Steel times international april 2015 by Quartz

April 2015 – Vol.39 No.3 – www.steeltimesint.com

PLANT SAFETY CLIMATE POLICY SUSTAINABILITY ENVIRONMENT

STEEL TIMES INTERNATIONAL – April 2015 – Vol.39 No.3

STEEL AND THE CIRCULAR ECONOMY

COVER April.indd 1

4/10/15 2:58 PM

Visit us at

Controlled heating – controlled cooling. METEC 2015

Hall 5, Booth E22 GIFA/THERMPROCESS 2015

Hall 10, Booth H41 June 16 - 20, Düsseldorf, Germany

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Floater/drying furnace

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Visit us at

Controlled heating – controlled cooling. METEC 2015

Hall 5, Booth E22 GIFA/THERMPROCESS 2015

Hall 10, Booth H41 June 16 - 20, Düsseldorf, Germany

CSP® tunnel furnace

Thermal treatment line for heavy plate

Floater/drying furnace

Continuous annealing furnace

SMS SIEMAG AG

Eduard-Schloemann-Strasse 4 40237 Düsseldorf, Germany

Thermische_Prozesstechnik_A3_e.indd 1

Phone: +49 211 881-0 Fax: +49 211 881-4902

E-mail: communications@sms-siemag.com Internet: www.sms-siemag.com

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CONTENTS APRIL 2015

Picture courtesy of Midrex. ESISCO DRI Plant in Sadat City Egypt. The 1.76Mt/yr plant supplied for Egyptian Sponge Iron and Steel Company (ESISCO) is designed for simultaneous discharge of hot DRI and cold DRI. The plant is in the commissioning stage and is expected to begin operations in Q2 2015. ESISCO is an operating unit of Beshay Steel.

April 2015 – Vol.39 No.3 – www.steeltimesint.com

PLANT SAFETY CLIMATE POLICY SUSTAINABILITY ENVIRONMENT

STEEL TIMES INTERNATIONAL – April 2015 – Vol.39 No.3

STEEL AND THE CIRCULAR ECONOMY

EDITORIAL Editor Matthew Moggridge Tel: +44 (0) 1737 855151 matthewmoggridge@quartzltd.com Consultant Editor Dr. Tim Smith PhD, CEng, MIM Production Editor Annie Baker

SALES International Sales Manager Paul Rossage paulrossage@quartzltd.com Tel: +44 (0) 1737 855116

4 Leader 5 News The latest steel industry news from around the world. 13 USA update Uncertainties abound 15 Latin America update Venezuela’s downward motion 18 India update Weak demand causes problems Iron ore 20 Challenges ahead for Guinea

Furnaces 41 Re-heat furnace sustainability Electric steelmaking 49 Organic Rankine Cycle waste heat recovery

SUBSCRIPTION Elizabeth Barford Tel +44 (0) 1737 855028 Fax +44 (0) 1737 855034 Email subscriptions@quartzltd.com Steel Times International is published eight times a year and is available on subscription. Annual subscription: UK £168.00 Other countries: £240.00 Single copy (inc postage): £38.00 Email: steel@quartzltd.com

Sustainability 23 What goes around,comes around 29 Europe is “steel” running

Sustainability 38 Sustainable stainless steel production

Sales Director Ken Clark kenclark@quartzltd.com Tel: +44 (0) 1737 855117

2 years subscription: UK £302.00 Other countries: £432.00 )

Climate policy 35 EU climate policy under scrutiny

Area Sales Manager Anne Considine anneconsidine@quartzltd.com Tel: +44 (0) 1737 855139

Advertisement Production Martin Lawrence

Safety 52 No room for complacency 54 Keeping safety ‘top-of-mind’

Published by: Quartz Business Media Ltd, Quartz House, 20 Clarendon Road, Redhill, Surrey, RH1 1QX, England. Tel: +44 (0)1737 855000 Fax: +44 (0)1737 855034 www.steeltimesint.com Steel Times International (USPS No: 020-958) is published monthly except Feb, May, July, Dec by Quartz Business Media Ltd and distributed in the US by DSW, 75 Aberdeen Road, Emigsville, PA 17318-0437. Periodicals postage paid at

Emigsville, PA. POSTMASTER send address changes to Steel Times International c/o PO Box 437, Emigsville, PA 17318-0437. Printed in England by: Pensord, Tram Road, Pontlanfraith, Blackwood, Gwent NP12 2YA, UK ©Quartz Business Media Ltd 2015

Perspectives 58 Turn – and face the strange History 60 UK ore resources during WW1.

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Contents MARCH.indd 1

April 2015

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LEADER

Life cycle assessment and the circular economy

Matthew Moggridge Editor matthewmoggridge@quartzltd.com

We need to face facts. The modern world cannot function properly without steel. It’s everywhere: In cars, buildings, bridges, ships, railways, even violin strings – they all rely upon steel. And because we don’t have enough scrap to make steel from recycled steel scrap, we still need to rely upon blast furnace steelmaking for 70% of world steel production, which means we need to mine iron ore to make pellets and sinter and we need coal to turn into coke. We also need electric arc furnaces – which account for 30% of world steel production – into which we can feed scrap, direct-reduced iron (DRI) and iron ore pellets to make steel. And yes, steel production is a heavy industrial process, but, as worldsteel points out in its latest publication Steel in the Circular Economy – a life cycle perspective, the steel industry has dramatically reduced its energy consumption over the past half century. It is also working hard to reduce the impact of CO2 emissions through the use of carbon capture and storage technologies. In a nutshell, the global steel industry is doing more than its fair share of the work to ensure that it produces steel in the ‘greenest’ way possible. In fact, when it comes to matters

environmental, steel scores highly because it is 100% recyclable and there’s a lot of it around in the aforementioned cars, buildings, bridges and ships waiting to be recycled. Did you know, for example, that the Sydney Harbour Bridge in Australia contains 53,000 tonnes of steel that, at some stage in the distant, faraway future, will be recycled and transformed into something else – possibly another bridge? Are you aware that 75% of all the steel products ever made are still in use today and that buildings and other structures made from steel can last for more than100 years if properly maintained? Facts like these and others are overlooked when governments sit down and discuss the effects of global steel production on the environment. Very often an obsession with the use-phase of products made from steel wins through when a broader life cycle assessment should be considered to establish steel’s true ‘green credentials’. The World Steel Association argues that the circular economy reflects the true value of steel to society in terms of its real environmental impact on the planet, and that ‘life cycle thinking’ is the only way to assess steel’s true sustainability.

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4/13/15 9:23 AM

INDUSTRY NEWS

Steel plant halves costs A new power plant at Hille & Müller, part of Tata Steel’s plating business based in Dusseldorf, Germany, has halved energy costs, claims the company. The new combined and heat power (CHP) plant will reduce annual energy costs by about €1 million (£750,000) and cut CO2 emissions of by almost 50%. Hille & Müller employs 275 people and is a leading European producer of specialised steel used to case household and car batteries. It was also the first company in the world to produce electroplated steel strip. In addition to producing electricity, Tata Steel’s €2.8 million (£2.1m) gas-fuelled CHP plant turns by-product heat into steam, which is used in manufacturing process-

es as well as to heat buildings for employees. It will also reduce CO2 from the site by the equivalent emissions of about 2,000 homes. Hille & Müller’s managing director in Düsseldorf, Friedmar Schhittko, said it was the company’s long-term aim to be self-sufficient in energy in order to improve competitiveness and become more resource-friendly. “In future we will be able to produce about half of our own electricity in Düsseldorf – about 13 megaWatt hours per year. This is equivalent to supplying almost 3,000 households with electricity,” Schhitko said, adding that the company was also looking into whether it can supply heat to neighbouring businesses. The CHP plant is now fully op-

erational and consists of two high-temperature boilers and a power-heat co-generation facility. The 2,500bhp engine (equivalent to about 25 car engines) for the power-heat co-generation runs on natural gas and produces approximately 2,000 kW of electricity. The plant also produces about 2,000 kW of by-product heat, which is turned into steam and used in manufacturing processes and to heat buildings for employees. According to Tata Steel, the CHP plant is just one component of the company’s energy management strategy. Hille & Müller has also implemented an energy management system according to ISO 50001 standard, certified by the technical control board (TÜV).

Fives supplies Baosteel furnaces China’s largest automotive steel producer has taken on international engineering group Fives to design and supply two Stein Digiflex vertical annealing furnaces for the steelmaker’s new 1,550mm cold rolling mill in Zhanjiang, Southeastern Guangdong. One of the furnaces will be supplied to Baosteel’s 700kt/yr continuous annealing line and the second will service the company’s 270kt/yr continuous galvanising line. According to Fives, the Digiflex annealing furnaces sport a new compact design and offer ‘the

most advanced combustion and cooling technologies’ including an AdvantTek WRT 2.0 combustion system. “Such combustion technology benefits from high recuperative energy efficiency, low NOx emissions and usage of the site-generated fuels,” claims Fives, adding that it will allow Baosteel to ‘significantly reduce operational expenses, minimise environmental footprint and achieve its target of a ‘double excellent project’ and a highly efficient plant. The 1,550mm cold rolling mill is

part of phase ll of a 10Mt/yr steel project in the port of Zhanjiang, which involves a pickling line, a pickling line-tandem mill, a continuous annealing line and a continuous hot-dip galvanising line. The mill will be ‘progressively put into action’ during 2016 and 2017 and, on completion, will have a 2.55Mt/ yr capacity of coil for appliance and automotive sheet. According to Fives, Baosteel has entrusted the engineering company with a total of five full processing lines since 2005 for its Baoshan and Zhanjiang plants.

SMS Mevac supplies Chinese steelmaker SMS Mevac has supplied a Duplex VOD unit to Fujian Fuxin Special Steel in Zhangzhou, China, following on from the start-up (by SMS Mevac) of the Chinese steelmaker’s stainless steel melt shop last year. The VOD facility is equipped with two tanks and two vacuum covers, a joint four-stage vacuum pump system with automatic vacuum pressure control (VOD-SC) and a common alloy storage and addition system. In terms of the environment, an integrated bag filter system with gas cooler separates process dust under vacuum. www.steeltimesint.com

Industry News april.indd 1

NEWS IN BRIEF

Climate consciousness will slash output A nationwide environmental campaign in China is expected to slash output. Prices are expected to rise and smaller mills not complying with new laws are likely to close down. Panzhihua Steel in China’s south western region confirmed recently that it would be closing 1.8Mt of steel capacity in Chengdu, the capital of Sichuan province.

More lay-offs for US Steel workers A report by Associated Press claims that US Steel is to lay off another 83 workers at its Gary works in Indiana, USA. A total of 780 jobs have been lost in North West Indiana this year, it is claimed. US Steel called the lay-offs part of an ‘ongoing operational adjustment’.

JSW weighs up mine closures JSW Steel is weighing up whether or not to shut its iron ore mines in Chile, according to a report by the Economic Times of India. The reason is simple: falling iron ore prices on the international market, which have fallen substantially over the past 12 months. As a result, Santa Fe Mining (SFM) has been considering a temporary shutdown in May.

Chinese mills fall foul of law Seventy per cent of steel mills in China fall short of the country’s new environmental laws, which came into force at the beginning of 2015. Billed as the ‘strictest environmental law in Chinese history’ the new legislation, which came into force in January, will require China’s steel mills to invest around 200 yuan (US$32) into environmental protection per tonne of steel produced.

Major expansion for Vizag Steel Steel Authority of India Ltd (SAIL) and Rashtriya Ispat Nigam Ltd (RINL) – otherwise known as Vizag Steel – have both announced modernisation and expansion plans designed to increase their respective hot metal capacities by 23.1Mt and 7.3Mt by the fiscal 2016/17.

For more steel industry news and features, visit www.steeltimesint.com

April 2015

4/13/15 11:44 AM

INDUSTRY NEWS

SAIL rolling mill ready to roll The Steel Complex Ltd (SCL), a joint venture between Steel Authority of India Ltd (SAIL) and the Government of Kerala, is ready to launch a new rolling mill in Kozhikoe on the Malabar Coast of the Southern Indian state of Kerala. The new mill will open slightly later than scheduled and cost 65 crore (US$139 million) most of which was paid for by a loan from the Canara Bank, SAIL stumping up 10 crore (US$2.1 million) and the Keralan government paying

9.72 crore (US$1.7 million). SAIL-SCL Kerala Ltd is the only minimill operation in the State of Kerala. The Kerala State Industrial Development Corporation and a private entrepreneur originally set up the company in 1969. A mini steel plant opened on site in 1972 followed a decade later by an expansion scheme that included a third electric arc furnace, raising capacity to 55kt/yr of steel billet. A financial crisis in the early nineties led to SCL being referred

to the Board for Industrial and Financial Reconstruction (BIFR) and in 2008 an MoU with SAIL led to a 50% acquisition by the Indian steel giant and an eventual takeover of operations early in 2011. The new rolling mill forms the cornerstone of the joint venture between leading Indian steelmaker SAIL and the regional Government of Kerala. Once up and running the new rolling mill will have a capacity of 65kt/yr of TMT steel.

Steel and the circular economy Steel in the Circular Economy – A Life Cycle Perspective is the title of a new publication published by the World Steel Association. The publication demonstrates how steel enables a sustainable society, through a circular economy, when the full life cycle of steel products is taken into account. According to worldsteel, the new publication ‘highlights the need for legislators and industry

decision makers to take a full life cycle approach before making legislative or manufacturing material decisions.’ Edwin Basson, worldsteel’s director-general, said that the ‘take, make, consume and dispose’ mentality was outdated and that a move toward a circular economy model for ‘optimal resource efficiency’ was more in keeping with a world of finite resources.

“To achieve this, we need a life cycle approach that measures the social, economic and environmental impact of a product at each stage in its lifecycle,” he said, adding that life cycle thinking must become a key requirement for all manufacturing decisions going forward. Turn to page 23 of this issue for an in-depth article on worldsteel’s latest publication.

NLMK Kaluga produces 1Mt of steel NLMK Kaluga has produced its millionth tonne of rolled steel. The EAF plant opened in July 2013 and is described as the ‘next generation EAF minimill by its Russian owner. Alexander Burayev, NLMK’s long products general director, said that efficient organisation of the plant’s production processes and ongoing process improvements were behind the company’s success.

UK Steel issue safety warning More warnings have been issued by UK Steel concerning the safety implications of using Chinese steel. “Some imported steel plates and sections from China are being supplied into the UK market which are not fully compliant with the requirements of the relevant standard,” said Ian Rodgers, director of UK Steel. According to Rodgers, it is imperative that structural steel plates and sections with elevated alloy www.steeltimesint.com

Industry News april.indd 2

levels are treated with great care and, where possible, avoided totally. Rodgers advised customers to check the alloy content of any structural steel from China before processing it as the EU specification for structural steel clearly states that it applies only to non-alloy steels. UK Steel argues that a ‘non-alloy’ must comply with strict limits on the quantity of other metallic

elements it contains to ensure that the steel is readily weldable without any special welding parameters being applied. Chinese steel with elevated levels of boron and chromium have been arriving on UK soil because, up until recently, Chinese producers have been offered tax rebates by the Chinese government if they add these elements to their steel so qualifying it as an ‘alloy’. The rebate has since been withdrawn.

NEWS IN BRIEF Lost production after blockade

Platts reports that ArcelorMittal, the world’s biggest steelmaker, has lost 90kt of finished steel production at its Lazaro Cardenas plant in Mexico due to a series of blockades by transport workers over the past five months. The loss has cost the company an estimated US$20 million as shipments of iron ore from the company’s Las Truchas mine have been disrupted.

Award for Tata Steel The 2014 Continuous Improvement Award from NACCO Materials Handling Group goes to Tata Steel. According to NACCO, the steelmaker has been committed to improving the quality of mast profiles delivered to NACCO plants over the past three years, reducing the number of rejected parts by 97%. NACCO claims to be the third largest forklift truck manufacturer in the world, while Tata Steel is a leading global supplier of special profiles for the forklift truck industry.

MTAG wins ArcelorMittal contract MTAG of Switzerland, a leading company in the field of vacuum degassing plants with dry mechanical pumps, has signed a contract with ArcelorMittal Hunedoara of Romania for the supply and installation of a vacuum degassing and dry mechanical pumping system. The vacuum degassing installation will include the latest technology available and will be developed and commissioned in ‘record time’.

Shipbuilding success for MMK Shipments of steel to shipbuilders have grown 37.2% year-onyear for Russian steelmaker OJSC Magnitogorsk Iron & Steel Works (MMK). The company claims to have enjoyed a long-standing track record of success with the shipbuilding industry and supplying up to half of all metal products sold to Russian shipbuilders.

