Steel Times International May June 2018

INNOVATIONS

PROCESS CONTROL

DIGITALISATION

STRUCTURAL STEEL

The latest supply contracts to the steel industry

Two articles from Primetals Technologies and SAIL

The new economics of steel manufacturing

Myra Pinkham on the state of the US structural steel industry

www.steeltimesint.com May/June 2018 - Vol.42 No4

STEEL TIMES INTERNATIONAL – May/June 2018 – Vol.42 No.4

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CONTENTS - May/June 2018

INNOVATIONS

PROCESS CONTROL

DIGITALISATION

STRUCTURAL STEEL

The latest supply contracts to the steel industry

Two articles from Primetals Technologies and SAIL

The new economics of steel manufacturing

Myra Pinkham on the state of the US structural steel industry

www.steeltimesint.com May/June 2018 - Vol.42 No4

STEEL TIMES INTERNATIONAL – May/June 2018 – Vol.42 No.4

Slab quality control with HD mold. SMS Group has been contracted by Russian steelmaker NLMK to supply a new thick slab caster for its steel mill number two in Lipetsk, Russia. See page 6 of this issue.

Picture courtesy of: SMS Group

1

2 Leader

By Matthew Moggridge, editor, Steel Times International.

CONFERENCE REPORT: AISTECH 2018

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

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

6 Innovations The latest new products.

12 Latin America update Chile’s challenging marketplace

9 USA update Don’t include us!

14 Conference report: AISTECH 2018 “We’ll find a new balance...”

20 Structural steel market 2018 - a good year?

27 Digitalisation The new economics of steel

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

Process control 33 Increasing BF hot blast temperature 39 Modernising the cooling line

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,

46 Perspectives: Jebens Strong focus on Europe

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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

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Contents.indd 1

May/June 2018

23/05/2018 14:56:53

2

LEADER

Tariffs on hold for China? What about Section 232?

Matthew Moggridge Editor matthewmoggridge@quartzltd.com

We all have dreams and a lot of the time they’re pretty weird. I once dreamt that I was being pursued across summery fields by a bunch of disabled skinheads intent on doing me harm. Like everybody, I’ve woken up relieved that I hadn’t been in the office, pontificating about something, but dressed only in my underpants; and I remember waking up in a cold sweat having been attacked by a gang of angry squirrels. I once had a vivid dream about removing a six-inch nail embedded in my forearm and woke up rubbing my arm. Air travel features in my nocturnal adventures, there’s always some kind of lurking danger.

I wake up, normally in the dead of night, when everybody else is asleep, asking myself one question: what was that all about? And then I try to remember what I’d been doing the day before to conjure up such strange dreams. Sometimes I have the answer, but mostly I’m left baffled. I’ve even dreamt of Donald Trump.

In fact, while you might think this leader is way off the mark in terms of sanity, it’s got a lot to do with our good friend, US President Donald Trump. On Sunday, I switched on my laptop and noted, to my surprise, that ‘the Donald’ had put a

hold on trade tariffs for China. It was one of those double-take moment. Trump is holding back on tariffs after the US Treasury Department’s Steve Mnuchin engaged in two days of negotiations with his Chinese counterparts. The aim, of course, is to avoid a looming trade war. But something is bugging me: there’s no mention of Section 232 steel tariffs. I read a couple of mainstream media news reports and not a word about whether or not steel tariffs were included in Mnuchin’s deal with the Chinese.

All I can say is thank God for the AIST’s Ron Ashburn. He sent me an email as I was about to go to press with this leader article.

I was going to say that the steel industry will be very angry with Mr Trump and how I wouldn’t fancy breaking the news to John Ferriola of Nucor Corporation. I had visions of Ferriola saying to Trump, “You won’t like me when I’m angry!” Fortunately, Ron sent me a link to a CNBC report in which Mnuchin says that tariffs on steel and aluminium will not be affected by his recent negotiations with the Chinese. This has to be great news. And talking of Ron Ashburn, see my review of the excellent AISTech 2018 convention on page 14.

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4 NEWS IN BRIEF Steel Dynamics to acquire CSN plant US-based Steel Dynamics Inc has entered into ‘a definitive agreement’ to acquire Companhia Siderurgica Nacional (Heartland) from CSN Steel, a whollyowned subsidiary of Companhia Siderurgica Nacional (CSN).

The Heartland plant is located in Terre Haute, Indiana, and produces various types of higher-margin, flat roll steel by further processing hot roll coils into pickle and oil, cold roll, and galvanised products.

Steel Dynamics has agreed to purchase Heartland for $400 million in cash inclusive of $60 million of normalised working capital.

Gerdau investing in Michigan steel mill Gerdau Special Steel North America is launching an additional $70.3 million investment project at it’s Monroe mill in Michigan, three years after completing a $155.6 million capital investment at the same facility.

With its latest investment, the plan is to add a new electric arc furnace (EAF) transformer, controls and mechanical upgrades in the EAF, and a new twin ladle furnace and material handling system.

According to Mark Marcucci, president of Gerdau Special Steel North America: “This project will upgrade our EAF and secondary refining technology and will be the final step to elevate the technological capability at Monroe to world class.”

INDUSTRY NEWS Ever since last year’s inaugural Future Steel Forum, held at the Sheraton Warsaw Hotel, Poland, the folks at Steel Times International have been beavering away on what might be described as the ‘difficult second album’. How could they possibly come up with a conference to surpass the 2017 event?

Well, they have done just that with Future Steel Forum 2018, which will also be hosted by the Sheraton Warsaw Hotel in Poland – a great venue for a European conference if ever there was one.

The 2018 Forum takes place 6-7 June 2018 and it is shaping up to be an unmissable gathering of the brightest and best minds in the business, all intent on discussing the application of Industry 4.0 and steelmaking.

An unrivalled programme of speakers embracing leading steelmakers (ArcelorMittal, Tata Steel, US Steel, Liberty House Group) academic institutions (Fraunhofer Institute, SWEREA MEFOS, IoM3,

Get yourself to: Warsaw

University of Liverpool) plant builders (Primetals Technologies, SMS group, PSI) and consultancy companies (Accenture, PwC) awaits over 150 delegates.

Entitled Industry 4.0 – the continuing story, Future Steel Forum

is focused on the application of Industry 4.0 to steelmaking and is the only conference of its kind dedicated entirely to the needs of the global steelmaking industry.

For further details, log on to www.futuresteelforum.com

Tata Steel Europe in business sell-offs Tata Steel Europe is selling off five business units following a strategic review of its portfolio.

The sale process will cover Cogent, a manufacturer and processor of electrical steels; Kalzip, an aluminium roofing and cladding business; Firsteel, a steel coating business; Tata Steel Istanbul Metals, a coil coating company; and Engineering Steels Service Centre.

With the exception of Kalzip, which is based in Germany, and Tata Steel Istanbul Metals, based in Adapazari, Turkey, the remaining units are UK-based.

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

Ma Steel orders continuous caster from Danieli Ma Steel (Maanshan Iron and Steel) has also ordered a twostrand, 12m radius continuous casting machine from Italian plant builder Danieli. It is claimed that the equipment will produce the largest beam blanks in the world.

The largest among the three beam-blank sections will measure 1300x510x140 mm and boast a linear weight of almost 2,700 kg/m.

The caster will be supplied with two twin-moulds, which will en-

able the casting of 550x280 mm blooms on four strands.

Ma Steel’s new continuous caster will be equipped with advanced Danieli technological packages, such as the Q-INMO oscillator with twin cylinders to support the big sections and provide full flexibility in guaranteeing top surface quality.

Full Danieli Automation L1 and L2 systems will include Danieli Liquid Pool Control System for ‘accurate and balanced secondary cool-

ing’ according to Danieli.

As a result of this investment MaSteel will consolidate its leading position in the Chinese market for sections, with H-beams in sizes never reached before.

This project, part of Ma Steel’s 35-year strategy, will be the third long-product conticaster project between Maanshan and Danieli in the last 15 years.

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

May/June 2018

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DIARY OF EVENTS

INDUSTRY NEWS

Astounding Facts and Figures...

• There is more steel created per hour than there has been gold dug up throughout history; around 161,000 tons of gold have been mined by humans. Gold can be found beneath the earth on all seven continents.

Source: Gold Telegraph.

• It is estimated that a rise of 1.5 degrees C could see a 10% increase in UK onshore wind energy. A recent study suggests that higher temperatures whip up stronger winds.

• The steel industry has an estimated $900 billion turnover, making it the second largest industry in the world after oil and gas.

Source: A-One Steel Group

• The Steel Man is the name of a stainless steel structure in Yorkshire, UK. It stands at 105 feet tall.

Source: Independent.

Source: Jindal Stainless.

• Six Chinese cities dominate global electric vehicle sales and they are: Beijing, Shanghai, Shenzhen, Tianjin, Hangzhou and Guangzhou. Why? Because these cities have initiated gasolinecar restrictions. These six cities accounted for 40% of China’s 579,000 electric car sales last year and 21% or world EV sales.

• One tonne of recycled steel saves 642 kWh of electricity.

Source: Bloomberg.

Source: Mughal Steel.

• ”This take that Trump’s tariff policy has just been theatre, nothing for grown-ups to be concerned about, ignores fact that his steel tariffs have raised US steel prices by 25%, [and] are having a real effect on costs and the economy.”

Source: Patrick Chovanec (@prchovanec)

‘Trumponomics’ on Twitter • “China was already buying a gazillion tons of soy beans and other [agricultural] products from US until [Trump] started a steel trade war to try and buy Pennsylvania votes. Now the Midwest farmers are ---ked by [his] bungling incompetence.”

Source: Marky Mark Twain on Twitter (@OldManRiver1800)

• President Trump said “a lot of steel mills are now opening up” because of his announced tariffs on imported steel. He’s right that some companies have announced they would reopen plants. But experts say other industries will lose jobs.

Source: factcheck.org

5

June 2018 5-7 Surface Technology, Location: Stuttgart, Germany.

Organised by WOTech Gbr. Which trends will play a key role in the future? This event brings together experts from around the world to discuss energy efficiency, surface technology, quality management and other important topics.

Further information, log on to www.surface-technologygermany.de 6-7 Future Steel Forum 2018 Location: Warsaw, Poland.

Organised by Steel Times International.

The second outing for this ground-breaking steel conference on the subject of Industry 4.0 and steel production. A top notch programme awaits the growing number of delegates booking places.

Further information, log on to www.futuresteelforum.com 11-12 14th Annual Steel Markets Europe Location: Barcelona, Spain.

Organised by Platts.

This event is designed for the region's leading producers, traders, service centres, raw material providers and end users.

Leading speakers will debate the key issues facing the European steel industry today.

Further information, log on to www.platts.com 13-15 7th International Congress on Science and Technology of Steelmaking Location: Venice, Italy Organised by AIM (Italian Association for Metallurgy).

A forum for researchers and manufacturers involved in the scientific and technical developments of steelmaking.

Topics under discussion include continuous casting, slags and fluxes, process control and electric steelmaking.

Further information, log on to www.aimnet.it/ics2017.htm

For more global steel news, log on to our news website, www.steeltimesint.com May/June 2018

Industry news.indd 2

23/05/2018 14:51:17

6

INNOVATIONS

NLMK orders new thick slab caster SMS group has been contracted by Russian steelmaker NLMK to supply a new thick slab caster for its steel mill number two in Lipetsk, Central Russia.

The new plant replaces a two-strand caster supplied by SMS group in 1976, and will be built in the same place.

According to SMS group, the continuous caster is to be completely rebuilt from the ladle turret to the exit section, and will be equipped with state-of-the-art continuous casting technology. “A few steel structures and foundation areas will remain as they are,� the company explained, adding that the new plant will be designed as a bow-type caster and offer a host of benefits, particularly for the casting of slabs made from crack-sensitive steel grades and over 300mm thick.

The scope of supply for SMS group comprises basic and detail engineering and mechanical and

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electrical systems for the caster. It also includes a ladle turret, adapted to the existing foundation and shop configuration, molds with hydraulic oscillation, strand guide with 25 segments, the relevant interchangeable parts, and the exit section. Erection and commissioning supervision is also part of the scope of supply.

The width range produced on the continuous caster is to be extended from a previous maximum of 2,200mm to 2,800mm and the thickness range from 355mm to 400mm. The plant will be designed for an annual production capacity of 2Mt and will be equipped for twin casting, which is used for slab widths between 900mm and 1,290mm, and a maximum thickness of 250mm.

The first cast is scheduled for December 2019.

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

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www.steeltimesint.com

23/05/2018 12:21:27

INNOVATIONS

7

Turkish steelmaker orders off-gas cleaning systems Turkish steelmaker Kardemir has ordered two new Meros off-gas cleaning systems for its sinter plants 1 and 2.

Each plant, supplied by Primetals Technologies, can treat 400.000 Nm2/hr of sinter off-gas and is claimed to reduce SOx by over 90% and deliver low dust emissions.

The plants are designed to use sodium bicarbonate as desulphurisation agent except for the plant installed at sinter plant 3, which will be upgraded in due course.

The two new Meros plants are designed to use sodium bicarbonate as desulphurisation agent, while the existing system installed at sinter plant No. 3 will be upgraded to employ sodium bicarbonate instead of lime in the future.

Primetals Technologies will be responsible for the engineering, supply of key equipment and advisory services for cold and hot commissioning.

Start-up of the Meros plants is expected by the end of 2018.

