot and cold rolled coil, which is made from slab steel. Low and medium wire rods, says Krakatau, have a carbon content of less than 0.25% and are commonly used to make wire, nails and wire mesh, among other products. High carbon wire rod – containing more than 0.40% carbon – normally incorporate alloys, such as Nb, V or Cr, to produce bar steels with better pull strength and formability and are used for spring beds, motorcycle wheel trellis and umbrella frames. In Indonesia, the automotive sector uses around 150kt of wire rod per annum. The deal between Sango Corporation and Krakatau will mean an increase in locally sourced ‘ingredients’ for Sango car parts, which can only be a good thing. Intially ‘local content’ will be around 30% but will gradually increase to 60%, something March 2018
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Industry Minister Airlangga Hartarto is very pleased about. Tube & Wire 2018 In April Düsseldorf plays host to the Tube & Wire trade fair (April 16-20) where one of the key themes will be digitalisation and Industry 4.0 and their impact on the tube and wire industry. One company, SMS group, believes that so-called ‘smart manufacturing’ will change things profoundly and will be explaining to visitors how new technologies will enable greater efficiency, higher quality and more flexibility. According to SMS group, the first impetus arising from digitalisation and Industry 4.0 concerns the design and manufacture of machines and components for tube and wire production. The company will demonstrate with an example of a mill stand for a cold pilger mill, which is made with the aid of additive manufacturing processes. “The component geometry of a mill stand, which up to now has been made by machining techniques, was optimised in terms of the stresses generated so that the number of strokes and thus the productivity were enhanced significantly.” SMS group will also highlight its competence centre for 3D printing that is under construction in Mönchengladbach, and 3D printed components. The company believes that digitalisation is creating new opportunities for plant service and claims that its ‘smart maintenance solutions’ are designed to enhance the availability of the plant and the quality of the end products by combining software solutions. “The creation of a digital plant structure will offer maintenance teams centralised access to all the relevant parameters in future,” explained the company. Sustainability certification In the world of tubular steel, ArcelorMittal Tubular Products Europe received a responsible sourcing certificate for its construction tubes and line pipe. An online report by worldpipelines.com claims that the company’s Polish production unit in Krakow and it’s Karvina facility in the Czech Republic, were both certified under the Environment & Sustainability Standard BES 6001, a standard designed specifically for construction tubes and line pipe covering hot-finished structural hollow sections and pressuretested pipes. March 2018
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It goes without saying that Adrian Alecu, chief marketing officer of ArcelorMittal Tubular Products Europe, is chuffed to bits by the news. The company is setting an example in the construction market in terms of sustainably sourced steel tubes. Anti-dumping in the USA In the USA, Wilbur Ross, the US Secretary of Commerce, announced recently the initiation of new anti-dumping and countervailing duty investigations into the export of large diameter welded pipe (LDWP) into the USA from a handful of countries. Canada, China, Greece, India, Korea and Turkey are the countries under the microscope, and the purpose of the investigations is to determine whether imports of LDWP are being dumped in the United States and/or if producers are receiving unfair subsidies. The American Line Pipe Producers Association (ALPPR), which (surprise, surprise) represents US line pipe producers, filed anti-dumping petitions on LDWP from Canada, Greece, India, China, Korea and Turkey on 17 January, and also
countervailing duty petitions on LDWP from India, China, Korea and Turkey. A strong supporter of President Donald Trump’s ‘America First’ announcement, the ALPPA claims that there is plenty of available pipe production capacity in the USA and that jobs will be created at the pipe mills and at numerous companies supporting the line pipe supply chain if that capacity is used. Jason Norris, president of Pennsylvaniabased Dura-Bond Industries, another US-based line pipe manufacturer, pointed out that ‘using American-made pipe does not just benefit our workers, it benefits the workers and communities of all of the companies in the supply chain’. According to Secretary Ross, “When initiating a trade investigation, the Department of Commerce begins an open and transparent process that allows American companies and workers to gain relief from the market-distorting effects of injurious dumping and subsidisation of imports.” The latest AD and CVD investigations were based on petitions filed by the above-mentioned pipe manufacturers and the American Cast Iron Pipe Company of Birmingham, Alabama. Tim Brightbill, partner, Wiley Rein LLP, counsel to the American Line Pipe Producers Association (ALPPR), commented: “We are deeply concerned by the recent losses of several $100 million or more pipeline projects and hundreds of American manufacturing jobs to dumped and subsidised imports from these countries.” Section 232 and ‘national security’ The bigger picture in the USA at present is Section 232 and the impact of steel imports on national security. Wilbur Ross has now released his department’s reports on the subject and has claimed that the quantities and circumstances of steel imports do ‘threaten to impair the national security’ as defined by Section 232. The matter is in the hands of President Donald Trump who is due to make his decision by 11 April. Industry observers believe he will focus on specific products, such as electrical steels and oil country tubular goods (OCTG). According to a report by AMM.com, the USA imported 3.09Mt of OCTG in 2017, a threefold rise from 1.03Mt in 2016. South Korea accounted for 1.05Mt of foreign OCTG exported to the USA last year, with Mexico in second place (426kt). � www.steeltimesint.com