Tata Steel wins Crossrail contract A contract to supply highly wearresistant rail for the London, UKbased Crossrail project has been awarded to Tata Steel. The line runs beneath London and will travel 100km from Reading and Heathrow, through central London to Shenfield and Abbey Wood. April 2015

4/13/15 11:44 AM

INDUSTRY NEWS

Infrastructure worth billions

Cut production, urges report

Major infrastructure projects embracing rail, water, roads and housing, are set to boost steel demand in China, it is claimed. Government-led projects worth billions are on the cards as details emerge of China investing in the construction of 13 highways and eight railways under its Silk Road economic belt initiative, according to a report in the Yangtse Evening newspaper. An estimated 30Mt of steel will be used on railway construction during 2015, up almost 43% over 2014 according to analysts SC199. com China used 21Mt of steel on railway construction in 2014. Source: China Metals

Near to 17% of forecast US coal production in 2015 is at risk of idling or closure, according to a report from Wood Mackenzie. The company’s Coal Market Outlook shows that the majority of the coal at risk is produced in the Central Appalachia region of the USA where, it is claimed, 72% of total output is unprofitable due to years of declining productivity, thinning seams and increasing strip ratios. More stringent government regulations and a highly paid workforce have also taken their toll, claims Wood Mackenzie. But Central Appalachia – the highest cost region in the USA – is not alone. Other regions also have substantial amounts of coal at risk, ranging from 47% of production in Southern Appalachia to 8% in

China’s traders are optimistic Steel traders in China are claimed to be more optimistic than steelmakers, but prices are destined to shrink further in early 2015, according to a report by China Metals. The China Steel Price Index (CSPI), compiled by the China Iron and Steel Association (CISA) fell to 75.06 by end February, down 2.68% when compared with end January 2015. The index was 21.92% lower than a year earlier. The price index of long steel dipped 2.72% month-on-month in February and steel sheet declined by 1.55%. In fact, the price of eight major steel products continued to fall during February, but they were smaller declines than those reported in January. According to the CISA, hotrolled coil, galvanised sheet, coldrolled sheet and medium plate fell by 107 yuan/tonne (US$17), 98 yuan/tonne (US$16), 91 yuan/ tonne US$15) and 73 yuan/tonne (US$12) respectively. During the first two weeks of March the CSPI slid marginally to 74.91 by 6 March and by 74.14 by 13 March. Source: China Metals For more steel industry news and features, visit www.steeltimesint.com April 2015

Industry News april.indd 3

the Western Bituminous and Powder River Basin. “In aggregate, this equates to approximately 14% of US thermal coal production and 58% of metallurgical coal production being at risk,” claims Wood Mackenzie. The company’s senior research analyst, Dale Hazelton, claims that there are a significant number of mines unable to cover their operating costs plus sustaining capital. Despite this, he said that mine closures, while not rare, are not a frequent occurrence. “Part of the reason for this is the amount of thermal coal sold on the open market is very small compared to that under contract,” he said, explaining how contracts can cover multiple years and prices may have been agreed well before

PCI saves money Pulverised coal injection (PCI) at NLMK Group’s Novolipetsk site in Lipetsk has saved the company 425 million rubles, it is claimed. PCI lowers natural gas and coke consumption by replacing it with steam coal, which reduces the cost of pig iron production and subsequently that of steel production while maintaining high quality and efficiency, claims NLMK. The PCI process is employed on two of the Novolipetsk blast furnaces and was first introduced at Lipetsk in 2013. After tests the Russian steelmaker has introduced commercial operation of the process in its blast furnaces 4 and 5 where it produces 3Mt and 2Mt per year respectively. During the testing period, these two furnaces decreased coke consumption by 10% and natural gas by 40%, NLMK claims.

According to the Novolipetsk managing director Sergey Filatov, more than a third of the plant’s blast furnaces have been fitted with PCI systems. “We continue to work on enhancing the efficiency and cutting the cost of pig iron production,” he said, adding that the plan is to equip almost all Novolipetsk blast furnaces with PCI systems. Furnaces 6 and 7 – the plant’s largest blast furnaces with respective capacities of 3.2Mt and 4.2Mt – are being prepared for PCI and the aim is to reduce coke consumption by 20% and natural gas by 60%. Improved pig iron smelting technology has increased productivity at all of the plant’s blast furnaces, NLMK claims. Daily pig iron output has increased by 2.3% year-on-year to 36kt on average.

the current market’s lows. “A producer may also be able to beat the market prices as they have a valuable niche-quality coal, such as stoker coal, or the location of the mine is near an end-user providing transportation advantage over competitors,” Hazelton said. For prices to rise, Wood Mackenzie argues that global demand for steel and power must increase or coal supply must decrease. For Hazelton, growth prospects for steel remain tenuous at best due to the fragility of global economies. The only way for the market to get back into balance is for producers to cut production ‘sooner rather than later’ and either voluntarily or involuntarily through bankruptcy.

Russia’s steel success story

NLMK, a leading Russian steel producer, has produced its millionth tonne of rolled steel at its Kaluga plant. The EAF facility opened in July 2013 and is described as the ‘next generation EAF minimill’ by its Russian owner. Alexander Burayev, NLMK’s long products general director, attributed the company’s success to efficient organisation of the plant’s production processes and ongoing process improvements.

MMK’s advanced IT solutions OJSC Magnitogorsk Iron & Steel Works (MMK) has adopted a ‘broad IT development strategy.’ The plan is to implement an integrated in-house corporate communications system, mobile access to core business applications, modelling and forecasting and continuous planning on custom-

ised production and operational management. A pivotal element of the IT programme is a mobility project involving the creation of new mobile applications that allow the company’s customers to monitor delivery status online and offer complete transparency from ordering

through to final delivery. A mobile maintenance and repairs application ‘makes it possible to ensure the timely execution of both scheduled and unscheduled repairs’ and detects equipment defects early on. The company expects a reduction in breakdowns and unscheduled downtime. www.steeltimesint.com

4/13/15 11:44 AM

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10 DIARY OF EVENTS

INDUSTRY NEWS

May

Crude production up by 0.6%

04-07 AISTech Cleveland Convention Center, Cleveland, Ohio, USA. A major global steel event embracing both a conference and exhibition and strongly focused on the US steel industry. For further information, log on to www.aist.org

June 01-02 Steel Markets Europe Hotel Rey Juan Carlos, Barcelona, Spain. A conference showcasing the region’s leading steelmakers and their innovation strategies. For further information, log on to www.platts.com 08-10 Steel Success Strategies Sheraton New York Times Square, USA. A leading steel industry conference focused on the global market. For further information, log on to www.metalbulletin.com 08-11 Metallurgy Litmash Expo Centre, Moscow. Organised by Messe Dusseldorf. International trade fair for metallurgy, machinery, plant technology and products. For further information, log on to www.metallurgy-tube-russia. com 16-20 METEC Trade Fair & 2nd ESTAD 2015 Congress Centre, Düsseldorf, Germany. A major exhibition and conference highlighting the latest and most sophisticated technological advances in the global metals industry. For further information, log on to www.metec-tradefair.com 23-24 African Iron & Steel Hotel Avenida, Maputo, Mozambique. Previously known as the African Iron Ore Conference and now re-named by organiser Metal Bulletin Events to reflect exciting changes in the region. For further information, log on to www.metalbulletin.com For more steel industry news and features, visit www.steeltimesint.com

April 2015

Industry News april.indd 4

World crude steel production for February 2015 stood at 128Mt, an increase of 0.6% when compared to the same period last year, according to the latest figures from worldsteel. In China, crude steel production was estimated at 65Mt. Total production for January and February was 130Mt. Japan produced 8.4Mt of crude steel in February 2015, down 0.2% compared with

last year and in South Korea the figure was 5.1Mt, down 4.4%. Germany produced 3.5Mt of crude steel, down 9.7%. France’s crude steel production was 1.3Mt, down 1.6% and the figure in Spain was 1.1Mt, down 4.4%. Turkey’s crude steel production for February 2015 was down 12.2% at 2.4Mt and in Russia 5.7Mt was produced, up 5.6%. In Ukraine the figure was down

33.2% to 1.6Mt and the USA produced 6.3Mt, a decrease of 7.9%. Brazil’s crude steel production for February was up 2.3% at 2.7Mt. The crude steel capacity utilisation figure for the 65 countries that report to worldsteel was 73.4% – 1.7 percentage points lower than in February 2014. Compared to January 2015, it was 3.8 percentage points higher.

For a full country by country listing visit: www.worldsteel.org/statistics/crude-steel-production.html

LATAM trade deficit deepens Declining commodity prices have deepened the trade deficit between Latin America and China, according to Alacero, the Latin American Steel Association. As the price of steelmaking raw materials (iron ore, coal and scrap) took a nosedive in 2014, China benefited from the situation and acquired 7% more raw materials from foreign markets at a value 13% lower in dollar terms. Latin American shipments to China grew by 5% but decreased by 16% in value terms. The region shipped 199Mt of iron ore to China in 2014, up 5% on the previous year and 86% originated in Brazil. Conversely, shipments of coking coal from China to Latin America grew by 23% in volume terms and

5% in dollar terms when compared with 2013. Coke was the main steelmaking input shipped by China to the LATAM region in 2014 (907Mt up 25% from 2013). Where finished steel was concerned, China shipped 8.3Mt in 2014 – 56% more than in 2013 – while the LATAM region exported only 41.5kt to China, 3% lower than in the previous year. Brazil was on the receiving end for most of China’s LATAM exports (2Mt) followed by Chile (1.25Mt) and Central America (1.17Mt). Mexico was the fourth most important destination (790kt). Flat products accounted for 67% of finished steel arriving in Latin America from China (5.5Mt) while long products totalled 2.2Mt, a

growth of 79% compared with 2013. Other products included other alloyed steel sheets and coils (2.16Mt), wire rod (1.18Mt) and hot dip galvanised (1.11Mt). Latin America increased shipments of seamless pipes to China by 106% despite the small volume of 18kt. However, it received 499kt of the same product from China. Where indirect imports were concerned, the Chinese shipped 6.1Mt to Latin America but imported just 106kt from Latin America. The most popular indirect steel import into Latin America was the automobile which accounted for 14% of total inflow. Other metal items amounted to 808kt while manual machines totalled 783kt.

Maintenance highlighted A report on predictive maintenance by a leading lubricant manufacturer argues that the practice has the potential to increase overall productivity and profitability in the manufacturing sector. Predictive maintenance: Is the timing right for predictive maintenance in the manufacturing sector? relies upon examples of results achieved in other industries. According to the report, energy companies have eliminated 75% of breakdowns through the implementation of predictive maintenance programmes, which equate to almost eight in 10 breakdowns. “Maintenance is increasingly seen as a strategic business function

by manufacturers looking for new opportunities to drive efficiency and lower costs,” said Bryan Rabenau of Castrol innoVentures. He said that advanced predictive

maintenance technologies present a powerful tool to aid manufacturers in easing their maintenance burden and increasing overall productivity and profitability.

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USA UPDATE

Uncertainties abound

Industry pundits speak of the uncertainties that characterise the US steel industry’s future outlook, although the economy is improving and rebounding. Nevertheless, rising imports also remain a source of concern for many steel producers. By Manik Mehta* THE year began on an uneasy note, with weak demand for tubular products hanging like the proverbial sword of Damocles’ over the industry; weak demand is attributed to a sharp decline in oil prices which, in turn, forced the oil and gas industry to drastically reduce capital spending for 2015. But that is not all: the US steel industry faces some more challenges in the shape of the appreciating dollar and an economic slowdown in China. But why would a rising dollar affect the US steel industry and force it to cut prices? The dollar’s value appreciated by nearly 17% in the second half of the previous year against major world currencies. A strong dollar is tempting for importers to buy more steel from low-cost foreign suppliers, notably China and South Korea which have, traditionally, benefited from such a development. To remain competitive, US steel producers have had to slash prices, a development that might lead to lower profit margins. Rising imports Nevertheless, data compiled by the American Iron and Steel Institute (AISI) suggests that steel imports into the US rose by 24% and 36% in January and February 2015 to 8.02Mnt (million net tons) and 6.39Mnt respectively, over the corresponding months of 2014. Indeed, imports of all kinds of steel, such as bar, rod, cold-rolled sheet and tin plate, have been rising. Imports have risen from all supply sources. In the first two months

of 2015, finished steel imports from South Korea, for example, jumped 59% to 1.31Mnt while it achieved an impressive 104% rise to 610knt from Turkey. China’s steel exports to the US rose 23% to 453knt. Industry sources say these rising imports have prompted the industry to call for government action against overseas competitors, including a possible antidumping complaint. The AISI has been describing Chinese steel supplies to the US in 2014 and 2015 as a source of “great concern” to the industry. The economic slowdown in China is forcing that country’s suppliers to “dump” their steel on the US market, one New York-based steel trader preferring to remain anonymous, told Steel Times International. China’s global exports touched a record 93.78Mmt in 2014, posting a 51% increase over the previous year. US steel producers fear that the downturn in China, coupled with the dollar’s strength, would unleash a wave of cheap imports from China, which emerged as the second largest source of steel exports to the US.

January 2015 barely changed over the December 2014 level, declining by a mere 0.4% to 925.4knt. US exports to Canada rose 2.3% to 480.8knt but declined by 0.8% to 337.5knt to Mexico in January. Both Canada and Mexico are partners of the US in the North America Free Trade Agreement (NAFTA). Nevertheless, the present situation is a far cry from the doom-and-gloom mood in the steel industry when the Great Recession descended on the USA. The industry is lot more confident today, with steel producers better prepared for a downturn after cutting costs, thinning layers of fat implicit in excess staff and suspending or even completely shelving projects that were considered, in hindsight, “superﬂuous”. In short, the mantra to future success will rest on boosting efficiency, profitability and competitiveness. US steel companies realise that one way to keep fit and agile is to invest in technology, develop highstrength grades for use in cars so as to reduce their weight and conform to the new emission standards requiring twice the fuel efficiency as now.

Anti-dumping complaint According to US-based analysts, a hearing in Washington could well lead to the launching of an anti-dumping complaint with the International Trade Commission, but Chinese steel suppliers have already been calling attempts to curb steel imports as “protectionist measures”. Notwithstanding the growing strength of the dollar, US total steel exports in

Cut costs and boost efﬁciency Both ArcelorMittal and US Steel are resorting to other measures that will generate “new ideas” for cutting costs and boosting efficiency levels. ArcelorMittal USA recently replaced president and CEO Michael Rippey with Andy Harshaw who will now be responsible for the management of the company’s US facilities.

** USA correspondent www.steeltimesint.com

USA.indd 1

April 2015

4/14/15 10:23 AM

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USA UPDATE

US steel circles assume that ArcelorMittal will shut down the electric arc furnace at Indiana Harbor Long Carbon, and possibly idle the number 1 aluminising line at the former LTV steel mill and shift production to the new AM/NS Calvert plant in Alabama, a joint venture between ArcelorMittal and Nippon Steel & Sumitomo Metal Corp. The plant, which produces 5.3Mt/yr of rolled steel, is located close to new automobile plants being set up in the south of the country. New product development ArcelorMittal’s global R&D Centre in East Chicago has been developing some of the most advanced grades of steel, which are stronger and hence used less in auto frames and other car parts. The company representatives assert that ArcelorMittal can take the lead in developing steel that complies with the official CAFÉ standards set by US authorities for automakers for compliance by 2025. The company has increased product development activities to offer innovative steel solutions, recently re-doubling R&D efforts in anticipation of a 35% rise in orders for advanced high-strength steel in the next five years. ArcelorMittal is getting the message across to the automobile industry, policymakers and regulators that steel remains the “dominant material used in vehicles because of its ability to provide superior cost and performance”. US Steel is investing in technology aimed at replacing the blast furnace at Fairfield Works in Alabama with an electric arc furnace that would require a smaller workforce, fewer raw materials and less electricity, since it could be run according to the imperatives of demand.

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More electric arc furnaces US Steel’s CEO Mario Longhi hinted in recent media interviews that the company would operate more electric arc furnaces, which can turn scrap metal into rebar and other construction materials. Analysts feel that mini-mill furnaces could replace conventional blast furnaces at Gary Works, given their age and the cost to replace them. Last year US Steel drastically cut costs, which included retrenching non-union managers at Northwest Indiana operations in Gary and Portage. The company closed a mill in Ontario, Canada, and idled tubular facilities in Ohio and Texas when oil plunged to less than $50 a barrel for the first time in years and reduced demand for tubular products. The steelmaker closed two more coke ovens at its Granite City plant in Illinois and temporarily idled East Chicago Tin, laying off 369 workers for the foreseeable future. The drive is aimed at achieving profitability. Tata car plant for the USA? Indian industry magnate Ratan Tata, chairman emeritus of Tata Sons, was recently in the US where he attended the 4th SC Automotive Summit. He said that Jaguar Land Rover was looking for a plant site. Tata headed the family-owned Tata Group, which includes India’s largest car manufacturer Tata Motors, which acquired Jaguar and Land Rover in 2008. “The company is indeed looking at North America as a location for another plant,” Tata said during the summit at the Hyatt Regency in Greenville, South Carolina. He said the choice of the next location for a Jaguar Land Rover plant, whether in the US or elsewhere, would be decided by the company. Jaguar Land Rover reported that sales increased 9% in 2014, to 462,678 vehicles. The prospect of Jaguar establishing a plant has created a lot of excitement in US steel circles, which envisage steel sales getting a strong boost in the future, even though Tata did not comment on the plant’s location. t April 2015

www.steeltimesint.com

4/14/15 10:23 AM

LATIN AMERICA UPDATE

Venezuela’s downward motion Venezuela used to be a prominent Latin American producer of steel inputs and products and was the world’s largest producer of DRI-HBI, achieving a 31.2% market share in 1983. However, since the decision to nationalise the country’s two largest steelmakers and all HBI producers in 2008-2009, the sector has rapidly declined. By Germano Mendes de Paula*

WHEN President Hugo Chávez took over in 1999, crude oil prices were only $12 per barrel. By 2008 it reached a record of $145 per barrel. Swimming in oil money, the government embarked upon a series of ambitious social-spending reforms (aimed at improving the lives of the country’s most marginalised citizens) and on nationalisation of strategic industries (including the steel industry). President Nicolás Maduro took over office in 2013. He inherited an economy in a critical situation, because of years of massive social spending and bad management (comprising considerable corruption) of government and stateowned enterprises (SOEs). The intention to go ahead of Chávez’s socialist revolution resulted in a very unfriendly market economy. Despite efforts to diversify the economic structure, Venezuela remained fairly dependent upon the oil industry. The collapse of global oil prices since June 2014 was a pivotal moment for the country’s macroeconomic chaos. Fig. 1 shows the evolution of GDP growth during the period 2007-2015. During the bonanza time of 2007, the economy enlarged by 8.8%. After the involution of 2009-2010, it recovered fairly well to 5.6% in 2012. However,

10 8 6 4 2 0 -2 -4 2007 2008 2009 2010 2011 2012 2013 2014f 2015f

Fig 1: Venezuela’s GDP growth 2007-2015 (%).