According to Primetals, the Meros process involves several modules for injecting and finely distributing adsorption and desulfurising agents, such as activated carbon and sodium bicarbonate, into the off-gas flow. This is claimed to efficiently bind and remove heavy metals, harmful and hazardous organic components, as well as sulfur dioxide and other acidic gases. The use of sodium bicarbonate to reduce the amount of sulfur dioxide also eliminates the need for a conditioning reactor. Dust particles are deposited in a specially developed, energy-efficient bag filter and the greater part of the dust removed by the precipitator is recycled back into the flow of off-gas to further optimise the efficiency and cost-effectiveness of the gas purification process.

Any remaining unused additives then rejoin the off-gas flow, so that they are finally almost completely used up. â&#x20AC;&#x153;There is also considerably less discharged residue when sodium bicarbonate is used instead of slaked lime. The process automation system ensures stable operation, even when there are

considerable fluctuations in the volume and composition of the off-gas,â&#x20AC;? Primetals explained, adding that emission limits can be observed at all times.

The modular design of the Meros system can

be provided, with possible upgrades by subsequent installation of required modules.

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

Korean steelmaker buys Danieli Q-Melt technology Market leading Korean steelmaker SeAH Besteel, believed to be the largest special steel producer in the country, with a total production capacity of 3.1Mt/yr is planning to upgrade one of its four electric arc furnaces (EAFs).

EAF#3 is to be fitted with Danieli Q-Melt technology.

According to Danieli, Q-Melt is the latest evolution of its automatic control concept for the EAF melting process.

The suite of Q-Melt products comprises Q-Reg Plus dynamic electrode regulator with arc coverage control and slag foaming detection; Lindarc in-situ gas analyser with TDLAS laser

www.steeltimesint.com

innovations - may june.indd 2

spectrometer; and Melt-Model process control and optimiser.

The core of the system is the Melt-Model that automatically identifies deviations in process-controlled variables and corrects them according to the best possible practice, to avoid losses or wasting of available energy sources.

This will be Danieliâ&#x20AC;&#x2122;s first Q-Melt in Korea.

Installation is expected by September 2018.

Danieli and SeAH Besteel have an established relationship going back 30 years.

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

May/June 2018

23/05/2018 12:21:30

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USA UPDATE

9

Don’t include us!

US importing companies are scrambling to apply for tariff exemptions from President Trump’s recent imposition of 25% blanket tariffs on imported steel. By Manik Mehta* US President Donald Trump’s imposition of steel and aluminium tariffs has resulted in what many industry experts describe as a ‘mad rush’ by US companies to apply for exemptions from the tariffs.

The applications have been piling up with the Commerce Department; and Commerce Secretary Wilbur Ross and his officials must now determine the merits of US companies applying for a waiver from tariffs.

As of writing this update, the number of applications from US companies seeking exemptions has exceeded 1,200 applications while aluminium-tariff exemption applications have touched 125, according to industry sources.

But the number could rise further as more companies are expected to seek exemptions.

Companies can apply for tariff exemptions if they can demonstrate a compelling case that the type of steel or aluminium they need to make a product is “not produced in the United States in a sufficient and reasonably available amount or of a satisfactory quality”. The waiver can be granted if a business can show that a specific metal needed to manufacture their product in the US is not produced in a high enough quantity in the US. This process will allow US steel and aluminium producers to object to the waiver if they can produce the required

metal or parts in the United States within a specified price range.

While every waiver granted will be welcomed by the applying US company, it can also, ultimately, blunt the effectiveness of the tariffs which, according to President Trump, were necessary to protect and reenergise the domestic steel and aluminium industries. After making the stunning tariff announcement, Trump seems to have mellowed down his rhetoric, and decided to exclude several supplying nations, particularly US allies, from the tariffs, thus softening the tariffs’ impact. The ‘mountain of tariff-exemption applications’ received by the Commerce Department, if approved, could further reduce the effectiveness of the tariffs.

But Trump is not the first US President to impose tariffs; there has been a precedent in March 2002 when President George W. Bush imposed a similar steel tariff. The Commerce Department, at that time, issued exemptions to US companies, allowing import of over 700 foreign steel products.

However, the tariff imposition was shortlived; President Bush completely withdrew the tariffs by December 2003.

While many of the companies affected by the steel and aluminium tariffs are small companies, big companies are also in the firing line. There is, for example, Borusan Mannesmann, the oil pipe supplier,

or the 7A Ranch in Texas, the builder of a children’s train at its resort, that are affected by the tariffs.

The softening of the tariff blow came about after Trump exempted Canada, Mexico, South Korea, Argentina, Australia, Brazil and several countries in the European Union. These countries supply roughly 63% of US steel imports, according to the Peterson Institute for International Economics. The most affected nations are Russia, Turkey and Japan. Canada, as a member of the North American Free Trade Agreement (NAFTA), is the biggest supplier of steel imported into the United States.

Trump’s actions have fetched criticism not only from steel and aluminium importers and buyers but also from former US officials.

Wendy Cutler, a former acting deputy US trade representative who has participated in international trade negotiations, was not in agreement with the administration’s manner of imposing the tariffs, even though she agreed that the serious unfair Chinese trade practices on intellectual property rights’ protection and forced technology transfer, which the administration laid out in detail in an almost 200-page report, needed to be addressed.

“I couldn’t agree more with the Administration that these unfair practices

* USA correspondent www.steeltimesint.com

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May/June 2018

23/05/2018 11:54:25

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USA UPDATE

need to be addressed. Where I differ, however, is how best to address these valid concerns in a way that minimises harm on the United States,” Cutler said recently at the Asia Society in New York.

“Instead of unilateral tariff action, I believe that it would have made more sense to work with a coalition of countries who share our concerns, and to respond in a way that does not run counter to our WTO obligations,” Cutler said, adding that the US steel and aluminum tariff actions had likely dampened the enthusiasm of many US trading partners to work with the US on China or other issues.

Nevertheless, the Commerce Department is giving a “patient ear”, as one small company representative told Steel Times International, to the hardship faced by the small companies with limited resources that preclude their ability to hire specialised lawyers. But whether this “patient ear” translates into any tangible issue of waivers, remains to be seen.

While steel and aluminium tariffs are a trade issue, the implications for US foreign relations can be huge as China’s massive trade surplus is causing heartburns even among US politicians who, usually, support trade with China.

Other countries are worried about the impact of US tariffs.

South Korean business representatives recently visiting the United States called on their American companies and think tanks to make concerted efforts to ease the Trump administration’s protectionist stance.

According to the Korea International Trade Association (KITA), representatives of 39 companies, including big names such as Samsung Electronics, LG Electronics, POSCO Daewoo, Hanwha Q CELLS and Hyundai Steel accompanied KITA chairman Kim Young-joo on a visit to the US where they called on the Centre for Strategic and International Studies (CSIS), the Heritage Foundation and the American Enterprise Institute (AEI).

During its meetings in the US, Hyundai Steel said the US unfairly imposed a 50% anti-dumping duty on it even though the prices for its steel products were not lower in the US than in Korea, and that it had supplied steel to Korean firms active in the US, such as Hyundai Motor and Kia Motors.

POSCO Daewoo said at the Heritage Foundation that the US Commerce Department’s anti-dumping investigations relied on what it said was adverse facts-available (AFA) used against it. The application of AFA refers to the Commerce Department’s practice of applying the most negative and adverse facts available in investigation when it determines that the investigated company is not co-operating enough for the investigation.

“Korea continues to expand investments in the US and well understands that only the most competitive companies can survive in the US market, which is one of the world’s best consumer markets. To help Korean firms establish factories in the US and produce the best products, there should be more smoothness in the import of materials and parts into the US,” KITA’s chairman Kim was quoted as saying by the Korean media.

Meanwhile, US steel producers, as expected, backed President Trump’s move to impose the tariffs on steel imports. Nucor Corporation applauded President Trump for his decision to implement the tariffs, saying that taking such a comprehensive economic action made it clear to foreign competitors that “dumping steel products into our market will no longer be tolerated”. �

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23/05/2018 11:54:25

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12

LATIN AMERICA UPDATE

Chile’s challenging marketplace This is the last in a series of articles dedicated to reviewing the steel market of the country members of the Pacific Alliance. Where Chile is concerned, it is worth showing some aggregated figures on a sectorial level, but also to focus on two recent decisions regarding corporate strategies: Gerdau’s divestment (lessening its degree of internationalisation) and CAP’s investment package (boosting its diversification).

By Germano Mendes de Paula*

CHILEAN crude steel production expanded from 1.0Mt in 2010 to 1.6Mt between 2011 and 2012, but falling to a 1.2Mt/yr plateau ever since (Fig.1). This movement was highly dependent upon CAP’s performance because its output grew from 0.7Mt in 2010 to 1.1Mt in 2011-2012 and then reduced to 0.85Mt in 2013 and to 0.7Mt over the 2014-2017 period. Indeed, during the second semester of 2013, CAP decided to prioritise the fabrication of higher margin steel products, by stopping the production of flats and focusing only on longs. Gerdau, the other relevant player, produces only longs.

Meanwhile, the country’s apparent consumption of rolled steel products has also enlarged from 2.4Mt in 2010 to 3.0Mt in 2012, then reverting partially to the level of 2.7Mt/yr over the period 2013-2017.

According to an Alacero presentation delivered in March 2018, Chilean steel demand is expected to reach 2.8Mt (1.1% year-on-year improvement) in 2018 and

3.0Mt (7.5%) in 2019.

Chile is considered the most open economy in Latin America and steel products are not an exception. As it can be verified in Fig. 2, annual imports have maintained, on average, a level of 1.7Mt/ yr, while exports have been reduced (to roughly 0.1Mt/yr). Most probably, the additional consumption expected for 2019 would be met by imports rather than domestic sales. This background information is valuable for gaining a greater understanding of the decisions taken by Gerdau and CAP. Gerdau’s divestment In October 2017, Gerdau signed a contract for the sale of 100% of its operations in Chile to local family groups Matco and Ingeniería e Inversiones. The assets included in the transaction were plants with an annual installed capacity of 520kt/yr of crude steel and 530kt/yr of rolled long steel products. The economic value of the deal

2,0 1,8 1,6 1,4 1,2 1,0 0,8 0,6 0,4 0,2 0,0

3,5 3,0 2,5 2,0 1,5 1,0 0,5 0,0

2010

2011

2012

Crude steel production

2013

2014

2015

2016

2017

Rolled steel consumption

Fig 1. Chile’s crude steel production and rolled steel products consumption, 2010-2017

2010

2011

corresponds to $154M. The closing of the transaction still depends on the approval of the Chilean competition authority, which is expected to happen this year. It should be remembered that Gerdau entered the Chilean steel industry in 1992 and has been operating in the market for 26 years.

From Gerdau’s perspective, the $154M transaction was small, being equivalent to just 2.3% of the company’s market capitalisation when it was announced.

However, as a BTG Pactual report stressed: “While this is a relatively small move, this is in-line with the company’s strategy of focusing on higher return businesses and de-leveraging, which we believe the [financial] market will welcome. Gerdau continues to ‘clean up its non-performing assets’ (not meeting minimum return rates), which we believe will structurally increase profitability and ROIs of its consolidated business”.

JP Morgan also highlighted that: “Although operational numbers from the

2012

2013

2014

Exports

2015

2016

2017

Imports

Fig 2. Chile’s steel exports and imports, 2010-2017 (Mt). Source: worldsteel, Alacero

(Mt). Source: worldsteel, Alacero

* Professor in Economics, Federal University of Uberlândia, Brazil. E-mail: germano@ufu.br May/June 2018

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LATIN AMERICA UPDATE 13

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CAP’s new investment package In mid-April 2018, CAP unveiled an investment plan that involved $1.6bn capital expenditure to be carried out over the next five years and aiming to deliver growth and to diversify into new businesses. The announcement was made by Fernando Reitic, the company’s President, during CAP’s general ordinary meeting of its shareholders. Regarding the composition, 50% of the budget will be invested in maintenance and cost reduction, 40% in growth projects (basically in mining and steel sectors) and 10% in sustainability.

CAP explained that it is analysing what will be the five minerals with the largest investment opportunities over the next 15 years. It also revealed that copper and gold are at the top of its list when it comes to potential additional metals to encourage further product diversification. The company is looking for options, preferably in Latin America, but it has not yet decided between developing strategic alliances and engaging in solo projects. It is important to highlight that CAP is already active in the business of steel, iron ore mining and infrastructure (port, seawater desalination and electricity transmission). Therefore, the aforementioned investment package would result in additional further product diversification.

The cited announcement has raised concerns from capital market analysts. According to a JP Morgan report: “Our understanding at this point is that this potential growth plan is still at a very premature stage, with no projects approved by the Board of Directors, and the investments could involve a series of options including greenfield, brownfield and M&A initiatives (with no details at this point). However, in our view, we take any potential announcement of this magnitude (almost equivalent to CAP’s market cap) in a negative light given that it would entail significantly higher leverage, reduced FCF [Free Cash Flow] yields in the coming years and an investment in metals that are not part of CAP’s core business (therefore execution risks are not trivial).

However, in our view, a potential investment into iron ore would be a much more sensible move, leveraging on the company’s expertise in iron ore and still providing a growth alternative ahead”.

From JP Morgan’s standpoint, CAP should maintain its core business, mainly iron ore. It is crucial to mention that, in 2017, the mining division generated 84% of the company’s EBITDA, followed by infrastructure (9%) and steel processing (6%), while steel production was responsible for only 1%. It can also be argued that CAP has transformed itself into a miner, which maintained steel operations (STI, July-Aug 2012, p. 12).

Summing up, the Chilean steel market seems to continue to be challenging for domestic producers, which fostered Gerdau to decide to sell its operations in the country and CAP to diversify further to other mining sectors. �

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[Gerdau’s] Chilean operation are not available publicly, if we look at CAP’s steel business in Chile (also a long steel player), we see an average EBITDA margin of 2-4% over the last three to four years.