08/03/2018 10:55:49
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Managing the digital revolution
Gianpietro Benedetti, CEO Danieli
Rolande Paolone, co-director Danieli
Peter Marcus, World Steel Dynamics
Research Centre
A late 2017 four-day gathering of steel industry leaders and experts, organised and hosted by Danieli at its Buttrio headquarters in Italy, brought together the steel industry’s top minds to examine dozens of technologies and trends affecting the global steel industry. In this article, we look at how the fourth Danieli Innovaction Meeting (DIM) dealt with the subject of digital manufacturing THE phrase ‘the factory of the future’ is one that receives increasingly more airplay as steelmakers consider their options ‘going forward’ and find that digital manufacturing has arrived. Industry 4.0, another phrase that is becoming popular in steel manufacturing circles – and is now the subject of a major steel conference in Poland this coming June* – is concentrating the minds of the world’s metal experts. On day one, after an introductory speech by Dr. Edwin Basson, director-general of the World Steel Association (worldsteel) Emanuele Morandi, CEO of Made in Steel, Italy, told delegates that advanced controls
and automation will ‘define the future’ of steelmaking operations. He predicted that the ‘factory of the future’ will produce data as well as steel. It was a theme enlarged upon by World Steel Dynamics’ Peter F Marcus, who told the gathering’s 600-strong audience of steelmaker delegates that they needed to embrace new technologies in order to survive. Marcus gave delegates a history lesson, covering the birth of blast furnaces in the 17th Century, the Bessemer steelmaking converter of the mid-19th Century and the first hot strip mill of the early 20th Century.
He spoke about the continuous casting process and how it replaced billet and slab mills in the 1950s and then discussed thinslab casting and hot-rolled band production in Crawfordsville, Indiana, in the late eighties. For Marcus, the prevailing technology today is ‘digitalisation’. He argued that there is now ‘ever greater’ digital control of the entire process from steel scrap to timely steel product delivery to the customer. There is also ‘old technology’, he said, citing two hot-strip mills still in operation after 80 and 50 years respectively. Old production equipment, said Marcus,
*Future Steel Forum, 6-7 June, Sheraton, Warsaw, Poland. Further details, www.futuresteelforum.com www.steeltimesint.com
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adds excess capacity to the over-supplied market of finished products, increasing the need for leaders of competing firms to improve their production-cost margins and enhance their service to the market. His advice to steelmakers was simple: jump aboard the technological revolution and use it as part of a strategy to manage a series of problems that are now at work in the global steel market. He cited decreasing volumes of steel demand from China, which, he said, was destined to drop 100Mt per year; accelerating steel price volatility; obsolete steel-scrap recovery in China, which is exploding; and labour costs as a diminishing factor in steel production as machines replace man. On price volatility, Marcus argued that ‘for better or worse, non-Chinese steel futures will be impacting the price in physical markets in a few years, as is the case in China today,’ he said. On ‘exploding’ obsolete steel scrap recovery in China, Marcus said that, in 2017, steel scrap recovery totalled 69Mt and that it would increase to 139Mt by 2025 and to 336Mt by 2042. He encouraged delegates to adopt an entrepreneurial attitude towards the steel market and embrace new production technologies and new opportunities for asset management, such as mergers and acquisitions. The technology revolution, he said, was the best strategy for managing the unpredictability of the marketplace. Later in the day, Danieli Automation’s Marco Ometto and Professor Thomas Parisini of the University of Trieste, tackled the emerging dynamic and digitalised approach to information management. They explained how new investments to achieve Industry 4.0 capabilities are a priority for businesses. Ometto said that Danieli’s approach was based on digital innovation as well as ‘outcome economy principles’ to transform conventional plants into smart factories. The potential of digitalisation-enabling technologies was very encouraging, according to Ometto and Parisini, and www.steeltimesint.com