GDP expanded only 1.3% in 2013 and moved to a negative variation of 3.0% in 2014. Morgan Stanley forecasts that an additional drop of 2.5% will occur in 2015. Skyrocketing inflation Venezuela established a three-tier currency system, in which the domestic currency is worth a different amount of dollars: a) rate of 6.3 bolivars for imports of food and medicine; b) a complementary rate of roughly 12 bolivars for other goods; c) a “free-floating” currency exchange mechanism, known as Simadi, which sold dollars for 178 bolivars in the first week of March 2015. Meanwhile, in the parallel market, the exchange rate was already 250 bolivars on the same date. In a context of shortages of food and other essential goods, the inflation rate skyrocketed to over 60% per annum in 2014. Morgan Stanley expects a consumer price inflation of 66% in 2015 and 72% in 2016. Another key determinant of such a high rate is the unsustainable fiscal budget deficit of 24% of GDP. DRI-HBI and steel performance Considering the domestic economic crisis and unsatisfactory global steel market

9 8 7 6 5 4 3 2 1 0

sentiment, it is wise to expect a poor performance from the Venezuelan steel business. However, the effective outcome seems worse than might be expected. Fig. 2 demonstrates that DRI-HBI output diminished from 7.8Mt in 2007 to 2.6Mt in 2013 and to 1.4Mt in 2014. Consequently, Venezuela’s global share retracted from 11.6% to 3.5% and 2.0% (preliminary estimation), respectively. As explained in the 2013 World Direct Reduction Statistics Report, edited by Midrex: “The immediate reason [for HBI output diminution] is a shortage of iron oxide pellets to feed the DR plants, but the underlying reason is lack of funds for maintenance throughout the supply chain; mining, transportation, materials handling, pelletising, ironmaking and infrastructure”. Not surprisingly, DRI-HBI exports plummeted from 2.7Mt in 2007 to 800kt in 2013, the latest available data. The evolution of the nation’s crude steel production is examined in Fig. 3. It diminished from 5Mt in 2007 to only 1.5Mt in 2014. Therefore, the country’s participation in Latin America dropped from 7.4% to 2.4%. The trajectory was the opposite of what was planned by the Venezuelan National Steel Plan (NSP), unveiled in January 2009. The goal was

6 5 4 3 2 1 2007 2008 2009 2010 2011 2012 2013 2014

Fig 2: Venezuela’s DRI-HBI production 2007-2014 (Mt)

2007 2008 2009 2010 2011 2012 2013 2014

Fig 3: Venezuela’s crude steel production 2007-2014 (Mt)

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

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LATIN AMERICA UPDATE

5 4 3 2 1 0

2007 2008 2009 2010 2011 2012 2013 2014

Fig 4: Sidor’s crude steel production 2007-2014 (Mt)

to boost the country’s output to 9Mt in 2013 and even to reach 15Mt by 2019 (STI, May-June 2009, p.12). Sidor, Venezuela’s largest steelworks, fabricates both flat and long steel products and experienced a noteworthy output retraction, as can be observed in Fig. 4. Its crude steel production decreased from 4.3Mt in 2007 to 3.6Mt in 2008, bearing in mind that the company was renationalised in July 2008. After that, it declined further to reach 1Mt in 2014. Sidor faced various problems, related to bad management, shortage of raw materials and strikes. Many times, the government approved investments to

April 2015

LA.indd 2

Sidor, but there has been a long distance between the rhetoric and the reality. Complejo Siderurgico Nacional (CSN, formerly Sidetur), a nationalised long products producer, interrupted five of its six plants from the end of 2014 onwards, due to a lack of equipment, inputs and maintenance. The only meltshop and rolling mill operating was located in Barquisimeto. The second meltshop (Casima) was stopped in November, while the rolling mills Antimano, Guarenas, Lara and Valencia have been idled at least since January 2015. Big hurdles to climb ArcelorMittal subsidiary Unicon is focused on welded tubes. It has an installed capacity of nearly 1Mt/yr, but produced 190kt in 2014 because of significant constraints derived from a lack of substrate in the country. Finished steel apparent consumption diminished from 3.6Mt in 2007 to 1.8Mt in 2014 in Venezuela, implying that its share in Latin American demand decreased from 6.2% to 2.6%, respectively. It should be highlighted that consumption experienced a lesser decline than production and it can

4 3 2 1 0

2007 2008 2009 2010 2011 2012 2013 2014

Fig 5: Venezuela finished steel apparent consumption (Mt)

be concluded that the Venezuelan steel industry’s hurdles are even bigger than those related to the country’s depressed macroeconomic performance. It is hard to predict if Venezuela’s steel sector has or hasn’t hit rock bottom. For optimists, the fact that state-owned iron ore producer CVG Ferrominera Orinoco (FMO) resumed production at its 3.3 Mt/yr pellet plant in January 2015, after a twoyear stoppage, can be viewed as a good indication that the worst is over. The plant supplies domestic HBI producers. For pessimists, there is little evidence that the Venezuelan steel industry is recovering even partially. t

www.steeltimesint.com

4/13/15 2:24 PM

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INDIA UPDATE

Weak demand causes problems

India’s steel industry is having a rough time at present thanks to the usual suspects of weak domestic demand, reduced infrastructure spending and, of course, a surge in imports from China and South Korea. By Dilip Kumar Jha* THE steel industry in India is currently passing through a rough phase due to weak domestic demand caused by poor infrastructure spending. While domestic steel mills are operating at just 70-80% of their installed capacity, a steep surge in cheap imports from countries like China and South Korea have worsened the financial health of Indian steelmakers, most of which have cut their selling prices to match the landed cost of imported steel. But, they fear that if the trend continues, imports will grow at the expense of domestic producers. The sector’s growth rate has shrunk to a mere 3.4% over the last two years as the government’s fund allocation towards infrastructure has dried up. Production down, imports up Data compiled by the Joint Plant Committee (JPC) under the Ministry of Steel showed total steel output at 65.19Mt between April and December 2014, a marginal increase from 64.19Mt reported in the same period the previous year. Amid expectations of a revival in demand following a positive Union Budget in February (2014?), steel mills continued production until the December quarter (Q3 2014/15?). The World Steel Association (worldsteel) estimated India’s steel production at 14.56Mt between January and February 2015. According to worldsteel, a lot of installed capacity in India is to be commissioned during 2015 from its present manufacturing capacity of a little over 100Mt. While steel mills have accelerated production, actual demand is yet to be seen on the ground. The new government has taken several initiatives to propel steel demand and experts believe it will take at least one year to take effect. Meanwhile, steel imports have risen sharply as traders build massive inventory amid fears of government moves to raise import duty. Between April and December 2014, India’s imports of finished steel

shot up to 6.49Mt, a staggering 57% increase from 4.12Mt during the same period in 2013?. Steel imports have already surpassed the last full year’s level of 5.45Mt (is this the figure for 2014 or 2013?). India has imported nearly 2Mt between January and February 2015 to take the overall import figure to 8.39Mt between April 2014 and February 2015 – an impressive 67% increase over the same period last year.”At 8.39Mt now, India’s steel imports will hit a record high in the current year,” said A S Firoz, chief economist, joint plant committee, part of the Ministry of Steel. “By March, India’s steel imports may surpass the record 10Mt mark,” said Jayant Acharya, director (commercial), JSW Steel, one of India’s largest private sector steel producers. Trade imbalance Meanwhile, India’s exports of finished steel declined 6% to 4.07Mt between April and December 2014 from 4.36Mt the previous year. Acharya believes that last year’s export figure would be unachievable this year. Last year, JPC reported India’s total steel exports at 5.98Mt. Falling exports and rising imports have created a massive trade imbalance in India’s steel sector. Until recently the country was self sufficient in steel and used to import only specialised steel for unique applications. However, oversupply and lower production costs in China have resulted in the dumping of steel into India. Indian steel producers have urged the government to raise import duty from 10% to 15% in addition to some non-tariff barriers to safeguard domestic players against the abnormal surge in imports. Indian steel mills are facing a host of other problems, such as higher production costs, due to the rising cost of raw materials and inflated interest rates. With a ban on mining, iron ore has become more expensive.

Demand drivers A Working Group on Steel report says that many factors exist which carry the potential of raising per capita steel consumption in India. These include, among others, an estimated infrastructure investment of nearly a trillion dollars, a projected growth of manufacturing from current 8% to 11-12%, an increase in urban population to 600 million by 2030 from the current level of 400 million, the emergence of the rural market for steel currently consuming around 10kg per annum buoyed by projects like Bharat Nirman (Development of India), Pradhan Mantri Gram Sadak Yojana (Prime Minister’s Village Road Connectivity Programme) and Rajiv Gandhi Awaas Yojana (Rajiv Gandhi Housing Programme) among others. The National Steel Policy 2005 had envisaged steel production reaching 110Mt by 2019-20. However, based on an assessment of current ongoing projects, both greenfield and brownfield, the Ministry of Steel has projected India’s crude steel capacity to rise to 140Mt by 2016-17 and has the potential to reach 149Mt if all requirements are adequately met. The policy, however, is currently being reviewed keeping in mind rapid developments in the domestic steel industry (in supply and demand) as well as the stable growth of the Indian economy. Falling prices Steel prices in India have been under severe pressure of late. Long product (TMT) prices fell 3.1%. Trading currently at INR 31,400/t, TMT prices have declined by 11% from INR 35,200/t in April last year. Prices of hot rolled coil have nose-dived by a massive 23% to trade currently at INR 27,500/t. Steel making raw materials have slumped in tandem with iron ore plunging by a massive 49% to $58/t. Coking coal and shredded scrap fell by 10% and 31% to trade at $101/t and $247/t respectively between 1 April 2014 and 28 February 2015.

* India correspondent April 2015

INDIA UPDATE.indd 1

www.steeltimesint.com

4/13/15 2:27 PM

IRON ORE

Challenges ahead for Guinea

One of the world’s largest iron ore deposits lies in Guinea – it is an upcoming source of the steel industry’s chief raw material, says Michael Schwartz* DISCUSSION has usually centred on the Simandou resource in Guinea which, according to Rio Tinto’s website, hosts reserves of high-grade iron ore (65.5% Fe). Simandou offers 40 years of mining, supported by major rail and port infrastructure improvements. The latter would include the Trans-Guinean Railway, which would literally cross through the middle of the country as would two other lines, along with three new ports. So far, so good. Enter Sam Walsh, Rio Tinto’s CEO. Quoted in Bloomberg Business on February 10, Mr Walsh declared that if Rio Tinto substantially reduced its iron ore output after prices had also declined, then other companies would make up the deficit but at higher prices. Or, using Walsh’s own words, “Guess what happens when you take 100 million tons off? The price goes up, and all those people that went out of the market come back into the market. And guess what? The price gets back to where it was and, whacko, we would be down 100 million tons.” This comment is having its effect on, among others, the Guinea iron ore market.

For example, there will be elections in Guinea this year, when President Alpha Condé will be up for re-election. In turn, observers have been asking whether Condé should promote Rio Tinto as beneficial for his country and, furthermore, whether he should be proclaiming the benefits of the rail and port projects when there is a possibility they might not even be built. Needless to say, the opposition in Guinea is making the most of this. Jeune Afrique, a widely read publication, has described Sam Walsh as speaking from both sides of his mouth: to Guinea he says that Simandou will be built, but to the rest of the world he asks why other projects should be allowed to come to market. Even more bluntly, the oppositionowned and run Guinea News has recently commented to the people of Guinea that, “Walsh has thrown Guinea, Alpha Condé and especially [mining minister] Kerfalla Yansane and his group under the bus.” Nothing if not explicit. And the implications for other producers? Well, it may seem bad, but one source (another producer) has briefed this writer that it is good for his particular

enterprise. This is based on the idea that if Rio Tinto reduces the amount of iron ore it ships, then the benchmark price for sales to China will rise, and a higher price will induce other producers to fill in the supply gap created by Rio Tinto. In other words, the price of iron ore, depressed at the moment (which is how the majors like it to be) will rise and iron ore projects that have been shelved could well be reinstated. Rio Tinto’s comments have imparted an element of instability into the pricing, not to say the extraction of one of the world’s key minerals. A major depletion of high-grade iron ore has already set in and is likely to last until 2070, if the statistics compiled from US Geological Survey figures by the Earth Policy Institute are not acted on. At present, lower-quality iron ore is being extracted worldwide, precisely to attempt to make up for shortages of good-quality ore. But then Rio Tinto is not the only iron ore producer in Guinea – step forward other companies to invest, extract and bridge the global quality gap with Guinea’s highquality ore. t

* Mining correspondent April 2015

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www.steeltimesint.com

4/10/15 11:02 AM

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SUSTAINABILITY

What goes around, comes around

Recycling Facts

When determining the ‘green’ credentials of steel should we be concentrating purely on the use-phase, such as car tailpipe emissions, or make a wider ‘life cycle assessment’? By Matthew Moggridge* THE World Steel Association (worldsteel) has recently published Steel in the Circular Economy – a life cycle perspective in which it argues the case for moving away from a linear business model embracing design, raw materials, production, manufacturing, use and disposal and focusing instead on a circular economy. The circular economy is defined by four key words: Reduce; Re-use; Remanufacture; and Recycle. Reduce Reducing the amount of raw materials and energy required to make steel is something the global steel industry has been working on for the past 50 years. It has developed a wide variety of advanced high strength steels that contribute to the ‘light-weighting’ of applications as diverse as wind turbines, construction panels and cars. By reducing the weight of the steel it produces, the steel industry uses less raw materials.

Re-use Steel’s durability means that it can be re-used or ‘re-purposed’ without remanufacturing. Train rails, automotive components and construction materials are good examples of where this is commonplace. Re-use is possible without reducing safety, mechanical properties and/or warranties, claims worldsteel. According to worldsteel, ‘the amount of energy and resources required for reuse applications can be significantly lower than producing a new application from raw materials.’ Re-manufacturing There is a big difference between remanufacturing and repair. The latter is a process limited to making the product operational whereas the former is described as ‘thorough disassembly and restoration with the possible inclusion of new parts’. The durability of steel components makes re-manufacturing

• Over 1,400kg of iron ore, 740kg of coal and 120kg of limestone are saved for every tonne of steel scrap made into new steel. • More than 23 billion tonnes of scrap have been recycled since steel production began. • More than 85% of vehicles are recovered globally, but nearly 100% of the steel in recovered automobiles is recycled. common practice for automotive engines and wind turbines, claims worldsteel. Typical products that are remanufactured include machines tools, electrical motors, automatic transmissions, office furniture, domestic appliances, car engines and wind turbines. Recycle Steel is 100% recyclable and always has been. It can be infinitely recycled to create new steel products in a closed material loop. In fact, over 650Mt of steel is recycled annually – and that includes preand post-industrial scrap. The high value of steel scrap guarantees the economic viability of recycling and magnets make the recycling process very straightforward

*Matthew Moggridge, editor, Steel Times International www.steeltimesint.com

WORLDSTEEL.indd 1

April 2015

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SUSTAINABILITY

Packaging Fact In 1998 Chinese steel maker Baosteel developed drawn wall ironing (DI) tinplate, which is used to manufacture two-piece steel food and beverage cans. The company reduced the thickness of the steel from 0.228mm to 0225mm but in doing so increased the energy consumption of the reheating furnace and rollers. The thickness reduction, however, meant less steel was needed, the production rate of finished cans was greatly improved, transportation impacts were reduced and, therefore, emissions and energy consumption decreased. by enabling steel that enters the waste stream to be easily separated from other materials. Life cycle thinking worldsteel believes that adopting a life cycle approach is crucial if we are to solve society’s problems sustainably. The term refers to the consideration of the raw materials used, energy consumption, waste and emissions of a product throughout its life time. ‘This starts with design and ends at the point where the product reaches the end of its natural life.’ To define the true environmental impact of a product from ‘cradle to grave’ life cycle thinking determines that we must calculate the resources and energy used and the waste and emissions produced at every stage of a product’s lifetime. Knowing the impact on the environment of each stage of a product’s lifetime also determines what materials are used. For example, while aluminium, carbon fibre and plastic are often used to ‘lightweight’ a product, consideration must be given to the manufacturing of such materials and whether or not they are recyclable. “The whole life cycle, from raw material extraction through to end-of-life recycling or disposal has to be considered,” says worldsteel. Life Cycle Assessment In order to understand the environmental impact of a product throughout its lifetime, a Life Cycle Assessment (LCA) needs to be undertaken. According to worldsteel, LCA is ‘a tool that enables us to measure the holistic environmental impact or performance of a product at each stage in its life cycle. It provides a measurement which can be used to compare the environmental sustainability of similar products and services which have the same function.’ The Life Cycle Assessment process can be described as a ‘cradle to grave’ approach as it considers the potential impacts from all stages of the material’s life cycle including manufacture, product usage and the end-of-life stages. Life Cycle Assessment comprises four stages. First the purpose of the study and its boundaries must be identified; second, the data collection process (Life Cycle Inventory or LCI) takes place, the April 2015

