Steel Times International Jan/Feb 2016 by Quartz

TESTING & ANALYSIS

HANDLING

DIRECT REDUCED IRON

PERSPECTIVES Q&A

Ferro-alloy optimisation and laser measurement techniques explained

Online billet length measuring improves furnace availability

Exploding the myths and highlighting the realities behind DRI

Denmark-based Danfoss Drives says the need for steel won’t disappear

www.steeltimesint.com January/February 2016 - Vol.40 No.1

STEEL TIMES INTERNATIONAL – January/February 2016 – Vol.40 No.1

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CONTENTS JANUARY/FEBRUARY 2016

TESTING & ANALYSIS

HANDLING

DIRECT REDUCED IRON

PERSPECTIVES Q&A

Ferro-alloy optimisation and laser measurement techniques explained

Online billet length measuring improves furnace availability

Exploding the myths and highlighting the realities behind DRI

Denmark-based Danfoss Drives says the need for steel won’t disappear

Picture courtesy of Midrex

2 Leader

www.steeltimesint.com January/February 2016 - Vol.40 No.1

STEEL TIMES INTERNATIONAL – January/February 2016 – Vol.40 No.1

4 News The latest steel industry news from around the world NORTH AMERICAN AUTOMOTIVE METALS STI cover ad 1.2016.indd STI Cover-mockups v4.indd 1 1

1/21/16 2:57 PM 1/25/16 12:31 PM

EDITORIAL Editor Matthew Moggridge Tel: +44 (0) 1737 855151 matthewmoggridge@quartzltd.com

8 USA update Tough times for US Steel

14 11 Latin America update How hot is Chile’s steel industry?

Consultant Editor Dr. Tim Smith PhD, CEng, MIM Production Editor Annie Baker Advertisement Production Martin Lawrence

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

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

14 China update Chinese steel consumption falls 16 Iron ore An aboriginal-owned iron ore mine 19 North American automotive metals Lighter, stronger metal on the pedal

Managing Director Steve Diprose stevediprose@quartzltd.com Tel: +44 (0) 1737 855164 Chief Executive Officer Paul Michael

SUBSCRIPTION Elizabeth Barford Tel +44 (0) 1737 855028 Fax +44 (0) 1737 855034 Email subscriptions@quartzltd.com

31 Handling Non-contact billet length measuring

Steel Times International is published eight times a year and is available on subscription. Annual subscription: UK £173.00 Other countries: £247.00 2 years subscription: UK £311.00 Other countries: £445.00 ) Single copy (inc postage): £39.00 Email: steel@quartzltd.com

Published by: Quartz Business Media Ltd,

24 Direct reduced iron DRI/HBI - exploding the myths

Testing & Analysis 37 Ferro-alloy optimisation explained 41 Consistent strip quality

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.

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47 Metrology Laser measurement explained 54 Perspectives The need for steel won’t disappear

©Quartz Business Media Ltd 2016

History 56 The Great War and UK steelmaking

ISSN1475-455X

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Contents.indd 1

January/February 2016

1/25/16 12:35 PM

LEADER

Trust nobody, not even the government...

Matthew Moggridge Editor matthewmoggridge@quartzltd.com

There was a time when the government – or the ‘powers that be’ – could be trusted with the welfare of the people. When I was a kid I had a kind of blind faith that those elected to run the country (and the world) were intelligent human beings who had the greater good of the people at heart. If we invaded a sovereign nation, we had good reason to do so; if we closed a hospital it must have been because it presented a public health risk and if we incarcerated a body of people it wouldn’t be before they were all given a fair trial in front of a jury. Today, I’m not so sure if any of the above still ring true – or whether they ever did. In his latest book, The Road to Little Dribbling – more Notes from a Small Island – Bill Bryson sums it up nicely: “In countless small ways the world around us grows gradually shittier.” The political landscape of the 21st Century is characterised by ‘career politicians’ and self-interest rather than a sense of philanthropy and well-being. Most tellingly, however, it’s all about greed. Iraq wasn’t about saving the world from weapons of mass destruction; it was about oil and construction contracts and

now, of course, it’s all back-fired as Islamic State runs amok and refugees risk life and limb, on choppy seas, to reach Europe. In short, there is plenty to be concerned about; and that common theme running through most episodes of the X-Files has returned to haunt us – ‘trust nobody’. I am constantly wracked with suspicion over the motives of the British Government, the European Parliament, whoever is in the White House and, lately, the World Trade Organisation. It has been made abundantly clear that bestowing ‘market economy status’ upon the Chinese will be disastrous for the global steel industry and the livelihood of those employed by it. And yet, an online report by Reuters has confirmed my worst fears.”Although fierce debate is raging, all signs point to the EU accepting China as a market economy after December 2016.” Why is it that Chinese steel companies are not bothered about making a return on capital? Because they can rely upon the support of the state. Tata Steel UK, of course, isn’t so lucky because the government’s hands are tied by EU state aid rules – meaning that it will sit idly by and do nothing. Disgraceful.

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4 NEWS IN BRIEF Chinese eliminate steel capacity Figures issued by the Ministry of Industry and Information Technology (MIIT) on Christmas Eve last year indicate that China eliminated 17Mt of steel-making capacity in 2015. It is expected to have eliminated 13Mt of iron-making capacity, 300kt of electrolytic aluminium capacity, 38Mt of cement capacity and over 11 million weight carbons of flat glass capacity. According to the MIIT, China is expected to resolve 15Mt of excessive shipbuilding capacity. Source: China Metals

Chinese crude output down 1.71% The daily crude steel output of China’s major steelmakers averaged 1.57Mt during the first 10 days of December 2015, down 1.71% from the period 21-30 November 2015, according to figures issued by the China Iron and Steel Association. Steel stocks held by China’s major steelmakers totalled 14.3Mt, down 0.16% when compared with endNovember figures. Source: China Metals

Ansteel president under suspicion Chen Guofeng, president of Ansteel Group Engineering Technology Development, is under investigation for being suspected of serious discipline violations. Chen is also the assistant to the general manager of Ansteel Group, a major state-owned Chinese steelmaker. Source: China Metals

Tata’s Scandinavian service centres Tata Steel has acquired two service centres from SSAB and bought a third service centre in Scandinavia. The three centres are located in Halmstad (Sweden) Naantali (Finland) and Frederikstad (Norway) and, claims Tata Steel, will offer cut-to-length, slitting and recoiling services to the steelmaker’s customers in the automotive, construction and electrical industries. According to Tata Steel, ‘having sites in these important regions gives us the opportunity to offer local expertise to customers combined with the backing of a larger, European-wide distribution network and an integral steel supply.”

January/February 2016

Industry news new file.indd 1

INDUSTRY NEWS

More jobs to go at Tata Steel More jobs are to go at Tata Steel in the UK and in terms of culprits, it’s the usual suspects – the flood of steel imports from China being a major factor, but also a strong pound, punitive business rates when compared to those of France and Germany and high energy costs. Gareth Stace, director of UK Steel, has been quick to point out that the latest job losses are ‘a wake up call again to government’ and Alan Coombs, president of the Community union in Port Talbot – where an estimated 750 jobs will be lost – wants tariffs imposed on Chinese steel and lower business rates. The latest round of job cuts – roughly 1,050 will go in total – follows hot on the heels of cuts made last year by Tata Steel. In October, the company announced that 1,200 jobs would be axed in Scunthorpe and Lanarkshire. “These job losses are a real setback to the Welsh economy and it’s clear that firms in our steel industry face major global challenges to stay competitive," said Emma Watkins, director of CBI Wales. “Chinese steel imports look to be having a big impact and it’s important that the European Commission urgently reports back on whether the market has been distorted unfairly by excess market supply," Watkins said. According to Watkins, “Our industrial base can best be supported by developing a long-term industrial

strategy, protecting research and development investment to help raise productivity and making energy costs more competitive." Watkins said that the Welsh and UK governments must work together and alongside business to develop 'new and compelling' offers for inward investment and extra support.

The job cuts announced today have fired up the UK-based Leave. EU campaign. A spokesman for the organisation said, “In our view this is a predictable consequence of politicians’ failure to address the EU elephant in the room, with further job losses in Scotland and the north of England inevitable.” "This latest round of job losses in Wales will set alarm bells ringing in Scotland and the north of England. Sadly, further losses are inevitable because the EU elephant in the room

remains deliberately unaddressed, with the Welsh First Minister even going so far as to claim that the terrible problems faced by steel workers have 'nothing to do with' the EU last week". Workers at Tata Steel’s Scunthorpe long products plant will avoid the latest round of cuts, thanks to a deal struck with Greybull Capital that has been ‘virtually sealed’ according to the Scunthorpe Telegraph. That said, 900 redundancies will go ahead at the plant despite a planned £400 million investment by Greybull. Potentially, there is worse to come. In December this year a decision will be made as to whether China should be granted market economy status (MES). If the decision goes in favour of the Chinese, anti-dumping measures that currently safeguard hundreds of thousands of EU jobs against unfair competition from China across a range of strategic industries will become ineffective overnight. China is placing political pressure on national and EU policymakers to prematurely grant MES, arguing that the WTO protocol assures its MES by the year-end. “However, the WTO protocol was established under the presumption that China would make sufficient progress towards becoming a market economy; progress that it has studiously failed to implement,” according to Axel Eggert, director-general of EUROFER, the European Steel Association.

Emissions reduced Russian steelmaker NLMK has launched what it regards as ‘an important environmental project’ at its Lipetsk site. The project, which involves the reconstruction of de-dusting systems at the company’s 3.2Mt/ year blast furnace number six, will result in more than six-fold reduction in dust emissions from the furnace, reducing dust emissions by more than 20%. The plan is to replace several de-dusting systems at the casting yard, the trestle, the receiver and the breeze bins at Lipetsk as well as installing ‘next generation’ bag filters in place of the current electric filters.

Shandong Iron & Steel Group Rizhao has ordered two twin-strand continuous slab casters from Primetals Technologies. Both casters will be installed at the Chinese steelmaker’s high quality steel plant in the Rizhao coastal region of Shandong Province and are designed to produce 4.6Mt (metric tons) of slabs per annum. The two machines will be fed with steel produced in basic oxygen steel converters with a total annual capacity of 5Mt (metric tons). Primetals’ ‘Connect & Cast’ principle will be employed for the installation of the casters, which will go on stream in June 2017. ‘Connect & Cast’ means that all plant functions and systems are ready for use from the very first batch. www.steeltimesint.com

1/25/16 12:36 PM

INDUSTRY NEWS

MES for China? No, not yet... On the day that the European Parliament debated the subject of MES for China, EUROFER’s director-general Axel Eggert insisted that China is not yet a market economy and that there is still too much state involvement. “The EU has set out five criteria establishing how China could be considered to be a market economy. Presently, the country meets just one of these conditions,” he said. According to Eggert, China is placing political pressure on national and EU policymakers to prematurely grant MES, arguing that the WTO protocol assures its MES by the year-end. “However, the WTO protocol was established under the presumption that China would make sufficient progress towards becoming a market econo-

my; progress that it has studiously failed to implement,” Eggert said. EUROFER argues that if China was granted MES, the anti-dump-

ing measures that safeguard hundreds of thousands of EU jobs against China’s unfair competition across a range of strategic EU in-

dustries would become ineffective. The EU’s other trade defence measures are either inoperative or simply insufficient to defend against the rising tide of dumped Chinese products, particularly steel. Eggert concluded, “Despite those that believe the EU must give China favourable terms, the fact remains that China already has a favourable commercial position: the EU’s total goods trade deficit with China was around 137 billion Euros in 2014, a figure expected to grow 30% larger for 2015.” He said that the EU must think long and hard about the political direction of the EU’s trade relations with China or face the potential demise of the sector on which Europe was built – the European steel industry.

Car plans of MMK The automotive sheet business has been kind to Russian steelmaker Magnitogorsk Iron & Steel Works (MMK). The company reports that shipments to foreign carmakers with localised production in Russia have increased dramatically when compared with 2014 figures.

Car manufacturing, claims the company, is one of the most promising and attractive segments and it is hoping to significantly strengthen its position in the sector. MMK intends to be the number one supplier to Russia’s domestic car manufacturing industry over the next decade as well as a key supplier to the three leading foreign brands producing cars in Russia. MMK’s production capability for high-quality rolled products has been significantly expanded, according to the company. Enlargement of the company’s Chelyabinsk Mill 2000 cold-rolling facility means that MMK can meet the strictest quality standards for both cold-rolled and hot-galvanised products. For more steel industry news and features, visit www.steeltimesint.com

www.steeltimesint.com

Industry news new file.indd 2

NEWS IN BRIEF TMK ships premium pipe

Russian steelmaker TMK, which claims to be one of the world’s leading producers of tubular products for the oil and gas industry, has shipped premium pipe products with lubricant-free coating GreenWell for LUKOILNizhnevolzhskneft. The supply included 32 tonnes of 177.8 mm P110-grade casing pipes and pipe nipples with TMK UP PF ET premium connection.

Tata and SNCF rail deal A new deal between Tata Steel and the French national railway company SNCF means that Tata’s Long Products Europe business will continue to supply the rail operator for the next five years. While Tata has been SNCF’s main rail supplier since 1999, the contract can be traced back 130 years. The new contract has a four-year extension clause option. Gérard Glas, Tata Steel’s rail sector head, said the new contract provides a ‘valuable foundation’ for the company’s future order book.