Chile is a complicated market as imports constantly pose a threat to the domestic market”. Gerdau’s decision will reduce its degree of internationalisation.

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CONFERENCE REPORT: AISTECH 2018

“We’ll find a new balance…”

2018

TRUMP AND THE SECTION 232 STEEL TARIFFS – DECISIVE OR DIVISIVE?

AISTech 2018 attracted over 6,000 visitors and is widely regarded as the largest technical conference in the world for the steel industry. Matthew Moggridge* found himself in Philadelphia, USA, where he met (and listened) to some of the leading players stateside THE best way to kick off any major steel convention and exposition is to inspire the audience and that’s just what Dr. John Speer did when he delivered AISTech 2018’s opening address, the J Keith Brimacombe Memorial Lecture, snappily entitled ‘The Continuing Development of Modern Steel Products’.

An audience embarking on a three-day event like AISTech need something inspiring to see them through and Dr. Speer didn’t disappoint, providing those in attendance with plenty to chew over. Imagine a world without steel, he asked, having shown some striking images of steel at work; there were shots of iconic structures, such as bridges and buildings, ships and tankers, cars,

pipelines and mining equipment – proof (if any was needed) that steel is ubiquitous and that the world would be a dull place without it. As, indeed, would the city of Philadelphia, which opened its bars and restaurants to the great and the good from the global steel industry who had gathered at the impressive Pennsylvania Convention Centre for three days of presentations, keynote addresses, plant visits and, of course, a vibrant exhibition (or ‘exposition’ as they call them on this side of the pond).

Dr. Speer ran through a roll call of individuals who, in the past, had played a major role in the development of the global steel industry; people like Bessemer who, in 1856, had developed the Bessemer

converter, enabling high-volume steel production. Or Robert Woolson Hunt who ran the first Bessemer works in the USA and went on to become the AIME president way back in 1883. And then there was another former AIME president, Alexander Lyman Holley who purchased the US rights to the Bessemer process back in 1875. Speer told AISTech delegates that the first steel rails ordered were produced in a Bessemer converter at PA Steel Company in Steelton, it’s now part of ArcelorMittal.

By the turn of the century, said Dr. Speer, 85% of Bessemer steel production was for rail production.

Other great luminaries from the past were mentioned, such as John Fritz, the so-

* Editor, Steel Times International May/June 2018

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CONFERENCE REPORT: AISTECH 2018

Jon Delano in full swing

called ‘father of the US steel industry’ and AIME president in 1894. Fritz developed the 3-high rolling mill, which, at the time, was used to make better quality rails. He was also the name behind the Fritz Medal, which was won in 1907 by Alexander Graham Bell (yes, he who invented the telephone) and then by the aforementioned Robert Woolston Hunt in 1912.

Dr Speer said that alloying was key to steel product development. Vanadiumadded high strength steel, he said, was an important part of the Ford Model T way back in 1906, and in 1920 the Climax Molybdenum Company and the American Metal Company used molybdenum steel to produce ‘the lightweight car’.

He spoke of recent progress and how wind towers use very high quality, high performance steels for their complex gearing systems. According to Dr. Speer, ‘the steel development community is currently working feverishly to develop new products to help enable automobile manufacturers meet aggressive federal fuel economy targets for future vehicles.’ He said that while competition remains intense between steel and other materials, steel retains its cost efficiency and ever-increasing performance and that AIST members play an important role in these developments.

“Every industrial laboratory [is] developing new high strength steels in every product form. While physical metallurgy is central to many of these efforts, process developments are important throughout the supply chain, including ‘customer’ application technologies such as forming and welding. Nearly every process involved in steel production influences the final product characteristics in some fashion, www.steeltimesint.com

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so a large portion of the steel technology community contributes meaningfully to new products,” Dr Speer explained.

The automobile industry, said Dr. Speer, is an‘aggressive adopter’ of successful new steel concepts, but developments have been ongoing for other markets too.

He cited energy exploration, production and conversion as examples and said that steel is used in high strength tubing for oil and gas production, in high temperature turbines for electricity generation, in mining equipment for coal extraction, in wind towers and wind turbines.

“Pipeline steels are a particularly important high strength steel application also requiring toughness (resistance to fracture), where increased strength enables higher operating pressures and improved economy,” Dr Speer said, adding that the advent of microalloyed, thermomechanically processed, and controlled, cooled steels over the past several decades has led to improved combinations of strength, toughness and weldability.

He concluded his lecture by stating that the work of steel product developers has enabled modern society, adding that we are living in exciting times and that product and process development were closely linked – “we all have a role to play” he said.

Positive vibes abound For once it wasn’t all doom and gloom about China. Or perhaps it was, but indirectly. The big news at this year’s AISTech was Donald Trump and his steel tariffs, of which, more later. There were other issues, like safety, which comes up every year, the goal always being zero accidents. At the President’s Award Breakfast, held on Tuesday 8th May (day

15

two of the event) Roger K Newport, chief executive officer, AK Steel, told attendees that his company held a leading position with safety that was four times better than the industry average. He said that a zero accident rate was the number one priority at AK. Speaking of Section 232, Newport said it was not about protectionism, but it was about national security and economic growth and that a fair marketplace would enable AK (and other steelmakers) to make innovative products.

Newport was keen to point out that steel is still top of the pile and that advanced high strength steels (AHSS) were the fastest growing materials in the automotive industry.

At a press conference after the President’s Award Breakfast, Newport highlighted AK’s Nexmet range of AHSS products for the automotive industry and said that sustainability was a key part of the equation, highlighting the lifecycle of the product from manufacture through to recycling and not just relying upon tailpipe emissions.

Trump and tariffs at the Town Hall At the Town Hall Forum – in Steel Times International’s opinion, the highlight of any AISTech event – moderator Jon Delano, money and politics editor of KDKA, a CBS affiliate, harked back to last year when he asked the panelists what they would say to President Donald Trump if they had 30 seconds of his time.

The question tied in with the theme of this year’s Forum – 2018: Trump and the Section 232 Steel Tariffs – Decisive or Divisive?

This year’s panelists were Mark Millet,

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CONFERENCE REPORT: AISTECH 2018

Randy Skagen (left) with AK Steel’s CEO Roger Newport, winner of the William T Hogan, SJ Lecture Award

Dr. John Speer: ‘Imagine a world without steel.’

Mark Millet: “Globally, every economy has come off the bottom.”

president and CEO of Steel Dynamics Inc; James L Bruno, senior vice president for automotive of US Steel; Lourenco Goncalves, CEO of Cliffs Natural Resources; and Thad Solomon, vice president and general manager of Nucor-Yamato.

Mark Millet brought up the devastation caused by the import pressures of recent years and how, in the early noughties, half of the US steel industry found itself in a state of insolvency.

James L Bruno, said that Trump’s actions taken so far were correct and his continued support was needed. In a similar vein, Thad Solomon said he would thank President Trump for actions taken so far and, he added, ‘please finish the job’.

Lourenco Goncalves, standing in for Tata Steel’s Anand Sen, provided a touch of comedy to the proceedings. He said that before he said anything serious to Trump he would first praise him and say how handsome he was.

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Thad Solomon: “If market forces were allowed to work, we’ll find a new balance.”

Are you optimistic?

What Delano wanted to know was simple: is the panel optimistic? Thad Solomon provided the answer: “Yes, more so than I have been,” he said, adding that Trump was getting the issues on the table and bringing other countries to the table too. He also praised Trump’s recent tax reforms and praised him for creating optimism.

Lourenco Goncalves fired up the patriots and claimed that the US was a powerhouse of manufacturing and will continue to be so. “The steel industry has a prominent place in our vibrant economy,” he said to applause from the floor.

James L Bruno described Trump’s actions as ‘energising’. “Think of all the innovation, the process technology and the great opportunities for us,” he said.

Mark Millet chipped in, claiming that he was optimistic a year ago and even more so today. “Globally, every economy has come off the bottom,” he said, arguing that the

glow of positivity was global.

Lourenco Goncalves argued that Section 232 was just one piece of the puzzle, stating that the USA ‘finally has a president who is pushing hard’.

232 – immediate effects?

Delano wanted to know what the most immediate effect of 232 had been on the panelists’ companies. For Millet demand was strong and 232 should prevent imports flooding the marketplace. Goncalves countered that by saying demand had always been here, but a big chunk of it was taken by imports. He claimed that the mainstream media was making the US steel industry look like a bunch of incompetents.

“We are competent, but we can’t compete against absurdly low wages in China and no controls against pollution, or subsidies designed to create over production. Thad Soloman agreed, claiming that the US steel industry could compete with anybody in the www.steeltimesint.com

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CONFERENCE REPORT: AISTECH 2018

James L Bruno: Trump’s actions taken so far were correct and his continued support was needed.

world, but not if ‘non-natural’ means and unfair rules are being employed.

For Mark Millet, 232 was an unnecessary evil. “Free trade economies out there don’t get it,” he said. “They’re worried about a trade war and we are at war with China and have been for years,” he added, claiming that the World Trade Organisation was ‘totally inefficient’ and that there needs to be some structure.

Tariffs the right remedy?

Delano reminded the audience and panelists that the US imports more steel than anybody else in the world and wondered whether steel tariffs offered the right remedy to reduce US reliance on foreign steel. For Lourenco Goncalves, it was a start. He argued that 232 was bringing people to the table. “We can’t afford to have our country flooded,” he said. Thad Solomon agreed that it was a great start. He said that having these issues out was the way to go. “And hopefully we’ll all play by the same set of rules,” he added.

Delano then focused on overcapacity, arguing that the US can’t consume all the steel the world produces. China, he said, was the main culprit and the largest exporter too, but how can tariffs address global overcapacity? James L. Bruno commented: “We must work with our partners to counteract it, but it’s not just a matter of global overcapacity, it’s global production. If we have no market we shut our facilities down, but China keeps rattling on because of subsidies. It’s not a matter of eliminating imports, but bringing it back to normal so we can reinvest, develop new products and grow our business,” he said.

Lourenco Goncalves said that maybe the www.steeltimesint.com

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Lourenco Goncalves: “Finally the USA has a president who is pushing hard”.

Trump administration was creating too many exceptions to 232. James R Bruno said it was a concern, arguing that there were many uncertainties facing the US steel industry, particularly the uncertainty surrounding the practice of transshipment, whereby ‘rogue’ nations, like China, were trying to dupe the US authorities by exporting their steel through the back door and via another country. “We want our industry to run at 80-85% capacity in order to create a level playing field,” he said. On the question of exceptions, Thad Solomon said there shouldn’t be any exceptions.

“Anything we do we’re going to have to enforce,” he said. “We need to hold the line,” added Goncalves.

Is NAFTA naff?

Delano moved on to NAFTA and Mark Millet said that anybody suggesting that NAFTA goes away is nuts. “It should be tweaked,” he argued, stating that trillions of dollars of trade existed between NAFTA countries. He also said that 232 had brought people to the table and given the US steel industry leverage for the first time.

Coming to the table and tweaking was very important, said Thad Solomon.

The conversation moved on to the markets and James L. Bruno said that steel was winning the war with aluminium, claiming that there were around 200 different grades of high strength steels on offer, but admitting he might be wrong on that figure. He said there was a push for great product and process innovation and that Ford was placing greater emphasis on trucks and SUVs and moving out of the passenger marketplace. Larger vehicles might use more steel, but they

still need to be fuel efficient, he said. Thad Solomon said that automotive was an important market and represented a huge opportunity. “We’ve realised gains there, it’s no secret, and we’ve developed some good materials, but fuel efficiency and CAFÉ standards will always be a factor,” he said.

The development of autonomous and electric vehicles and the phenonmenon of car sharing didn’t bother Mark Millet. He said that steel consumption might go down ‘a few million tonnes’ but not a massive amount. Laurenco Goncalves said the latest trends meant that more cars were being produced, which in turn means more steel is being manufactured. James L. Bruno said there was plenty of opportunities out there, but argued that we’re knocking back aluminium, but what’s next? What about carbon fibre? For Goncalves if a problem existed it was to do with communication.

“Steel is so much better than aluminium,” he said. “But we need to do a better job communicating the message.”

Construction The construction industry is big business for the steel industry too and even more so when you consider President Trump’s proposed Infrastructure Bill. For Mark Millet the market is relatively healthy today and will be boosted by Trump’s infrastructure plans. Nucor’s Solomon said that construction played an important role in Nucor’s business. He said there was a need for an Infrastructure Bill tied in to national defence. For Goncalves, the fact that any medium-sized city in China has a better train station than those found in the USA was cause for concern and evidence May/June 2018

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CONFERENCE REPORT: AISTECH 2018

that an infrastructure bill was needed.

“Construction comes when we’re in the mood for development,” he said, adding that infrastructure needs to be addressed.

“Trump made similar comparisons, but why aren’t we doing anything?” James L. Bruno said infrastructure spending was needed, but where was the money coming from?

“It needs long-term planning and must be long-term driven. We have to respond to our shareholders, we must plan for the future, the long-term,” he said.

For Mark Millet, infrastructure spending was the ‘icing on the cake’. He said we must recognise that tax reform should drive fixed asset investment and he believes there are ‘great times ahead’. Thad Solomon said he was optimistic about the Infrastructure Bill. “It’s very important, we need it, and hopefully we’ll get a Congress that puts it into action,” he said.

Goncalves, it was simple: China will become the biggest world producer of scrap, but the vast majority of it will be used in China.

“We will see incredible growth of EAFs in China, well above all other developing markets and the biggest victim will be Australia,” he said, referring to reduced demand for Australian iron ore.