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Material production greenhouse gas (GHG) emissions: GHG from production (in kg CO2e/kg of material) Steel

Current average GHG emissions primary production

2.0 - 2.5

Aluminium

11.2 - 12.6

18 - 45

Magnesium

Carbon FRP

21 - 23

Footnotes: - All steel and aluminium grades included in ranges - Difference between AHSS and conventional steels is less than 5% - Aluminium data: global for ingots; European only for process from ingot to final products

objective being to compile a list of inputs and outputs of the materials, energy and emissions related to the product under scrutiny. Third, a Life Cycle Impact Assessment (LCIA) takes place to quantify the environmental impacts. Fourth, ‘significant environmental issues’ along with conclusions and recommendations need to be identified. Standards of measurement The International Organisation for Standardisation (ISO) has set down specific standards governing the methodologies employed when undertaking a Life Cycle Assessment. Worldsteel relies upon ISO 14040: 2006 and ISO 14044: 2006 which relate respectively to the principles and framework and the requirements and guidelines for Environmental management – Life cycle assessment. Since 1995, worldsteel has been busy compiling life cycle inventory (LCI) data from its global membership. The information gathered was updated in 2001 and 2010 and will be updated again this year (2015). The full database is maintained by worldsteel and is available to members and third parties. What’s the point? LCA data, which is collected from different regions of the world from worldsteel members, is used to encourage best practice among its global membership. Academics, architects, government bodies and steel customers can use the data if they want to undertake their own

LCA study of steel-containing products. Data currently exists on 15 steel products and is available to anyone who wants to conduct an LCA study. It can be used across a number of market sectors including automotive, building, packaging, energy and electronic appliances. The available LCI data from worldsteel covers the raw material and production phases of the steel life cycle and includes environmental inputs and outputs, such as resource use and emissions to land, air and water. The processes involved include coke making, steel production, final processing (of steel products) and any other processes such as wastewater treatment. Worldsteel argues that by using its LCI data either globally or regionally, the environmental impact – or LCA – can be calculated for a final product from cradle to grave. Sustainability Nobody can criticise the global steel industry for ignoring big issues such as climate change, the environment and saving the planet. In many ways, the steel industry flies in the face of the stereotype that equates ‘big business’ with environmental catastrophe. In 2012 66 members of worldsteel signed up to the Sustainable Development Charter, which basically committed them to operating their businesses in a financially sustainable way as well as supplying steel products that met the needs of their customers, offered value www.steeltimesint.com

4/10/15 11:07 AM

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SUSTAINABILITY

The durability of steel and optimised ‘the eco-efficiency of steels throughout their life cycle’. The charter committed the 66 steel makers to pay close attention to environmental, social and economic sustainability and this meant improving resource and energy efficiency, being respectful to humanity and making ethical profits ‘to ensure the long-term viability of their enterprises’. Life Cycle Assessment fits into the spirit of the Sustainable Development Charter inasmuch as it addresses economic, social and environmental sustainability. Where the latter is concerned, there has been a 60% drop in energy consumption per tonne of steel produced as a result of changes made to the production process over the last 50 years. Where social sustainability is concerned, the steel industry has focused strongly on worker safety (see page 51 of this issue) and economically it is worth pointing out that the steel industry currently employs two million people and a further two million as on-site contractors, not forgetting those who work for upstream suppliers and related downstream industries. The by-products of steel production According to Clare Broadbent, head of product sustainability at worldsteel, one of the key aims of the steel industry is to have zero waste and with this in mind she highlights the way in which slag, a byproduct of the steel production process, is used successfully in other industries. “When we make steel we also want to make a good quality slag so we add extra things into the process to improve quality and make it good enough to sell on for other uses. By doing this we achieve a 96% utilisation rate,” she said. Slag is widely used in the cement industry and, according to the Slag Cement Association, by replacing Portland cement with slag cement a saving can be made of up to 59% of the embodied CO2 emissions and 42% of the embodied energy required in cement manufacturing. Slag can also be used as a crop fertiliser and as an aggregate in road building.

• New York’s Brooklyn Bridge, built in 1883, was the first bridge built to carry traffic. 130 years later it carries 120,000 vehicles per day. • The Basilica of San Sebastien in Manila, the Philippines, was built in 1891 and is the only pre-fabricated steel church in Asia. • The Sydney Harbour Bridge in Australia opened to traffic in 1932 and contains over 53kt of steel waiting to be recycled.

Short-sighted legislation? Worldsteel argues that there is plenty of legislation in place around the world to ensure that the environmental impact of products, manufacturing and waste are minimised. The problem is that most of the laws in place tend to focus on the usephase of the product and don’t take into account so called ‘life cycle thinking’. Most legislation focuses on emissions and in this respect the steel industry is on a back foot as, with 1.6 billion tonnes produced annually, it is the biggest emitter of CO2. Product Environmental Footprint There are, however, a number of regional and global initiatives in place that do follow life cycle assessment thinking and these include the European Union’s Product

Environmental Footprint (PEF) standard, which measures the environmental performance of a product throughout its life time. The PEF is currently a pilot project, but there are steel companies assessing the PEF’s suitability for the industry. Life Cycle Initiative Currently in phase lll of its development is the Life Cycle Initiative, a joint venture programme between the United Nations Environment Programme and the Society for Environmental Toxicology and Chemistry (SETAC). According to worldsteel, this initiative ‘aims to enable the global use of credible life cycle knowledge in order to create more sustainable societies’. Chinese Eco-design initiative While the media paints a picture of China as uncaring when it comes to environmental matters, some would argue the complete opposite. The Eco-Design Initiative, says worldsteel, ‘aims to draft the eco-design manual for several key products including cars’. Many car manufacturers and raw material suppliers have been involved in the pilot project and an authentification system for eco-designed products is in the pipeline. Professional LCA society The American Center for Life Cycle Assessment (ACLCA) aims to build knowledge of the practice among industry, government and NGOs. The ACLCA is a professional body for LCA and organises conferences on the subject. The Australasian solution Life Cycle Assessment bodies in Australia and New Zealand joined forces in September 2014 to form the Australasian Environmental Product Declaration (EPD) Programme. It is hoped that EPDs will become commonplace in the region. Steel in the Circular Economy – A lifecycle perspective is published by worldsteel. t For further information, log on to worldsteel.org

Manufacturing facts • Steel makes up nearly 60% by mass of North American vehicles and 50% in the rest of the world. • The fact that wind tower turbines are 50% lighter today than 10 years ago translates into a 200-tonne reduction in CO2 emissions for a 70-metre tower.

April 2015

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SUSTAINABILITY

Europe is “steel” running How the European Commission intends to help the steel industry to remain competitive in the globalised world. By Carlo Pettinelli* SINCE taking office in November 2014, the new European Commission has been fully aware that, in order to rebuild the confidence and regain the trust of EU citizens, it is time to make a difference on the big economic and social challenges of Europe. High unemployment, slow growth, high levels of public debt, investment gap and lack of competitiveness in the global marketplace: these are the main challenges that the Commission has identified in its Work Programme 2015. Jobs and growth will be at the heart of the EU’s political agenda, in line with the 10 priorities of President Juncker’s Political Guidelines. The way we need to follow is clear: Europe has to base its prosperity on the real economy. The financial and economic crisis has made it clear that we cannot rely solely on the services sector, including financial services, for our prosperity. Europe’s economic recovery will not happen without industry, which accounts for over 80% of Europe’s exports and 80% of private research and innovation, returning a €365 billion surplus in the trade of manufactured products, that is €1 billion a day. For all the above reasons, the European Commission has set the objective of raising the profile and importance of industry in the European economy, from less than 16% today towards 20% of the EU’s GDP by 2020. Moreover, the President of the Commission, Mr. JeanClaude Juncker, reaffirmed that a highperforming industrial base is needed for growth in Europe, as much as a strong services sector, and the synergies between these two should be fully exploited. This should ensure that Europe maintains its global leadership in strategic sectors with

high-value jobs such as those found in the automotive, aeronautics, and engineering industries. In this context, the steel industry plays a key role, contributing 335,000 direct jobs, around 1.5 million supply chain jobs and a turnover of €170 billion (a 1.4% share of the EU’s GDP). Additionally, a strong and competitive steel sector is important for Europe’s industrial base as steel is at the beginning of a number of industrial value chains and is closely linked to many downstream industrial sectors such as automotive, construction, electronics, mechanical and electrical engineering. Major challenges Nowadays, the European steel sector finds itself in a difficult situation, with up to 40,000 jobs lost in recent years plus the simultaneous effects of low demand and overcapacity in a global steel market dogged with high energy costs, volatile raw materials prices, a regulatory burden that implies certain costs, the need to invest in the transformation towards a clean, low-carbon economy and the development of innovative products. All these challenges have been taken into account in the comprehensive Steel Action Plan of 2013, which recognised the strategic importance of steel in the EU. Where steel demand is concerned, the Commission is confident that downstream sectors will be re-launched and thus steel demand will increase. The recently announced EU Investment Plan, which is expected to mobilise at least €315 billion of additional investment over the next three years will definitely help achieve this vision. Some projects in the Investment Plan, which are proposed by

Member States, directly concern the steel sector; for example: (i) the Italian project Energy Efficiency for Steel Production of ILVA, aiming at the improvement of energy efficiency and the implementation of the best available technology and (ii) the HISARNA project in the Netherlands, presented by PPP HULCOS (Ultra Low CO2 Steelmaking). The steelmaking process that has been developed uses 20% less energy and results in a reduction of 20% of CO2 emissions and could, therefore, help the European steel sector to improve its competitiveness. Thus, the Investment Plan can provide good opportunities for the steel sector not only on the demand side, but it could also potentially support the financial investments necessary to develop breakthrough technologies to reduce GHGs. In addition, other opportunities can come from the EU’s research and innovation funding programme, Horizon 2020 (around €600 million to be spent over a seven-year period on the topic of raw materials within Societal Challenge 5), as well as from the Research Fund for Coal and Steel (RFCS) which supports research projects in the coal and steel sectors with an annual budget of €44 million. At an international trade level, the EU addresses trade barriers and unfair practices by rigorously implementing its market access strategy in order to enforce international commitments and secure a level playing field for EU operators on the global steel market. One major challenge the European steel industry has to face stems from the global industry’s overcapacity problem and the fact that third countries [such as China] are exporting excess production through commercial behaviours that sometimes

* Director – Sustainable Growth and EU2020, European Commission www.steeltimesint.com

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April 2015

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SUSTAINABILITY

Jobs and growth will be at the heart of the EU’s political agenda, in line with the 10 priorities of President Juncker’s political guidelines. can be considered predatory. These unfair trade practices are addressed through the application of the EU’s trade defence instruments: there are currently 10 ongoing anti-dumping investigations and 37 measures in force, related to imports of steel products into the EU and some measures have already been implemented. Electricity and coking coal are the steel industry’s most important energy sources and the EU is under pressure for both. On average, EU industrial retail electricity prices are higher than in the US and China. However, there are significant differences between member states and there are quite different causes for elevated prices. One is that there is too little, if any, competition on the retail market (while the wholesale market appears to work much better) and another is the, sometimes, significant burden from national energy taxes and levies. In the steel sector, depending on the type of production and the existence of exemptions or state aid, energy costs may have a significant impact on the final steel producers’ profitability, especially in years when margins are low. In order to address the problem of high energy prices, on 25 February 2015, the European Commission adopted the Energy Union Strategic Framework that, among other provisions, introduced measures for further integration of the internal energy market where companies freely compete to provide the best energy prices. The price of the other input, coking coal, has also significantly increased over recent years. The Commission, therefore, proposed the inclusion of coking coal in the list of critical raw materials in addition to other key essential elements for steel production. As of May 2014, the new list of raw materials that are deemed “critical” for Europe includes borates, chromium and coking coal, which are particularly relevant for the sector as they are needed for the production of steel alloys. We are confident that this inclusion will have positive effects for the sector, especially in trade negotiations with third countries April 2015

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and/or in research projects. Where regulatory burden is concerned, the steel sector has undergone a cumulative cost assessment to evaluate the impact that the most relevant EU legislative acts and initiatives have on the performance of the sector. Findings show that the cumulative regulatory costs are low compared to the overall cost of steel production. However, because the steel industry is a pro-cyclical industry, in times of crisis, regulatory costs may be even higher than EBITDA, for example, in the exceptional case of 2009. More often, they represent 20% to 30% of EBITDA and, therefore, may endanger the viability of the industry, as EBITDA need to cover financial expenditures, depreciation and amortization, that is the cost of capital. More investment needed EU industry is not investing enough in the transformation towards a clean, lowcarbon economy and in the development of innovative products. Investments are still 20% below pre-crisis level and this means an estimated €500 billion investment gap for the EU. Meanwhile our competitors in the USA and Asia are investing heavily in smart and clean technologies. If Europe does not act, it may lose its global leadership and risk being confined to the low-tech/low-profit segment of value chain. On the other hand, Europe’s industrial strategy for the 21st century aims to find the right balance for securing a high level of prosperity

and employment, while reducing its environmental footprint. Against this background, in October 2014 EU leaders have set long awaited head-line targets and the architecture of the 2030 framework for climate and energy policies, putting forward ambitious objectives for GHG emissions reduction, renewable energy and energy efficiency. We are, of course, aware that complex work is still ahead of us and that we need to define the most appropriate technical solutions. The details of further EU proposals will need to be based on a thorough assessment of impacts, with valuable inputs from all stakeholders. Simple, predictable and effective provisions, for example, will have to be found to address the competitiveness of industry sectors covered by the EU emissions trading system (EU ETS) which are deemed to be exposed to a significant risk of ‘carbon leakage’. These provisions will need to take into account (i) the technological feasibility of reducing emissions; (ii) direct and indirect sources of cost increase and (iii) the need for an adequate level of free allocation of allowances. All these elements will need to be accompanied by increased efforts that trigger investment in research and innovation for low carbon technologies and energy efficiency. Equally, we have to examine the opportunities offered by the green economy: the global market for ‘low carbon’ and ‘environmental’ goods and services (a subset of the total market of green products) is estimated at €4.2 trillion with an EU share of 21% . This market has been growing at an annual average rate of 4%, even during the recession, making the green economy one of the sectors with the strongest job growth potential. Europe needs real economy which certainly involves manufacturing and – as a consequence – the steel industry. At the same time, there are several challenges that the sector must face: some come from outside (energy and raw material prices, unfair competition) others are set by us (regulatory burden, EU climate goals). The EU has to tackle these issues in order to maintain and reinforce its position as the second largest producer of steel in the world. As the title says, the EU is “steel” running, and I think we cannot stop if we want our steel sector to remain competitive on the global stage and grow in a sustainable way. I am confident that the European Commission is ready to play its part by acting at a global level and by proposing the right framework conditions with its industrial policy to stimulate new investments and speed up the adoption of new technologies. t www.steeltimesint.com

4/10/15 11:12 AM

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CLIMATE POLICY

EU climate policy under scrutiny It is 10 years since the European steel sector first begun grappling with the complexities of the EU’s emissions trading system (ETS). The intervening years have not made the bloc’s climate and energy policy framework any simpler or more predictable for steelmakers. By Gareth Stace* EU leaders might have agreed outline targets for 2030 last October, but the detailed rules are still to be decided and policymakers reminded yet again of the value, and vulnerability, of some energyintensive industries. In the meantime, a political deal is likely to be reached on the market stability reserve (MSR), which is designed to push up the price of ETS allowances and adds more complexity and uncertainty to the market. This year will also see major UN climate talks in Paris, which could shift the landscape in which the EU’s targets sit. Taken together – and in the context, of course, of the wider economic uncertainties facing European steelmakers – the picture is a concerning one for the industry. It is difficult to say at this stage, what the eventual impacts will be. A market-based approach The debate over the 2030 targets occupied most of last year, with the final deal struck between EU governments and the Commission in October centred on a 40% cut in total greenhouse gas emissions below 1990 levels. The parts of the EU economy covered by the ETS have to reduce their emissions to 43% below 2005 levels. There will also be a binding EU-wide renewable energy target of 27% and a similar, but voluntary, energy efficiency goal, and the final text included a promise to review the package in light of any deal reached at the Paris talks. That might not sound particularly welcome to some in the industry, but there were elements to be pleased about. First, the UK government helped resist the imposition of further nationallevel renewables and energy efficiency

targets, on the grounds that it would be more cost-effective to have an approach focused on the ETS. This is the view of UK Steel too: we have long argued that the EU’s complex regulatory landscape with multiple overlapping targets prevents the ETS functioning efficiently. In addition, a fund used in the existing phase of the ETS to support carbon capture and storage schemes and innovative renewables technologies will be expanded in the next 2020-30 phase to include industrial emissions reduction projects. Industry has long been frustrated at how little support it receives for decarbonisation compared to the energy sector and, with the right rules, this could start levelling the scales. Steelmakers also managed to secure some encouraging, if slightly vague, commitments to retain and reform the current system of support for sectors considered to be at risk of ‘carbon leakage’ because they compete globally and cannot pass on ETS costs to their customers. This support is meant to stop vulnerable industries moving overseas and potentially increasing net global emissions in the process. The current system is based on free allocation of allowances for direct ETS costs and, in some countries, state aid to cover ETS costs passed through by energy suppliers. It does not deliver the degree of protection originally promised because of overly ambitious benchmarks for the steel sector and an arbitrary cross-industry cap on free allowances, as a result there will be an increasing shortfall through this decade. Even in those countries offering state aid for indirect ETS costs, this is still capped at around 80%.