Metal shows increase frequency

Korean steelmaker Hyundai has started up a continuous bloom caster and long product rolling mills at its plant in Dangjin. The caster has a capacity of 1.1 Mt/ yr (metric tons) and a large bar mill at the plant produces 1Mt/yr (metric tons) of end products and billets for a small bar and wire rod mill. Both the caster and the mill were

started up last October (2015) and were supplied by Primetals Technologies, who were awarded the order early in 2014. Hyundai Steel is part of Hyundai-Kia Automotive Group and runs six production facilities in South Korea. The caster incorporates Primetals Technologies’ Mold Expert monitoring system.

Fast start-up for DRI plant Following the installation last month of a new Energiron DRI plant at Egypt’s Ezz Rolling Mills (ERM), the company reports that the plant has passed its performance test one month after startup. According to leading Italian steel production technology provider Danieli, ERM’s new cold DRI plant, featuring ENERGIRON lll technology, produced its first DRI on 22 November and passed the hot test on 2 December.

Limited national gas forced the plant to work at a reduced rate followng completion of the hot test, despite the fact that it was ready to increase productivity. Natural gas availability was restored on 14 December and the plant was ramped up to full productivity, starting its performance test the following day and performing well above its target figures. Danieli claims that productivity was 112% of the guaranteed value.

GIFA, METEC, THERMOPROCESS and NEWCAST – four leading and inter-linked metals industry events – are switching to a three-year cycle and will next be taking place in Dusseldorf, Germany, from 2630 June 2018. Organiser Messe Dusseldorf said that ‘these leading trade fairs have already adapted to the changes in their industries’ innovation cycles on several occasions’ and continue to produce ‘exceptionally good results’. The most recent events (in June this year) attracted 78,000 visitors from more than 120 different countries and 2,214 exhibitors.

America in discussions with China The global and challenging issue of Chinese steel overcapacity has yielded an important step forward, according to the AISI’s president and CEO Thomas J Gibson, following a meeting between the American and Chinese governments in China. According to Gibson, highlevel meetings between the two countries resulted in the two governments agreeing to hold further talks this year. January/February 2016

1/25/16 12:36 PM

INDUSTRY NEWS

Green issues delay projects The Indian Parliament has been informed that as many as 23 steel projects across India, including those of Tata Steel, JSW Steel, Essar Steel and Posco’s JV in Maharashtra, are being delayed for environmental reasons. “Presently, 23 steel projects are pending due to grant of environment clearance. Out of which, two steel projects are from Maharashtra,” Indian Minister of State for Steel, Vishnu Deo, said in a written reply in the Indian parliament at New Delhi on December 21, 2015. In addition to environmental concerns, the steel sector is also suffering from overcapacity issues – particularly in China – as global demand for steel shrinks.

Global prices under pressure International steel prices remained under pressure in December, due to sluggish global demand and high inventories. According to MEPS International Steel Review, world steel prices slipped further across flat and long product areas. In North America, flat prices continued to weaken amid lacklustre demand domestically while a strong US dollar hampered exports. Buyers are delaying purchases as they prioritise their year-end stock positions. Chinese spot prices have reached record lows with local producers selling excess stock at discounted prices. With demand slowing down domestically, China continues to pitch its exports at remarkably low prices. Subsequently, steel mills have cut domestic selling values in Taiwan and South Korea. However, US flat prices may have bottomed out as many domestic steel mills have announced price increases for the first quarter. At this stage, it is unclear whether the price hikes will be accepted by the market. Source: MEPS International Steel Review

For more steel industry news and features, visit www.steeltimesint.com January/February 2016

Industry news new file.indd 3

Aceria de Angola is the name of an ambitious US$300 million private steel project in Angola, funded by K2L Capital, which will produce 250kt of steel per year during its first phase, and ultimately will negate the need for Angola to import steel. The project is part of K2L Capital’s growing portfolio of ventures in the region and has been approved by His Excellency José Eduardo dos Santos, President of the Republic of Angola. K2L claims that the new steel plant will produce over 300kt of steel rebar when in full production, which is roughly how much Angola has been importing. K2L’s remit is to build a better Africa and support Angola in its plan to diversify its economy in the midst of an oil crisis. The company’s chairman and CEO, Georges Choucair, described the ADA steel project as ‘part of the road to economic diversification’. He said it would bring a new and dynamic industry to Angola

Angola’s steel ambitions that was not related to oil and gas and would save US$200-300 in foreign currency reserve for the Angolan National Bank. The ADA project represents the largest private investment in the region. It will create 600 direct jobs and 3,000 in-direct jobs. The quality of the steel produced is certified by European and Western standards and is environmentally responsible, meeting all the requirements of the US, EU and World Bank, accord-

ing to K2L. “The economic, social and developmental aspect of this project is unparalleled, providing healthcare, education, water and hope for thousands while building new communities in an ongoing effort to make Angola self-sufficient,” a K2L spokesman said. According to K2L, the community around the factory now has access to clean water, a training centre, health centre and electricity.

ArcelorMittal Belval of Esch-sur-Alzette in Luxembourg, has started up a CRS Compact Roller Straightener supplied by SMS Group of Germany. It took only four weeks to dismantle the plant’s old equipment and install the new model, which can handle the largest sheet piles currently produced in the world, claims SMS.

The scope of the supply included the mechanical equipment, electrics and automation plus the media supply systems and all the roller change machinery. According to SMS, CRS straighteners have been used successfully by numerous rolling mills for sections and semi-finished long products.

Production to re-start Shanxi Haixin Iron and Steel Group is expected to resume production early this year (2016) following on from its acquisition last September by Beijing Jian Long Group. Once China’s largest steelmaker, Shanxi Haixin halted production in March 2014 due to excessive capacity in the domestic steel industry, a sluggish steel market climate and financial strain. Prior to closure, Shanxi had an annual capacity of 5.6Mt (metric tonnes) of iron, 6Mt of steel and 5.2Mt of steel products. Since the takeover the company has been renamed and is now Shanxi Jian Long Iron and Steel Company.

New president for EUROFER Geert Van Poelvoorde, executive vice president of ArcelorMittal and CEO of Flat Carbon Europe, has been elected EUROFER president. Mr Van Poelvoorde takes up the post immediately and will remain president for the next two years. He takes over from Robrecht Himpe, who was EUROFER’s president from 2014 onwards. “Mr Van Poelvoorde’s leader-

ship will ensure EUROFER can continue to support the steel industry in facing economic and policy challenges,” said Axel Eggert, director-general of EUROFER. Mr Van Poelvoorde said, “I would like to thank Mr Himpe for his outstanding commitment to the organisation during his tenure, and for his tireless efforts in building EUROFER’s reputation.” www.steeltimesint.com

1/25/16 12:36 PM

INDUSTRY NEWS

Crude production down 2.8% World crude steel production reached 1,622.8Mt for 2015, down by -2.8% compared to 2014. Annual production for Asia was 1,113.8 Mt of crude steel in 2015, a decrease of -2.3% compared to 2014. China’s crude steel production in 2015 reached 803.8 Mt, down by -2.3% on 2014. China’s share of world crude steel production increased from 49.3% in 2014 to 49.5% in 2015. Japan produced 105.2 Mt in 2015, down by -5.0% compared to 2014. India’s crude steel production for 2015 was 89.6 Mt, up by 2.6% on 2014. South Korea produced 69.7 Mt of crude steel in 2015, a decrease of -2.6% compared to 2014.

In 2015, the EU (28) produced 166.2 Mt of crude steel, a decrease of -1.8% compared to 2014. Germany produced 42.7 Mt of crude steel in 2015, down by -0.6% over 2014. Italy produced 22.0 Mt in 2015, a decrease of -7.1% over 2014. France’s crude steel production in 2015 was 15.0 Mt, down by -7.2%. Spain produced 14.9 Mt of crude steel in 2015, an increase of 4.4% compared to 2014. Crude steel production for 2015 in North America was 110.7 Mt, a decrease of -8.6% compared to 2014. The US produced 78.9 Mt of crude steel, down by -10.5%. The CIS showed a decrease of -4.3% in 2015, producing 101.5 Mt of crude steel. Russia* pro-

duced 71.1 Mt of crude steel, down by -0.5% on 2014 and Ukraine recorded a decrease of -15.6% with a year-end figure of 22.9 Mt. Annual crude steel production for South America was 43.9 Mt in 2015, a decrease of -2.5% on 2014. Brazil produced 33.2 Mt in 2015, down by -1.9%. In December 2015, world crude steel production for the 66 countries reporting to the World Steel Association was 126.7 Mt, down -5.7% compared to December 2014. The crude steel capacity utilisation ratio was 64.6%, 4.9 percentage points lower than December 2014. The average capacity utilisation in 2015 was 69.7%.

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

Finished steel production down 2% Finished steel consumption in Latin America and the Caribbean was down 2% for the period January to October 2015 when compared with the same period in 2014. The region produced 53.7Mt of crude steel and Brazil accounted for 53% of regional production (28.2Mt and an annual contraction of 1.2%). The region produced 44.9Mt of finished steel, down 4% on the previous year’s figures and with Brazil as the main producer (accounting for 19.3Mt – 43% of output). Mexico was the second biggest producer and accounted for 33% of regional output with its 14.7Mt of production. Finished steel production for the region reached 57.9Mt – down

3%. Mexico recorded the largest increase in consumption, up 9% or 1.6Mt. Chilean consumption was also up 9% and Argentina’s was up 3% having produced 115kt more steel when compared to the same period in 2014. Rolled steel consumption in Brazil was down 3.3Mt and there were declines of 4% and 15% respectively in Columbia and Peru. Latin America imported 20.3Mt of finished steel, a rise of 1% over the January to October 2014 period. Imports account for 35% of regional finished steel consumption. Latin America exported 7.5Mt of finished steel, an increase of 8% year-on-year, and recorded a trade deficit for the period of 12.7Mt (finished steel) and this repre-

sented a trade imbalance 3.6% lower than during the same period in 2014 when the figure was 13.2Mt. A trade surplus was maintained by Brazil alone (1.4Mt) while the largest deficit was recorded by Mexico (down 5.7Mt). Columbia followed (- 1.9Mt), Chile (- 1.5Mt) and Peru (- 1.2Mt). Figures for November 2015 show that crude steel production reached 5Mt, down 7% on October 2015 and 4% less than November 2014. Finished steel production closed at 4.6Mt. Over the first 11 months of 2015, crude steel production in the region totalled 58.7Mt. Production of finished steel reached 49.5Mt. Source: Alacero

EUROFER applauds climate deal EUROFER, the European Steel Association, welcomes the fact that a global agreement has been reached on climate change, but says that it lacks a comprehensive strategy as to how to achieve its intended objectives. Axel Eggert, director-general of EUROFER, said that while the agreement – if correctly implemented – would tread ‘the right path towards mitigating anthrowww.steeltimesint.com

Industry news new file.indd 4

pogenic climate change, it ‘didn’t create the much-needed level playing field because third country competitors ‘will continue to face far lower environmental burdens’. According to Eggert, “Europe’s steel industry is amongst the cleanest and most advanced in the world. If it collapses due to ‘carbon leakage’ – compounded by ongoing unfair trade practices from non-EU countries – then Europe

will simply have exported its CO2, as well as hundreds of thousands of jobs,” he said. Eggert said that, ‘as long as no equal measures exist for industrial competitors globally, the Emissions Trading System (EU ETS) will have to be shaped in a way that guarantees – at least at the level of the 10% most efficient steel plants in Europe – that the system does not result in any costs.”