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included the co-ordination and optimisation of planning, scheduling and logistics processes in order to achieve a one-day ‘production-to-shipment’ lead time, not forgetting EAF process control using a real-time predictive model, based on machine learning and fed by process data to reduce electrical energy consumption by 25kWh/t. The technology can also be used to estimate steel bath temperature with a prediction accuracy of plus or minus 5 deg C and predict material mechanical properties using a machine learning model fed by process data, reducing by 25% the need for tested samples. Maximising input values and increasing plant productivity have been part and parcel of so-called ‘endless’ production concepts developed by Danieli over the past 20 years. A presentation by the company’s Andrea De Luca and Alessandro Pigani in collaboration with Shougang Jingtang’s Wang Guiyang, highlighted two recent ‘endless’ approaches: first the MIDA Micromill Danieli plant design for endless production of long products, which, it is claimed, can achieve a rolling mill yield of 99.7%, a plant utilisation factor of 90% and reduced operating expenditure in the region of 20% when compared with traditional minimills. The Danieli Universal Endless (DUE) system, it is claimed, enables coil-to-coil and endless production for thermomechanical and multi-phase, ultra-thin and thick product from a single production line. Endless casting and rolling technology, claims Danieli, can transform scrap into
finished rolled products in less than two hours. Furthermore, combining different energy sources makes it a ‘green’ process and significantly reduces operating costs – by up to 20% – when compared with current thin slab-based plants. The scarcity of knowledge and skills to execute advanced technological programmes is a big concern for the steel industry, according to Giacomo Mareschi Danieli and Mauro Pitton who examined how market contingencies enhance the need to fully control the risks associated with the execution of a turnkey project. In “Turnkey projects and product on hand: Global expertise for EPC management and production” they argued that costs associated with plant operations and maintenance over a 20 to 30-year period may run 100 times higher than design and construction costs. Danieli’s TK business service, they claimed, offers the following key attributes: • Proper market assessment. • Strategic product positioning in market ‘value pools’. • The best sustainable solution for capex/opex optimisation, • Plant design and construction execution. • Endless support (up to business success) in partnership with the plant owner until production is achieved. Later in the programme, Rolande Paolone, co-director of the Danieli Research Centre and chief technology officer of the Danieli Group, said that digitalisation has provided the steel industry with a new vision for steel making. According to Paolone, digitalisation is more than just automation; it is an array of devices, technologies, and protocols for linking machines in communicative networks, to share information easily and reliably, and to improve performances, schedules and results. While automation is widely used to control steelmaking activity, the opportunity created by digitalisation will be found in predicting outcomes of the activity, Paolone argued. March 2018
07/03/2018 10:07:36
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“We need to be able to anticipate problems,” he said, adding that making steel products is capital- and cost-intensive. Problem and error recognition can maximise investments, he believes. “Prediction brings us the possibility, during casting or just immediately after casting, to understand what has been done, if it has been done right or not – or if something went wrong. We will know immediately if a product will be good, or not,” said Paolone. He went on to explain the thinking behind Danieli’s Digi&Met product line, which offers customers a series of technologies that are ‘something more than equipment’. Digi&Met is described as a crossfunctional business unit created to develop and implement new plant design concepts, based on digital innovation, and also new business models based on ‘servitisation’ and outcome economy principles in order to ensure consistency in quality, plant utilisation, OpEx and faster deliveries. Danieli summarises its Digi&Met vision with the slogan, “From a plant to a smart plant”. The company defines a smart plant as one that is safe, flexible, efficient and environmentally friendly, founded on the extensive digitalisation of processes and the deep integration of cyber and physical worlds and the strong interconnection of intelligent systems and humans. Smart plants, claims Danieli, ‘execute complex tasks autonomously and support humans in complex decision-making, or even provide decision-automation’. It’s all about implementing a customer-centric model that allows its customers to: • Increase overall plant efficiency in terms of higher productivity, higher yield, reduced lead times, increased plant availability and optimised usage of resources. March 2018
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• Deliver quality products in order to establish stable and effective relationships and create ‘customer intimacy’. • Improve worker health and safety by adopting solutions aimed at avoiding accidents or reducing their effects. • Monitor and control plant energy and utility consumption and implement efficient recovery strategies, currently one of the most important objectives of the metals industry.