Commission projections show the MSR could push up carbon prices from around €7/t of carbon dioxide to around €30/t in the next phase of the ETS. Other market analysts have suggested €40/t or higher. Adequate carbon leakage provisions will become even more important under these kinds of scenarios and the steel industry continues to be frustrated that these two ETS reforms are being agreed separately. MEPs and some member states are now looking to increase the mismatch further by bringing forward the start of the MSR to 2019 or even 2017. The European Steel Association (Eurofer) has calculated that carbon prices of €30€40/t, when combined with the existing carbon leakage rules, would cost the European industry €43bn-€58bn during the 2020s. This equates to around €20€30 per tonne of steel – a level that could be harmful for steel products on which contracts can be won or lost on a few Euros per tonne. Industry’s critics tend to argue that there is no evidence of carbon leakage to date, but many of the studies they point to do not analyse the more subtle impact of changing investment patterns. This may be particularly damaging for installations with managing directors and sister plants outside the EU, and is likely to become more pressing at higher carbon prices. Reforms needed to protect vulnerable industries UK Steel would like to see the EU’s original political intention on carbon leakage, which is for the most efficient 10% of steel plants in Europe to receive all the allowances they need for free, actually delivered in future. (Even this might be

* Head of climate & environment policy, Engineering Employers Federation (EEF). www.steeltimesint.com

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CLIMATE POLICY

difficult for some installations to accept, but it is a political compromise that ensures there is still a clear incentive for the sector to improve.) The most important reform to achieve this would be the removal of the cap on industry allocation to ensure companies receive all the allowances they are entitled to and need. This might also require protection to be more tightly focused on those industries that really rely on it and the creation of a new reserve to even out demand for free allowances. We want the benchmarks, used to assess which sites are the best performers, reviewed based on the operational realities at current plants, and a system in which allocation is more closely linked to recent activity levels, rather than historical ones. Taking this approach in the past, as advocated by the steel sector, would have

April 2015

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avoided some industrial sites building up considerable surpluses during the recession and potentially rendered the MSR unnecessary. The Commission will not come up with any formal proposals on this and other detailed ETS reforms until the summer. A political deal will take another 18 months or so. The resolution of other loose ends left in the 2030 conclusions, such as the governance rules needed to ensure the EU renewables and energy efficiency targets are delivered, will take longer still. UK Steelâ&#x20AC;&#x2122;s members are willing to play their part in the decarbonisation of the EUâ&#x20AC;&#x2122;s economy but need to be sure their ability to act and the investment cycles they work to are properly understood and accounted for. If they keep being hit by ETS costs when there is little they can

realistically do to reduce emissions, and left uncertain about future rules, it will hit their capacity to invest when appropriate opportunities arise. From this perspective, the 2050 lowcarbon roadmaps the UK government is drawing up with the help of academics and industry could be really valuable, creating a common evidence base of what can be achieved in steel and seven other energy-intensive industries, and by when. The EU should take note. It cannot risk losing industries like steel that are hard to decarbonise and yet form the backbone of key supply chains, and represent crucial sources of employment and training. Far from being the final deal, Octoberâ&#x20AC;&#x2122;s 2030 package was the start of a long battle by European steelmakers for a decarbonisation programme they really believe can work for them. t

www.steeltimesint.com

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SUSTAINABILITY

Versatile and 100% recyclable, stainless steel is arguably a dream material for sustainable living. But producing it, as is the case in any heavy industry, has traditionally taken a heavy toll on the environment. This article looks at how Outokumpu, a leading stainless steel manufacturer, approaches the sustainability challenge. By Steve Roman*

EVEN decades before the term sustainability was in vogue, the case for manufacturing in a low-impact way was well understood by Outokumpu. Using less energy and producing less waste have always been good for the environment, to say nothing of a company’s bottom line. Lately, tighter emissions regulations and reduction targets have provided good reason for maximising sustainability. In the stainless steel business, according to Juha Ylimaunu, head of Outokumpu’s sustainability and environmental matters, there’s also an intense push coming from the customer. “It has really increased during the last five years,” Ylimaunu noted, referring to the phone calls and questions Outokumpu receives, mostly asking for data about the company’s sourcing of raw materials and the sustainability of its production process. It’s a supply chain phenomenon, he explains, where the end customer wants to know that every component is made in as sustainable manner as possible. The questions – and the demand – flow upstream. Clearly, there is no lack of incentive for a company to operate as sustainably as possible. Given the complexity of this kind of operation, exactly how should it be done? Outokumpu’s answer has been a multi-pronged approach combined with sustained effort. Reducing by recycling When working with a material that is 100% recyclable, upping the amount of reclaimed material in the manufacturing process is an obvious place to start. There are real benefits to using recycled steel as opposed to virgin iron ore, says

Sustainable stainless steel production Stainless steel enables carbon savings in other areas and applications. Without it, renewable energy projects like solar power plants and wind farms, would not exist.

Ylimaunu. Apart from avoiding the need to mine, there are energy savings in the manufacturing process itself, which means reduced emissions. Last year, Outokumpu’s use of recycled material topped the 85% mark and continues to be the highest in the industry globally. The company hopes to push that number up even further. Recently, it has begun making contracts with its larger customers to bring their surplus steel back for melting. There are, however, upper limits to recycling, Ylimaunu cautions. As the world’s economy develops, demand for new stainless steel will inevitably outstrip the supply of used material coming back in – a phenomenon that is especially noticeable in high-growth economies like China. The result is that some portion of the stainless steel output will always have to be created from virgin materials. The first critical step in creating sustainability is to ensure that raw materials have been sourced as ethically and sustainably as possible, something that Outokumpu already does today. Then there is the constant process of finding new ways to improve efficiency in the manufacturing process itself. And finally, there is the tough question: What do you do with the waste? The zero-waste proposition Outokumpu’s ultimate target is zerowaste stainless steel production. It sounds like an ambitious goal, especially given the sheer volume of slag generated. In Finland alone, the figure for 2014 was 1.1Mt, nearly the same as all the country’s household waste combined.

But last year, Outokumpu’s Tornio, Finland, plant actually reached a 100% use rate for all of its slag. At the company’s UK melting shop in Sheffield a use rate of 90% has been achieved for many years. Some other production units in the USA and Europe have also decreased their amount of waste significantly. To manage these kinds of achievements, Ylimaunu says that the company has relied on a very systematic approach in two areas. The first is avoiding producing waste in the first place by choosing the right raw materials and making improvements in the manufacturing process. The second is developing byproducts from the waste, and this is a breeding ground for exciting innovation. As industry insiders well know, slag is not waste, or at least it does not have to be. Outokumpu extracts valuable alloying metals like nickel, chromium and molybdenum from the slag and returns them to the manufacturing process, saving considerable materials costs. The company similarly pulls metal out of dust and scales produced in steel making. What is left over from the slag is sold on and used in other applications, mainly road construction. Used in an asphalt mix, slag actually works better than the virgin aggregate it replaces, leading to increased grip values and less rut formation. Outokumpu’s Sheffield plant in the UK has made gains in landfill avoidance over the last seven years thanks to sending slag to be used for road works and improving other material recovery and recycling. Meanwhile, slag from the company’s Swedish branch has been used to make concrete mega blocks that can be formed into walls.

* Freelance writer April 2015

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SUSTAINABILITY

Corporate DNA For carrying out practical measures like the ones mentioned above, having the right internal management structures and attitudes can be critical. This, says Ylimaunu, is where Outokumpu sets itself apart from competitors. Systems it uses today to steer sustainability efforts have deep roots in the company’s history, going back decades. In 1969, the mining company that would become Outokumpu, was the first in its field to create an internal environmental committee. That committee has now developed into an internal environmental network, a group of experts, with a mandate from top management, who can get things done and get them done quickly. One of the benefits of this set-up has been the implementation of a standard tool for Energy and Environmental Reporting (EER) that is used in all of Outokumpu’s global operations. While it may seem like mundane paperwork at first glance, Ylimaunu says this kind of data collection and transparency is absolutely crucial in today’s business climate. Moreover, the year 2015 will mark 40 years since the first environmental report of Outokumpu was published in 1975. Not only does this show where things stand, and move, regarding sustainability targets, it is also a vital part of meeting improvement and customer demands. For all its main products, the company provides a variety of relevant data in the form of Environmental Product Declaration (EPD) that is verified by a third party. For clients in the ABC sector (architecture, building and construction), these data sheets are essential for developers who want to participate in green building certification schemes such as the USA-based LEEDS (Leadership in Energy & Environmental Design). “If you don’t provide that kind of information, you cannot even make an offer or sell anything to those kinds of building projects,” Ylimaunu said. Staying on target Having the right systems in place and keeping the innovation efforts rolling on has allowed Outokumpu to set itself ambitious targets for sustainability such as improving its energy efficiency by 10% and reducing CO2 emissions by 20% per tonne by 2020 (from a 20072009 baseline). Ylimaunu pointed out that these two targets are actually linked. “There is no magic way to decrease the CO2. In the whole of the steel industry, it goes hand-in-hand with energy efficiency and investments made to make things happen more efficiently. Then we use less energy, which normally means less fuel, oil, gas or electricity, and this reduces the CO2,” he said. Finding these new pathways to efficiency, he said, “is more or less our daily work.” So far, the industry has yet to find an economically feasible way of meeting some regulatory targets, like the European Commission’s mandated 40% CO2 emission reduction target for 2030. Outokumpu is nevertheless continuing on its course of investing in R&D projects to get the efficiency levels up. It is important to note that steel itself is an enabler of carbon savings in other areas. Without it, renewable energy projects like solar power plants and wind farms could not exist. Savings it creates in transport and logistics should also be taken into account. An independent study carried out by Boston Consulting Group & VDEh determined that, while steel production in Europe causes some 220Mt of CO2 emissions, applications in eight areas actually decrease emissions by 350Mt to 440Mt. For Outokumpu’s part, it is continuing to relay the message to its customers that choosing stainless steel is a cost-effective move, despite the initially higher investment, because it is maintenancefree and its lifespan is long. As Ylimaunu put it: “The mission and vision of our company is to create a world that lasts forever. We are producing a type of product and creating a really long-lasting and sustainable world.” t www.steeltimesint.com

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FURNACES

Improving reheat furnace sustainability Fives Stein believes that the main cause of GHG emissions in steel production is the burning of fossil fuels and electricity consumption. With this in mind it has employed the principles of its eco-design philosophy throughout the development of its Stein Digit@l Furnace AT 2.0. By Pauline Plisson*

because their energy consumption is small compared to that of the blast furnace and continuous casting •Process Avoiding over-consumption and, therefore, increased emissions due to a Other energies discrepancy between design and operating conditions •Electricity Recovery and use of energy from furnace exhaust gases • Recovery and use of energy from hot products storage • Modulation or temporary shutdown of energy-intensive processes to enable greater flexible towards electricity price variations, possibly in combination with the use of energy storage systems • Synergy with nearby industries to valorise waste streams.

GHG emissions repartition per source

Process 4%

MUCH attention is paid to renewable energy sources these days, particularly in the building and transportation sectors and it is important to remember that energy-intensive industries, like the steel industry, are part of the solution. The growing popularity of wind power will mean an increase in demand for structural steel while the development of Carbon Capture and Storage technology (CCS) will increase demand for speciality steel such as seamless tubes, which are needed to build the CO2 transportation network. However, if no effort is made to reduce the environmental footprint of steel production, improvements in the power sector may be accompanied by an increase in emissions from the steel industry. In order to achieve its target of halving greenhouse gas (GHG) emissions by 2050, the steel production industry needs to divide its carbon intensity by four2 (t CO2 per tonne of crude steel). In the steel industry, the main cause of GHG emissions is the burning of fossil fuels in furnaces and electricity consumption by rolling mills and electric arc furnaces (indirect emissions) and intrinsic CO2 emissions generated by the blast furnace. Other environmental impacts include dust, PAH and other waste from the coke and iron ore preparation processes, NOx and particles from furnaces. Significant progress has been achieved by the industry to improve steel process recyclability and reduce the industry’s carbon footprint, by using site gases (COG, BFG) instead of natural gas, and breakthrough innovations to capture CO2 emissions from blast furnaces are being investigated by projects like ULCOS. To further reduce their environmental footprint and fossil fuel bills, steel producers need to investigate new areas of improvement such as: • Ultra low NOx burners • Energy efficiency in parts of the process that have been historically overlooked

Electricity 19%

Other energies (coal, oil, gas,heat, biomass, waste) 77%

Crude steel production (2007) 870Mt/y Recycled steel (2007)

480Mt/y

GHG emissions (2005)

2.6GtCO2 e/y

Average GHG emissions

3.2tCO2 e/t crude steel

Average GHG emissions

1.1tCO2 e/t recycled steel

Several technologies from Fives Group (reheating furnaces, annealing furnaces, cold rolling mills and coal tar distillation) are key to address those challenges. For that reason, these technologies have been selected to be part of a corporate ecodesign programme.

Percentage of GHG emissions worldwide: 6%

Fig 1 Greenhouse gases emissions in the steel process (source: World Steel Association, GHG Protocol)

Blast furnace + converter + continuous casting 70%

Hot rolling 10%

Reheating 80%

Cold rolling 10%

Strip processing 10%

Rolling 20% Fig 2 Energy consumptions breakdown in the steel process

Stein Digit@l Furnace A.T. 2.0

(source: EUnited)

* Innovation and sustainability program manager, Fives Group www.steeltimesint.com

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FURNACES

Quality of final product

Greenhouse gases

Productivity

Energy

Water Pollutants

Noise

Lifetime extension Floor space

Recyclability

Retooling/dismountable products Downtime/discard rate

Load and fuel flexibility OPEX/lifecycle cost

Consumption of non renewable resources Ease of use Environmental

Operational performance and economics

Safety Operator training

Fig 3 Areas covered by the Engineered Sustainability® programme

Human

OutputAir (kW)

Input (kW)

Gas Air 21438

Gas

Combustion

175

Products 66331

Waste gas 42462

115 Wall s2

oli

ter

Combustion 100303

Fig 4 Fig 5

NOx emissions

Energy ~9M€/year 60,000tCO2eq/year (case: natural gas)

Waste heat 350°C up to 800°C

Scale loss ~6M€/year: waste of energy and money

Inefficient use of furnace Furnace designed for nominal production, but used most of the time in different conditions (low load, variable product mix)

Eco-design programme Fives Group is active in many energyintensive industries such as steel, aluminium, cement and glass and strives to minimise the environmental impact of its technologies, concentrating primarily on environmental performance. This strategy is implemented within the company’s product development process with a program called Engineered Sustainability. This program is both an internal quality process and a brand: • A process for systematically reviewing impacts and continuously improving Fives April 2015

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technologies, and for providing customers with quantified data and resources to achieve the best-possible performance in operation • A brand for Fives best-in-class products in terms of environmental performance. The Engineered Sustainability programme follows ISO 14062 recommendations and has been reviewed by Ernst &Young (an independent auditing company). The programme involves technical

and sales teams from the early stages of design, and relies on an eco-design toolkit. A broad range of aspects are assessed: environmental (energy consumption and emissions but also noise, consumables and floor space), economic (lifecycle cost and production flexibility) and human (training operators in the most effective use of technology). Opportunities to reduce the main impacts are systematically listed, studied and implemented when they are successful; and their benefits are proven. As of January 2014, four eco-design projects were completed, 10 are ongoing, and about 70 people from Fives have been trained. Sustainability assessment of a reheat Waste gasfurnace The reheating furnace is critical for the steel production process as it is located just upstream of the hot rolling mill. Its Cooling water share of the energy consumption for the steel production process is 8% (blast furnace, converter and continuous casting Walls represent 70%, cold rolling 10%, strip processing 10%, and hot rolling 2%. (Source: EUnited). Products Assessing the energy balance of a reheating furnace has been performed by Fives Stein and was conducted for a furnace that heats slabs in low carbon steel (8510 x 1574 x 220 mm) using natural gas as a fuel (LHV = 8610 kcal/Nm3). The main heat loss is in waste gas, which is already partially recovered by flue gases recirculated in the furnace but can be further optimised. Then come losses in cooling water, that are already partially recovered through ECS (Evaporative Cooling System), regularly installed by Fives Stein on its customers’ sites. Losses through walls appear to be negligible. As explained above, the Engineered Sustainability program deals with more topics than energy. NOx emissions have been identified as a priority area, as well as scale loss, which is a major concern for steelmakers as it results in a costly loss of production and energy as it corresponds to metal that has been heated and is ultimately discarded. Maintenance requirements and consumables have also been looked at. To sum up, the main areas of importance to optimise the environmental impact of a reheating furnace have been listed as follows by Fives Stein: NOx emissions reduction • Heating curves adjustment to minimise NOx formation • Burners/combustion: better mixing of fuel and air, staged combustion, high recirculation rate • Control of air/gas ratio • Limitation of cold air intakes (parasite air ingress) through walls and doors www.steeltimesint.com