Delano moved on to the energy industry, prompting Nucor-Yamato’s Solomon to chime that it was in a ‘very positive’ situation. He cited wind and solar power transmission as two very important steelconsuming sectors of the market. James L. Bruno said it was ‘starting to come back’ and Millet cited Steel Dynamics’ Columbus, Mississippi mill, purchased in 2014, a year prior to the energy market imploding. “We transformed the product mix there and are not totally reliant on energy at the plant now,” he said.

The legendary, ex-Nucor head honcho Dan DiMicco appeared on the giant screens behind the panelists, like the US steel industry’s very own Wizard of Oz. He was concerned about China’s huge domestic scrap mountain and, therefore, their move into the world of electric steelmaking. For

communications message, claiming that the steel industry needed to improve its message. “We are not the dirty industry of the past and need to communicate that,” he exclaimed.

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The importance of digitalisation The importance of digitalisation was high on the agenda at this year’s AISTech and it didn’t escape the Town Hall panelists. Mark Millet said that the industry was already ‘incredibly advanced’ and that sensors and controls at the mills were already outstanding.

Millet argued that digitalisation will change things on the communications and supply side of the business. Lourenco Goncalves continued to hammer home his

The regulatory environment James L. Bruno said that, so far, the Trump administration appears to be pro-business.

“I hope it stays that way,” he added. Thad Solomon said it was encouraging to see a lessening of bureaucracy, but Mark Millet said he hadn’t witnessed a vast change.

“I think it depends on where you are, but some states have become ‘institutionalised’ and it takes time to change that mindset,” he said.

Plant safety On the perennial issue of plant safety, Millet

said: “Every individual needs to go home to their families as they come in”, meaning that when you leave home able-bodied and alive you should expect to go home in the same state. “We strive for zero accidents,” he said. “We must strive for zero and it only happens when safety gets into the fabric of the company. General managers talk to operations managers daily and if not, you’re short-changing,” said Millet.

Delano asked if it was possible to achieve zero accidents and James L. Brown responded by saying it starts with leadership. “We must keep the conversations happening, keep it interesting and be aware the whole time,” he said.

Thad Solomon said zero was achievable and agreed with Brown that it started with leadership and personal responsibility.

Goncalves agreed (who wouldn’t?) and said that it must come from the top. “The bottom line is it’s a priority, he said.

Another subject regularly debated by AISTech Town Halls is that of so-called ‘millennials’ and how they do have a future in the steel industry, but only if the steel industry gets its act together and communicates its greatness to them.

Delano hinted that technology would reduce the steel industry’s reliance on people in future and that plants would be more automated, something Lourenco Goncalves refuted. “We rely more and more on people,” he said, adding that technology doesn’t preclude people. Thad Solomon took up the baton, adding: “A wide variety of skills are needed,” but he was keen to emphasise the need to communicate ‘what we do, explain what we do and then we’ll be able to attract. We need strong, vibrant, hardworking people who will work in a team and innovate,” he said. Millet said Steel Dynamics was looking for positive spirits who don’t see a wall in front of them, but admitted that staff turnover was low (the sign of a good employer).

James L. Bruno said US Steel was in need of ‘continued innovation’.

Somebody asked a question about China and carbon electrodes and whether China had destroyed that particular sector of the industry. Mark Millet said yes. “They probably added four to five dollars per tonne to conversion costs,” but in a strange way, Thad Solomon summed up the challenges facing the global steel industry in the 21st century in one sentence. “If market forces were allowed to work, we’ll find a new balance,” he said. � www.steeltimesint.com

23/05/2018 14:59:21

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STRUCTURAL STEEL MARKET

2018 – a good year?

The US structural steel industry is picking up and this year (2018) could be slightly better than last year, according to Myra Pinkham*

WHILE it continues to be somewhat lacklustre, this year should be at least a moderately better year for the US structural steel market with construction continuing to make modest gains. That isn’t to say that there aren’t challenges, including growing competition from imported fabricated beams, which, at least as of mid-May, are not expected to be subject to Section 232 tariffs or quotas.

This year the structural steel market actually started off relatively strong from a shipments perspective, it hasn’t been quite as strong from an apparent consumption point of view. According to John Cross, vice president of special projects for the American Institute of Construction (AISC), while US domestic mill structural steel shipments were up about 5% year-on-year during the first quarter of 2018, due to the impact of imports, apparent consumption was actually relatively flat.

Service centre shipments of structural steel have been even stronger – up almost 10% in the first quarter of this year versus

a year earlier, observes Norm Browning, vice president of business development for O’Neal Industries Inc. This, Scott Hazelton, managing director of IHS Markit’s construction service, points out, comes as the overall construction activity is faring slightly better than some initial expectations, and is expected to see single-digit year-on-year growth during both 2018 and 2019.

2017 – a disappointing year That comes after a somewhat disappointing 2017. “At the beginning of the year forecasters were expecting about 5% growth in building construction spending, but it turned out to be about half of that – about 2.5% – due to a somewhat bad second half of the year,” Kermit Baker, chief economist of the American Institute of Architects (AIA) observes, adding that 2018 is already showing signs of being a better year. He notes that AIA’s consensus nonresidential construction forecast is calling for 4% growth this year. “We are currently

on pace to accomplish that with the growth coming about evenly from commercial and institutional construction,” he says.

“There is every reason to think that construction should be strong this year,” Alex Carrick, chief economist of ConstructionConnect, says, pointing out that the underlying economy is doing very well, consumer confidence is at ‘unbelievable highs,’ unemployment is down to just 3.9% and the US population has been increasing by 0.7% – about 2 million people – per year.

But while there is strength, he says the construction sector is still not as strong as it had been in the past at this point in the business cycle. Already the recovery, which started to take hold in 2012, is feared by some as getting ‘a little long in the tooth’ according to Robert Murray, chief economist for Dodge Data & Analytics.

Ken Simonson, chief economist with Associated General Contractors, says that currently construction sector growth is somewhat uneven, with some pockets of

* USA correspondent May/June 2018

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STRUCTURAL STEEL MARKET

strength, such as single-family housing, warehouse and airport construction, while others, such as retail and manufacturing, aren’t doing quite as well.

Also given a general trend toward smaller square footage per project, especially for office buildings, structural steel suppliers might not be seeing as much benefit as the construction activity would seem to indicate.

What will the millennials do?

Cross says even multi-family housing, which had been extremely strong over the past few years – including a 26% yearon-year jump in 2017 – is seeing some flattening this year. Simonson says due to saturation of demand, particularly for luxury apartments, it could only see about 1% growth this year, although it could start to pickup again in 2019.

That will, however, depend upon moves by millennials, who, Carrick notes, had been clustering around downtown areas, but now that they are beginning to form families it is possible that more could choose to buy single family homes in the suburbs.

While commercial construction was up 5.8% last year, Hazelton expects it to be flattish – only up 1-2% this year with the fastest growing sector continuing to be warehouse construction, which saw 33% growth last year following 26% growth in 2016 with e-commerce companies building up their infrastructure. He says that while such increases can’t last forever, he is optimistic that warehouse construction, which tends to be very steel intensive, will www.steeltimesint.com

structural steel.indd 2

likely be up another 8-10% this year.

But this is at the expense of the retail sector – especially bricks and mortar general merchandise stores that are traditionally small anchor stores. Hazelton predicts that US retail construction will be down another 3% this year after falling 2% in 2017.

Simonson says airports continue to be the strongest public construction market, helped by contributions from the airlines themselves, which are flushed with cash.

According to Carrick, starts for airport construction, which includes new terminals, new runways and other investments, jumped 89% last year. While they will likely ease slightly this year, he says he expects airport construction to remain strong for some time.

Manufacturing construction was steeply negative in 2017 as well as during the first two months of 2018, Simonson says, “But that could level off and even pick up later this year or early next year.” Christopher Plummer, managing director of Metal Strategies Inc., predicts that the value put in place could move up 4% this year after declining 12% in 2017.

Corporate tax reform That could, however, depend upon the impact of certain, possibly offsetting, governmental policies, Simonson says, particularly the recently passed tax bill and the potential for a trade war thanks to the steel Section 232 tariffs and quotas.

“The corporate tax reform initiative should make US businesses more competitive with their international competitors, incentivising investment in

21

existing businesses and attracting new direct investment,” Rob Thompson, vice president of sales and marketing for Gerdau Long Steel North America, says. While he agrees that it is likely that many companies will use any ‘windfall of cash’ they see to invest in their businesses, O’Neal’s Browning says he believes that it is too early to tell what the impact will be from tax reform.

Paralysis?

Meanwhile, John Anton, director of steel analytics for IHS Markit’s pricing and purchasing service, maintains that Section 232 tariffs and quotas are creating a good deal of paralysis. “Both construction and manufacturing firms don’t know what to do so they are doing nothing,” he says, especially with President Trump delaying his decision on countries that were granted temporary exclusions to 25% tariffs until June 1 and early indications that most of those countries could be required to accept a ‘pure’ import quota equal to 70% of their average 2015-2017 imports, such as those that South Korea, Brazil, Argentina and Australia has already agreed to.

Anton calls such quotas ‘just about the worst thing I could imagine,’ with the potential of killing jobs, causing steel shortages and driving prices up, even more than tariffs, as companies will not be given the choice of paying extra to import the steel they need.

“Already increases in building material prices has been a giant headache for contractors,” Simonson says, especially for contractors that have projects already May/June 2018

23/05/2018 15:27:42

22

STRUCTURAL STEEL MARKET

underway at a guaranteed price but haven’t ordered their steel yet. He says there is concern that at some time their customers are going to reject bids and either defer, scale back or even cancel projects, although that hasn’t happened yet.”

Infrastructure – the big unknown?

Infrastructure construction also remains a big unknown. Baker points out that interest in the Trump administration’s infrastructure investment proposal has been ebbing and flowing. “The big question is whether there is much appetite for further increasing deficits by spending on infrastructure at this time,” Baker says, observing that given that the big issue is how to pay for such a plan, it is generally believed that nothing will happen until after the mid-term elections this November.

Tabitha Stine, AISC’s vice president of market development, agrees. And even though Congress did pass its first long term highway bill in a decade – the Fixing America’s Surface Transportation (FAST) Act in 2015 and that there was $10 billion in transportation funding in the Omnibus budget that was passed in March, she says it hasn’t had much of an impact to date. Dodge’s Murray agrees, noting that especially the surprise additional funding in the fiscal 2018 appropriations bill should keep the public works sector moving at a decent clip, “But it still remains to be seen if all that money gets to the construction sites.”

Gerdau’s Thompson says there is optimism that Congress will pass new waterways development legislation later this year, “But a large-scale infrastructure investment package is badly needed and long overdue.”

May/June 2018

structural steel.indd 3

According to Metal Strategies’ Plummer, public works construction is likely to be up 2% in 2018 and up another 3% in 2019 after falling 6% last year. But he says that will likely be more beneficial for steel reinforcing bar and fabricated plate than for structural steel.

While there is an opportunity for structural steel to replace tubing in certain applications given how much hot roll prices have increased in recent months, Pauline Malone, vice president of Klein Steel Service Inc., Rochester, N.Y., said that overall demand is fairly equal.

This, Plummer points out, comes as US structural steel operating rates, while up slightly year-on-year, remain below 70% of production capacity despite it being the fifth year of recovery for the industry.

Calling this ‘highly unusual,’ Plummer attributes it to the level of imports coming into the United States, particularly imports of fabricated beams, which, at least currently, aren’t subject to Section 232 tariffs or quotas.

Stine says that the AISC is actively working with US Trade Representative Robert Lighthizer to explain why including fabricated beams in the Section 232 is important to the domestic industry. “In conjunction, we are supporting a group of fabricators that are exploring a trade case,” she says, adding, “At this point nothing has been filed, but the exploratory work has been going on for a number of months and we are supporting that with different types of logistics and funding.”

Plummer notes that while US imports of rolled heavy structural shapes have been declining – falling 1.8% in 2017 with expectations of a 5% decline in 2018 – total structural steel imports when including fabricated beams were actually up 2.2% last year and are expected to rise another 5.4% this year, indicating a 31.2% import share versus a 12.6% share for just rolled beams.

AISC’s Cross says that over the last several years fabricated beam imports, which are currently coming in at twice the rate as imports of rolled beams, picked up from 7% of the market to 14% as of 2017. Despite this, US fabricators currently remain very busy with strong backlogs.

Section 232 – a final decision?

While it could depend upon the Trump administration’s final decision regarding Section 232, Amy Bennett, principal consultant for Metal Bulletin Research, says it is possible that rolled beam imports could start picking up again in the third quarter.

She says even though prices for beams and other long products haven’t gone up that much, the gap between domestic and import prices, which narrowed in late 2017 and early 2018, started to widen again in April.

www.steeltimesint.com

23/05/2018 15:27:57

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STRUCTURAL STEEL MARKET

While it depends upon how much tightening of supply there will be with Section 232, Bennet says that after peaking at $840/short ton early in May, domestic structural prices could come down slightly in the second half.

“They won’t collapse, but they could gradually move down as much as $100/ton

by November.

“It appears as if 2018 will be a good year for structural steel. It started off with positive momentum and while there could be some peaks and valleys, the valleys are not likely to be deep. Overall it should be a growth year,” Browning says.

Late this year and next year, however, is

a little less certain, depending on Section 232, Anton says. “In a tariff world, things will return to some level of stability, but a quota world could be painful.