“We need to put intelligence into the equipment,” he said. Paolone went on to discuss ‘servitisation’ which is repair and replacement services for critical parts. Servitisation ensures that a machine is always available, and always running. “Any problem that develops with a part will be repaired quickly and returned to service,” said Paolone. Customers do not invest in the machine, they invest in the service, he added. The success of servitisation, of course, is dependent upon the gathering and management of information. “We know how to design a machine, but in reality how the customer uses the
machine is another issue. So, we need to be better at getting feedback from the equipment we have installed around the world,” Paolone said, noting that the trend towards digitalisation is helping the development of servitisation, because as sensors are more widely applied it will become easier to collect the data needed to develop a database of information on equipment and operations. Paolone acknowledged the challenge of learning how to manage so much information and gain an understanding of how to apply sensors for accuracy and 100% reliability. Otherwise, he argued, there can be no prediction. “We need to grow, we need to achieve a learning curve with managing information from sensors. We need the right feedback, and we need reliable collection/delivery of that feedback,” he said. “If we are unable to trace problems, then we have not learned to manage digital information effectively, and that will influence servitisation. We need accurate feedback to be able to understand how the customers use the equipment, and to offer them the right service at the right price.” The Danieli Research Centre, of which Paolone is co-director, comprises 100 people working together, but also working with Danieli Group’s product lines. “The research centre is at the disposal of the product lines,” Paolone said. “We are entrusted by them to investigate things that are out of their normal route, not for tomorrow, but for the day after tomorrow. They come to us and ask us to investigate with them.” Working closely with the product lines means being close to the problem under investigation. “We cannot invent anything if we are not close to the problem, the need,” Paolone said, and that means remaining close to the customers. � www.steeltimesint.com
07/03/2018 10:07:41
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PERSPECTIVES: LTI-METALTECH
47
“Innovation is on the move” LTI-Metaltech is expanding into different markets and is picking up new business from around the world. The company is a strong supporter of new technologies, like Industry 4.0, and views 3D printing as a revolutionary leader. We put our questions to the company’s Edgar Rayner* 1. How are things going at LTIMETALTECH? Great! As an end-user, there’s a lot going on at LTi Metaltech, especially with our expansion into new sectors and market applications, but also I know for the steel industry as a whole. 2. In which sector of the steel industry does LTI-METALTECH mostly conduct its business? Traditionally, we’ve majored in the healthcare sector as a leading supplier of cryogenic pressure vessels used in MRI scanners. In recent times we’ve been expanding into the fluid transfer, energy, food manufacturing and transport sectors, as well as nuclear and renewable energy, so our high-end steel fabrication techniques have been found increasingly in demand. 3. What is your view on the current state of the global steel industry? It’s hard to get away from the problem of overcapacity. The government-subsidised industry in China, which now produces more than half of the world’s steel, is flooding the market and preventing other countries from trading competitively. Combined with other factors, the UK in particular has felt the effects of this. The global industry will have to show some resilience while the world adjusts. 4. Steel Times International is buying, what’s your poison? A ‘copper’-coloured craft ale! 5. Where in the world are you busiest at present? Much of our work is for German clients, but destined worldwide, but we are 100% a
UK-domiciled business. 6. Can you discuss any major steel contracts you are currently working on? Siemens is a major client, and blue-chip obviously, but we have recently secured a range of mid-market clients in the fluid distribution and energy sectors. Last year we completed an award-winning piece of work in partnership with Tokamak in fabricating critical components in nuclear fission.