DIARY OF EVENTS

February 2016 24 EEF National Manufacturing Conference, QEll Centre, London, UK. Organised by the EEF Key themes up for discussion include the UK’s future in the EU, unlocking the global trade challenge, the Apprenticeship Levy: tax or talent generator? And cracking Britain’s productivity puzzle. High-profile speakers include: Rt Hon Sajid Javid MP, Secretary of State for Business, Innovation and Skills; Tom Watson MP, Deputy Leader of the Labour Party; Martin Wolf CBE, chief economics commentator, The FT. Details, log on to http://www. manufacturingconference.co.uk

March 2016 1-3 China Iron Ore 2016 Grand Millennium Hotel, Beijing, China. Organised by Metal Bulletin Events Organised in conjunction with the China Minmetals Corporation, China Iron Ore 2016 looks at the pressures affecting the iron ore sector of the commodities market as prices fall and demand slows. How much of new supply will come on stream between 2016 and 2018? Will India resume its iron or exports? For further details, log on to www.metalbulletin.com/events/ 8-10 American Metal Market’s 9th Tube & Pipe Conference Doubletree Houston Greenway Plaza Hotel, Houston, Texas, USA. Organised by MetalBulletin Events. Billed as America’s largest gathering for the steel, tube and pipe industry, this event will examine the latest news on anti-dumping trade cases and debate how the industry can survive in an environment of lower prices. New projects and capacity will also be under discussion along with the latest trends and outlook for the American oil and gas industry. The last event attracted 416 delegates from 235 companies based in 20 countries. For further details, log on to www.metalbulletin.com/events/ For more steel industry news and features, visit www.steeltimesint.com

January/February 2016

1/25/16 12:36 PM

USA UPDATE

Tough times for US Steel Bad news about US Steel has intensified by the day. Chief executive and president, Mario Longhi has frozen the pension fund, cut off the Canadian subsidiary by filing bankruptcy, closed down steelproduction and finishing operations at Fairfield, Alabama, saved over $800 million by rescinding a problem project in Gary, Indiana, and generated some $600 million in annual savings from his ‘Carnegie Way’ initiative. But is he happy? By Manik Mehta* THE downturn has washed some of the sheen off the Carnegie Way, pursued by Longhi, which, in his own words, would make US Steel capable of “earning the right to grow.” Nevertheless, such measures have, apparently, not brought the company out of the loss-making zone. US Steel’s problems have been compounded by heavily discounted prices forced by cheap imports, the greenback’s appreciation against most international currencies, a sluggish energy market that buys less of steel tubing and a global steel glut. Many analysts have been saying that US Steel will report a loss for the entire year 2015 which would mean, if this prediction is proved right, that the company would not have earned any profit for the sixth time in seven years. But some analysts credit Longhi with having, at least, prevented a worsening of the company’s losses. Invariably, attention turns to what some critics describe as the “China effect”, a euphemism that suggests China’s steel dumping practice in the US market is largely to blame for the industry’s woes. US Steel has also been adversely affected by a sharp decline in steel prices following a flood of foreign imports. Many analysts, however, are applauding the company’s move to cut off its “sick Canadian limb”, as some call its failed Canadian operation. US Steel and its Canadian associate US Steel Canada have decided to part company after the Canadian chapter was forced to file for relief from its creditors. This followed unsuccessful attempts to sell the Canadian company. Many say this may spare US

Steel from pumping money into what is described as a “bottomless barrel”. There is also the argument that by severing its Canadian links, US Steel can concentrate on its US operations unlike in the past when it was sending business across the border to sustain the existence of the Canadian company. US Steel will have a dual benefit: it will not have to continue carrying the financial burden of its Canadian facility, and it will properly utilise capacity at its USbased operations. US experts hailed his decision as “wise and practical” arguing that steel mills are expensive to operate. Steel mills are productive as long as their capacities are fully utilised, they argue. The surge in foreign steel imports, mainly of Chinese origin, has reduced the capacity

of US mills to about 70%, and has driven prices sharply lower. Many steel products cost about $200/tonne less than they did a year ago. Indeed, analysts say that some prices are at levels not seen since the 2003 steel recession, which wiped out several big producers. The US International Trade Commission (ITC) is expected to decide in December and January whether to impose duties on these imports. The higher the duties or margins, the more the sanctions will curb imports. “If positive results come from these trade cases, it could help the industry out,” according to Matt Miller, a metals analyst with S&P Capital IQ. There is a general feeling in US steel industry circles that regardless of whether US steel companies make money or not, China will continue to produce, and get rid of its excess production, in overseas markets, particularly the US, because it enjoys the unfair advantage of being subsidised by the Chinese government. The US dollar’s appreciation – accompanied by the devaluation of the Yuan – also helps Chinese steel producers who enjoy a better cost structure when their currency depreciates in relation to the dollar. The general feeling within the US steel industry is that China is always doing something to undermine the rules of the level-field playing game. But seeking redress against Chinese dumping practices – and also against tariffs imposed by them against some speciality products – can be an arduous and protracted process, taking years to resolve. Gary Hubbard, a spokesman for the

* USA correspondent January/February 2016

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www.steeltimesint.com

1/22/16 10:50 AM

USA UPDATE

United Steelworkers International Union in Washington DC, has called for efforts to “defend your market or they’ll steal it from you.” The USW has supported the ATI and AK Steel in filing a complaint against China for dumping electrical steel on the US market. That case is pending an appeal before the ITC. The disproportionate supply-and-demand situation – excessive capacity and declining demand – has had an adverse effect on the steel industry. The global steel glut has had a strong negative impact on AK Steel Holding, a Fortune 500 steelmaking company, which is now slashing jobs, cutting expenses and struggling to keep sales and profits up. AK Steel sources hope that a balanced supply-demand situation emerges, with improvement coming from capacity reductions not only in the US but globally. Worldwide steel production has risen by about 46% from 2005 to 1.8 billion tons in 2014, according to the American Iron and Steel Institute (AISI). During that period, steel imports into the US market surged 38% from 32.1Mt in 2005 to 44.3Mt in 2014. Finished steel imports into the US so far this year, have been growing at about 3% ahead of last year, surpassing what was already a record year for imports in 2014, according to the AISI. The steel industry was “under attack” from the surge in foreign imports, Lisa Harrison, spokeswoman for the AISI, said. She also blamed “foreign government subsidies and other trade distorting practices” for the problems in the steel industry which are fueling the surge and causing US producers to idle facilities and lay off workers. Besides AK Steel and US Steel, which have taken measures to slash costs, trimming production and other operations and doing away with “excess fat”, Nucor also felt the squeeze on its profits in its most recent earnings release on 22 October, noting a 69% decline in overall operating rate at its steel mills over the three months ending 3 October. A year ago, Nucor reported its mills were running at 81%. It also warned stakeholders that the end of the year would be tough too. “A slowing economy in China is causing further global overcapacity and resulting in significant levels of steel imports into the US market,” the company said in a statement. AK plans to temporarily idle the blast furnace of a Kentucky steel mill, citing imports and unfair trade concerns. Ashland Works employs a total of about 940 workers, but the number of jobs affected has not yet been determined, according to the company. The steel industry derives comfort from political statements issued by leading political personalities, including Presidential candidates, as the country enters the candidate selection phase of the two leading parties, with each carefully calibrating comments to appeal to voters. The debate has become lively with remarks, sometimes not so restrained, by Republican presidential candidate Donald Trump who said on 10 November that he would have China declared a “currency manipulator”, a call often made by the steel industry. Beijing’s “great wall of protectionism” used unlawful tariffs to keep US companies out and tilt the playing field in its favour. “The worst of China’s sins is not its theft of intellectual property, but the wanton manipulation of China’s currency, robbing Americans of billions of dollars of capital and millions of jobs,” Trump recently wrote in his usual blunt style in an op-ed in The Wall Street Journal. Such views seem to resonate well with American steel workers and also steel companies. t www.steeltimesint.com

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LATIN AMERICA UPDATE

How hot is Chile’s steel industry? Chile’s open economy and highly competitive industrial environment points to a healthy steel industry, but this is not the case according to Germano Mendes de Paula* CHILE is usually considered the best Latin American nation regarding competitiveness. According to the Global Competitiveness Index (GCI), developed by the World Economic Forum (WEF), Chile is currently ranked in 35th place, among 140 countries. It is important to stress that Mexico is in 57th position, followed by Colombia (61st), Peru (69th), Brazil (76th), Argentina (106th) and Venezuela (132nd). The complete list of the Latin American nations is shown in Table 1. Chile is a very open economy, applying an average import tariff of 6%. Moreover, since 1996, it has celebrated various Free Trade Agreements (FTAs), including: Pacific Alliance, Turkey, Australia, Japan, Colombia, Peru, China, United States, South Korea, European Union, Mexico, Canada and Mercosur (see the whole list of the FTAs and the Preferential Trade Agreements in Table 2). This high openness cannot be dissociated from the fact that its economy is greatly dependent on mining, in general, and copper in particular. After a military dictatorship during the period 1973-1990, Chile developed a quite democratic and stable political system. Despite the differences concerning ideological orientation, the governments typically adopted ‘responsible macroeconomic policies’. Nonetheless, Chile’s economy is adapting to a more 800

Fig 1. Chile’s GDP growth (%) Fig 2. Nominal exchange rate

(CLP/$), at the end of the

period, 2007-2016

600

468

520

479

5.8

5.2

5.8

5.5 4.2

3.3 1.9

2.0

2014

2015f

2.5

Fig 3. Chile’s monthly shipment of rebar, 2007-2015 (kt)

715

606 507

496

Steel industry performance Fig 3 summarises the evolution of the Chilean steel market over the 2007-2015 period. It is fair to avoid paying attention to the 2009-2010 period, as Chile was an outlier due global steel turmoil. Apparent steel consumption in Chile increased from 2.3Mt in 2007 to 3.0Mt in 2013, reverting to roughly 2.5Mt in 2015 (an estimation recently released by the Latin American Steel Association/Alacero). Simultaneously, finished steel imports skyrocketed from 0.9Mt in 2007 to 1.7Mt in 2013, declining marginally to 1.6Mt in 2015. Meanwhile, the import penetration ratio was equivalent

700 629

credible inflation target and low public debt leave Chile better placed to face the external shock in contrast to its Latin American peers. In this context, someone might expect that the Chilean steel industry is performing quite well, but this is not the case.

Fig 1

7 5

Fig 2

700

500

adverse external scenario, derived from the slowdown in China’s economy and lower copper prices. GDP growth nowadays is lower than during the commodity boom, as can be observed in Fig 1. The bank Itaú forecasts that the Chilean economy will expand 2.5% in 2016, in contrast with over 5% registered over the period 2010-2012. Fig 2 shows that the nominal exchange rate varied from 624 Chilean Peso (CLP) per $ at the end of 2008 to 470 CLP as of late 2012, representing a strong currency appreciation. Since then, it engaged in a depreciation trend, which might bring the exchange rate to 715 CLP by year-end 2016. Although this tendency helps the local industry (against imported goods), a higher inflation is a collateral effect. It is estimated that 4.8% consumer inflation in 2015 – considerably lower than a 15.5% currency depreciation – can be partially explained by declining international oil prices. However, a

-1

-1.0

-2 2007 70 60

2008

2009

2010

2011

2012

2013

2016f

Fig 3

525

400

300

200

100 0 2007

2008

2009

2010

2011

2012

2013

2014

2015f

2016f

0 2007

2008

2009

2010

2011

2012

2013

2014

2015

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

LA new.indd 1

January/February 2016

1/25/16 3:03 PM

LATIN AMERICA UPDATE

Country Ranking Chile 35 Panama 50 Costa Rica

Mexico 57 Colombia 61 Peru 69 Uruguay 73 Brazil

Ecuador 76 Guatemala 78 Honduras 88 Trinidad and Tobago

El Salvador

Domenican Republic

Argentina 106 Nicaragua 108 Bolivia 117 Paraguay 118 Venezuela 132 Haiti 134 Source: World Economic Forum (WEF)

Free trade agreements Agreement/Partner(s)

Table 1. Latin American countries in the Global Competitiveness Index (GCI)

to 38% in 2007, 57% in 2013 and 63% in 2015. Despite registering strong variation, exports were relatively modest (70kt/yr on average). Fig 3 also demonstrates the evolution of production. Concerning pig iron, it oscillated around the 1.1Mt/yr plateau over the period 2007-2012. Nevertheless, in 2013, Compañia de Acero del Pacífico (CAP) decided to interrupt its operations dedicated to flat steel production. As a result, the company, which has the only coke-integrated mill in the country, shut down one of its two blast furnaces. Pig iron output dropped to 0.6Mt in 2014-2015. The company unveiled that one blast furnace will be idle until 2018, at least. Crude steel production (CSP) was around 1.6Mt/yr between 2007-2012. Due to CAP’s aforementioned decision, Chilean CSP plummeted to 1.3Mt in 2013 and to 1.1Mt in 2014-2015. Flat steel production was equivalent to 551kt in 2007, 412kt in 2012 and 189kt in 2013, when the country stopped fabricating such products. CAP’s installed capacity was reduced from 1.45Mt/yr to 0.7Mt/yr, employing just one blast furnace. The company made a strong adjustment to its industrial processes and labour force. In reality, CAP continues to be a player in the flat steel business, but now it depends only on imports. The company claims to be the largest steel importer on the Pacific coast of South America. Its processing division sales (including operations in Peru January/February 2016

LA new.indd 2

Date of Signature

Date of Entry into Force

Pacific Alliance

10 February 2014

20 July 2015

Thailand

04 October 2013

05 November 2015

Hong Kong, China

07 September 2012

29 November 2014

Vietnam

12 November 2011

04 February 2014

Malaysia

13 November 2010

18 April 2012

14 July 2009

01 March 2011

Turkey Australia Japan Colombia Peru Panama China

30 July 2008

06 March 2009

27 March 2007

03 September 2007

27 November 2006

08 May 2009

22 August 2006

01 March 2009

27 June 2006

07 March 2008

18 November 2005

01 October 2006

New Zealand, Singapore and Brunei Darussalam

18 July 2005

Various

European Free Trade Association (EFTA)

26 June 2003

01 December 2004

06 June 2003

01 January 2004

United States of America Republic of Korea European Union (EU)

15 February 2003

01 April 2004

18 November 2002

01 February 2003

Central America (Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua)

18 October 1999

Various

Mexico

17 April 1998

01 August 1999

Canada

05 December 1996

05 July 1997

25 June 1996

01 October 1996

MERCOSUR

Preferential Trade Agreements Agreement/Partner(s)

Date of Signature

Date of Entry into Force

Ecuador

10 March 2008

05 January 2010

India

08 March 2006

17 August 2007

Bolivia

06 April 1993

Venezuela

02 April 1993

Argentina

02 August 1991

Source: Organisation of American States

Table 2. Chile’s free and preferential trade agreements

2007 2008 2009 2010 2011 2012 2013 2014 2015e

Apparent Finished Steel Use

2.310 2.568 1.705 2.382 2.738 2.921 2.966 2.760 2.516

Finished Steel Export Finished Steel Import

108 49 89 95 80 63 23 41 73 885 1.248 558 1.864 1.118 1.611 1.685 1.660 1.594

Pig Iron Production

1.147

Crude Steel Production

1.678 1.549 1.308 1.011 1.615 1.671 1.323 1.079 1.103

1.109

923

635

1.072

1.068

766

584

643

Long Steel Production

1.061 1.112 845 730 1.080 1.186 1.100 1.017 1.000

Flat Steel Production

551 479 433 272 438 412 189 ... ...