4/10/15 12:19 PM

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FURNACES

NOx emission vs burner load 2

NOx (NOx 100%)

1,8 1,6 1,4 1,2 1 0.8 0%

40%

20%

80%

60%

100%

Burner load (%)

Fig 7

Fig 6 Zone consumption

140% 130% 120% 110% 100% 95

digital furnace

264,0

Energy efficiency and greenhouse gases: • Heating curves adjustment to produce a minimum of flue gas (CO2, CO). • Recovery and re-use of flue gas energy • Control of air/gas ratio to use the necessary amount of fuel gas • Minimise electricity consumption of fans, pumps and motor Scale loss: • Heating curves adjustment to limit oxygen, and to avoid too high temperature in the furnace, or to reach the scale loss formation conditions as late as possible • Limitation of cold air intakes (parasite air ingress) through walls and doors • Control of air/gas ratio • Scale handling and evacuation Stein Digit@l Furnace AT 2.0 Fives Stein developed the concept of Digit@l control (on-off firing of burners instead of proportional control, and intelligent sequencing of burners’ ignition) of reheating furnaces in the 1990s. The first fully Digit@l furnace in the world was conceived in 1999 and went into service in 2000 in the USA. Since then, Fives Stein gradually improved this state-of-the-art

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260,0 258,0 256,0 254,0 252,0 250,0 300

325

350

375

400

Production (t/h)

Sequential firing

Fig 8

April 2015

262,0

248,0 275

Hearth coverage (%) Modulated mode

conventional furnace

266,0 Specific consumption (Kcal/kg)

150%

Specific consumption Specific consumption at reference condition

160%

100

Specific consumption for a constant length of slabs and residence time variable Slab 0.225* 1.250* 12.000*m - Nominal production = 400t/h - Furnace util length = 49.4m

170%

Fig 9

technology in terms of NOx reduction, energy efficiency and furnace control. An eco-design project was performed in order to: • Quantify the environmental performance of the technology by analysing site data from furnaces recently commissioned (Cölakoglu, Turkey; OMK, Russia), in comparison with competing technologies • Identify and validate improvements to the furnace design, leading to even less environmental impacts. System benefits Thanks to patented Advantek burners and Digit@l control, NOx emissions of Stein Digit@l Furnace AT 2.0 are outstanding by design. Advantek burners have been designed for ultra low NOx emissions, and are always operated at 100% capacity, ie at their minimal NOx emissions level. Stein Digit@l Furnace® AT 2.0 is the only technology which operates the burners at 100% capacity at any production rate and operational conditions. Burners operating at 100% capacity give the best conditions: flame length control, better efficiency, lower consumption, lower NOx. This leads to -10 to -20% NOx emissions compared with alternative technologies.

The burner technology and the digital furnace control system allow for flame length adjustment on individual burners to be fully decoupled from the burner power control. Burners operate with long or short flame and a combination of both lengths. The flame length does not vary with the power injected by the burner. The burners always operate at 100% rated power, and the injected power varies with the firing time. The drawbacks of other technologies are as follows: • Increase of NOx by 30% to shorten the flame (and +10% due to the use of roof burners). • Increase of fuel consumption by 3% when operating with short flame is the equivalent of €250 000/year Energy efficiency Fives offers a furnace design that is optimised on reference operation modes (which occur most of the time during the line yearly production). Indeed, energy efficiency is dependent upon the furnace load so it makes no sense for a steelmaker’s decision to be based on fuel savings guaranteed at a 100% load. www.steeltimesint.com

4/10/15 12:19 PM

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Ground billet surfaces

Bar end quality after cutting

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FURNACES

Roof Temp _ minNOx

1400

On line furnace temperature control Heating curves

Consumption, scale loss, NOx = f (discharging temperature)

Roof Temp _ minEnergy

Consumption

TopTemp _ minNOx

Temperature (°C)

1200

TopTemp _ minEnergy

0,97 0,96

800

0,95 0,93

- 2% energy consumption - 5.5% NOx emissions - 9% scale loss

0,92

Variation of heating strategy Min Nox vs Min Energy

0,91 0,9 1230

0 Heating length (m)

Fig 10

1235

1240 Discharging temperature (°C)

1245

1250

Fig 11

Most efficient heating -5% fuel consumption* Shorter furnace thanks to higher overall efficiency and heat recovery

Minimal NOx emissions

Fig 12

-10% to -20% NOx* Burners always operated at 100% capacity Flame length adjustment

Optimised heating profiles Individual control of burners Maximum re-use of flue gases energy *not simultaneously attainable

Maximum flexibility

Minimal operation cost Longer refractory lifetime Less maintenance - less complexity (only one type of burners) - less spare parts - decreased intervention time

Lowest energy and NOx in reference operation modes Up to +/-50°C between head and tail at the core of the product Easier use of site generated fuels

(in Purple: benefits of Fives furnace compared to competition)

Novaflam, a rotary kiln burner for cement processing:

Fig 13

Eco-design studies conducted in 2013 and 2014 revealed that Novaflam was the best compromise between primary air and pressure for an optimal momentum. This user-friendly burner produces a strong, short and high temperature flame that can bring multiple benefits to customers such as: • Better clinker quality: up to +2 Mpa at 3 days strength • High alternative fuel substitution: up to 100% fluff or 60% saw dust • Up to -4% thermal specific consumption • Up to 4 to 7% production increase • -10% NOx emissions • Stability allowed by a high reactivity to variable conditions • Higher kiln availability: -30% of ‘volatilisation’, no reduced yellow clinker, less ring formation

April 2015

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Estimations for discharge at 1230°C instead of 1250°C:

0,94

600

200

NOx

0,98

1000

400

Scale loss

1 0,99

Independent control of each burner and furnace design improvements (long recuperation section allowing maximum heat recovery in flue gases and large capacity side burners) result in a 5% fuel consumption saving on annual production compared with alternative technologies. If local regulations allow NOx emissions to be downgraded, optimisation of heating profiles make it possible to achieve even lower energy consumption. Also, higher overall efficiency and heat recovery in the furnace allow Fives Stein to design shorter furnaces, which bring economic and footprint benefits. 100% COG can be used in Stein Digit@l Furnace AT 2.0, thanks to the absence of a mixing station, which improves overall energy efficiency. As steelmakers face increasingly unpredictable market conditions, Stein Digit@l Furnace AT 2.0 is highly flexible and allows for: • multi-fuel firing (dual or triple-fuel) thanks to Advantek burners and Stein Digit@l Furnace AT 2.0 piping system • fuel change with minimum intervention, in case new fuels (such as site-generated gases) become available during the furnace’s lifetime • easy switch between “minimum energy” and “minimum NOx” modes thanks to the Virtuo furnace control system • delivery of complex profiles: up to +/- 50°C between head and tail, measured at the core of the product (taper heating function) “Virtuo, the furnace’s level 2 control system, calculates in real-time the optimal heating curves to obtain the best energy consumption or reduce NOx levels”. High versatility and flexibility are enabled by unique design www.steeltimesint.com

4/10/15 12:19 PM

FURNACES

features such as individual and independent burner control (each burner is one zone). Stein Digit@l Furnace AT 2.0 also features maintenance improvements: • only one burner type is used, and access to these burners (side burners) and to the control devices is easy, which simplifies maintenance • furnace design and control, and avoidance of roof burners that are hotter and cause more refractory damage, result in a longer refractory lifetime (>10 years).

W E

C O N V E Y

Q U A L I T Y

Hot DRI Conveyor

Finally, thanks to the heating quality and the product homogeneity which is guaranteed with Stein Digit@l Furnace AT 2.0, Fives Stein demonstrated in many cases that the product discharge temperature can be reduced. Fig.11 shows the improvements of fuel consumption, scale loss and NOx emissions when decreasing the product discharging temperature from 1250°C to 1230°C. Summary and recommendations Fives Stein recommends that steelmakers consider the following aspects before launching a project, in order to optimise their investment: • Think “reference production” instead of maximum • Think about the future: anticipate fuel changes • Know your priorities (min CAPEX, min energy, min NOx, max flexibility) • Design your reheat furnace in accordance with your rolling mill • Investigate opportunities for waste heat valorisation Stein Digit@l Furnace AT 2.0 – benefits Stein Digit@l Furnace AT 2.0 has obtained the Fives Engineered Sustainability brand, thus classifying it as a bestin-class product in terms of environmental performance. Fives Group is promoting the eco-design approach in the steel industry and beyond, as it believes it can bring value to many an industry. In addition to the Stein Digit@l Furnace AT 2.0, another product developed by Fives Stein is currently progressing into the Engineered Sustainability process: Digiflex, vertical furnace for strip processing line (continuous annealing and galvanising lines). Other eco-designed technologies within the Fives Group are being studied such as a kiln burner for the cement industry (see Fig 13) t References - Fives’ AdvanTek® : Advanced Combustion Technologies to Reduce the Steel Industry Carbon Footprint”, 8th China International Steel Congress. Beijing, China. 17-20 May 2014. - AdvanTek® WRT 2.0 burner for radiant tube furnaces: TOTeM 42 “industrial heating: Furnaces, Process Heaters, Kilns – Design of Safe, fuel and environmentally efficient thermal equipment” organise by IFRF (International Flame Research Foundation). Ijmuiden, Netherlands. 24 & 25 June 2014. - Cash for Clunkers in the Reheat Furnace World: Iron & Steel Technology 2010. Article presented at the AISTech 2010, Pittsburgh, PA. ISO TR 14062: Environmental management - integrating environmental aspects into product design and development.

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For further information, log on to:www.engineered-sustainability.com www.fivesgroup.com www.steeltimesint.com

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April 2015

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09.03.15 15:41

ENERGY EFFICIENCY

Energy efficient electric steelmaking Organic Rankine Cycle-based waste heat recovery systems for electric steelmaking are currently few and far between, but a recently installed system in Riesa, Germany and another underway in Brescia, Italy, could bring greater energy efficiency and has opened the way for similar applications. By Alessandro Foresti* and Daniele Archetti** will allow savings of up to 5% of total EAF electricity consumption when there is no significant direct use of the off gas thermal energy recovered. When, on the contrary, as in the case of ESF within the steel plant or nearby, the possibility exists to utilise a portion of the recovered EAF off gas heat directly and efficiently as thermal energy, the remaining heat available for power conversion by the ORC – and the electricity saved – is less. ORC-based Waste Heat-to-Power system at ESF Riesa (Germany) A brief history of the EAF waste heat recovery project in Riesa[1] and the reasons behind choosing ORC technology might help explain why the ESF example is now being followed by other European minimill operators. Feralpi, an important European steelmaker, producing long products for the construction industry from plants in Italy and Germany, considered installing a new waste heat recovery system in one of its electric steel plants in order to improve EAF energy efficiency, reduce emissions and cut operating costs simultaneously, maintaining overall plant availability and not increasing personnel.

Based on these objectives, Feralpi decided to install an innovative heat recovery system coupled with a totally renewed EAF fume treatment plant, employing evaporative cooling in ESF plant in Riesa (Germany). This site was chosen because it offered the opportunity to export heat as steam to an industrial client, thanks to an agreement with the local utility. The ORC-based plant installed at ElbeStahlwerke Feralpi Steel Shop in Riesa is a Combined Heat and Power (CHP) system. The saturated steam (approximately 30 t/h) produced by the EAF fume treatment evaporative cooling system has two different destinations. Typically 20 t/h are converted to power in the ORC to produce 2.6 MW, while the remaining 10 t/h are sent to the nearby Goodyear Dunlop tyre factory (Fig 1). A very important feature of the plant is the highly flexible heat-to-power conversion: the ORC operates continuously with a variable steam flow rate between 2 and 22 t/h, automatically adapting to the different operating conditions of the EAF system. The ORC plant was started up with the first parallel on 18 December 2013

Steam Turbine (Traditional Rankine Cycle) Temperature

Power output

Industrial thermal user

Cooling water system ORC

Industrial waste heat recovery

Entropy

Thermodynamic features Operation and maintenance costs

Heat carrier loop

Fig 1. EAF Heat Recovery Scheme at Elbe-Stahlwerke Feralpi Riesa, Germany

Organic Rankine Cycle (ORC) Temperature

THE world’s first Organic Rankine Cycle (ORC)-based waste heat recovery system with power production in electric steelmaking was started up on 18 December 2013 at Elbe-Stahlwerke Feralpi (ESF) in Riesa, Germany. The successful start-up and the subsequent commercial operation demonstrated that ORC systems are a reliable tool available to steelmakers to improve the energy efficiency of their electric arc furnaces (EAFs). Over 5,000 hours of actual operation and more than 10 million kWh produced are sufficient proof that ORCs can withstand and match the peculiar conditions of electric steelmaking, following the normal operating routine of EAFs with highly variable loads, exhaust gas flows and temperatures and with alternating poweron and power-off periods during melting or tapping and charging respectively. The continuous operation of the new waste heat-to-power ratio installation in Riesa confirmed that the ORC system, automatically adjusting to the EAF operating cycle, does not distract the operators from their normal duties and has minimum maintenance requirements. A properly designed ORC-based waste heat recovery system coupled to an EAF

Other features

Entropy

High enthalpy drop

Small enthalpy drop

Superheating needed

No need to superheat

Risk of blade erosion

No risk of blade erosion

Water treatment required

Non-oxidising working fluid

High pressures and temperatures

Minimum personnel

Specialised personnel necessary

Automatic/self regulating

Convenient for plants > 10MWe

High flexibility and good performance at

Low flexibility

partial load

Lower performance at partial load

Well proven in industrial heat recovery

Fig 2. Heat-to-power conversion with Rankine Cycles

*Alessandro Foresti, Turboden Srl, ITALY - alessandro.foresti@turboden.it - +390303552213 **Daniele Archetti, Turboden Srl, ITALY - daniele.archetti@turboden.it - +39 0303552431 www.steeltimesint.com

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ENERGY EFFICIENCY

Heat (steam) recovered

EAF off gas

Turboden ORC unit

Electricity Heat

 Standard units from 200 kW to 10 MW  Customised solutions up to 15 MW

Fig 3. Turboden ORC sizes and applications

reaching nominal capacity the following day. The start-up activities were completed during the first half of 2014 reaching uninterrupted continuous operation according to the EAF’s normal operating routine. The plant is now in full commercial service and has demonstrated that it well exceeds the contractually guaranteed power output[2]. Why ORC instead of Steam Turbine? Heat-to-power conversion is commonly achieved with Rankine Cycle systems where a working fluid is compressed by a pump and evaporated to the gaseous phase by the heat of the hot source in a boiler. The compressed vapour expands, spinning a turbine to generate power. The expanded vapour is then condensed by the cooling effect of the heat sink and conveyed to the pump to begin a new cycle. Traditional Rankine Cycle systems use water and steam as working fluid and are the most common solution for power units above 20 MW where efficiencies above 30% can be obtained using super-heated steam at high pressure/temperature. Organic Rankine Cycles employ working fluids with a heavy molecular weight (siloxanes, hydrocarbons and refrigerants) that guarantee dry vapour expansion in all operating conditions. ORCs are typically preferred for smaller scale heatto-power systems up to 10 MW, due to higher efficiencies at lower heat source temperatures[3] and maximum ease of operation with minimum running costs (no dedicated personnel necessary). The main difference between traditional Rankine Cycle with Steam Turbine and ORC is shown in Fig 2. These operating advantages convinced ESF to choose the ORC solution. The superiority of ORC in small-tomedium-sized distributed generation systems is confirmed by the large number of units supplied by Turboden over the April 2015

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Brescia district heating Electric energy