7. “Aluminium will always outperform steel on a weight basis; and on the stiffness issue alone it will carry the day,” said Alcoa. Where do you stand on the argument? Steel is the stronger of the two obviously, being much more resistant to warping than aluminium. But the trade-off has always been on weight, as aluminium is a much lighter material. But with innovations
showcasing the production of lightweight steels, this dynamic might be set to change in the future, so I keep an open mind. 8. Is aluminium ‘greener’ than steel? The benefits of both steel and aluminium are that they are very recyclable because the process does not undermine their structural integrity. With aluminium in particular, the recycling process uses only a fraction of the energy required to make it initially. While steel can be recycled too, the lightness of aluminium gives it an additional edge, as this also helps save fuel consumption elsewhere. 9. “…any hint of doubt when it comes to predictions of climate doom is evidence of greed, stupidity, moral turpitude or psychological derangement.” This is a quote from Bret Stephens writing in The Wall Street Journal. Do you sympathise? Stephens is spot-on to take a clear stand against climate change denial because the evidence pointing to climate change is simply overwhelming. It’s a very real problem with no simple solution, and businesses have an important role to play in addressing it. While he’s said that climate change denial often sources from greed, it’s promising to see a positive trend of businesses increasingly taking their environmental responsibilities seriously. LTI always considers its commitments to sustainability in business decisions. Hopefully this trend will spread and grow. 10. Why is Industry 4.0 so important to the future of steel production? Industry 4.0 is set to really help make the steel industry become more efficient,
*Technical director, LTI-Metaltech www.steeltimesint.com
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PERSPECTIVES: LTI-METALTECH
driving innovations and competition. But it also has the potential to fundamentally change the industry and its business models, which will produce both benefits and challenges—not least the impact of automation on jobs. 11. Is the steel industry wellplaced to take advantage of digital manufacturing? Yes and no. While digital manufacturing certainly has the potential to transform the industry’s capabilities, again this needs to be balanced against concerns regarding the loss of jobs. But make no mistake, I’m not a closet luddite!
14. How would you solve the issue of global overcapacity? Global overcapacity has produced an ongoing crisis for the steel industry in recent years. A lot of this stems from subsidised overproduction in China undercutting the competition. Rebalancing the market is key: the deal reached at the recent G20 summit to better manage production capacity is a good first step, as are the promising predictions that Chinese exports will decrease as its domestic market improves. 15. The Chinese still rely heavily upon Western steel production technology. What is LTI-METALTECH’s experience of
more downstream? As an end-user, I can only comment on what we see, which is that innovation is on the move across the whole landscape of manufacturing, from production to products themselves. I’d expect innovation to permeate every aspect of the production process simultaneously. 18. How important is reputation management to the steel industry? Very. There’s a lot of speculation at present about the future of the UK’s steel industry and the impact this could have on the economy. Managing these concerns will be vital. 19. What challenges face global steel producers? While recent years have shown up some problems for the steel industry, there’s certainly been a recognition of this with positive actions being taken to address key issue-areas, so I’m optimistic going forward. More immediate challenges are whether we’re identifying the right solutions: for example, the protectionist response from America. Brexit is overplayed, as I’m quite sure that once trade deals are sorted, we’ll continue to respond to new markets.