Source: worldsteel, Alacero

Table 3. Chile’s steel market, 2007-2015 (kt)

www.steeltimesint.com

1/25/16 3:03 PM

LATIN AMERICA UPDATE

exceptions of 2009 and 2010. CAP and Gerdau are the only domestic producers, with respective production shares of roughly 70% and 30%. Gerdau is focused on attending to the construction sector (rebar, in particular), whereas CAP has a higher degree of product diversification. According to the latter, the resilience of long products demand is mainly explained by the need for grinding media supply to

and Argentina) maintained its volume around 400kt/yr from 2012 to 2015. Consequently, CAP’s flat steel operations were transformed from a producer into an importer. Relative stability Long steel production has been relatively stable around 1.0-1.1Mt/yr for most of the analysed period, with the obvious

the mining sector. As can be verified in Fig 3, the country’s monthly shipment of rebar diminished from 64kt in October 2012 to 33kt in July 2015, recovering partially to 52kt in October 2015, which is the latest available data. In an attempt to protect long steel producers, in October 2015, the Chilean government imposed a temporary safeguard (for 200 days) of 37.8% on wire rod. The measure applied to all countries, with the exception of Canada, Mexico and Peru (due to the FTAs) and developing nations, which have lower than 3% participation regarding Chile’s wire rod imports. While this affects numerous countries, the evident target is China, which detains an 83% share of all Chilean long steel imports. Wire rod accounts for 20% of CAP’s production. Considering that Chile is a very open economy, the adoption of this safeguard could be interpreted as a sign that the government wants long steel domestic production to survive, avoiding a repetition of the same fate that has befallen flat steel operations.

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January/February 2016

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CHINA UPDATE

Chinese steel consumption falls Steel consumption is set to fall across many of China’s industrial sectors and steelmakers are bracing themselves for reduced profits. For the ‘rest of world’ steel industry, greater communication with China might help to allay fears going forward. 2015 steel consumption in China is likely to fall by 4.8% year-on-year to 668Mt, it’s first fall since 1995, according to a report by the China Metallurgical Industry Planning and Research Institute (CMIPRI) in early December. Domestic steel demand in China will shrink further in 2016 to 648Mt – a drop of 3%. China’s crude steel output and iron ore demands are expected to be 806Mt and 1.12 billion tonnes respectively in 2015 and 781Mt and 1.073 billion tonnes in 2016, according to the CMIPRI. Li Xinchuang, head of the CMIPRI, said that the fall in steel consumption was due to the economic ‘new normal’ in China and a general slowdown of the steel industry’s downstream sectors. Slowing property investment and weakening manufacturing are also cited as root causes of the Chinese steel industry’s woes, according to the CMIPRI. On a global level, world steel demand is expected to fall 2% in 2015 and a further 0.9% in 2016 to 1.51 billion tonnes and 1.5 billion tonnes respectively. Looking at the situation sector-by-sector, steel consumption in the Chinese machinery industry is likely to fall 6.5% and in the construction sector by 7.2% . A fall of 7.7% is likely in the railway industry. Large and mid-size Chinese steelmakers lost a total of 38.6 billion yuan (US$5.9 billion) between January and October 2015, according to the China Iron and Steel

Association (CISA). During the first 10 months of 2015, medium-sized and large steelmakers lost 72 billion yuan (US$11.34 billion) according to CISA. Of 101 steel mills tracked by CISA, the average sales margin stood at minus 1.5% between January and October 2015. In October it declined further to minus 5.37%. Reduced profits for steelmakers have forced smaller players to exit the market. CISA claims that 48 of the 101 tracked large and mid-sized steelmakers were in the red between January and October 2015 and that during the first three quarters of the year they incurred losses in the region of 28.1 billion yuan (US$4.3 billion). Stainless steel woes The bad news keeps coming as six Chinese stainless steel manufacturers agreed to slash production by 30% from December 2015. It is claimed that eight or nine out of every 10 stainless steel producers in China are currently in the red and forced to reduce production. Some have been cutting production since August/September last year. Output has been falling from Q3 2015 having risen month-by-month during the first six months of the year. In October, output declined 9.53% year-on-year. Xu Lejiang, chairman of China’s Shanghai Baoshan Iron and Steel Co, speaking at a news conference in Shanghai towards the end of last year, said that China will experience troubled times based on excess

production capacity between 2016 and 2020 (China’s 13th Five-Year Plan period). Unlucky for some, perhaps. China’s 13th Five-Year Plan will focus heavily on environmental protection, placing additional pressure on steelmakers and jeopardising the very existence of smaller, less financially assured producers. Many steelmakers have looked to diversify their operations by launching downstream projects and investing in emerging industries rather than relying upon the lower profitability of mainstream steel production. Heartening news for the ‘rest of the world’ steel industry, however, is the recent announcement by CISA that China intends to enhance communication and strengthen co-operation with international steel industry associations with a view to safeguarding the international steel trade and promoting its healthy development going forward. China’s move was in response to recent accusations by European and US steel associations that China was the chief culprit behind the global industry’s massive overcapacity problems and the resultant plant closures and job losses witnessed around the world. Chinese crude steel output for the first three quarters of 2015 was down 2.14% year-on-year to 610Mt. Apparent consumption declined 5.82% over the same period. t Source: China Metals

* Matthew Moggridge, editor, Steel Times International January/February 2016

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IRON ORE

An aboriginal-owned iron ore mine Following a commercial agreement between two mining enterprises, the Pilbara region in Western Australia will soon host the first Aboriginally-owned and operated iron ore mine in Australia. By Michael Schwartz* FORSTESCUE Metals Group Ltd (FMG) (ASX: FMG) entered into an agreement with Australian Aboriginal Mining Corporation Pty Ltd (AAMC). Key to the development is FMG providing AAMC with access to its infrastructure, with AAMC consequently able to deliver up to 2Mt/yr from its existing projects to FMG’s port or rail facilities for a five-year period. The amount of ore that can be delivered to the rail facilities will be determined by FMG taking into account a range of factors including the prevailing rail volume and any potential for surplus capacity. Additionally, FMG may either purchase ore directly from AAMC at the point of delivery or transport, market and sell it on behalf of AAMC. Fergus Campbell, executive director of AAMG, spoke to Steel Times International about the many factors that will combine to make the new venture a success. He identified as essential: “A mature and supportive Pilbara iron ore industry that understands that there will be iron ore mining in the Pilbara for potentially centuries to come and that it must continue to work hard at improving outcomes for all of its stakeholders and most importantly the traditional landowner groups on which mining projects sit.” In addition, there must be “a company like AAMC that seeks to engage with Aboriginal businesses because it understands that this improves its chances of securing support from within the industry, access to infrastructure and commercial success.” This, in turn, must be supported by: “infrastructure-owning companies that support the long-term advancement of Aboriginal stakeholders and community groups.” Campbell turned to the geological aspects

Iron ore mining

that will enable the project: “Quality iron ore resources, like the Extension and Breakaway resources, that are intrinsically low-cost as a result of material properties, strip ratio, hydro-geological conditions and ore quality and that are also close to existing infrastructure and that could be exploited profitably at current market conditions if access to that infrastructure were secured.” AAMC’s resources are the Channel Iron Deposits that are typical of those at the BHPB Yandi and Rio Tinto Yandicoogina mines, which share the same genesis. Iron content is typically ~57% and with an LOI of ~10% the calcined iron grade is ~63%. In resource terms, Campbell explains, “Reserves are currently ~20Mt but we have good exploration potential that could see significant reserve growth as a result of AAMC’s early success in identifying more than 10 new discovery areas on AAMC’s existing tenements.” As to how much quicker the ore can be transported through the FMG link, Campbell comments: “This is not a timing issue. Without an agreement with one of

the big three Australian iron ore miners, AAMC would not have a port or rail solution, so it would not have a business model at all. Securing an agreement with Fortescue has delivered AAMC a business solution. Processing of the ore will take place on AAMC’s Extension project.” AAMC welcomes a group of seed investors who believe in AAMC’s Aboriginal engagement strategy and are prepared to make significant commercial investments to advance an iron ore project in preparation for Aboriginal investors to be brought in – and who are then prepared to see their equity proportion in the business decline when this strategy is successful. Customers are in place for AAMC’s iron ore. This is because, as Fergus Campbell points out: “… the agreement with Fortescue is an iron ore sales and purchase agreement that includes AAMC selling ore directly to Fortescue as it is delivered to Fortescue’s infrastructure.” Australia is set to host its first Aboriginally-owned iron ore mine, with many key factors set to combine to make this aspiration a reality. t

* Mining correspondent January/February 2016

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AUTOMOTIVE

Lighter, stronger metal on the pedal The North American Automotive Metals Conference, organised by American Metal Market and Metal Bulletin, took place on 2-3 September 2015 in Dearborn, near Detroit, Michigan, USA. It attracted 157 delegates and one of them was Steel Times International’s Hans Mueller*

the natural ‘light metal’ often referred to as the ‘miracle metal’. The Al industry would be vulnerable if the environmental authorities decided to assess not just the pollution—and CO2 generation—when vehicles are actually in use (by measuring tailpipe emissions) but accept the larger concept of ‘life cycle assessment’, which also includes the pollution caused in the production phase of the vehicles and of all the materials of which they are made. The production of Al requires a huge amount of electric power. Steel industry experts calculated that in its production phase Al generates four to five times more CO2 than steel. Thus Al’s poor showing in the production phase easily overwhelms its advantage in the use phase. The Al industry fought back, especially the Canadians, who produce more of that metal than their US counterparts, all of it with hydro-generated electric power. The debate has become a publicity battle between the two industries. The steel versus aluminium tug-of-war was only one of the topics discussed at this

engines and transmissions, streamline their car bodies and, most important of all for metal producers, make their vehicles lighter. Steel producers, the principal metal suppliers to the automotive industry, knew they had to turn out lighter and stronger steels to help the carmakers achieve the higher standard. Even so, they were prevented from going all out in this endeavour by safety rules issued to protect persons inside the vehicles from frontal and side-impact collisions. Another constraint on so-called ‘lightweighting’ was the added cost imposed on the car companies, especially in the case of cars expected to be purchased by persons with low or medium incomes. The cost of such vehicles had already been driven up by the public expectation to have items previously available at extra cost become standard equipment. The steel industry’s public relations experts realised that the car companies might decide to substitute a large amount of automotive steel with aluminum (Al),

DEARBORN is an industrial city near Detroit, Michigan, in the USA and last year it played host to the North American Automotive Metals Conference. The conference’s 157 delegates included 42 from outside of the USA, 13 from Canada, seven each from Mexico and the United Kingdom, three from Japan, two each from Brazil, South Africa, South Korea, Taiwan and Turkey, one from France and one from Italy. Background note For 25 years, from 1985 to 2010, fuel economy regulation for ‘light vehicles – passenger cars and small trucks (or ‘pick-ups’) – remained unchanged in the USA at 29.5 miles per gallon (12.5 km per litre). Fears of excessive dependence on imported oil then moved the US authorities to give producers of light vehicles 15 years to improve average fuel economy to 54.5 miles per gallon (23.15 km per litre). To achieve this ambitious goal, car manufacturers must develop more efficient

North America light vehicle sales outlook

WHAT AUTOMOTIVE CUSTOMERS NEED... ALUMINIUM DEMAND DRIVERS - 2015:25 Weight Reduction

14.5

(Multi-Material Vehicles) 11.6

- Fuel Economy/CO2 (CAFE) - Performance Safety, 0-60, handling, ride, NVH, braking, etc. Payload, towing capacity

15.6

16.5

12.2

§7.5

12.7

 Aluminium Products Body sheet Extrusions Structural castings  Properties

Strong, tough, energy absorbing, corrosion resistant, formable, etc

 Cost Effective

* Global correspondent www.steeltimesint.com

AUTOMOTIVE Hans.indd 1

January/February 2016

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AUTOMOTIVE

Worthington Industries Overview Market-leading metals manufacturing company serving more than 5,000 customers

 Domestic leader in flat rolled metal processing  Leading global manufacturer of pressure cylinders for consumer, industrial, alternative fuel, energy and cryogenics markets

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use of advanced steel grades to rise from 125 kg/vehicle in 2015 to 219 kg/vehicle by 2025. The use of Al would increase from 179 kg/vehicle to “227kg plus/vehicle”. They also evaluated the performance of three bonding methods – spot welding, rivet bonding and adhesive bonding – with respect to their reliability, cost, quickness, ‘repairability’, as well as skill and capital requirements.