Waste heat boiler

Consteel fed EAF

Heat recovery system 90 t EAF

Thermal energy

10 MWth district heating 2,1 MW ORC

CO2 saved: 10,000 t/y

Fig 4. EAF heat recovery scheme at ORI Martin, Brescia, Italy

last 15 years and currently operating throughout Europe and elsewhere. Turboden ORC Units Turboden was founded in 1980 by Prof. Mario Gaia to develop the research work started at Politecnico di Milano. Thirtyfive years of work fully dedicated to ORC development allowed the company to become Europe’s leader in ORC with about 300 systems supplied worldwide. Turboden ORC distributed generation systems between 200 kWh and 10 mWh are used in renewables (biomass, geothermal and solar) and in heat recovery applications either bottoming reciprocating engines and gas turbines or converting waste heat to power in energy intensive industries (cement, glass, metals) (Fig 3). Many of these ORC systems are Combined Heat and Power Systems where the ORC heat sink (low temperature heat discharge) is, in fact, a thermal user (space heating system, dryer or other). ORC and industrial heat recovery ORC systems demonstrated in different energy-intensive industries – such as cement, glass, metals – that they respond well to the requirements of effective industrial heat recovery installations. The simple, automatic, modulating, fail-safe operation of ORC systems can match the actual process regime in all conditions, maintaining overall system reliability. Decoupling from the main process interface is a desirable feature in most heat recovery applications. This is facilitated by introducing a heat carrier between the residual heat sources of the process (typically streams of dust laden exhaust gases) and the ORC unit. Different heat carriers such as thermal oil, saturated steam or pressurised water can be used. Efficiency and investment costs depend on this choice. Notwithstanding the carbon intensity of steelmaking and the proven track

record of ORC in industrial heat recovery in other energy intensive industries, the steel industry has been slow to accept the ORC concept. The first application in steel was a small unit in operation since February 2013 at the NatSteel mini-mill in Singapore recovering waste heat from a rolling mill billet reheating furnace. The breakthrough application at ESF’s electric steelmaking furnace in Riesa has opened the way for similar waste heat recovery systems with power generation in other EAF steelmaking plants. Today, the ORC is the easiest and most efficient way of converting the exhaust gases of highly variable discontinuous heat loads in melting furnaces. EU support The dissemination of the results obtained at ESF to promote further application of the ORC process in electric steelmaking gained the support of the European Union’s Sustainable Industry Low Carbon scheme through the project WHAVES (Waste Heat Valorisation for more Sustainable Energy Intensive Industries)[4]. ESF’s successful experience led to a second similar EAF project awarded to Turboden, which is now well under way with start-up scheduled for year-end 2015. The new 1.9 MW Turboden ORC will equip the new waste heat recovery installation of ORI Martin steel plant, featuring a 90 tonne Consteel-fed EAF (Fig 4). Brescia, Italy-based ORI Martin is a leading European supplier of engineering steel (SBQ) for the automotive industry and for general mechanical applications. Combined heat and power (CHP) The ORI Martin system is also a combined heat and power project where the thermal heat recovered as steam from cooling EAF exhaust gases is either exported to the district heating network of A2A, the local utility serving the entire city of Brescia, or converted to power in the ORC to reduce electricity consumption at the steel plant. www.steeltimesint.com

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ENERGY EFFICIENCY

The ORI Martin EAF heat recovery with CHP system is particularly interesting because it is designed to guarantee maximum flexibility in conveying the recovered heat to the District Heating to meet varying seasonal and hourly demand or, alternatively, to the ORC for the remaining portion. The ORI Martin project will improve the energy efficiency of the steel plant while maintaining competitive industrial activity within the city of Brescia. The project was included in the EU Smart Cities programme called PITAGORAS â&#x20AC;&#x201C; to promote sustainable urban planning with innovative and low-energy thermal and power generation from residual and renewable sources[5]. The main parameters of the EAFs and waste heat recovery systems and ORC at ESF and at ORI Martin are summarised in Table 1. Conclusion The effective operation of the first ORC heat-to-power system in the steel industry supplied by Turboden proves that ORC responds well to the requirements of steel makers to have efficient, robust, easyto-operate heat recovery plants capable of adapting to highly variable operating

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Components

Electric Furnace

Waste Heat Recovery System

ORC

Data

Unit

Elbe-Stahlwerke Feralpi

ORI Martin

Riesa, Germany

Brescia, Italy

Tapping weight

100

Scrap charging

3 Baskets

Consteel

Heat exchanger

Radiation + Convection

Convection

Heat carrier

Steam

Pressure

bar g

Total steam production (nominal)

t/h

Steam flow rate to the ORC (nominal)

t/h

Steam inlet conditions

Â°C

245

200

bar g

Gross ORC active electric power output

2,700

1,885

ORC captive consumption

120

Net ORC active electric power output

2,580

1,821

Table 1. ESF and ORI Martin with waste heat recovery parameters

conditions. The positive experience at ESF in Riesa has opened the way to similar applications. The second Turboden ORC plant is being installed at ORI Martin in Brescia, Italy. Different European programmes have supported the development and dissemination of ORC-based waste heat recovery projects. Further EU policy actions, stimulating investments in advanced heat recovery systems, would alleviate some of the problems experienced by European steel makers in a continent where energy costs are higher than elsewhere. t

References [1] Bause, Campana, Filippini, Foresti, Monti, Pelz, Cogeneration with ORC at Elbe-Stahlwerke Feralpi EAF Shop. AISTech 2014 proceedings, May 2014. [2] Archetti, Foresti, Organic Rankine Cycle Technology for Steelmakers, ESEC 2014 proceedings, September 2014. [3] Neeharika Naik-Dhungel, Waste Heat to Power Systems. U.S. Environmental Protection Agency CHP Partnership, May 2012. [4] WHAVES Project, www.whaves.eu [5] PITAGORAS Project, http://pitagorasproject .eu/

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SAFETY

Safety in any heavy industrial environment is top priority, and the key to a safer steel production plant is impeccable leadership and constant awareness of the risks. Keeping workers safe is initiated from the top down and there’s no room for complacency. By Matthew Moggridge* WORLD Steel’s second Steel Safety Day will take place on 28 April 2015. Last year’s inaugural event engaged half a million participants, including steel company employees and contractors. “One thing we always make sure of is that people don’t forget their contractors,” said Henk Reimink, director of safety, technology and environment at the Brussels-based World Steel Association (worldsteel). “In a lot of cases contractors form 20, 30, sometimes 50% of the workforce on site,” he added, explaining how they don’t necessarily make steel but drive trucks, operate cranes and move coils around the plant. The Steel Safety Day is preceded by a safety audit. World Steel asks all of its members (global steel producers) to carry out an extensive audit on the five identified main causes of incidents. Reimink says that the lost time injury (LTI) frequency rate has been dropping steadily year-on-year at a rate of between 15% to 20%. Serious incidents, however, while few and far between, were ‘up and down’ and not decreasing sufficiently. “When we looked at serious injuries it was always the same causes that kept popping up,” Reimink said, pointing to moving machinery, falling from heights, falling objects, asphyxiation or gassing, and cranes as the chief causes of major breaches in safety. “We went back six years and it was always the same top five,” Reimink explained, and this is why the safety audit was introduced. Preventing safety incidents is often simple common sense. During plant audits, steelmakers are asked to look for the hazards in their plants, paying particular attention to the top five most

No room for complacency common causes listed earlier. Questions need to be asked: Are there any confined spaces? Is there a tank that people have to get into to clean or pipework that needs to be opened up? When cleaning or maintaining machinery is it possible to isolate all energy points? Steelmakers admit that there are risks everywhere and Reimink agrees. “Everything that is moving up and down potentially can catch people out and cause injury and with heavy machinery there is often just one outcome so the means of isolating equipment for cleaning and maintenance is very important,” he said. A lot of steel companies have systems in place, but plenty of situations arise where they don’t apply and that is when injuries occur. If an isolation policy exists it might need to be applied in more than just one place and very often risks are not identified until it is too late. When worldsteel’s safety committee collated the information received from 2014’s safety audit it found that there was a big gap between the equipment on-site

deemed to be covered by existing systems and procedures and the machinery not covered. “So that’s why we’re repeating the audit this year and again next year and so on until those top five causes are nailed down to full 100% compliance,” he said. While Steel Safety Day is so-called, it’s more than just one day as the planned safety audit needs to cover 100% of a steel plant’s employees and not just those working in the factory. “We’re also looking at the office workers, the sales guys, those working in distribution centres, truck drivers, the CEO, every single person,” said Reimink. Steel Safety Day is about awareness at every level. Reimink hopes create interest in safety issues and bring about a shift in thinking. “We’re moving through people’s level of maturity to where every piece of equipment is no longer a threat or something to be afraid of. You need to be aware of the risks. It’s all about doing everything safely,” he said. Reimink equates the risk of serious injury at a steel plant with that of serious injury

* Editor, Steel Times International April 2015

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SAFETY

on Europe’s roads – 1 in 15,000 fatalities. “But every fatality can be prevented and we’ve seen many plants where they’ve had five, even 10 to 15 years with zero injuries and that’s pretty amazing,” he said. The big problem will always be complacency, especially in plants with outstanding safety records. “That’s why the leading indicators that we’re slowly working towards are increasingly important because they are designed to prevent injuries and keep everything fresh all the time,” Reimink explained. Keeping safety ‘top of mind’ is crucial and Reimink puts the worldsteel board on the spot every year. Have they participated in Steel Safety Day? Are they improving their safety record? Did they sign up to the safety audit? “There are some red faces, but that is what we ask them to do and the commitment from the leaders is pretty strong,” he said. In days of old, getting a burn mark or a scar was often viewed as a badge of honour – a rite of passage, no less – and while there are probably some sites that still run that kind of culture, by and large, today’s steel industry views the workforce as significant and people as very important assets. “If you have people absent it will cost you a lot of money because if the person is not there you’ve got to put somebody in their place and that usually means on extra time. So you try and make sure that people are safe in their work environment and they want to come to work, they want to be there and they want to participate,” Reimink said. Having a safe environment, he explained, was akin to a licence to operate and in the same way that people expect quality products from steel manufacturers and quality cars from the automotive industry, safety occupies the same realm of reality. It would be wrong to try and pinpoint ‘accident black spots’ because they don’t exist. Good leadership determines plant safety in terms of the overall business and individual sites. The question of leadership starts with the CEO. Reimink says that the success of safety programmes in action depends upon whether the person at the top asks appropriate questions. “Just by walking into the plant and asking an operator when the last injury occurred – ‘do you know about it, do you understand what happened, were you briefed on the incident?’ – is enough to keep the supervisor on his toes,” Reimink said. It’s not just about plant safety. Senior staff must be mindful of safety at home. “If you see a senior manager mowing his lawn without safety boots on or standing on a ladder cleaning his gutters without the ladder being secured, or if the CEO drives at 50km/hr across the site when there’s a 10km/hr speed limit, what www.steeltimesint.com

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message does that send out?” Ultimately it’s about a duty of care that goes hand-in-hand with managing a business well, said Reimink. “It’s the same as making sure the quality is right or making sure your operation is running efficiently, its part of the culture of your business,” he said. Reimink would not be drawn on the number of Serious Safety Occurences (SSOs) recorded in 2014, but he did say ‘not a huge amount’. The World Steel Association’s Safety and Health Committee, over which Reimink presides, encourages global steelmaker members to log SSOs as they occur, the aim being to identify risks and hazards rather than name and shame the companies concerned.

Members of worldsteel’s Safety and Health Committee set priorities and develop initiatives for years to come; there’s an annual survey, Steel Safety Day, safety audit support and safety recognition and, when a steel plant informs the committee of 10 or more Lost Time Injuries (LTIs) a call is made to the plant and a site visit is organised. “If I get a good report [from a steel plant] and I go to the factory and walk through the door and trip over a hose or there’s half an inch of dust everywhere, something is not right. A lot of the systems in place are spot on and comply with every regulation in the book, but when I walk into the plant it’s a different story,” said Reimink. He has a kind of sixth sense where plant hazard identification is concerned. “The minute I walk into a plant I can tell you whether it’s right or wrong,” he said and then he offers assistance, explains how similar plants are in better shape and suggests a few site visits to illustrate best practice. “They will say ‘this is the best I can do’ and that they need new equipment and I’ll say that some plants have older

equipment in better condition,” he added. Reimink – or a member of his committee – will take steelmakers on visits to a cement or chemical plant. After all, safety is an education process and the same themes are applicable to other industrial sectors. Workshops are organised in different regions of the world where the committee thinks there is a need to build awareness ‘for our processes and definitions’, Reimink said. “It’s about helping people make improvements,” he said. How the steelmaker reacts to the committee’s suggestions depends on the style of leadership. Steel companies approach the subject of safety differently and while when the word ‘safety’ is mentioned, the immediate thought is how to avoid fatal or near fatal accidents, many incidents are less severe. This is reflected in the initiatives of some of the world’s biggest steelmakers who were recognised by worldsteel as part of its 2014 Safety & Health Recognition programme at last year’s World Steel conference in Moscow. Tata Steel Europe Netherlands focused on hand injuries with its Time Out for Hand Injuries initiative while ArcelorMittal Tubarao in Brazil zoned in on quality of life and the health issues surrounding smoking. “We always talk about safety and health, but the latter has taken a back seat for a long time,” said Reimink, expressing how automation had dramatically reduced the level of physical exercise for employees and contractors. Other steelmakers recognised by worldsteel at last year’s conference were: Celsa Huta Ostroweic of Poland for its Brother’s Keeper programme where employees form into groups and look out for one another; Essar Steel Hazira of India for it’s sustainable Health, Safety and Environment Management System; Gerdau Brazil for its Safety Behaviour Management System; and Ternium of Argentina and Mexico for its Logistics Safety Preventive Action Plan. While Reimink is happy with the direction in which the steel industry is travelling with regard to safety, he is aware that the quest for greater safety is relentless and possibly never-ending. “You can never take the pressure off and it will not be possible to ever do that,” he said. Reimink said that the industry had reached many different levels of maturity regarding safety, but if the leadership of a steel company changed for whatever reason, the culture of the company would change too. “We constantly have to engage people to get it right and it is very difficult for them to accept, but if they understand it and integrate safety thinking into their jobs, then our ultimate goal is fulfilled,” he said. t April 2015

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SAFETY

“WE consider employee safety to be our greatest responsibility,” declares Steve Thompson, director of health and safety for Chicago-based ArcelorMittal USA. This is a sentiment that is echoed throughout the US steel industry and one that has resulted in both fewer fatal and nonfatal incidents compared with previous decades. Nevertheless, serious accidents continue to occur. As recently as this January a worker at service centre Kloeckner Metals Corp.’s Heavy Carbon Group in Middletown, Connecticut, was killed after being hit in the back by a crane while he was loading sheets of metal onto a truck. Also in January a 23 year-old contract worker was injured at AK Steel Corp.’s Middletown (Ohio) Works when he fell 20 feet while performing industrial cleaning work there. Recently steel producer Commercial Metals Co. was fined $18,000 by the US Labour Department’s Occupational Safety and Health Administration (OSHA) relating to the August 2014 death of a worker who received severe burns to 60% to 80% of his body during a ladle spill at its Seguin, Texas, steelmaking plant. OSHA maintains, “The employer did not furnish a place of employment which was free from recognised hazards that were causing or likely to cause death or serious physical harm to employees in that the employees were exposed to the hazards of molten metal splashes, fire and being struck by falling loads.” These, of course, are just a few tragic incidents that have occurred recently and are not necessarily representative of the steel industry’s safety performance. In fact, Philip Bell, president of the Washington-based Steel Manufacturers Association (SMA) notes that overall steel industry fatalities have been declining with 12 deaths reported in 2014, which is down significantly from 20 steel industry fatalities in 2013. He says there has also been a steep decline in the past 20 years for steel nonfatal injury and illness rates. Where electric arc furnace (EAF) steel makers represented by the SMA are concerned, the current rate is 2.76 incidents compared with an incident rate of about 14 in 1994. “We’ve also seen the EAF steel mill OSHA recordable rate decline significantly over that period to below three incidents and the lost work day rate to below one,” he said. This is consistent with overall national trends. According to the US Bureau of Labour Statistics’ latest Census of Fatal Occupational Injuries, there were 3,929 fatal injuries in private industry in 2013, which was the lowest annual total since

Keeping safety ‘top-of-mind’ Safety is top priority for the global steel industry. In the USA there were only 12 reported fatalities in 2014, down from 20 in 2013 – good news, but deaths are still avoidable if operators concentrate harder on hazard recognition. While most steel makers have some kind of safety programme in place, the key is not to get complacent. Myra Pinkham* reports

the fatality census was first conducted in 1992. This includes declines in both goods-producing and service-providing industries. Fatal injuries in private mining, quarrying and oil and gas extraction were 15% lower at 154 deaths in 2013 compared with 181 in 2012. “While statistically the industry is doing well, the steel industry should not allow itself to have a false sense of security,” Bell says, “Ultimately our goal is to return all of our employees safely home in the same condition that they came to work,” adding that there is still significant room for improvement in doing so. The aim, Tom Stone, vice president of industrial relations and EHS (environment, health and safety) for Timken Steel Corp, Canton, Ohio, observes, is continuous improvement, reinforced with a robust audit process to ensure accountability and that its workers engage in safe business practices on a daily basis.