If there isn’t enough steel to go around, some work won’t be done and people could possibly be laid off. “It could affect the whole US economy.” �

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DIGITALISATION

27

The new economics of steel The steel industry has an historic opportunity to change the economics of steel-making by adopting digital transformation across the life-cycle of its operations leading to significantly elevated sustained EBITDA, EBITDA/ton and return on capital employed. By Atanu Mukherjee1 and Kinnor Chattopadhyay2

1. Digital enablement of the capital investment cycle Engineering intelligence, flexible and

productive capacities are a critical enabler for sustained EBITDA trajectory transformation in steel plants. The capital investment cycle in steel plants is fraught with uncertainties both in the design and the project execution phase. These uncertainties elevate the risk premium in terms of project finance and reduce life cycle cash-flows due to delays. This increases capital cost substantially, raises sustainable EBITDA barriers and reduces the return on capital employed. Evaluating options for flexible design of plants in the face of market and raw material uncertainties is likely to result in more flexible plants which can alter productmix, substitute raw materials and trade-off between economies of scope and scale in iron-making, steel-making and downstream

units. Market uncertainty modeling coupled with design options analysis using realoptions models can yield realistic scenarios and shift the NPV likelihood curve with higher expected value and lower risks.

An indicative shift of the NPV curve with flexible design options for an integrated steel plant is shown in Fig. 1 below.

Outcomes of such stochastic and complexity models of capital investment and flexible design options require largescale digital simulation to explore the solution possibilities. Options then need to be evaluated for operational integrity and optimal outcomes. This requires virtual simulation of the plant design options based on a digital operational plant model.

Once the design option is selected based on simulations, project execution needs to

100% 90% 80% Cumulative probability

WORLDWIDE, the bane of excess capacity, commodity price swings, demand stagnation and operational flexibility and efficiency have led to depressed EBITDAs and global steel companies have rarely exceeded profitability levels above 10% on average in the last 10 years. Similarly, the EBITDA/ton of profitable integrated steel companies worldwide have ranged from $50-80/ton, well below a sustainable level of $100-120/ton. In developing countries like India, barring a few integrated steel companies, the EBITDA levels after discounting for the elevated cost of debt have struggled to breach the sustainable level of about 16%. With worldwide excess capacity expected to recede slowly, flexible design, operational flexibility and operational efficiency, enabled through digital technologies hold the key to economic transformation and sustained competitive advantage for steel firms. Our research shows that applying specific integrative digital techniques can improve EBITDA margins by 5-7% points and EBITDA/ton by $25-60/ton over baseline performing levels. Focused and realistic adoption of digital technologies in progressive steel firms could well push the productivity envelope to over $180/ ton in terms of EBITDA/ton. In the life-cycle of an integrated steel plant, we think that the digitally enabled capital-investment and design phase, and digitally integrated operations execution provides the deepest impact in the steel industry.

70%

ENPV of flexible design concept 1&2

ENPV benchmark design

ENPV of flexible design concept 7

60% 50% 40%

Better upsides (e.g.

P95)

ENPV of flexible design concept 3

ENPV of flexible design concept 4,5 &6

Better expected value

30% 20%

Improved downsides (e.g. P5)

10% 0% -20

0

20

40

Flexible design concept 1 Flexible design concept 4 Flexible design concept 7

60

80 100 120 140

Net present value (S$ million) Flexible design concept 2 Flexible design concept 5 Benchmark design

160

180 200 220

Flexible design concept 3 Flexible design concept 6

Fig 1. An indicative shift of the NPV curve with flexible design options for an integrated steel plant

1 President, M. N. Dastur & Co. (P) Ltd.P-17 Mission Row ExtensionKolkata 700013, India Phone: +913322250500 2 Principal Consultant, Dastur Innovation Labs, 250 Yonge Street, Suite 2201, Toronto, ON M5B 2L7, Canada, Phone: +(1) - 647-6-DASTUR, +(1) - 647-632 7887 www.steeltimesint.com

digitalisation.indd 1

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28

DIGITALISATION

Market

Structure

Feedstock

Investment

Organise

Technology

Finance

Land

Labour

Manage

Insure

Dynamic Behaviour, Risk and Uncertainty Characterisation work to be done

Really done Work being done

Customer changes

Causal models

Design Structure Matrix Project Databases

Hybrid Simulations

Project Supply Chains Flexibility and Options

Uncertainty Models

Fig 2. Framework for modeling the dynamic behavior of large engineering projects

ensure that the design, engineering and construction are completed with minimal delays and cost escalations. Unfortunately, our current project management models are actually time and resource accounting models with linear dependence and do not capture or reflect the dynamics of project execution and control. Large projects are inter-coupled, non-linear and have interacting feedback loops that exhibit what is known as dynamic complexity rather than combinatorial complexity. This makes large project executions inherently unstable.

This means a change or an intermediate delay can have an exponential ripple effect on the end outcome in terms of time and cost. The impact of these changes and uncertainties across the project lifecycle can be significant, at times leading to cost and time overruns of well over 100% and beyond, leading to suspensions or eventual abandonments. Therefore, projects need to be structured, organised, financed and managed in a way that accommodates change, characterises risk while minimising late cost, functionality and schedule impacts. A digital project dynamics model captures the non-linear structure and form of such large projects, which lays the basis for characterising and understanding its behaviour. Fig. 2 above outlines a framework for modeling the dynamic behaviour of large engineering projects.

Dynamic project models are simulated in real time for predicting scenario outcomes May/June 2018

digitalisation.indd 2

and for dynamically assessing risks, which then aid rapid decision making in the face of changes and uncertainty during a steel plant’s project execution.

2. Digital transformation of plant operations Even today’s best-in-class steel plant operations have significant headroom for improvement from both an operational efficiency and flexibility perspective. Digital technologies and artificial intelligence (AI) perhaps have the biggest immediate contribution to make in upstream iron making and steel-making, maintenance and supply-chain operations. High temperature

0.09 0.08 0.07 0.06 0.05 0.04 0.03 0.02

metallurgical processes although tractable have several opportunity areas for improvement in productivity, quality and consistency of output. BOF steel-making for auto-grade steels in India, for example, can improve end-blow phosphorous strike rates by several percentage points using a combination of computational fluid dynamics, chemical reactions and deeplearning AI models. Similarly, integrating kinetics and thermodynamic models for blast furnaces with support vector machines can aid in improving blast furnace process parameters and productivity. Maintenance is one of the single largest cost line items in capital-intensive steel plants. A reduction of several percentage points is possible using a well-architected AI-based prescriptive and predictive maintenance system in upstream, like sinter plants and downstream facilities such as rolling mills. While condition-based monitoring systems have been around for a while, distributed computational intelligence methods embedded in AI chipsets, advanced signal processing and accurate sensors for vibrations can make practical condition-based monitoring systems possible.

However, deep learning and AI-based systems for plant operations have three distinctive challenges. Unlike traditional Machine Learning (ML) systems in areas like retail and credit card processing, understanding the nature of causality – or what causes what – for steel plant operating processes is crucial for its success.

Unfortunately, most machine learning approaches frequently use correlation as a proxy for causality. This may work some

Strike rate improvement A B C

PHOS Levels

0-0.015% 0.016% >0.30%

B to A 6.6% C to B 2.2%

0.01 0

Incremental EBITDA Total incremental EBITDA per year

Incremental EBITDA

2.5 Million USD 7.5 Million USD 20 Million USD

Fig 3. An indicative shift of the phosphorous level strike rates in a BOF and its EBITDA impact based on a dynamic temporal ML model

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23/05/2018 12:31:15

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DIGITALISATION

Strike rate likelihoood %

improvement in EBITDA could range from $5-15/ton. Digital simulation of supply chains yields important insights on the tracking and routing possibilities leading to improved cycle times, significantly lower demurrage, route optimisations, better crane sequencing, better resource utilisation and lower capital outlays.

All such digital enablement of the steel plants is closely tied to the capability and efficacy of sensor technologies. Smart sensors directly influence the availability and the quality of the signals and data required for process modelling, simulations and ML-based algorithms.

Apart from low power smart sensors for physical parameters, vision is becoming an important dimension of smart sensing. High temperature and noisy processes in steel plants can take advantage of both optical vision and thermal imaging along with digital image processing to extract both equipment and material data in real-time.

Tracking of ladles in noisy environments using a combination of thermal imaging, optical imaging, digital signal processing and image reconstruction can increase ladle life-times, reduce refractory wear and decrease number of ladles in circulation.

Emissivity analysis based on optical imaging of liquid steel and slag can allow ML algorithms to estimate the state of an operating process, decreasing the cycle time and improving quality. Similarly, automated visual inspection of surface defects on rolled steel, by using computer vision and Artificial

Continuous strike rate improvement with learning (indicative) More learning

100% 90% 80%

Initial learning Fig 4. Shift of strike-rates

70% 60% 60

of end-point phosphorous levels in the ML models 65

70

75

80

85

Strike rate %

times, but is unlikely to work consistently in steel plant machine learning/AI applications.

Understanding of metallurgical processes is an essential first step in understanding causality in deep-learning models in steel plant operations. This may take different forms of metallurgical modelling, but we find computational fluid dynamics and thermo-chemical modeling are essential complements to machine learning algorithm design. The second challenge has to do with the ongoing capture and conditioning of the deluge of near real-time data acquired for processing. Real-time signal streams from high-temperature processes have significant noise embedded in them. Unlike data cleansing in static AI systems, dynamic AI requires advanced signal processing to extract the signal from the noise on an ongoing basis. This requires intimate understanding of the applicability of the appropriate signal processing algorithms in the context of the process operations. The third challenge in applying machine learning to steel plant operations is the time dimension.

Unlike, finding a pattern or a behaviour at “a” point of time, most steel plant unit operations demand that the pattern of the variables be determined over the temporal dimension as it evolves. In BOF steel-making end-blow phosphorous level strike rate maximisation, for example, it is not only important for the AI algorithm to accurately estimate how much oxygen flow is optimal or how much fluxes should be added, but is equally important to estimate the determining difference in hitting the end point – which is the lance blow sequence and the flow pattern and the sequence of flux additions. The latter requires advanced deep-learning algorithms, and much of the approach is not standard ML and forms the later stage of exploring for minimums in the feature space. Some of the choices for such May/June 2018

digitalisation.indd 3

modelling are deep neural nets or random forests – possibly even recurrent nets (such as long short term memory). However, operationally stable recurrent neural networks in dynamical systems require careful consideration to rules for tuning the learning weights. An indicative shift of the phosphorous level strike rates in a BOF and its EBITDA impact based on one of our BOF dynamic temporal ML models is shown in the Fig. 3.

Over time, operationally stable learning models adjust their parameters to push the strike rate envelope outward for better end-point phosphorous control in the ML models. Fig. 4 above indicates a pattern of the strike rate shift based on our model.

Better supply chain operations – inbound, outbound and in-plant – have a significant EBITDA impact on operations. In some of our supply chain digital enablement and optimisation analyses we found that between raw materials, ladle movement tracking and optimisation, in-shop logistics and outbound dispatch, the effective

Design & engineering bridge

Investment & project bridge

New EBITDA

~10

120

+ 64

-5

-12

184 Capex reduction Opportunity cost

Flexibility

Operations bridge

220

~15

205

RM & Iron making - Blending models - CFD simulation - Energy control

80

-

-

~10

~4

70

60

56

12

~4

-

8

~4

Steel Conversion Finishing & Rolling Maintenance Logistics - Composition control - Surface quality - Condition based - Simulation - Cracks/quality - Mechanical properties monitoring - Optimisation - Energy control - Predictive modeling

Fig 5. Indicative Digital EBITDA bridge for steel plants in developing countries like India

www.steeltimesint.com

23/05/2018 12:31:16

DIGITALISATION

31

MATERIAL HANDLING SOLUTIONS FOR YOUR INDUSTRY Neural Networks will increase throughput of flats as visual inspection has proven to be a critical production bottleneck. Distributed intelligent sensors are, therefore, the essential enablers for digital transformation of operations in the steel plant.

3. Digital bridge to new EBITDA Comprehensive digital enablement of a steel plant from the concept stage to operations can thus transform how we conceive, design, build and operate steel plants. This can change the economics of steel making by changing the EBITDA trajectory, thus creating a durable competitive advantage for the steel firm.

Digital enablement and transformation spanning across the capital investment cycle and the on-going plant operations can serve as the bridge to elevating EBITDA, productivity and the return on capital substantially. Fig. 5 shows that contribution to EBITDA across the life-cycle can be over $60/ton, which elevates the Return on Invested Capital to 20% levels. As the figure also shows, apart from operations, flexibility and opportunity costs make a substantial contribution to the improved EBITDA.

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4. Conclusion It has been conjectured that the steel industry in general has been conservative in the adoption of new technologies. It is true that compared to other fast moving industries like software and semiconductors, the “clock speed” – or the rate of change of technology – in the steel industry has been measured in decades. However, pervasive digital technologies and AI provide the steel industry with a unique opportunity to engender the new economics of steel making, as there is a substantial EBITDA and productivity motive. It is likely that the early embracers of digital enablement and transformation will establish leadership positions in the industry with superior EBITDAs, higher return on capital and much higher levels of productivity. � www.steeltimesint.com

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PROCESS CONTROL

33

Increasing BF hot blast temperature Process optimisation at the blast furnace preheat stoves at SAIL's Durgapur Steel Plant have enabled the blast temperature to be raised from 910° to 1000°C resulting in increased productivity of the furnace by 257t/d or 10.8%, along with a reduction in coke rate of 5.2%, an increase in coal injection of 450% and O2 enrichment up 42%. By R K Singh, S Sudhir, R R Kumar, V K Jha, B K Das, A Mallick, S K Pan & A Arora

THE Hot Blast Temperature (HBT) is the most important parameter and frequently used to control the supply of thermal heat into the blast furnace. Higher blast temperature or higher thermal heat input through the tuyeres decreases the total heat requirement generated in the furnace.