 Market-leading joint ventures serving construction and automotive end-markets  Headquartered in Columbus, Ohio with 80 facilities in 11 countries with 11,000 employees  Annual revenue: $3.4 billion (FY15)  Publicly traded on NYSE: WOR

conference. Others were the outlook for the North American (NA) light vehicle market, production and metallurgy of new types of steel, processing problems encountered with high-strength steels, advances in the production of Al and in laboratory testing of corrosion in Al alloys, the future demand and capacity of both Al and advanced high-strength steel (AHSS) and the use of magnesium in NA light-vehicle production. The ‘lightweighting’ challenge The conference opened with a keynote panel at which executives of both car companies and metal suppliers were present. P. Friedman of the Ford Motor Co. and C. Horvath of General Motors commented that they closely followed their suppliers’ pace of innovation, but what influenced them most of all were the purchasing choices of their customers. Dr. P. Rastogi of AK Steel looked at several phases of automotive production where steel has long been used and then made a wave-of-the-arm observation that the use of advanced high-strength and ultra highstrength steels alone would be capable of achieving the required weight reductions to raise the average light vehicle fuel economy to the mandated 2025 level. J. Dickson of Rio Tinto Alcan contributed the equally partial observation that the large weight reductions demanded in this case cannot be achieved without the greater use of Al, – or ‘magic metal’ as he put it. B. Keeler of Timken Steel opted to stay out of the fray, saying that the highly specialised nature of his company’s engineered products, such as crankshafts and pinion gears, ruled out any experimentation with substitute materials. A delegate inquired whether the car manufacturers would not prefer it if their steel and Al suppliers came out of www.steeltimesint.com

AUTOMOTIVE Hans.indd 2

their foxholes, shook hands and together developed superior joining methods for automotive materials. The question received favourable comments from GM’s Horvath and Alcan’s Dickson to the effect that modern society ranked innovation above rivalry, while Mr. Friedman and Dr. Rastogi agreed on the need for more research on the bonding of different materials. D. Richman of Kaiser Aluminum and the Aluminium Transportation Group provided a detailed description of the NA Al industry. Upon listing the qualities of Al in effusive terms – strong, tough, formable, energy-absorbing, corrosion-resistant – he showed consumption estimates for the region of the North American Trade Trade Agreement (NAFTA) as well as global and NAFTA capacity numbers. According to Mr. Richman, 2.31Mt of total NAFTA capacity is located in the USA, 2.81Mt in Canada. Furthermore, 75% of the primary NAFTA smelting process is hydro-powered. In that case, 5 kg of CO2 are generated per kg of Al by mining, hauling, etc. The remaining 25% of smelting in the NAFTA region is based on fossil fuels and produces 20 kg of CO2 per kg of Al. Advanced Al alloys can be targeted to achieve either maximum strength, energy absorption or formability. In the view of S. Ulnick and A. Abraham of the research and forecasting firm Ducker Worldwide, “the new advanced grades of steel are cost-effective solutions for weight savings” whereas the use of Al leads to higher incremental costs. But certain Al processes are nonetheless attractive to car producers. For example, the net vacuum die casting process turns out thin-wall, high elongation parts that reduce the complexity of designs, thereby saving weight and costs. The Ducker experts expect the automotive

Extra cost to the consumer J. Schuster of LMC Automotive estimated that the modifications required for compliance with the 2025 mandate will cost US new car buyers an additional $5,000. His annual growth forecast for light vehicle sales during the next five years was 4% for the USA, 1% for Canada and 11% for Mexico. In the USA the steep drop in fuel prices stimulated short-term demand for large pickup trucks. However, over the next several years it will be compact SUVs that will set sales records. Automatic transmissions will go to 10-speeds, electric vehicles and hybrids will gradually expand their share of the market, and by 2018 NA will go through a recession of limited duration. The chairperson of the next session was a Canadian, M. Hartlieb, an executive with the Al industry of Quebec (by far the largest in Canada). He compared lifetime energy consumption and CO2 generation of steelintensive vehicles with Al-intensive vehicles in the USA and Canada. The speaker at this session was Dr. J. Hall, an executive at a research institute affiliated with the US steel industry’s trade association. She presented the results of an identical comparison but limited to the USA. The Canadian study found that Al-intensive vehicles do less harm to the environment – in the US study that result was claimed by steel-intensive vehicles. However, due to the different regions and pollution estimates, a simplistic comparison of the results is of little value. Supply chain issues M. Chamberlain of the London Metal Exchange told of a warehousing problem that had caused delays and long queues in Al ‘load-out’ rates. It required a thorough reform of warehousing rules to alleviate inordinate queuing and undesirable differentials in contract prices. The development of advanced steels is absolutely necessary to fend off substitute materials. But new grades of steel, with their superior strength and ductility, often January/February 2016

1/22/16 2:17 PM

AUTOMOTIVE

have characteristics like excessive springback and poor formability for which the car industry’s existing tools and process lines were not designed and operators lack the proper training. D. Kanelos of Nucor explained the steps that need to be taken to cope with these problems, including the acquisition of more capable machinery, the harmonisation of testing procedures with partner companies, training workshops for the workers of supply-companies and the transfer of technology to some suppliers. In the last session of day one, T. Duff of Worthington Steel spoke about the importance of constant collaboration with all customers. Worthington is a leading multi-material distributor and processor (pickling, annealing, cold-rolling and galvanising). The firm has made increasing use of its collected data for the purpose of ‘predictive modelling,’ i.e. learning the customers’ pattern of actions and reactions to anticipate their needs before the customers themselves have identified them. Moreover, distributors must have a robust sales and operations system that can buffer or work around unforeseen flow variations and disruptions on both the demand and supply side. NAFTA shines on Mexico The first session of day two put the spotlight on the rapidly expanding Mexican car industry. The chairperson, L. Alvarez of Industria Nacional de Autopartes, voiced his concern about Japan’s position at the Trans-Pacific Partnership negotiations. Mexico, Canada and the USA proposed a 50% regional content rule in the value of vehicles, whereas Japan has insisted on 30%. Parts makers from many countries have been flocking to Mexico and the industry now employs a workforce of

724,000 people. Adoption of the 50% rule would raise the number to nearly one million by 2025. The 30% rule would lower it to little more than half that number. The first speaker was F. Leal of Ternium, a large producer of flat-rolled steel in Mexico. Ternium is currently developing high-value sheet products with the intent to displace imports. A. Lagarda of Serviacero Worthington, which operates three large service centres plus a pickling line in Mexico, thought there was plenty of service centre capacity in that country but not enough production of automotive components. N Vidaña of Nemak, a major producer of complex Al parts, expects Al use to grow especially in structural applications. A delegate asked whether the rapid industrial expansion had led to a shortage of skilled workers and what the average compensation was. The answer was that thanks to ambitious training programmes launched by several Mexican provinces the supply of skilled labour seems to be adequate. Compensation was about $6/hr, roughly one third of the US level. Micro-topics The next two sessions presented highly technical topics. D. Gallant of the National Research Council of Canada explained how laboratory simulation of corrosion could duplicate the corrosion damage found on samples of Al alloys mounted under trucks driven in traffic for a lengthy period. The lab work provided crucial information for the development of alloys with improved corrosion resistance. E. Petersen of AK Steel examined the tensile strength/elongation relationships and microstructures of dual-phase and press-hardened steels. In the same graphical

displays, he indicated the path that would lead to the development of third-generation AHSS grades. An Al executive, J. Butler of Alcoa (which was recently split into two companies), announced a ‘breakthrough’ advance in Al production. It is embodied in Alcoa’s new micromill in Texas, which turns out sheet products of superior strength and deep-drawing properties while using far less energy and generating less CO2 than traditional mills. At present only a 60kt/yr pilot plant, it can be expanded to a commercial size of 450kt/yr. The metallurgical causes of the mill’s noteworthy product improvements were not revealed. Passenger safety C. Horvath of General Motors took the podium once more to describe efforts besides lightweighting to achieve the 2025 fuel economy targets, such as raising the efficiency of powertrains and improving the aerodynamics of vehicles. He also summarised some of the issues that had come up in the discussion of lightweighting such as rules to ensure passenger safety in the vehicles. He noted, moreover, that the cost of vehicles is likely to rise steeply with a high degree of lightweighting. There is not only the higher cost of advanced materials but also the cost of new equipment to deal with the springback and stubborn waviness of advanced flat-rolled steel as well as the cost of preparing new designs appropriate for the optimal use of Al, magnesium (Mg) and carbon fibre. The final speaker was B. Kight of Meridian Lightweight Technologies. He pointed out the advantages of using Mg, especially its ease of being cast into highly complex shapes, which in some applications justifies its high cost. 

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AUTOMOTIVE Hans.indd 3

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1/22/16 2:17 PM

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DIRECT REDUCED IRON

DRI/HBI – exploding the myths Half a century of DRI/HBI electric arc furnace (EAF) use, coupled with low-cost American natural gas (NG) suggests a needed review of trends and controversial issues surrounding this alternative iron source (AIS). Aspects such as iron ore quality and operational influence; DRI stockpiling and transportation auto-ignition; optimum charge design, temperature and mechanism; compositional impact on EAF operation and performance; oxygen/carbon balance; and chemical energy need to be addressed. By Sara Hornby*, Jorge Madias** and Francisco Torre***

DRI/HBI production has grown “exponentially” since its inception in the seventies (Fig 1)[1]. Mexican, Trinidadian and Argentinean steel mills use captive DRI. Venezuela produces captive DRI and exported (merchant) HBI. Recent significant Venezuelan production curtailment has created a worldwide AIS shortage. This dearth (and dependence) has renewed interest in USA DRI/HBI production where Natural Gas (NG) availability and price evolution now make low-cost AIS production possible. Aspects of DRI/HBI production and use, such as iron ore quality, stockpiling, transportation, optimum charge design, method; temperature and chemistry; and its influence on EAF operation, energy balance and performance, are reviewed in this article.

NOTE: Unless otherwise stated, DRI is used for both DRI and HBI. Iron ore quality Most gas-based DRI production uses pellets since DRI quality lump ore is rarely available. Quality iron ore production usually includes concentration steps which, while influencing gangue and phosphorus content, isn’t enough to compensate for decreasing DRI pellet feed quality arising from over-exploitation of resources during the first eight years of the last century[2]. Besides gangue and phosphorus, sulfur released during the pellet reduction process is important for modules using process gas in the reformer. During the pelletising operation, DRI gangue content (SiO2 and Al2O3) can increase (from the binder) as can sulphur (from the induration fuel). Many DRI pellet producers use organic binders[3]

(Peridur for example[4]) instead of bentonite to lower gangue content[7], improve metallurgical and chemical qualities, and thereby improve EAF operations and lower overall steel production costs. To counteract lower ore quality, miners are changing concentration schemes [5, 6] and using new approaches to better define the relationship between mineralogy, pelletising and reduction behaviour [7].

Auto-combustion risk Despite the known auto-ignition risks involved in stockpiling and transporting DRI, more DRI than HBI has been shipped annually since 2006: in 2013, 8.56 MTe DRI vs. 5.65 MTe HBI (Venezuelan HBI shipped to the USA alone decreased from 1.8MTe to 0.5MTe). Generally, DRI ships shorter distances than HBI, although Acindar and Nucor import DRI

Year Total Year Total Year CDRI HBI HDRI Total 1970 0.79 1988 14.09 2006 48.41 8.60 1971 0.95 1989 15.62 2007 55.79 8.34 1972 1.39 1990 17.68 2008 56.52 8.19 1973 2.90 1991 19.32 2009 52.54 6.93 1974 2.72 1992 20.51 2010 56.60 7.21 1975 2.81 1993 23.65 2011 59.41 7.60 1976 2.02 1994 27.37 2012 59.51 7.90 1977 2.52 1995 30.67 2013 62.80 6.17 1978 5.00 1996 33.30 1979 6.64 1997 36.19 1980 7.34 1998 36.96 1981 7.92 1999 38.60 1982 7.28 2000 43.78 1983 7.90 2001 40.32 1984 9.34 2002 45.08 1985 11.17 2003 49.45 1986 12.53 2004 54.60 1987 13.52 2005 56.87

1970 Fig 1. DRI/HBI world production 1970-2014 [1]

2.69 59.70 2.99 67.12 4.24 67.95 4.86 64.33 6.47 70.28 6.20(e) 73.21 5.73(e) 73.54 6.25(e) 75.22

HDRI HBI 75.22Mt CDRI

Lebedinsky GOK 2.3mt HBI •LISCO 0.65mt HBI 1.1mt DRI •Trinidad & Tobago (DRI): ArcelorMittal and Nucor captive plants - 3.6mt

•Comsigua 1.3mt HBI • Briqven 1.5mt HBI • Venprecar 0.9mt HBI • CVG-FMO 1.0mt HBI • Orinoco iron 2.2mt HBI

2013

•Qatar Steel 1.5mt DRI/HBI

• Antara Steel 0.9mt HBI • Lion DRI 1.54mt DRI/HBI

• Welspun Maxsteel 0.9mt DRI/HBI • sponge iron producers using rotary kilns fired with coat±20mt •Jubdak Shadeed 1.5mt HBI/DRI

Fig 2. Merchant DRI & HBI production sites [10]

* Global Strategic Solutions Inc.,16317 Woolwine Road, Charlotte, NC 29278, USA. T: 704-488-7969 shornbyanderson@carolina.rr.com ** Jorge Madias, metallon, 432 9 de Julio St, San Nicolas, Buenos Aires, B2900HJG, Argentina. T: 011-54-336-442-1318 jorge.madias@metallon.com.ar *** Francisco Torre, Formerly Acindar ArcelorMittal, 1930 Ayacucho St., Rosario, Santa Fe 2000, Argentina. T: 011-54-341-482-9302 fltorre@fibertel.com.ar January/February 2016

DRI.indd 1

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DIRECT REDUCED IRON

600

Rebar

Minimum liquid steel cost (US dls/tls)

700

L Free D Drawing Drawing F wine C quality Structural

800

DRI price = 420

500

Mixed with scrap

DRI price = 150

300 200 100 0 0.20

0.40 0.60 0.80 1.00 Sum of residuals (Cu, Ni, Mo & Sn) wt %

1.20

DRI Maximum % Residuals IF 0.106 DOQ 0.145 Drawing Q 0.210 Fine wine 0.250 Commercial 0.295 Structural 0.390 Rebar 1.060

from Trinidad. Increased DRI shipments and DRI winter stockpiling to compensate for NG scarcity-induced downtime, caused a recent re-visitation of DRI auto-ignition [8, 9]. Fig 2 shows 2008 Venezuelan production of 6.9MTe[1]. In 2013 HBI production dropped to 2.8MTe. Changes to passivation/ shipping regulations made in 2011 impacted DRI shipments.