While Mark Millett, president and CEO of Steel Dynamics Inc, Fort Wayne, Indiana, boasts that his company’s safety performance is already better than the industry average and that its overall incident rate continues to decrease, he says its goal (just as that of many other domestic steel makers) remains a zero safety-incident work environment. “About half of our location went the entire year without an incident, so we know this high standard is possible, and we’re going to be implementing new initiatives this year to continue to drive toward our goal,” he says. The company is not alone in taking such actions. Paul Wilson, vice president of operations for SSAB Americas, Lisle, Illinois, attributes much of its success in being consistently ranked at the top of the industry in terms of the number of safety initiatives it engaged in over the past years. Not only are all of its five facilities

* USA correspondent April 2015

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SAFETY

16 14 12 10 8 6 4 2

2014

2010

2005

2000

1994

Average Incidence Rates – non-fatal injuries and illnesses – US Iron & Steel Industry. Sources: BLS.gov, SMA

in the Americas certified to the OHSA’s 18001 safety management programme, an international compliance standard for occupational health and safety, but last year all employees at its production facilities were required to take safety awareness training. “The primary goal of this training is to provide employees with the information needed to make safe decisions when faced with a job hazard,” Wilson says, although it also emphasised how unsafe decisions can affect others, including not just coworkers, but family members as well. Encouraging workers to maintain their focus, to keep safety top-of-mind, is the most effective way to increase plant safety, Marlene Owens, Steel Dynamics’ director of investor relations, maintains. She says that this, as well as by constantly reinforcing employee responsibility, including encouraging workers to report potential safety hazards and to work as a team, and other types of training, has a positive impact upon safety performance. www.steeltimesint.com

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Thompson says that ArcelorMittal, as part of its goal to reach zero fatalities or injuries, has designed a comprehensive company-wide safety programme called Journey to Zero which has the aim of preventing accidents by creating a culture of shared vigilance with respect to workplace safety. “We will only achieve our goal once we create a culture in which every employee, wherever they work in the organisation, takes responsibility for their own safety and the safety of those around them,” he says, noting that ArcelorMittal has also launched a number of leadership and awareness programmes across its sites. For example, its 10 Golden Rules of Safety programme states what every employee can do to contribute to a safer workplace. “We also require our managers to spend at least 20% of their time on the shop floor so that our employees know that safety is a top priority to the company,” Thompson says. Every year ArcelorMittal has a companywide health and safety day to share best practice throughout the company. Also, it has jointly worked with the United Steelworkers in implementing certain new safety initiatives such as Green Guardians, a special group of employees that conduct safety audits to ensure that maintenance projects are planned and executed with the utmost attention to performing all tasks safely for construction and major maintenance outages; and the cumbrously titled Hazard Identification, Risk Assessment and Control and Occupational Safety and Health Administration Hazard Communication Standard training classes. Stone says training is also a key component of Timken’s safety initiatives, including giving new hires “intense” safety training before they even set foot in the shop. Also the speciality steel maker has concentrated much of its efforts on ensuring that it has top rate machine guards. “That includes adding air locks to shut down machines if they sense that a

worker is going somewhere he shouldn’t.” In addition, all of its mobile equipment has alarms to ensure that there is no pedestrian contact, he observes. The SMA’s Bell says this makes good sense given that it is mobile equipment that is one of the top causes of steel industry fatalities. “What you are seeing is a lot of companies beginning to redesign the ways they are handling truck and rail car loading. You are seeing such things as dedicated walkways being added to ensure that either the workers or contractors are safe.” Technology also plays a role in safety, whether it is in terms of cameras to help to analyse the processes in the various areas of the steel mill, enabling workers to make decisions at a distance so they don’t put themselves and others in harm’s way, or technologies that can aid in post-incident analysis. Bell says that could include using animations to do a retrospective look at what went wrong and what should be done to prevent future accidents. There are also some “low tech” solutions as well, Bell says. In fact, he noted that last year’s SMA innovation award was given to Steel Dynamics for its revamped truck loading system. “It is a simply constructed platform making it safer to load and unload trucks by elevating the worker to the appropriate level so the load is administrated easier.” Owen says that some other lowtech solutions that Steel Dynamics has undertaken include lock-out and tag-out procedures, strobe lights on fork lifts, blue strobe lights on all heavy equipment, including slag pot haulers, and additional fall protection devices and guard rails. The steel industry’s trade associations have also had a role to play in improving safety, Brett Smith, senior director of government relations for the American Iron and Steel Institute (AISI), observes. This, he says, includes being a conduit to promote best practices throughout the steel industry and to share its member April 2015

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SAFETY

companies’ incident reports to help others in the industry learn from their colleagues’ mistakes. Adam Parr, the SMA’s vice president of policy and communications, notes that his association first launched its largely procedural-based fatality prevention initiative in 2008, which resulted in the development of written guides, analytical and audit tools and videos aimed at educating member companies about what they could do to increase safety. “But in many cases it ended up just being another document or DVD that sat on companies’ shelves,” he admits. However, the SMA has focused on ways to breathe new life into that initiative by offering companies more practical advice. One way it has done that, he says, is by engaging with academic researchers and safety professionals outside of the steel industry. For example, a representative from the Russian nuclear treatment industry is slated to speak at an upcoming SMA safety committee meeting. While there have also been new governmental regulations considered to promote industrial safety, Smith says they will not necessarily have a positive impact upon safety in the steel industry. This, he says, is the case with the OSHA

proposal to lower the permissible exposure level of inhalable crystalline silica, which could actually make some activities in the steel mill more dangerous. The problem is that the proposed regulation would prohibit dry sweeping, which is currently how mills control crystalline silica and other dust accumulation. “Wetting methods for dust control in these areas present the potential for steam explosions, a significant and immediate safety hazard for any workers in these areas of the facility,” Smith maintains. No to e-disclosure Both the AISI and SMA have come out against OSHA’s e-disclosure proposal, which, Bell says, would not only result in improved safety but would invade the privacy of employees. If OSHA goes through with this rule,

companies would be required to submit all filed data on significant safety incidents on a quarterly basis. OSHA would then make that data available online without any explanatory information that would put that data in to any kind of context. This, according to Tressi Cordaro, an attorney representing the Coalition for Workplace Safety, reflected the view of a recent public hearing that the proposed rule would force employers to reveal sensitive information that could be accessed by anyone. Smith maintains that the rule would not result in OSHA achieving its goal of making operations any safer. Bell lauds OSHA’s commitment to contractor safety. “For a number of years many steelmakers took an arm’s length approach to contractors. But now there is a better understanding that both the contractor and the company they are contracting for need to work together on safety issues,” which could result in fewer incidents, he says. The challenge to work safely will always be there, “But with hard work I think we can succeed to continue to improve safety,” Timken’s Stone says, not just of his company, but the steel industry as a whole. t

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16/05/2014 17:19

PERSPECTIVES: KONECRANES

Turn – and face the strange Konecranes’ steel and metals director, Heikki Lappalainen*, argues that the steel industry should seriously consider how the digitalisation of the world will affect the steel industry and must be ready to embrace new ideas 1. How are things going at KONECRANES? Is the steel industry keeping you busy? The steel industry is one of the main customer segments for Konecranes and because of our wide product portfolio including a range of service products, there are plenty of opportunities for us in the global steel market.

delivering a large-scale project in the USA for a new steel pipe mill. 6. “Aluminium will always outperform steel on a weight basis; and on the stiffness issue alone it will carry the day,” says Alcoa’s chief technology officer Ray Kilmer

2. What is your view on the current state of the global steel industry? It seems that the steel segment is going through bit of a transformation at the moment. There are several factors that underline the change. The segment suffers from overcapacity and low demand. There are other materials like aluminium and carbon fibre that can affect steel demand on a long-term basis. In addition, green values will have an impact on steel producers all over the world. However, a good thing is that steel demand will not vanish – there will always be a demand for structural steel, pipes and other highgrade steel applications. 3. In which sector of the steel industry does KONECRANES mostly conduct its business? We are involved in all production phases from raw material handling to endproduct handling. 4. Where in the world are you busiest at present? We are currently providing cranes for new steel pipe mills that will support increased US drilling activity. Furthermore, it will be interesting to see what happens in India in the coming years. If the planned infrastructure investments take place, there will be a huge demand for materials handling equipment and services. 5. Can you discuss any major steel contracts you are currently working on? We do not publish details of our contracts, but as an example we are currently

speaking about aluminium usage within the global automotive industry. Where do you stand on the argument? I’m glad to say that we are in a good position because we can serve customers in both industry segments. When the usage of aluminium increases, it typically means more demand for materials handling equipment and services. We are currently active with most of the major aluminium producers who have been expanding and updating their facilities in recent years to meet the new demand. 7. “While there will be increased aluminium penetration, vehicles will continue to be predominantly steel,” said Ducker Worldwide’s Dick Schultz. Is he right or wrong? I’m quite sure that steel producers continue to develop high-grade steel to keep steel competitive enough against

aluminium. Having said that, we need to keep in mind that developing economies create a huge demand for vehicles and steel will probably remain one of the main construction materials for vehicles. 8. “Within the next 15 years or so there could be a nearly even split between steel, aluminium and carbon fibre content in the average North American produced light vehicle.” So said Jay Baron, president of the Centre for Automotive Research. Who is closer to the truth – Dick or Jay? The automotive industry will continue to seek lighter structures for vehicles to improve energy efficiency and meet tougher fuel efficiency standards. 9. It is always claimed that aluminium is the ‘greener’ metal when compared to steel. What’s your view? Both materials are recyclable and the production of steel and aluminium requires energy. The question is how the energy consumed in material production is supplied. If the energy is supplied from renewable sources, then I do not see a big difference when comparing these two materials. 10. In fact, talking of ‘green issues’ and emissions control, how is the steel industry shaping up? In developed economies the governments push cleaner and energy-efficient production technologies forward and the steel industry has to follow the given norms. The same trend takes place in developing economies and in these economies steel producers start to pay more attention to green values. 11. Are you finding that steel producers are looking to companies like KONECRANES to offer them solutions in terms of energy efficiency and sustainability? If so, what can you offer them?

Director Email: heikki.lappalainen@konecranes.com April 2015

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PERSPECTIVES: KONECRANES

Our customers are getting more aware of green values and sustainability and many require control systems capable of energy savings. They are also interested in monitoring systems that present the status of equipment and, based on usage, it is possible to define what maintenance is needed. Konecranes can offer such systems to the steel industry. For example, our DynAReg network braking system was developed to reduce the energy consumption of the overhead crane. 12. How quickly has the steel industry responded to ‘green politics’ in terms of making the production process more environmentally friendly? I’m sure that there is room for improvement. One of the biggest problems is that steel producers on different continents are not on the same line. Those in developed economies have to follow norms that are tighter than those in developing economies. This gives steel producers in developed economies and extra hurdle to jump, especially in international trade. It would be much easier and faster to apply “green politics” if the rules of the game were the same for everybody.

the right features. 16. Where do you see most innovation in terms of production technologies – primary, secondary or more downstream? Where materials handling is concerned, innovations are related to green values, safety and operational efficiency. Plants will increase the level of automation in materials handling and reap the benefits of digitalisation, i.e. the internet of things. Digitalisation can help maintenance organisations gather real-time information from the equipment and utilise this information in resource planning. 17. How optimistic are you for the global steel industry going forward and what challenges face global producers in the short-tomedium term?

require cranes as a vital part of the process. We will be discussing safer crane operation and increased performance using Active Anti Sway technology. We have members in good standing on the AIST Crane technical committee, which provides input for AIST technical Report #6 which details crane design recommendations for steel mill type cranes. We are also active within the regional chapter meeting within AIST. In 2014 we attended AIS TECH in Indianapolis, as well as the Crane symposium in Pittsburgh, PA and the AIST/ IAS symposium in Argentina. We also attended three regional meetings. 19. You’re based in the USA, but what’s happening steel-wise in the country? The US economy shows positive signs and this will have a positive impact on steel demand. Steel usage is heavily connected

13. Where does KONECRANES lead the field in terms of steel production technology? We pay a lot of attention to userfriendliness, safety and sustainability and connect these items with state-of-theart control and sensor technology. The end result is an offering that helps steel producers and their organisations in their daily materials handling tasks. 14. How do you view KONECRANES’ development over the short-tomedium term in relation to the global steel industry? We have a positive, yet humble attitude. When it comes to materials handling equipment and services, we strive to achieve a leading position. 15. The Chinese still rely heavily upon Western steel production technology. What is KONECRANES’ experience of the Chinese steel industry? It used to be so that Chinese companies were dependent on Western production technology, but things and customers change. Chinese companies seek technology that fits their production purpose. For example, if the production process needs high-end equipment, then such equipment is purchased. The nationality of the supplier is not the main factor in the decision-making process – it’s more the ability to offer products that are of good quality, the right price and offer www.steeltimesint.com

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The biggest challenge for the steel industry is to solve the overcapacity problem. Then the next hurdles are related to megatrends such as environmental matters and workforce. It is important that steel producers strive to improve the working conditions and safety of the workforce to maintain competitiveness in the market. The new generations that enter the workplace require proper working conditions and are used to a digital environment. 18. What exhibitions and conferences will KONECRANES be attending in 2015? We will have a booth at AISTech in Cleveland, Ohio, USA. This is the leading metal industry show in the US. Most Konecranes business units will be represented including Process Cranes, Industrial Cranes, Light Lifting Products, Parts, and Service. We are also presenting at the Crane symposium in Pittsburgh, PA for AIST. The conference is tailored towards people within the metals industries that

with other major industry segments and when the automotive and construction industries start to recover, the steel industry starts to recover too. So, all-in-all, very positive signs at the moment. There is some uncertainly right now due to low oil price levels and how they will affect steel demand. It is hard to say how long this situation will exist. 20. Apart from strong coffee, what keeps you awake at night? We would say that global economic uncertainty and oil prices are still issues that may affect the industry. 21. If you possessed a superpower, how would you use it to improve the global steel industry? I would push the steel industry seriously to “rethink” how the digitaliation of the world affects the steel industry. There are several opportunities for process and safety improvements through digitalisation – you just need to think differently and be ready to embrace the new ideas. t April 2015

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HISTORY

UK ore resources during WWI In 1913, the UK relied heavily on imports of high grade hematite ore, mainly from Spain – which supplied 87% of all imported ore – with the remainder imported from Sweden, to feed its 495 blast furnaces – of which 340 were in blast. By Dr. Tim Smith* A JOINT partnership mining company, Orconera Iron Ore Company, was formed in 1873 to exploit reserves near Bilbao in Northern Spain. It was owned in equal shares by Guest, Keen & Nettlefolds, Consett Iron Co, a Spanish company and Alfred Krupp. On the outbreak of World War l, court action was brought under the ‘Trading with the Enemy Act’ against Friedrich Krupp to seize their share of the company and administer it by the government appointed ‘Public Trustee’. However, since northern Spain soon came under German control, no further ore could be imported by Orconera for the duration of hostilities. Imports were being disrupted, particularly on the East coast of the UK, by enemy action – mainly from submarines – and British Admiralty restrictions. In 1914, imports of ore to Middlesbrough on the East coast, for example, fell to their lowest value since 1904 – a 26% drop from 1913. What ore was still imported to UK ports suffered sharply rising freight costs. The then Minister of Munitions, Dr. Christopher Addison, called on output from domestic mines to be greatly increased underlining his statement by saying that for every ton of iron ore not imported sufficient imports of flour to bake 70,000 loaves of bread would result. He called for iron output to be increased by 3Mt a year to solve the shortage of shipping, which was being lost to enemy submarines. He wanted to increase the number of ships built in British yards by 250% in 1917 over those built in 1916. (The enemy had calculated that if shipping losses could exceed 600kt a month Britain could not sustain the loss). Of the 8.91Mt of pig iron made in 1916, 4.31Mt (48.4%) was produced from imported ore. According to a review paper of 1917 by Mr CG C Lloyd(1), the UK had a reserve of 39.5 billion tons (ton = 1016kg) of iron ore – of which 39 billion tons was stratified carboniferous and just 500Mt hematite and magnetite. The iron content of the richest ores reached 65%, but lower grade ores predominated ranging in Fe typically from just 19% to 40%.

Year

Pig Iron

Ore*

Coal

Coke

Ore Rate

Carbon Rate

1916

8.919469

21.505556

2.612543

10.300888

2.41

1.45

1915

8.723560

21.706411

2.509456

9.746743

2.48

1.40

*Ore includes 138,269 tons of forge and mill cinder, steel turnings, scale etc in 1916 and 36,250 tons in 1915. Source: The General Report on Mines and Quarries

Raw material consumption 1915 & 1916 (million long tons) Iron ore mines in the Cleveland district of Northeast Yorkshire

The workforce rallied to the call. In South Wales, they volunteered to increase their working hours to 12 hours a day (an average of 70.8 hours per week for a 5.91 day week), to ensure sufficient supply to the local blast furnaces. By March 1915, 11,842 iron ore miners were in employment across the UK, and this number excludes those in open pit ore mines and where ore was associated with coal mining – an industry then employing nearly three times as many workers at 135,155. The Cleveland district of Northeast Yorkshire was by far the UK’s largest ore producer. In 1914 it mined 5.2Mt of low-grade carbonate ore averaging 27.4% Fe content (37.2% when roasted), 0.43%P and 0.2%S. This was followed by Lincolnshire (Frodingham), 2.6Mt averaging 33%Fe; Northamptonshire

2.5Mt of limonite sands – mainly by open-cast mining, and Cumberland & Lancashire 1.5-2.0Mt of hematite mainly with an Fe content range of 50-55%, but some as rich as 66%. Other regions of the UK together produced around 3Mt in 1914 and some 17 locations of ore were identified in Ireland that had been worked in earlier times, but output was minimal. Between 1915 and 1916, ore won from underground mines fell by 7% from 6.08Mt in 1915 to 5.64Mt in 1916. At the same time, the output of limestone dropped 44.5% from 4,464 tons to 2,477 tons. The drop was largely the result of a shortage of manpower as men were called to serve in the army. t (1) ‘Report on the resources and production of iron ore and the other principal metalliferous ores used in the iron and steel industry of the United Kingdom.’

* Consultant editor, Steel Times International April 2015

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