A high hot blast temperature is one of the enablers to enhance pulverised coal injection (CDI). The hot blast temperature also directly influences the combustion raceway adiabatic flame temperature (RAFT). A rise in blast temperature of 10°C increases the combustion raceway temperature by 8.4°C. Such a rise in blast temperature decreases the coke rate by 1.23kg/thm, lowers the blast volume by 5.65Nm3/thm and reduces the top gas volume (800Kcal/ Nm3 basis) by 4.04 Nm3/ thm.

HBT is thus an important parameter for controlling the heat content inside the blast furnace. A number of advantages are associated with high HBT in blast furnace operation. To achieve higher HBT, the blast preheat stoves must be operated efficiently.

The major factors affecting HBT are the gas rate, air-gas ratio (excess air coefficient), waste gas temperature, draught at chimney, cold blast temperature and its leakage into the flue tunnel, the calorific value of blast furnace top gas (BF gas) and blast furnace gas temperature, among others.

The use of a high blast temperature results in a saving of coke and in an increase in productivity. The saving is mainly due to an increased supply of sensible heat from the blast which reduces coke consumption at the tuyere. Generally, 85%

of heat to the furnace is supplied by coke consumption at the tuyere and 15% by the hot blast. The blast temperature directly influences the theoretical combustion temperature in the raceway which exerts substantial influences on the cohesive zone configuration and also on burden descent.

The blast enters through the tuyeres and causes combustion of coke and auxiliary fuels in the combustion zone or raceway.

The character of the raceway plays a vital role in intensifying smelting. The raceway is a cavity, immediately in front of the tuyeres, in which coke particles are found loosely packed. The Raceway Adiabatic Flame Temperature (RAFT) is the maximum flame temperature, which is attainable by burning incandescent coke in front of the tuyeres using atmospheric or enriched oxygen in the hot blast. The RAFT is a function of blast temperature, blast humidity, granulated or pulverised coal injection (CDI) and the oxygen content of the blast.

A number of advantages are associated with high HBT. To achieve high HBT, the air pre-heater stoves must be operated efficiently, but additional important factors are gas rate, air-gas ratio (excess air coefficient), waste gas temperature, draught at the chimney, cold blast temperature and its leakage into the flue tunnel, calorific value and temperature of the Blast Furnace top gas, and others.

Measures for improvement The condition of the stoves requires a number of measures to be taken both in operation and maintenance. Only operational aspects are discussed here.

High dome temperature The resulting HBT depends on the stove dome temperature and the degree of heat soak in the checker brickwork of the stoves. Efforts should be taken to maximise the dome temperature. This is dependent on the calorific value of fuel gas used in heating the stoves, normally a blend of blast furnace (BF) top gas and coke oven gas. However, this must not exceed the maximum allowable temperature for the refractory used in the combustion chamber, dome and the top layers of checker work.

It can be maximised by improving the combustion of the fuel gas by correct setting of the air-to-gas ratio, or by use of higher calorific value gases for preheating the furnace blast.

Correct dome temperature protects the refractories from overheating and so prevents premature failure and the appearance of hot spots in the combustion chamber and dome. Normally, the dome temperature is kept about 150-200°C higher than the Hot Blast Temperature (HBT) required.

The dome temperature is lowered by increasing the air to fuel gas ratio (α). Once the dome temperature reaches its set value the air-gas ratio is increased automatically to maintain the set dome temperature.

This reduces the BF top gas fuel into the stoves in order to keep the total generated waste gas at a constant level. It is essential to improve the insulation of stove and hot blast delivery system to achieving higher HBT. Table 1 shows the effect of calorific value of the stove fuel gas and the air-gas ratio (α) on stove dome temperature.

The authors are with R & D Centre for Iron and Steel, Steel Authority of India Ltd, Ranchi-834002, India e-mail: rajusingh@sail-rdcis.com www.steeltimesint.com

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34

PROCESS CONTROL

Ratio BF to coke

oven gas

Calorific Value (kcal/Nm3)

Maximum dome

BF adiabatic flame

t emperature achievable (0C) α = 1.1

temperature at α = 1.1(0C)

α = 1.2

1:0

800

1200

1169

1364

50:1

868

1240

1205

1409

45:1

875

1243

1208

1413

40:1

885

1248

1213

1418

35:1

896

1255

1218

1426

30:1

912

1257

1226

1429

25:1

933

1275

1236

1449

20:1

965

1290

1250

1466

15:1

1016

1315

1272

1494

10:1

1114

1357

1311

1542

Table 1. Maximum dome temperature for different calorific values of fuel gas

Calorific value of gas The calorific value (CV) of the fuel gas blend determines the maximum achievable dome temperature. The flame temperature is purely a function of the calorific value of gas and the amount of excess air coefficient (α) in the waste gas. The higher the calorific value, the higher the flame temperature resulting in a higher dome temperature.

It is, therefore, essential to work out the exact requirement of the calorific value of fuel gas to achieve the required dome temperature. If the condition of the stoves and hot blast delivery system are unsatisfactory, unblended BF gas is used with a higher air-gas ratio to maintain lower dome temperatures, otherwise mixing coke oven gas or coal bed methane (CBM) in the ideal ratio may be employed to increase the adiabatic flame temperature which will lead to increased HBT. The blast furnace top gas calorific value can be calculated from an analysis of the gas. The main gases with a fuel value are CO and H2.

CV kCal/Nm3 = 30.2 kCal x %H2 + 30.0 Kcal x %CO + 93.9 KCal x %CH4 BF top gas temperature The effect of BF gas temperature on stove dome temperature is significant.

The BF top gas undergoes wet-cleaning to remove dust. If the gas temperature exiting the cleaning plant is high then the moisture content of the gas will also be fully saturated at a level dependent on gas temperature. As a result, the maximum attainable dome temperature decreases as the BF gas temperature increases. With almost the same BF gas, the maximum attainable dome temperature decreases by 70°C, if the BF gas temperature increases May/June 2018

Kumar.indd 2

from 30 to 45°C and the corresponding moisture content increases from 35 to 85gm/Nm3 of dry gas. If the dome temperature decreases, the HBT will also be lower for the same CV of BF gas. Therefore, it is desirable to cool the BF gas in the gas cleaning plant to about 30-35°C. Air-to-gas ratio The Air to Gas ratio is also equally important to achieve a higher dome temperature for a given CV. Excess air not only lowers flame temperature, but also increases the waste gas volume resulting in increased load on the chimney. Finally, it will affect the gas input to the stove, thereby lowering hot blast temperature. It is essential, therefore, have the air-gas ratio correctly set by using automatic mode.

The effect of excess air coefficient (α) on the gas input to stoves is shown in Table 2.

Waste gas temperature The temperature of the waste gas exiting the stoves is an indication of the level of the temperature of the stove checker bricks. A higher waste gas temperature at exit indicates more heat retained in the checker brickworks. Gas exit temperature should be maintained in the range of 375 to 400°C. This will ensure a higher hot blast Excess air ratio (a)

temperature for a longer duration. It also ensures higher chimney draughts resulting in higher gas input to the stove.

The trend of waste gas temperature is also important in achieving higher hot blast temperature. If the waste gas temperature at exit increases or remains constant, the thermal stability of the stove improves, otherwise it deteriorates. This means that the heat input to the stove is below that required to maintain a constant hot blast temperature.

The waste gas temperature should be 190 - 200°C at the end of an on blast heating period and is 25-30°C above the unheated (cold) blast temperature. This, with a temperature of 375- 400°C of the stove waste gas, will help improve the chimney base draught leading to increased BF top gas input to the stoves.

Corrective action is to be taken either by increasing fuel gas input or reducing the hot blast temperature, otherwise hot blast temperature will keep on falling until the heat input to the stove by the fuel gas becomes higher than the heat taken by hot blast and losses.

Cold blast valve & chimney valve The cold blast valve should be completely closed when the stove is on the fuel gas period, otherwise there will be leakage of cold air into the checker. This will dilute the waste gas, lowering its temperature and increasing the waste gas volume, thereby reducing the draught and this will reduce the gas input into the stove thereby decreasing hot blast temperature and loss of cold blast. Similarly, the chimney valve should also be completely closed during the blast preheat period.

If it does not hold, then there will be leakage or loss of cold blast and it will dilute the waste gas temperature coming from other stoves and increase chimney load. This will again affect the gas input in the other stoves thereby decreasing hot blast temperature.

Air requirement

Waste gas generation

Gas flow rate

Adiabatic

Dome

(Nm3/Nm3 of gas)

(Nm3/Nm3 of gas)

(Nm3/hr)

flame temp (0C)

temp (0C)

1.1

0.70

1.58

93671

1346

1211

1.2

0.76

1.64

90244

1306

1175

1.3

0.83

1.70

87059

1268

1141

1.4

0.89

1.77

83616

1232

1109

1.5

0.95

1.83

80874

1199

1079

1.6

1.02

1.89

78307

1167

1050

1.7

1.08

1.96

75510

1137

1023

Table 2. Effect of excess air on heat input to stove

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Parameters Production (t/d)

Jul Aug Sep Oct Nov Dec

Jan Feb

2383 2388 2493 2428 2329 1410 2578 2640

Productivity (t/d/m3) 1.58 1.58 1.66 1.61 1.58 1.17 1.69 1.74 Coke rate (kg/thm) 516 499 462 470 481 515 502 489 CDI rate (kg/thm) 10 19 57 56 62 36 58 55 Wind volume (Nm3/min) 2133 2200 2183 2133 2050 1750 2250 2200 Blast pressure (kg/cm2) 1.52 1.57 1.56 1.59 1.58 1.22 1.66 1.67 O2 enrichment (Nm3/h) 4526 4706 5484 5077 5146 2178 6198 6438 HBT (oC)

910 914 921 984 1007 970 908 1000

Table 3 Operating parameters of BF # 4, Durgapur Steel Plant

Stove availability Stove availability is a very important factor which affects HBT. In cases of three stove operation, one stove is on blast and two stoves are on fuel gas. If, due to any reason, one stove is down, then only one stove will be heating on gas. This adversely affects the gas input to the stove. Similarly, for four stove operation, two stoves are on blast and two on gas. If one stove is down then one stove is on blast and two stoves remains on gas. But if out of four stoves, one stove is under capital / long repair then it becomes a three stoves operation and if any stove out of three is down, it adversely affects gas input to the stoves. Therefore, it is essential to improve stove availability by good maintenance and stocking critical spares. Due to ageing of stoves, the gas input decreases resulting in lower HBT. Where four stoves are available, three stoves can be kept on gas and the other on blast.

If three stoves are put on gas, the total gas input into the stoves increases by about 25 - 30%, which will meet the hot blast temperature of 1000°C with BF gas alone.

It is, therefore, essential to ensure high availability of stoves by proper maintenance.

Operational aspects for high HBT The hot blast temperature (HBT) depends on stove dome temperature and the level of soaking of the checker brickwork. A May/June 2018

Kumar.indd 3

high dome temperature will give a high blast temperature, but it will not sustain this for long. Therefore, both the dome temperature and the stove waste gas temperature, being a measure of the checker brick soak, are equally important.

If higher CV gas is used, the higher dome temperature is achieved within half an hour from the start of the fuel gas period even at lower gas input. But, it will not ensure proper soaking of the checker bricks. The waste gas temperature will be in the range of 225-275°C against the desired 375400°C required for proper soaking. If the waste gas temperature is at about 250°C, the bottom checker will only be at about 150-175°C. The cold blast temperature, enters the checker at about 150-170°C, so there is hardly any temperature difference between the cold blast and checker bricks resulting in no heat transfer. In this situation, utilisation of the bottom part of the checker is very poor. There is a loss of effective surface area of the stove for heat transfer resulting in lower hot blast temperature.

To achieve higher hot blast temperature, it is essential to have properly soaked 1020

Case study HBT of BF#4 DSP The stoves of BF 4 at Durgapur Steel Plant, SAIL are based on HTS technology. HBT was in the range of 920-930°C in the months of Jul-Aug’ 2012, which was on the low side, hence measures were taken to increase the HBT to 1000°C. Install drip pot in gas lines The installation of drip pots in the gas line of all three stoves was undertaken with significant effect on the dome temperature.

Before drip pots were installed the gas was absorbing moisture from water present in

1007

1000

1000

984

980

970

960 940 HBToC

Draught The draught is a very important parameter for gas input to the stoves. It is dependent on the waste gas temperature at the chimney base for a given chimney. It is therefore essential to maintain a waste gas temperature 20°C higher than the cold blast temperature at the end of the blast period and 350-400°C at the end of the gas period. Further, It is also essential to stop cold blast leakage into the stove and atmospheric air, and water infiltration into the flue tunnel.

checker brickwork. The gas input into the stove has to be increased. Increasing the gas CV alone will not improve soaking, it will only increase dome temperature and may damage the top checker and dome refractory. To increase the gas input into the stoves, the following measures can be adopted: • Increase and maintain the gas line pressure.

• Cool the BF gas in the gas cleaning plant to reduce moisture carried to the stove.

• Three stoves on fuel gas instead of two stoves, wherever four stoves are available.

• Increase the stove availability by good maintenance.

• Improve chimney draught by eliminating leakages from the cold blast valve.

• Close chimney valve and avoid water logging in flue tunnel/ chimney base.

• Fully open the fuel gas valve.

• Auto operation of air-gas ratio.

920

912

921 908

900 880 860 840

Base (Jul-Aug)

Sept

Oct

Nov Month

Dec

Jan

Feb

Fig 1. Hot blast temperature variation Jul 2012 to Feb 2013. *BF was under CR in Dec’12 for top repair and stabilisation in Jan’13

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37

the gas line. Drip pots have enabled continuous removal of water from the gas line leading to less moisture carry by the fuel gas.