Charging Optimum charge design [12, 13] Charge optimisation is very important considering that the EAF charge constitutes 73% to 89% of total liquid steel costs[12]. Historically, mills believed DRI/HBI carried an $8 to $30 premium due to penalties (higher kWh/Tels, tap-to-tap times (TTT), fluxes, slag FeO content, refractories and electrode wear, yield losses). As a result, DRI EAF use was restricted to producing high quality, low residual steels. Today it is known if EAF operators identify and understand the inherent and unique DRI properties and modify standard operating practices (SOPs) accordingly, educated use not only negates these disadvantages, but actually improves operations and operating costs (Table I).[13] Fig 3 shows that even 50% DRI (composition: 93% Fe total, 93% Met., 1.8%C, 1.5% (CaO + MgO), 1.9% (SiO2 + Al2O3), 0.003%S) has reduced kWh/tcharged and TTT below that for 100% scrap. Note: today 93% Met. is low and basicity is now nominally 0.4 to 0.5 vs. the 0.79 cited, especially when operating 60% to 65% DRI. To reduce operating costs, steel mills need to understand and quantify current operating efficiencies, optimise practices by charge mix and accurately define www.steeltimesint.com

Batch alone Cold DRI

Continuous feeding 0

C o n t i n u o u s

95-100

% DRI/HBI in the metallic charge

Fig 4. Nominal charging practice by %DRI/HBI[12]

Fig 3. Summary of DRI VIU results for 7 steel grades[12]

DRI.indd 2

Continuous feeding

DRI price = 330

400

0.00

Hot DRI

% DRI

kWh/ton

TTT (mins) 61

All Scrap

421

375 52

377 53

380 54

393 55

399 57

408 59

Table I. %DRI Impact on operating parameters

yield. Quantification of cost of variables associated with DRI use (continuous charging, safety and ease of handling (shipping, transfer, storage…), nitrogen removal capacity, carbon efficiency (in-situ), and practice changes needed will reveal the true value of DRI and metallics – enter the most important concept for optimising charges, the Value-in-Use (VIU) [12, 13, 14, 15]. Tenova demonstrated how DRI price, metallics’ VIU and end-product residuals’ constraints affected the use of DRI and the cost of liquid steel. A summary of results (three DRI prices, seven steel grades) is shown in Fig 3 above[12].

Charging methodology As DRI use increased worldwide, charging methods changed. Fig 4 shows nominal charging practices change with temperature and %DRI charged. Continuous feeding is usually employed above 25% to facilitate matching feeding rate to power, flux and chemical energy input to prevent, in part, ‘icebergs’ (‘ferrobergs’) and ensure slag control (foaming height, viscosity etc.). For example, an 80MW average active power on a flat bath is equivalent to 1333kWh/min. If DRI consumes 500kWh/Te. to melt, the feed rate would be 2.7 Te/min.

or 33.75 kg/MW/min [13, 16]. Bucket charging is generally used by steel mills using less than 25% to 30% DRI/HBI, although it is preferable to continuously charge DRI. DRI/HBI in the bucket densifies charges, lowers liquid steel residuals and circumvents the cost of a continuous charging system. HBI, charged on top of heavy scrap or bundles (Fig 5) for charge densification[13, 16] can improve melt refining (high FeO/low C). The rest of the bucket is loaded according to site-specific practice(s) [13, 16]. Fifth hole (roof) charging, preferred for DRI, is definitely more efficient for >30% charged. Captive DRI plants, mandated by poor quality or low availability scrap, use 60% to 100% DRI (Argentina, MENA) with DRI diverted to storage bins or warehouses when the EAF shop is down for maintenance or delays or in anticipation of DRI plant shut downs. Continuous versus batch charging[12] negates roof swings (heat and time losses) significantly lowering energy needs and potential nitrogen pick-up (air ingress[15]). Table II shows that continuously charged 33% DRI has the best results, saving 50.6 kWh/Techarged (Tec) and four minutes TTT compared to the two-bucket charge. Even continuously feeding 43% DRI saves 37.4kWh/Tec. Cold versus hot charging: hot charging DRI reduces the power requirement by 20kWh to 30kWh/100oC. Fig 6 shows 27kWh/Tels[12].Tenova reported[17] that only 375kWh/Tels is required to melt 100% DRI with 4%C charged at 600oC using 42Nm3 O2/Tels. Continuously charging 600°C DRI can lower energy by 16% to 20%. Table January/February 2016

2/4/16 9:36 AM

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MidrexSTIAd4.15.indd 1

3/31/15 9:54 AM

DIRECT REDUCED IRON

25 kWh/tls

Medium scrap HBI

20 Electricity saving

Light scrap

min/heat

1.5 15 25 10

Heavy scrap/bundles

Flames/coal

0 100°C

Fig 5. HBI bucket layering example[13, 16]

700

33% DRI - 2 bucket charge

426

600

33% DRI - continuous charge

380

43% DRI = 33% cont, 10% charge

390

43% DRI - continuous

392

III summarises the data on the economic impact of 3.1% C HDRI in an EAF. Metallon benchmarked HDRI charging using published data from 150 EAFs. Fig 7 represents the specific power consumption for EAFs charging between 20% and more than 80% of hot metal, pig iron, CDRI/CHBI or HDRI. Some HDRI EAFs match scrapbased EAF energy consumption. Specific consumptions shown are: • PI between 325 and 400kWh/Te • CDRI 470 to 600kWh/Te • HDRI 425kWh/Te • Scrap 320 to 520 kWh/Te • HM (the best results) at 180 to 300kWh/Te

Carbon High FeOslag increases refractory erosion. Neutralisation requires the DRI to contain 0.215%C for every 1% Fe as FeO. So, 93% Met. DRI with 93% total iron theoretically requires 1.4%C for “neutralisation”. Any excess carbon can combust with oxygen and reduce electrical energy (9.09 kWh/ kg of C at 100% efficiency). Excess carbon also promotes a faster, earlier, foamy slag reaction as CO and/or CO2 are evolved as FeODRI melts. In the early 1990s most steelmakers requested 1.6%C to 1.8%C DRI because O2 tools and/or O2 supply were lacking for economical decarburisation (deC). (A longer deC time reduces productivity, costing more than inherent carbon energy/power savings). The advent of more efficient O2 tools and/or O2 supply, and quantification

DRI.indd 3

Table ll. Continuous vs batch charging of DRI[13, 14]

Fig 7. Specific power consumption for HM, PI, CDRI and HDRI operations

Specific power consumption (kWh/Mt)

TTT (mins)

www.steeltimesint.com

1% Met

1%C

Fig 6. Savings available from DRI variations[12 kWh/t

Power on-time saving

500 Hot metal

400

Pig iron

300

Scrap Cold DRI

200

Hot DRI

100 0 -

0,500

1,000

of in-situ Carbon economics, has increased the %C requested today. Today, optimal DRI %C is controversial and requires site-specific VIU analysis, considering local carbon costs, injected versus in-situ carbon efficiency (25% to 75% versus 95% as seen at AM Mexico[13, 15] ), operational efficiency (deC potential, addition efficiency, TTT, DRI temperature) and productivity needs (DRI and EAF plant), to evaluate DRI carbon levels. Tenova HyL promotes ≥4%C DRI while Midrex recently stated[18] that “the proper percentage exists as a spectrum of sorts,

2,000

not a fixed point” where “too much carbon is that which does not add any value to the production or further decreases the TTT of a steel heat”. Ergo consider VIU. HDRI captures latent heat, imparts greater energy to the melt but shortens available deC time and reduces the ability to handle higher %C. AM Mexico modified SOPs when DRI carbon increased from 2.7% to 3.1%C DRI [13] . They negated carbon additions, used O2 earlier and fed DRI faster (improved, earlier foamy slag, better heat transfer and bath reactions achieved from in-situ carbon).

AM MX CDRI % Carbon in DRI

1,500

Specific power (MVA/Mt)

2.08%

Projected HDRI

3.10% 3.10%

Charge % DRI/scrap (TeDRI/Tescrap) 94.4/5.6 (252/15) DRI temperature (°C)

25 700

Scrap temperature (°C)

% Metallisation

% Yield

Power on time (minutes) Tap to tap time (minutes) Totan energy (kWh/Tels) Productivity (Te/hour) Savings

66 80

57 38.9 71 53.9

585.9

527 (-58.9)

419.1(-191.11)

163

177 (+14)

222 (+59)

$/Te@$0.035/kWh

4.64

9.27

$/Te@$0.050/kWh

5.53

12.14

Table III. Economic* impact of 3.1%C HDRI in an EAF.[15] Economics assigned by author

January/February 2016

2/4/16 9:36 AM

DIRECT REDUCED IRON

750

y= 7.6107x2 -1468.5x + 70418

700

675

660 DRI Yield (%)

Energy consumption [kWh/Tonne]

725

625 600 575 550

y= -0.2997x2 + 57.203x - 2637.4

89 88 87

525

500 90

90.5

91.5

92.5

93.5

94.5

85 90.5

95.5 96

Metallisation [%]

Fig 8a. kWh/Te vs. metallisation[13, 19]

Table III shows that $4.64/Tels is saved when 94.4%DRI is charged (at $0.035/kWh) not counting the 14 Te/hour productivity benefit[15]). This DRI C efficiency, coupled with its low residual properties, provides benefits such as: lower [N]steel and [H]steel (CO purging), energy use, TTT, refractory wear, liquid steel cost (Table III, Fig 6), and increased yield and productivity[12, 15, 17] . Tighter chemistry control allows tighter process control and greater yield and quality downstream[12].

Metallisation Table IV shows the benefits derived from a 1% increase in metallisation at Acindar [13, 19] , Ternium Guerrero[4] and industry in general. Figs 8a and 8b represent Acindar’s results. Savings of 10 to 25 kWh, 0.425 kg refractories and 0.0375 kg electrodes/Tels with between 0.3% and 2% increase in yield were realised. Increasing metallisation from 91% to 95% reduced power by 40 kWh/Te and increased yield by 1.5% per 1% increase in metallisation. Similar results were achieved at Qatar Steel[21].

Gangue High oxide has detrimental process effects. 10% DRI charge penalties are 15 kWh/Tels, 0.19 kgelectrode/Tels, 2.5 mins. TTT, more slag former (greater slag volume/disposal cost) and l0.4% yield and productivity loss. A 1% decrease in metallisation increases power needs by 8kWh/Te to 16kWh/Te. Contrarily, 10% PI (4%C, low oxide) lowers power by 27.1 kWh/Tels. A 1% increase in acid gangue increases basic fluxes (MgO, CaO) to satisfy the V4 EAF slag ratio. CaO’s 2% increase /1% SiO2 is exponential when SiO2 >2%, increasing power requirements 20 kWh/Te, as well as slag volume and disposal costs. The acid gangue components, SiO2 and Al2O3, have a more costly impact on production costs January/February 2016

DRI.indd 4

91.5

92.5

93 93.5 94 Metallisation [%]

94.5

95.5

Fig 8b. DRI Yield vs. metallisation at Acindar[13] Benefits Category

General

KWh/T liquid steel

10 to 25

Refractory savings (kg or $/Tonne liquid steel)

Acindar13

Ternium Guerrero4

25 12

0.425

$0.70

Electrode savings (kg/Tonne liquid steel)

0.0375

0.15

Yield Increase (%)

0.3 to 2

1 0.4

Coke savings (kg/Tonne liquid steel)

0 to 4

5.8

Productivity Increase (%) Cost Reduction (VIU) ($/Tonne liquid steel) Increase in Metallisation (%)

Up to 5 $0.68 to $2.96 92 to 93

Up to 5 $6.00 to $8.09 $5.00 93.5 to 94.5

Table IV. Benefits of a 1% Increase in Metalsation of DRI/HBI

than these basic flux components due to their higher flux and yield loss cost [12, 13, 14, 15] . FeO is required to help flux/dissolve the lime and/or dolomitic lime, promoting an early liquid slag. 67% of the FeO in DRI is reduced by C resulting in CO gas which promotes an earlier, better, foamy slag.