12. Where does LTI-METALTECH lead the field in terms of steel production technology? LTI is operating across a number of steel industry sectors, but our services are right at the cutting edge of the high-tech fabrication marketplace, which is applicable to a range of demanding regulated industries. 13. How do you view LTIMETALTECH’s development over the short-to-medium term in relation to the global steel industry? We’re always looking to expand our offerings into new sectors of the steel industry, so I expect to see us become more widely integrated with an increasing stake in the market in the coming years. The more successful we are, the more steel we need, so it’s a win-win situation I hope. March 2018
Perspectives .indd 2
the Chinese steel industry? We compete with Chinese specialist fabricators, but our quality – we believe – has more than an edge over them. Everything is not just down to price and I think we’ll see more revelations here as we compete head-to-head with Chinese manufacturing. 16. Which breakthrough technologies will have a revolutionary impact on the steel industry? 3-D printing has got to be a contender for revolutionary leader. Whichever technology becomes the champion of radical change in engineering and manufacturing, however, is unlikely to be one size fits all. 17. Where do you see most innovation in terms of production technologies – primary, secondary or
20. LTI-METALTECH is UK-based, but how is the steel industry performing? It’s been a difficult few years for the UK steel industry. In addition to the global issue of cheap Chinese exports, the UK industry has had to adjust to new climate change policies and contend with high domestic energy prices. Impacting on performance, this has triggered uncertainty about jobs and the future. That said, there has been some turnaround: for example, sterling depreciation has helped UK exporters. 21. What keeps you awake at night? I dislike uncertainty or volatile conditions in the market. But to be frank, running any kind of business is tough work, and so to some extent being kept on your toes keeps you fit. 22. If you possessed a superpower, how would you use it to improve the global steel industry? I’d like to see faster progress on the sustainability side. The steel industry can always be on the look-out for ways to mitigate its environmental impact, but a superhero fix would be great! � www.steeltimesint.com
07/03/2018 10:08:39
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52
HISTORY
British industry between the wars In the aftermath of World War One the fortunes of the nations’ citizens varied depending on where they lived in the UK – North or South. By Harry Hodson* THE financial services, tourism, and entertainment industries, concentrated in the South and parts of the Midlands, were not as badly as affected as traditional heavy industry in the North. Nevertheless, there were also plenty of southern manufacturing companies that were kept busy by a growing demand for domestic electrical goods, bicycles, motorcycles, cars, aircraft, and cosmetics, sought after by the growing middle class. The North fared less well, the miners’ strike of 1926 lasted a full year and between May and September it was the longest period of hot weather on record. Consequently, there was little demand for coal from the domestic market. There was also a huge stockpile of it, which had been built up by the government in anticipation of the strike. Some steelworks took advantage of the situation to buy coal for their coking ovens at a reduced price, while mine owners modernised their collieries. Many older mines still had wooden headgears, but these were quickly replaced by steel during the stoppage period. It was a “win-win” situation for some steelworks and mines. The 1930s saw a further downturn in traditional northern industries when many shipyards closed never to re-open again. In 1934 the government attempted to kick-start the shipping industry by subsidising the building of a few luxury super-liners. The Queens Mary and Elizabeth helped ease unemployment on Clydebank. New innovations in industry There were mixed fortunes in industrial output, but this did not stop investment in new machinery and ideas. In 1927 Edgar Allen & Co, Sheffield, introduced electric smelting, a practise successfully tried in Germany some years before. Dorman Long & Co, Redcar & Cleveland, made
improvements to their electro-magnet for the handling of the largest steel plates required for shipbuilding. The railway
companies operating on the East Coast and West Coast main lines continued to battle it out with each other to haul the fastest trains from London to Scotland. The main benefactors of this were the Doncaster and Swindon works whose locomotives were the record-breaking “Flying Scotsman” and “Mallard”. The better off could afford the luxury of these shipping lines and high speed trains, enjoying restaurant meals, telephone, hairdressing, and wine bars aboard. Most of the nation, however, was content to have a job, rent or buy a house, own a radio and enjoy a trip to the seaside, cinema, or football match. Towards the end of the decade there was an increase in car ownership with some models costing £100150, but even this was well out of the reach of most of the nation. By the close of the decade in 1939 almost everyone would be employed – but not necessarily for the right reasons. �
* The author is an iron and steel specialist in the field of the Industrial Revolution March 2018
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07/03/2018 10:09:53
AS ONE We are stronger
Two powerful companies in the metals industry have forged together. Mitsubishi-Hitachi Metals Machinery and Siemens VAI Metals Technologies have united to become the new global force in metals technologies. Creating the future of metals as one. primetals.com
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PROCESS OPTIMIZATION AND QUALITY CONTROL
CONTOUR CHECK Full profile measurement for rounds, squares, flats and tubes Recognizes rolling and surface defects
STRAIGHTNESS CHECK Measurement and documentation according to standards for tubes and bars Inline local straightness or offline overall straightness gauges
THICK CHECK High accuracy single or multi track thickness measurement Cross profiles with traversing gauges Laser-based, alloy independent, no radiation
PLATE & STRIP CHECK Measures flatness, thickness, width, length and shape of cold and hot material Optimizes the leveling/ cutting process
LASER MEASUREMENT SYSTEMS FOR LONG AND FLAT METAL PRODUCTS, IN ROLLING AND PROCESSING LINES, HOT OR COLD
www.LAP-LASER.com/STEEL