Stove flue gas analysis The Air-to-Gas ratio is equally important to achieve higher dome temperature for a given gas CV. Initially, the air-gas ratio of all three stoves was in the range of 0.95-1.0. The ratio was optimised at 0.80-0.85 with the help of a flue gas analyser on the basis of % CO and % O2 in the flue gas.

Gas to stoves when BF off blast During a shutdown of the furnace continuous heating of the stoves is very important to maintain the heat inside the stoves for later providing heat to the blast furnace. Excessive cooling is also not good for the stove refractories as it creates greater thermal stress.

Hence during short shutdown periods (6-8hr) BF gas is provided to the stoves to maintain heating.

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Waste gas temperature enhancement Initially the set point of HBT was reducing in steps of 10°C to improve the thermal status of the stoves as the waste gas temperature at the end of the blast period was less than 300°C. Once a waste gas temperature of above 300°C was achieved at the end of the on blast period, gradually the HBT was increased in steps of 10°C. Optimisation of blowing parameters Furnace RAFT was maintained at around 2050 ± 50oC in BF# 4.

Adequate steam of 3-4 t/hr was added to maintain the desired RAFT with a HBT of 1000-1020°C along with oxygen enrichment of 6000-7000 Nm3/hr (3-4%), and CDI of 6-8 t/hr. Operating parameters of BF#4 are given in Table 3.

Conclusions The combined effect of various process optimisation measures – the installation of drip pots, optimisation of the air/gas ratio in all the three stoves by flue gas analysis, maintaining a higher stove waste gas temperature leading to higher chimney draughts – have resulted in improving the hot blast temperature from 920°C to about 1000°C during Nov-Dec 2012 and beyond (Fig 1). � Bibliography 1) A K Biswas: Principles of Blast Furnace Iron making: Theory and Practice, Cootha publishing house, Brisbane, (1981).

2) CBR Applications in Combustion Control of Blast Furnace Stoves”, Proceedings of the International Multi Conference of Engineers and Computer Scientists 2008 Vol I IMECS 2008, 19-21 March, 2008, Hong Kong by SUN Jinsheng, Member, IAENG 3) AM Dalley, “Failure Analysis of a Section of Bustle Pipe from the No. 13 Blast Furnace at Gary Works,” U. S. Steel Research Interorganisation Correspondence, November 6.

4) M L Wei, and T. E. James, “Design, Maintenance and Repair of Blast Furnace Bustle Pipes,” Iron and Steel Engineer, August 1981, pp. 51-59.

5) Investigation of Blast Furnace Bustle Pipe Failures and Repair

by D. J. Radakovic and Y. Zhao, United States Steel Corporation Research & Technology Centre.

6) Blast temperature optimisation philosophy and practice by Yasushi Ishikawa, Shin Hashimoto and Hiromitsu Yoshimoto. www.steeltimesint.com

Kumar.indd 4

VELCO GmbH Haberstraße 40 42551 Velbert (Germany) info@velco.de • www.velco.de Tel +49 (20 51) 20 87-0 23/05/2018 15:09:35

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PROCESS CONTROL

39

Fig 1. The power cooling line of thyssenkrupp Steel Europe AGâ&#x20AC;&#x2122;s hot strip mill no 2 in Duisburg â&#x20AC;&#x201C; Beeckerwerth.

Photo (source): thyssenkrupp Steel Europe

Modernising the cooling line In 2010 Primetals Technologies installed in its first power cooling line within a conventional hot strip mill. Four years later, the power cooling line was substantially extended and was also equipped with a new process automation system. The overall goal of this modernisation was to secure the existing hot strip production and to be able to produce high- and ultra-high-strength steel grades within a wide thickness range. By Martin Moninger1, Christian Matten2, Dr. Alexander Gaganov3, and Elena Schaffnit4 PRIMETALS Technologies installed and commissioned the first stage of a power cooling system on hot strip mill no. 2 at thyssenkrupp Steel Europe (tkSE) in December 2010 (Fig. 1). This revamp involved installing 16 cooling headers above and 16 below the run out roller table. To do this, the first two cooling groups of the existing laminar cooling were removed to make room for the new unit. To shorten the time during rolling from the last stand in the finishing mill to the start of the cooling,

the first intensive cooling header was moved closer to the last finishing mill stand.

The first five top and bottom headers of the power cooling were either supplied with high-pressure water from a booster pump or directly with laminar pressure. Initially, the remaining headers have been constantly connected to the laminar pressure system.

In this way, after the first stage of the modernisation, a volume of water of 4100 m3/h in low-pressure mode and up to 5000 m3/h in high-pressure mode could be

applied to a length of eight metres.

The switchable volume of water in the power cooling system was increased to 12,500 m3/h in a further extension in 2014.

This involved installing a second, almost identical, group of cooling headers directly downstream of the existing power cooling line. The resulting power cooling system now has 32 headers on the top and 32 on the bottom with a total length of just 18.5 metres. The cooling is fed by four speedcontrolled booster pumps that can increase

1. Special engineer, Primetals Technologies Germany, Erlangen. 2. Senior engineer, automation hot strip mill 2. 3. Senior engineer, hot strip mill 2. 4. Senior engineer, research and development, thyssenkrupp Steel Europe, Duisburg, Germany www.steeltimesint.com

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23/05/2018 12:17:36

40

PROCESS CONTROL

section from a laminar tank, which is usually located close to the cooling section and ensures a constant pressure, the power cooling line in hot strip mill no. 2 is supplied through a 200-metre long pipe from a high-level tank situated outside the rolling mill building. As the laminar cooling and booster pumps for the power cooling are connected to the same supply line, the suction pressure of the pumps drops when the volume flow of water increases, and the supply pressure to the laminar flow cooling also drops. The suction pressure model, therefore, calculates the expected pressure drop in the water circuit as a function of the currently switched or future planned water flow and the fill level of the tank, and switches the valves of the power and laminar flow cooling so that the volume of water required for cooling is provided.

The suction pressure drops to a critical level near to 0.5 bar, an intelligent suction pressure limiter is activated in the basic automation, limiting the nominal suction pressure of 1.8 bar to a minimum value of 0.5 bar without the pumps being switched off to avoid dry running. In this way, it is possible to rise to the full volume flow of water in less than two seconds despite the long cooling water supply line. Power cooling can then be used for thin strips with fast final rolling speeds of over 10 m/s.

The full water output is still produced at the right time even if the specification requires an uncooled strip head or a temperature profile of just a few metres. With this control and a delivery pressure of 3 bar, the

Control of a strip with 4mm thickness and high difference between finishing and coiling temperature

the laminar pressure to 3 bar with the full volume of water. Furthermore, multiple drain valves were installed near the power cooling line which, in conjunction with the valves of the power cooling and the booster pumps, create constant pressure conditions on the headers of the power cooling system.

In the last modernisation step, the process automation of the cooling line was also completely modernised. A newly developed comprehensive temperature model using a uniform approach to calculate and predict the strip temperature from the roughing mill through to the finishing mill, the cooling line and the coiler was installed (Fig. 3). In order to achieve exact temperature control, even with high volumes of water, the process automation was also equipped with intelligent control for the high-pressure pumps. The intelligent

control is based on an exact balance of water volumes which are derived from the characteristic curves of the different units.

The characteristic curves were determined during cold commissioning and stored in the Level 2 process automation. The control system calculates the valve settings for the power cooling headers and the drain valves lines cyclically, determines the pump setpoint speeds in real time on the basis of the setpoint pressure increase and the volume of water to be switched by the pumps, and sends a common setpoint set to the basic automation. This then controls the valves and frequency-controlled pumps simultaneously.

A suction pressure model was developed to produce a constant supply pressure at the power cooling bars even if the suction pressure drops. In contrast to the supply to the pumps and the laminar cooling

Primary data

control of pumps and valves

Roughing mill R1

Roughing mill R2

Water supply and distribution

W model

W Fig 3. Comprehensive temperature modelling and

Tr, dr

F,M, v ...

TFM, d

Ki

TH

p

n

Horizon of comprehensive temperature model

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Photo (source): Krone

Fig 4. Example of usage of high-strength cold forming grade perform®700.

Photo (source): Putzmeister

May/June 2018

Primetals rainer.indd 3

process automation.

During the revamp phase, only the changed plant configuration was parameterised. This made it possible to start the technological commissioning immediately after production resumed. The contractually agreed targets were achieved (including the ramp-up curve).

For the production run-up in the first four weeks the plant was run in the lowpressure range without the booster pumps.

The specified cooling rates corresponded to those of the laminar cooling section, 1300 1200 Yield strength [MPa]

full volume flow of water for power cooling is increased from zero to 12,000 m3/h within two seconds. The total volume of water, including downstream laminar flow cooling, can be increased to 15,000 m3/h throughout the entire run of the strip.

The production and production experience For a steel producer, it is important that production runs smooth and fast after a modernisation. The specialists from tkSE and Primetals Technologies, therefore, worked out a concept for the run up and take over of the existing production before each modernisation step. In this way, during the second revamp step the extension of the cooling line could be installed within 14 days, and the production could be run up again with no loss of quality. To ensure a smooth start-up of production, the new process automation had already been commissioned, comprehensively tested, and actively used for cooling before the conversion took place. For this purpose, a computer system was set up parallel to the ongoing production, which, in shadow mode, was supplied with exactly the same primary and measured data as the existing

which had been removed at this point. This ensured that the strips could be cooled at the same rate as before. Subsequently, the booster pumps were switched on for the power cooling, initially with a minimal pressure increase, almost in “laminar mode”. This meant that the booster pumps simply compensated the stationary pressure drop on account of a falling level in the high-level tank. After another four weeks, the complete power cooling line was run in high-pressure mode for the first time.

With the cooling concept now implemented, the entire production runs with the booster pumps switched on. If a low cooling rate is required, cooling takes place in almost laminar mode. If a higher cooling rate is desired, the pump speed is increased correspondingly in order to increase the delivery pressure and consequently the volume of water. In this way, the desired cooling rate can be set flexibly for each individual strip. This possibility was a significant success factor, because it allowed some trial strips to be inserted into the ongoing production without interrupting operations. The effects of higher cooling rates could be investigated on them.

Step by step, not only the new materials but also the grades previously produced in the low-pressure cooling were included in the test mode, and tested with higher cooling rates. tkSE made increasing use of this flexibility and conducted many trials and metallurgical investigations. The result is a highly precise and efficient production of additional steel grades, as well as a high degree of flexibility when changing steel grades on the rolling mill. The short project runtime and the minimum downtimes for the installation during the scheduled plant shutdown also contributed to the success

1100 1000 Re min

900 800 700 600 Head

Middle Position of sample

Tail

(of strip)

Fig 5. Low variance of the yield strength over the whole strip length for ultra-high-strength cold forming grade perform®960

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Example of ultra-high-strength grade, perform®960/1100. Photo (source): thyssenkrupp Steel Europe

Fig 7. Flatness of wear-resistant plates XAR®400 after cutting and straightening. Photo (source): thyssenkrupp Steel Europe

of the project.

Currently, the newly supplied process model (2014) is being expanded by a module that is specifically designed for cooling to low coiling temperatures.

A special control algorithm and new inheriting and adaptation cycles meet the high requirements for controlling low target temperatures. tkSE and Primetals Technologies are working closely together on the technological commissioning in order to optimise future product development.

High-strength steel grades High strength steel grades are growing in importance, particularly in commercial vehicle construction, because they enable the tare weight of the vehicle to be reduced and thus the load capacity to be increased.

A low weight not only contributes towards optimal exploitation of the technical performance capability of the particular drive unit, but also supports the efficient use of resources, cost optimisation and climate protection.

The tare weight of sheet steel structures May/June 2018

Primetals rainer.indd 4

can be decisively reduced by increasing their strength properties, especially the yield point. Alongside a high yield point and tensile strength, good toughness properties, a high resistance to brittle fracture, and optimal suitability for cold forming and welding are required.

This combination of characteristics can be achieved by a suitable choice of alloying concept and a special production process. The conventional production of high-strength steels usually consists of hot rolling followed by water quenching after reheating. Expensive alloying elements that increase the carbon equivalent are used to adjust the desired microstructures, for example bainite and martensite, leading to high strength values accompanied by the required toughness.

If the hot strips can be cooled directly from the rolling heat using accelerated cooling, then high strength values paired with good toughness properties can be achieved, even in steels with a low carbon equivalent. In this way, on the one hand, alloying costs can be saved, and, on the other hand, the process paths can

be significantly shortened. The surface quality is also improved. However, these advantages can only be exploited in modern rolling mills with a high-performance power cooling system.

Power cooling of the hot strip mill has contributed to the continued development of the high-strength grade perform®700, and facilitated the development of the ultra-high-strength grades perform®960/1100, and the wear-resistant XAR® grades.

The power cooling line is run in high-pressure mode to produce the high-strength grade perform700.

Perform700 is a low-carbon, microalloyed, thermomechanically rolled steel with a minimum yield strength of 700 MPa. Thanks to its good cold forming properties, it is used for the construction of components with complex geometry (Fig. 4).

So power cooling has contributed to extend the producible range of dimensions of the high-strength, thermomechanically rolled grade perform®700 to a thickness of 15 mm and a width of 2000 mm. Alloying costs could also be saved, and the scatter of the mechanical properties over the entire length and width of the strip could be reduced. The grade perform®700 has not only excellent surface properties and the narrowest thickness tolerances, but also very good machining characteristics.

High-pressure cooling has facilitated the development of high-strength perform grades with a minimum yield strength of 960 or 1100 MPa. The low scatter of mechanical properties (Fig. 5) and the good toughness properties with very high strength values are achieved by an optimised cooling pattern with highpressure cooling.

The ultra-high-strength grades perform960/1100 are intended for use in mobile crane manufacture, concrete pumps, heavy-load flat-beds and telescopic jibs, for example.