Chemical energy The main parameters impacting EAF energy use are composition of raw materials (chemistry, metallisation, energy content), operating practices (power profiles, carbon additions, foamy slag and melting practices) and furnace design (heel, O2 use and tools, off gas (OG) and charging systems, AC/ DC). Informed and intelligent DRI use can significantly benefit the operating results[15, 19, 20, 21, 22] . Chemical energy, from combustion of C (contained, charged, injected), O2, NG (“fuel”) and “burning” bath elements (iron (Fe), silicon (Si), aluminum (Al), etc.) is today about 35% of total energy and rising (more than 50% has been seen). This should be maximized if the economics of so doing are beneficial (VIU). Greater chemical energy infers increased volume and energy loss to the OG System (OGS) due to partial combustion (nominally 17% to 22% in standard EAFs, 10% in Consteel® and shaft furnaces and 7% in finger shaft furnaces). The OGS must be large enough and/or fan

operations modified; combustion optimised (maximised) and energy captured/retained through understanding the materials’ VIU, partial combustion source, chemical and electrical energy balance [14, 15], and OG analysis (temperature and composition). Hot charging reduces energy needs significantly. Charging HDRI negates the gangue impact[12].HM reduces energy the most but deC time can become an issue (productivity loss). When injection systems in two DRIbased EAFs were revamped, Krakatau Steel cited 155kWh/Tels, 0.1kgelectrodes/Tels and productivity gains, lance pipe elimination with increased NG consumption (+3Nm3/ Tels) and refractory wear[22].

Conclusions – DRI/HBI is here to stay • Declining iron ore quality is being improved from the mines through to pellet binders. • DRI shipped tonnage today exceeds that of HBI • The greater carbon (chemical) energy efficiency of DRI’s in-situ carbon can significantly alter the VIU of DRI. • Site-specific VIU should consider ability to handle high %C (deC tools, OGS), the use of low oxide load (gangue), DRI/HBI (organic binders) and (long-term) charge pre-heating to reduce operating costs. • As SOPs are altered to accommodate DRI use, the benefits and VIU of DRI will be www.steeltimesint.com

2/4/16 9:36 AM

DIRECT REDUCED IRON

maximised and detriment to EAF operations minimised. • EAF optimisation will be site-specific, balancing DRI and metallics’ VIU with SOPs. • The VIU of DRI burdens changes significantly with price. • Cheap North American shale gas will drive new DRI plant investments and guarantee long-term quality metallics supply. • DRI use will grow as the ‘price will be right’! • Educated use of DRI (VIU, DRI specific SOPs) will allow mills to produce low-cost liquid steel as effectively as scrap charges. t References 1.

“2013 World Direct Reduction Statistics”, Direct from Midrex Second Quarter 2014.

Grazziuti, A., private communication, July 2014.

Valadares de Andrade Resende, F. et al; “Performance Analysis of Organic Binder Compared to the Sodium Bentonite and the

Over-activated Sodium Bentonite in the Production of Direct Reduction Pellets”. 43rd Raw Materials and Iron Ore Ironmaking Seminar, September 2014, Brazil, pp. 1009-1013 (in Portuguese). 4.

Hornby, S.; “EAF Optimization”, 2007 Intertech Conference on Scrap Substitutes, October 2007.

Pereira Lima, N. et al; “Process Routes for the Exploitation of Poor Itabirites of the Iron Quadrangle”. 41st Raw Materials and Iron

Ore Ironmaking Seminar, September 2011, Brazil, pp. 587-594 (in Portuguese). 6.

Uliana, A. et al; “Characterization of Compact Itabirites of Alegria Mine – SAMARCO Mineração (part 1)”. 42nd Raw Materials and

Iron Ore Ironmaking Seminar, September 2012, Brazil, pp. 1551-1562 (in Portuguese). 7.

de Pinho Rocha, J.M. et al; “Detailed Investigation on Goethites Present in Altered Amphibolitic Itabirites (MG-Brazil)”. 42nd Raw

Materials and Iron Ore Ironmaking Seminar, September 2012, Brazil, pp. 1754-1764 (in Portuguese). 8.

Ajargo, F.M. et al; “Methods and Experiences in Open Air DRI Storage in Tenaris-Siderca”. 7th IAS Ironmaking Conference, November

2009, Argentina, pp. 64-71 (in Spanish). 9.

Grazziutti, A.G. et al ; “Development of Laboratory Tests to Evaluate the Reactivity in Sponge Iron”. 6th International Congress on

the Science and Technology of Ironmaking – ICSTI, October 2012, Brazil, pp. 932-942. 10. Hassan, A., “Ore-Based Metallics 101”, International Iron Metallics Association (IIMA) Seminar, October 28th 2012, USA. 11. Noel. N. et al “Shipping of DRI – The Nu-Iron Experience”. AISTech 2014 Proceedings, pp. 823-829 12. Hornby, S; “Mini-Mill Burdening for Maximum Efficiency and Yield?”, AISTech 2014 Proceedings pp. 1027-1038 and Re-published in Iron and Steel Technology, January 2015, pp. 50 – 62 13. Midrex Melt Seminar, May 2000, Tuscaloosa, AL, USA. 14. HBI and DRI Melting Seminar, May 2002, Singapore, Co-hosted by Midrex and BHP Australia.

HBI is here to stay!

15. Hornby-Anderson, S., “The Educated Use of DRI/HBI Improves EAF Energy Efficiency and Yield and Downstream Operating Results”, European Electric Steelmaking Congress, Italy, May 2002. 16. IIMA Seminar in conjunction with the AIST Scrap Supplements & Alternative Ironmaking VI Conference October 2012, USA 17. Memoli, F. et al; “The Use of DRI in a Consteel® EAF Process”, Iron and Steel Technology, January 2015, pp.72 – 80. 18. Direct From Midrex First Quarter 2014. 19. Torre, F. et al; “Results of CoJet® technology (gas and coal fines injection system) in ACINDAR S.A., with continuous DRI charging”, 15th IAS Steelmaking Conference, November 2005, pp. 24-32 (in Spanish)

For 40 years, Köppern briquetting machines have played a key role throughout the world in the production of HBI for DRI processes.

20. Al Saif, M.M. et al; “Improvements in graphite electrode consumption in HADEED long products”, 8th European Electric Steelmaking Conference, 2005, pp. 173-182. 21. D’Souza, J. et al. “Use of High Percentage Quality DRI in EAF and Its Benefit in Cost Reduction”. AISTech 2011 Proceedings – Volume I, pp. 955-972. 22. Stagnoli, P.; “Smart injection tools in DRI-based EAF steelmaking at Krakatau Steel”. Steel Times International – November/December

And HBI is still in demand, as demonstrated by the upcoming installation of new HBI plants equipped with Köppern roller presses, at LEBGOK (Russia) and Voestalpine (USA).

2011 pp. 13-16. 23. S. Hornby et al, Myths and Realities of Charging DRI/HBI in Electric Arc Furnaces, AISTech 2015, PR-368-204.5664

DRI/HBI – exploding the myths[23] Myth –

DRI significantly increases steel costs

Reality –

Not if mills optimise operations

Myth –

Iron ore quality is constant

Reality –

It is diminishing

Myth –

DRI cannot be shipped distances

Reality –

More DRI than HBI is shipped today

Myth –

DRI use increases liquid steel cost

Reality –

Not if mills use VIU to define charge mixes

Myth –

DRI is detrimental to EAF operations

Reality –

Not if SOPs are optimised

Myth –

DRI does not add chemical energy to the EAF

Reality –

DRI’s in-situ C is a more efficient energy source

Myth –

DRI/HBI is used only where scrap quality is bad, availability of low or high quality steel predicates.

Reality –

Metallics’ VIU, optimisation of charges and SOPs, lower cost DRI/HBI production, promote increased use.

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DRI.indd 5

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State of the art technology Experts in process technology High plant availability Long-lasting equipment

Köppern – Quality made in Germany.

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January/February 2016

2/4/16 9:36 AM

AM6025 adverts_Steel Times International 18/01/2016 16:43 Page 1

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HANDLING

Non-contact billet length measuring To prevent over-length billets being charged to the reheat furnace and causing jams, a laser distance measuring system has been installed at the charging grate to warn operators of oversize billets. Furnace availability has improved 10% since its implementation. By V Kumar1, A Sharan1, U Rani1, A Kumari2, P Kumar2, S Kumar1, B N Ghosh1, M K Gupta2 & B K Prasad1 THE Wire Rod Mill (WRM) of Bhilai Steel Plant (BSP) is a continuous high capacity mill comprising two furnace charging grates, a common pusher type reheat furnace, a common mill train of 15 roughing and intermediate stands and four finishing strands and a coil handling area. The operations and controls are distributed throughout several pulpits and machine halls. In the furnace charging area, there are two charging grates (Fig. 1) onto which the billets are placed by cranes and then pushed onto a roller table to be carried to the furnace. Some of the billets may either be defective or over-length. These should be visually identified by the operator and removed from the roller table by a billet rejecter mechanism (Fig. 2). Each charging grate has one billet ejector. Refractory damage In the absence of any on-line billet measuring system, oversized billets, greater

Fig 1. Billet charging grate

than 11,800mm long, are frequently not identified manually and are fed into the furnace where they become stuck when pushed through the furnace, which results in furnace delay, damage to refractories and hampers production. In view of this, a non-contact billet length measuring system comprising laser sensors, a Programmable Logic Controller (PLC) and display has been conceived, designed and implemented to measure the length of billets at the charging grates and so identify billets that are too long. The lengths of all the billets are displayed to the operators at the charging grate’s control pulpit (CP). A Binary Coded Decimal (BCD) unit is provided along with a warning light to alert operators of billets that are too long. The system has been commissioned and is running satisfactorily enabling online determination of billet length to an accuracy of ±4mm. It provides timely identification of billets that are too long for

the furnace and has completely eliminated these being charged to the furnace. This has reduced downtime in the furnace area by 10% and so increased productivity. Design and implementation The objective was to reduce controllable furnace downtime by providing an online billet length determination and identification system to warn operators of over-length billets. The approach used was to: • Implement a comprehensive system for billet length measuring and identification of long billets at the charging grates and set a visual alarm/annunciation system at the control pulpit. • Provide instantaneous display of all billet lengths on both charging grates to the control pulpit operator with visual alarm/annunciation in the case of overlength billets. • Install a PLC panel, non-contact laser sensors, BCD displays and visual alarm.

Fig 2. Billet rejecter

1. Research & Development Centre for Iron & Steel (RDCIS), SAIL, Ranchi-834002, India 2. Bhilai Steel Plant (BSP), SAIL, Bhilai – 490001, India e-mail: vikas@sail-rdcis.com www.steeltimesint.com

Handling Scheduling SAIL Tim.indd 1

January/February 2016

1/22/16 2:19 PM

HANDLING

PLC room

100 Metres

Power cable

150 Metres Signal cable

to install the PLC panel display in the pulpit without disrupting normal operations; and lay power and signal cables and necessary interfacing to the laser sensor and BDC. Cables were laid through a conduit following various routes to the control pulpit. A water line was extended to each sensor for cooling purposes as well as extending an air line to each sensor for lens purging. Four mounting structures were constructed to mount the laser sensors at the specified distance from the ends of a billet, two for each charging grate. A base plate was also fabricated to mount the PLC. The BCDs were installed in the control pulpit to display the length of each billet.

200 Metres

Charging grate #1

Charging grate #2

100 Metres Power cable

Charging grate #2 Pulpit

Charging grate #1 Pulpit 4 digit BCD display for billet length

Laser sensor with cooling jacket Annunciation LED lamp for longer billets

PLC panel

Billet (105mmx105mmx11800mm)

Trials Extensive trials were carried out during scheduled shut down periods as well as when the mill was operating to test the on-line conditions during rolling. All ran trouble-free and safely. After fine-tuning the PLC software the system was running as planned.