The production of abrasion- and wearresistant XAR400 – directly hardened strips of sheet metal with a hardness level of 400 HBW – would not be possible without power cooling. Not only high cooling rates but also low coiling temperatures are required in order to achieve the high strength values for these grades.

With the aid of the power cooling’s highpressure mode and the optimised cooling process, the XAR strips of sheet metal www.steeltimesint.com

23/05/2018 12:17:41

PROCESS CONTROL

Photo (source): thyssenkrupp

Fig 8. Application examples for wear-resistant plates XAR®

Steel Europe

Photo (source): thyssenkrupp Steel Europe

are given their outstanding mechanical properties with high wear resistance accompanied by very good flatness and good forming properties (Fig.7).

XAR grades are used in the manufacture of special vehicles subjected to higher wear stress (Fig.8), and they lengthen the service lives of the used tool components.

The new cooling model achieves high precision control and tighter temperature tolerances. Cooling can be adapted flexibly to the particular steel grade being produced, and ensures significantly more homogeneous material properties. In the meantime, thyssenkrupp Steel Europe AG now produces almost half of all materials with a threefold higher cooling rate than

with conventional laminar flow cooling and, at the same time, is extending its range of products. New possibilities for improving the strip surface can be found in the symmetrical cooling characteristics of the new power cooling system.

Modern high-performance cooling opens up the possibility of producing high-

strength and ultra-high-strength steels on a conventional hot strip mill straight from the rolling heat, whereas they could previously only be produced by water quenching after reheating. The advantages are not only cost savings and improved characteristics, but also an improvement in the ecological balance as a result of CO2 savings. �

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22/05/2018 11:28 23/05/2018 12:17:43

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PERSPECTIVES: JEBENS

Strong focus on Europe Jebens buys a large proportion of steel from sister company Dillinger and specialises in complex steel processing. The company is in a very good strategic position, according to Carsten Schmickler*

1. How are things going at JEBENS? Is the steel industry keeping you busy?

Jebens as a partner and supplier of the heavy machinery industry is quite busy. Our customers are generally well booked and the steel prices in 2017 did not see the same volatility as in recent years.

2. What is your view on the current state of the global steel industry?

The following challenges are making steel quite a competitive business:

5. Can you discuss any major steel contracts you are currently working on?

As a sister company of Dillinger, we are buying a good part of our steel from them.

We are also working with Italian re-rollers and Italian forges for very thick and heavy material too. We even get some material from Ukraine, Russia and Korea via traders.

A good part of our business is contract-

• The global steel industry is still facing the problem of structural overcapacities for all products.

• Ecological issues (CO2 emissions) have an increasing influence on international cost competitiveness • Increasing international trade barriers are making markets more regional again.

• New technologies can change the game over the next few decades: 3D-printing for costly parts; decreasing material costs for new composite materials (automotive).

3. In which sector of the steel industry does JEBENS mostly conduct its business?

Jebens is a steel processor specialised in the production of ‘oxycut’ profiles and the production of complex welded components based on heavy plates. Our core competence is the processing of very heavy and large pieces for the heavy machinery sector like mobile cranes, plastic injection mould machines, presses of all kinds, mining equipment and so on.

4. Where in the world are you busiest at present?

We are very much focused on Europe.

based. Usually we cover these needs directly on the purchasing side to avoid any speculation, but we have a lot of spot business and irregular needs too for which we are carrying an important stock.

Currently we stock 30kt of heavy plates of which more than 50% have a thickness of > 200mm.

6. “Aluminium will always out-perform steel on a weight basis; and on the stiffness issue alone it will carry the day,” said Alcoa’s chief technology officer Ray Kilmer speaking in 2013 about aluminium usage within the

global automotive industry. Where do you stand on the argument?

As we are not in the automotive business this question is not of major importance to us. If aluminium usage increases, there will be some positive effects as the OEM will invest in building new presses.

For us, the indirect discussions are of greater importance. What will happen if big parts are not produced by stamping any more but by 3D-printing? Then our customers, like the press producers, will not need any more of our components or ‘oxycut’ parts.

Today it is hard to predict if 3D-printing will really be competitive for parts made out of ‘standard’ steels – especially if we are talking about a certain series. But if we have single parts that need a lot of production processes and for which a lot of material is removed by machining operations, then the overall cost of 3D printing might become attractive in the foreseeable future.

7. It is always claimed that aluminium is the ‘greener’ metal when compared to steel. What’s your view?

It is extremely difficult to have a sound and correct evaluation how ‘green’ a metal or a technology really is. Take the example of electro mobility. Sure there are no emissions coming out of an electric car, but how was the electricity produced? What are the environmental impacts of recycling the batteries?

8. “…any hint of doubt when it comes to predictions of climate doom is evidence of greed, stupidity, moral turpitude or psychological derangement,” said Bret Stephens writing in The Wall Street Journal. Do you sympathise with his view?

* Managing director, Jebens May/June 2018

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PERSPECTIVES: JEBENS

In my opinion it is hard to evaluate if the changes we are facing in the last decades are entirely man-made or if they are partly due to ‘natural’ changes. But it is not negotiable that temperatures are increasing with all the well-known consequences like the melting of the icebergs. Therefore, we have to work very seriously on all the known influencing factors that have a negative impact on climate change.

9. In fact, talking of ‘green issues’ and emissions control, how is the steel industry performing in this respect?

Steel production is, by definition, not very green and certainly progress in improving the eco-friendliness is always possible and necessary. Unfortunately we do not have a one-world approach.

EU mills aren’t the most important players in the global steel industry anymore. If the global competitiveness of EU steel mills is lowered and production cut further there will automatically be more steel from other parts of the world where steel production is governed by lower environmental standards and, therefore, much more CO2 emissions because of longer transportation distances.

10. How quickly has the steel industry responded to ‘green politics’ in terms of making the production process more environmentally friendly and are they succeeding or fighting a losing battle?

In the EU we have the highest environmental standards. There have been a lot of initiatives to reduce CO2 emissions, to save energy and water, to reduce all kinds of emissions. If the rest of the mills in the world, notably in China, faced the same challenges over the next few years, it would be a big advantage for the EU steel industry. But if the environmental standards in other regions of the world remain much lower, the steel produced without stringent environment controls will eventually replace EU steel or – if we are talking about steel intensive products – the whole production of the final goods might be shifted elsewhere.

11. Where does JEBENS lead the field in terms of steel production?

Jebens is not a steel producer, but has Dillinger, the world-leading producer of heavy plates, as a sister company.

Jebens specialises in complex processing www.steeltimesint.com

Perspectives - jebens.indd 2

and carries one of the largest stocks in Northern Europe for heavy plate with thicknesses over 200mm -> more then 16kt. Our oxy-cutting technology is very sophisticated. The use of a cutting robot and specialised cutting machines means that extremely precise 3D cutting is possible and that, for certain applications, costly machining operations can be avoided.

Our second field of specialisation is the production of large welded constructions.

In the last couple of years we have developed this business substantially and today can offer ready-to-install components. This spring we delivered our heaviest component at over 160 tons – a huge press table – that we sent directly to the company where the press was installed – and that included electric and hydraulic pre-installations.

12. How do you view JEBENS’s development over the short-tomedium term in relation to the global steel industry?

Because of the big piece weights and high transportation costs, Jebens is focused on Europe. We are observing a certain trend of shifting the borders of the value chain in the machine making industry. More and more customers are focusing on the design and development, automation and the Internet of Things (IoT) and they do not consider pure manufacturing as a core competence any more. For these customers Jebens will not only be the production partner, but will provide input for the optimisation of designs.

13. China dominates global crude steel production and is accountable for almost half of total production.

How should the industry react to this situation?

Our big customers have their own production in China. Usually it is dedicated to serve the local market. In the next couple of years standard products and components will be exported from China to the rest of the world and Europe. But with shortening lead-times, projects that start without being 100% exactly defined will be difficult to fulfil purely from Chinese production. In addition to this, we are talking about big and heavy pieces that often require special logistics and that are not as easy to handle as ‘normal’ plates.

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14. What is JEBENS’s experience of the Chinese steel industry?

Before we had the anti-dumping on Chinese plate in the EU, we were sourcing it from specified Chinese mills. The absolute standard quality was normally acceptable.

But the usual lead-time from order placement to delivery at our factory was easily three to four months.In a very volatile marketplace, like the steel market, this is rather long.

And frankly speaking, it was more than once that a potentially attractive buy became even rather expensive by the time the material arrived in Europe.

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

In my opinion one of the key drivers over the next few years will be digitalisation.

The question will be how agility could be improved by using all the data available and by shortening lead-times substantially.

16. What exhibitions and conferences will JEBENS be attending in 2018?

In 2018 we will attend the EuroBLECH in Hannover and most probably the redesigned MIDEST in Paris.

17. JEBENS is based in Germany, but what’s happening steel-wise in the country?

There will be no more substantial growth in steel demand in Germany.

18. Apart from strong coffee, what keeps you awake at night?

I sleep well and Jebens has a very good strategic position. Therefore I spend my nights either by sleeping or enjoying a good glass of wine. The only thing that might interfere with my dreams would be substantial health problems in the family or worries about the kids, which I normally do not have.

19. If you possessed a superpower, how would you use it to improve the global steel industry?

Cutting overcapacity, no subsidies, securing a level playing field for energy costs and the environment – then it would be easy as the best would win. � May/June 2018

23/05/2018 12:14:24

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HISTORY

Main picture: The

How to find Pontcysyllte

307m long Pont-

make the water

Today, the canal is known as the Llangollen Canal and the 11-mile Heritage section as the Pontcysyllte Aqueduct and Canal. There is an information centre at Trevor at the northern end of the aqueduct, just off the A539 between Llangollen and Ruaban. The southern end of the aqueduct can be accessed off the A5 at Froncysyllte – turn left immediately after the Aqueduct Inn LL20 7PY. The canal is open to boats and the towpath to walkers and cyclists.

For further information, log on to:

channel

www.pontcysyllte-aqueduct.co.uk

cysyllte Aqueduct rises 38.4m above the valley floor on 18 pillars Below: Detail of the cast iron plates bolted together and sealed with Welsh flannel to

Pontcysyllte Aqueduct – A World Heritage site On 25 July 1795 the foundation stone was laid for what was then the longest and highest canal aqueduct ever built. At 38.4m above the valley floor and 307m long, its dimensions were not exceeded for 200 years. It took nine years to build due to a radical re-think of design changing from masonry arches between stone piers to cast iron arches. By Tim Smith* DESIGNED by Thomas Telford (1757-1834) the aqueduct was a vital link between the mineral rich areas of North Wales, offering slate, coal, limestone and iron ore, and the rest of Britain, through its network of canals and navigable rivers.

Thomas Telford was appointed ‘general agent, surveyor, engineer, architect and overlooker for the works’ by the Ellesmere Canal Company which aimed to link Ellesmere in north Shropshire with Ellesmere Port on the river Mersey, a distance of some 50 miles by boat. William Jessop (17451814) was appointed consulting engineer for the building of the canal. Originally, it was to take a shorter more northerly route to Chester and then on to the Mersey.

However, this proved too expensive so a north-easterly route was chosen to join the Chester Canal and then on to Chester and north to the Mersey. However, this route offered little water to supply the canal so a north-westerly branch was constructed for some 20 miles just south of Ellesmere to take water from the river Dee at Llangollen.

The final 11 miles of this route required the building of two large aqueducts – Pontcysyllte and Chirk – two small ones and two tunnels. It is this section that was designated a World Heritage site by UNESCO in 2009.

An earlier aqueduct completed in 1796 on the Shrewsbury canal at Longdon used stone throughout with a clay lining to waterproof the channel. This proved unstable because of the great weight of masonry and clay, hence the change in plan for Pontcysyllte. Telford, who was also county surveyor of Shropshire, was familiar with the use of cast iron for bridges as that county boasts the famous ‘Iron Bridge’ at Coalbrookdale built by Abraham Derby III in 1781.

To reduce the weight on the foundations of Pontcysyllte, Telford built 18 tapering piers of sandstone across the Dee valley, hollow in section for the top third or so.

Between each of these he arched four cast iron ribs each cast in three sections bolted together with connecting plates to span the 13.4m gap between pillars. The outer ribs have cast iron cover plates, more for looks than strength. On to this was placed a trough made of cast iron plates 25mm thick. Cast with flanges, they were bolted together, the joints being made watertight by sandwiching Welsh flannel coated with white lead and iron borings between them.

The trough is 3.61m wide and rests – not fixed – on the arch ribs located by lugs. The depth of water is 1.5m. A towpath extends on one side extending out over the water to

reduce wake turbulence. This is supported on uprights – originally of wood but now of steel. A railing, located by lugs, protects the walker on the drop side, but there is no railing on either side of the water.

The iron was supplied by Shropshire ironmaster, William Hazledine who built a works just north of the site at Plas Kynaston. Each part was numbered to assist in assembly. Telford evidently favoured Hazledine for the work since tenders from the Quakers of Coalbrookdale were later found in his office unopened.

Chirk aqueduct, some four miles south and completed in 1801 after five years in construction, is a more conventional structure with 10 stone arches raising the canal 20.7m above the valley floor. Again, to reduce weight, the pillars are tapered and the arches hollow. To avoid lining the water channel with heavy clay, cast iron plates were laid to make the channel bed, but the sides were of high-fired brick and hydraulic cement until iron side plates were added in 1869.

At the north end, the canal enters a tunnel, one of the first in Britain to include a tow path rather than barges having to be ‘legged’ through the tunnel by bargemen lying on their backs to ‘walk’ the tunnel roof. �

* Consulting editor Steel Times International May/June 2018

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23/05/2018 12:06:06

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