Fig 3. Configuration of on-line measuring of billet length

Display of billet length

Visual annunciation of longer billet

Results With the installation of the billet measuring system, information regarding actual billet length is instantaneously available at the pulpit for further decision. The PLC calculates the actual billet length as BL = L- (L1 + L2) (Fig. 5). The result is displayed at the BCD in the control pulpit (Fig. 4). The PLC also enables easy and fast troubleshooting in case of system breakdown. The various features incorporated for measuring, monitoring and supervising have enabled a reduction in controllable mill delays caused by furnace jams. The installation is designed such that future expansion and modification can easily be implemented. It has been running continuously since commissioned and is in use for effective operation and maintenance

Fig 4. Operatorsâ&#x20AC;&#x2122; display in pulpit

Principle of operation The configuration of the PLC and other equipment is summarised in Fig 3. The system is built around one PLC, two laseroperated distance measuring devices at each grate and, in the control pulpit, a BCD display and visual alarm LED light as annunciator, for each grate. The sensors are mounted with water cooling and with air purging, to keep the lenses clean. The two laser sensors are positioned on opposite sides of a charging grate so as to view each other across the grate at a set distance (L). As a billet, aligned with the laser beam, passes between them it interrupts the beam and each sensor instead measures the distance to the respective ends of the billet (L1 & L2). The sensors each give these distances as an analogue signal which arrives at an analogue module connected to the PLC. The length of the billet (BL) is simply calculated as: BL = L â&#x20AC;&#x201C; (L1 + L2). All calculations are performed by the PLC using an in-house developed program. The result is shown by the BCD display in the January/February 2016

Handling Scheduling SAIL Tim.indd 2

control pulpit; which is connected to the PLC via a digital output module. In the case of the PLC sensing a billet longer than the pre-defined maximum length it transmits the digital output to a warning LED light installed in the control pulpit. The online billet length display and excess billet length warning light displayed in the pulpit is shown in Fig 4. Erection and commissioning Erection and commissioning involved meticulous planning and execution, using existing shop shutdown periods in order

L1 (mm)

L2 (mm) Billet Laser sensor

Laser sensor

Billet length (mm) = L - (L1 + L2)

Fig 5. Method of calculating billet length

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1/22/16 2:19 PM

HANDLING

management. It has enabled online measurement of billet length to an accuracy of ± 4mm, timely identification of over-length billets and total elimination of such billets being charged to the furnace. As a consequence, downtime in the furnace area has fallen 10% and so increased productivity. The installation has demonstrated that modern state-of-art automation can greatly improve accuracy, reliability and repeatability. The equipment has good reliability, but should a fault occur this is much easier to diagnose and rectify than in previous systems. Also, modifications in the control algorithm are easier to carry out. The laser distance sensors also exhibit good connectivity and compatibility with the PLC software enabling ease of configuration, status checking and rectification of any faults. The success demonstrates that similar billet length measuring and identification of over-length billets can be effectively implemented in other rolling mills for materials handling where length or distance measuring is required for smooth operations and control. Acknowledgements The task force members are grateful to the management of RDCIS & BSP for providing this opportunity and continuous support for executing the project successfully. Special acknowledgments are due to all the people of WRM, BSP for supporting the project from concept to commissioning and for maintaining quality and timely execution of the project. The taskforce sincerely thanks all those who have directly or indirectly supported the project. Bibliography 1 ‘Automated monitoring and diagnostics of metallurgical plants and rolling mills’, by Jorg Deckers, Olaf N Jepson, Siegfried Latzel, MPT International 5/2002:This provides an insight into the state of automation and monitoring systems prevailing in modern steel processing units and helped in formulating the project scope and design features. 2 ‘Laser ranging: a critical review of usual techniques for distance measurement’ by Markus-Christian Amann; Opt. Eng. 40(1), 10-19 (Jan 01, 2001); http://dx.doi. org/10.1117/1.1330700

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TESTING & ANALYSIS

Ferro-alloy optimisation explained An optimisation model to determine the lowest cost of ferro-alloy additions has been developed inhouse by SAIL R&D. In-plant trials have resulted in an average 5.33% reduction in costs by replacing HCFeMn with lower cost SiMn and reducing the use of FeSi, without detriment to the chemistry of the steel grades tested. By K K Keshari, R K Singh, S Kumar, S Roy, S Ghosh & R Datta*

THE ferro-alloy market is very competitive, open and dynamic, which results in frequent changes in prices on the international market. Steelmaking requires the addition of ferro-alloys depending on the grade-specific requirement to meet the stringent quality demands of the customer. To be more competitive in the market and produce steel at lower cost, using the exact quantity of ferro-alloy is required. The use of a process model based on current market price is a must to maintain market share. The stiff rise in price of high carbon ferro-manganese (HCFeMn) and ferrosilicon (FeSi) in recent years has increased the input cost of ferro-alloys in steel production. But the conservative nature of steelmakers coupled with an absence of decision-making tools makes any change in de-oxidation and alloying practice difficult in day-to-day operations. The higher input cost of ferro-alloy for steel production can be tackled, to some extent, by selection of grade-specific de-oxidation and alloying practice using lower cost de-oxidisers and ferro-alloys. Additions of ferro-alloys account for 3.0 – 6.0% of the total cost of saleable steel, the range depending on the product mix of the steel plant. Lowering production costs can be tackled in two ways: • Process improvement to achieve higher recovery of the ferro-alloy by using the latest technology, such as modelling of blowing practice, control of slag oxygen potential, detection and control of carry over slag to the ladle and so on. • Judicious selection of the right quality and quantity of ferro-alloy for de-oxidation

Developed by RDCIS, SAIL, Ranchi LOGIN LOGIN ID

admin

PASSWORD

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RESET

HOME CHANGE ADMINISTRATOR PASSWORD CHANGE OPERATOR PASSWORD

Fig 1 Logging in window

and alloying using a dynamic and flexible optimisation model based on the current market price of the ferro-alloy without affecting the end quality of the steel. In-house model A model taking into account the prevailing purchase price of the ferro-alloys has been developed in-house. The ‘front end’ providing the graphical user interface, through which the operator will interact with the software, is designed in Java while all background calculations are performed in Microsoft Excel. The program is a decision-making tool for shop floor managers in the steel melting shop to be used to calculate optimised additions of various ferro-alloys such that the cost of addition is minimised while the chemistry of the steel grade is achieved without affecting the final quality of the product. A manager can log into the system either

in ‘administrator’ or ‘operator’ mode (Fig 1). For the ‘operator’ mode, the inputs are the tap chemistry and heat weight, the type of de-oxidation practice, the target grade of steel and the combinations of alloys preferred (Fig 2). Using the recovery factor, chemical composition of the alloys and the price of different alloys, which has been pre-defined, the model calculates an optimised routine and suggests a combination of de-oxidiser and ferro-alloys to be added which will achieve the target grade chemistry at lowest cost (Figs 3 & 4). Alternatively, if the user logs in as ‘administrator’, this provides the ability to add new grades of steel, edit the target chemistry of existing grades, edit the composition of the ferro-alloys, change the price of the ferro-alloys as well as change the recovery factors for different de-oxidation practice. This data is saved in the Excel worksheet which then uses the

* The authors are with the Research and Development Centre for Iron & Steel, Steel Authority of India Ltd, Ranchi e-mail kkkeshari@sail-rdcis.com www.steeltimesint.com

testing &Analysis ferro.indd 1

January/February 2016

1/27/16 12:03 PM

TESTING & ANALYSIS

Hardware requirement

Software requirement

Minimum 512 Mb RAM.

40 Gb Hard disk.

> Operating System- windows 98, windows 2000,

Colour Monitor.

Windows XP, Windows Vista, Windows 7.

> Java Runtime Environment (JRE 5.0).

> Microsoft Excel 2003 or Microsoft Excel 2007.

Table 1 Hardware and software requirements to run optimisation model Ferro-alloy quantity (kg) Grade

Pet coke

Nut coke

160

SAIL Tower

HCFeMn

FeSi

SiMn

Ferro-alloy input cost (Rs/t)

355 264 2399

1474

Fe500D 37 294 223 355 1768

1189

C-15

34 231 140 370 1721

1109

C-20

41 291 208 349 1830

1207 1245

Average (Rs.)

Table 2 Ferro-alloy consumption and input cost for earlier practice

Ferro-alloy quantity (kg) Grade

Pet coke

Nut coke

178

SAIL Tower

HCFeMn

FeSi

SiMn

Ferro-alloy input cost (Rs/t)

0 138 2947

1419

Fe500D 29 364 0 266 2082

1134

C-15

29 215 0 255 1922

1036

C-20

24 368 0 290 2010

Average (Rs.)

1125 1179

Table 2 Ferro-alloy consumption and input cost for earlier practice

optimisation routine to calculate the lowest cost ferro-alloy addition. The quantity to be added, total cost of addition and temperature drop following the addition is displayed on the screen.

units are carried out very carefully to avoid off-grade chemistry as well as adding extra costs. Targeting the lower range of the

Development of model After completion of the oxygen blow in the BOF converter, steel is tapped into a preheated ladle along with flux and de-oxidiser to maintain a slag basicity suitable for the ladle lining and to remove oxygen dissolved in the steel. De-oxidiser and additions of ferro-alloys are made to the ladle during tapping to achieve the target grade chemistry. Any necessary trimming additions that take place in the secondary refining

Validation and industrial trials Trials were carried out at the Durgapur Steel Plant (DSP) of the Steel Authority of India Ltd (SAIL) keeping in mind the prime objective of reducing ferro-alloy input cost. The Steel Melting Shop (SMS) at Durgapur produces a variety of steel grades using the

Fig 2 Initial home window to define alloy

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chemical specification to reduce cost may lead to off-grade chemistry. To determine the optimised additions, the heat weight that is being tapped from the converter along with the bath oxygen level is entered as input. Next the target grade, the type of de-oxidation practice being followed and the different ferroalloys available in the bunkers is selected. Hardware and software requirements are presented in Table 1. Software developers may install purchased software or develop new, custom designed programs. Programmers are responsible for documenting the program, providing an explanation of how and why certain procedures are coded in specific ways. Documentation is essential to test the program and for maintenance once the application has been installed. Evaluation of development in accordance with such yardsticks as overall development time and effort, conformance to budgets and standards and other project management criteria is necessary. On-going maintenance is also required to eliminate errors during the programâ&#x20AC;&#x2122;s working life and to tune the system to any variations in its working environment. Small deficiencies are often found when a system is brought into operation and changes are made to remove them. Operators must plan for resource availability to carry out maintenance, which is essential to ensure the new system meets any modification in standards.

Fig 3 Cost of ferro alloys

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TESTING & ANALYSIS

Fig 4 Final window showing optimised inputs

BOF-LF/VAD â&#x20AC;&#x201C; Bloom/Billet Caster route. DSP produces mostly Si-killed and semi-killed steels using high carbon ferro-manganese (HCFeMn), ferro-silicon (FeSi) and silico-manganese (SiMn). As well as for deoxidation, ferro-alloys are also used for micro alloying and alloying of special steels to impart distinctive properties to the steel. Stiff rises in the price of HCFeMn and FeSi, increase the input cost of steel production. Re-designing the de-oxidation and alloying practice based on the outcome of the in-house-developed ferro-alloy optimisation model helped to significantly reduce ferro-alloy input cost. The model was validated in DSP and could be fine-tuned to other steelmaking routes such as electric arc or induction furnace melting with continuous or ingot casting. Plant trails were carried out for the four major targeted steel grades made at Durgapur, namely SAIL Tower Gr-6, Fe-500D, C-20, and C-15 using the ferro-alloy additions presented by the optimisation model. Price fluctuation of ferro-alloys during the trial were taken into account and adjustments made to the process chart. All the heats made during the trial met the target chemistry and over 1000 were made without problems. The model calculates the quantity of de-oxidiser and ferro-alloy to be added during tapping from the BOF into the ladle. After tapping, ladle metal samples were taken and accordingly trimming additions made at the ladle furnace. Metal samples were collected and analysed. The results indicated that a 100% replacement of costlier HCFeMn by cheaper SiMn and a substantial reduction (17 - 48%) in FeSi additions (depending on steel grade) are possible. The modified de-oxidation and alloying practice did not call for any additional amount of ferro-alloys, but rather higher consumption of SiMn, for all four major grades of steels considered. The target chemistry was achieved for each grade of steel in every heat. The average input cost of the ferro alloys for each grade was calculated for comparison and to determine the effectiveness of modelbased addition practice. Cost data indicates a lower cost for all the grades. The cost benefit was calculated based on the prevailing market price of ferro-alloys during the validation period. A comparison of cost data for normal and modified practice is shown in Tables 2 & 3. These show a benefit of Rs55/t for SAIL Tower Gr 6 and Fe500D, Rs82/t for C-20 and Rs73/t for C-15 Assuming equal quantities of each steel grade is made, the average saving is Rs66/t, which is an average reduction in ferro-alloy input cost of 5.33%. The model can be fine-tuned for any steel plant including other steelmaking routes. t www.steeltimesint.com

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STEEL’S PREMIER TECHNOLOGY EVENT

16–19 May David L. Lawrence Convention Center Pittsburgh, Pa., USA

The Iron & Steel Technology Conference and Exposition

AISTech.org

TESTING & ANALYSIS

Consistent strip quality When faced with multiple challenges, choosing the right equipment or process can often prove complicated. To see a project through to a successful conclusion, steel producers need to find the optimum balance between the technical performance of their products and minimising costs. Then, to make the right decision, they need to be able to rely upon sound and versatile technical and process skills. By Michel Dubois and José Callegari* CMI has engineered and commissioned automotive galvanising lines all over the world. The company’s strip processing lines, feature the very latest process technologies, including: Multi-stage cleaning section, vertical furnace (including L-Top math model and jet cooling system with energy recovery), zinc pot section and air-knife system, After-Pot-Cooling – the APC Blowstab cooling system – in-line skin pass mill and tension leveller, chemical and organic roll-coat post treatment, side trimmer and exit shear. These features are at the heart of CMI’s Operation, Process Expert System (OPExS). OPExS Steelmakers’ quality control systems are often set up to simply monitor key variables, affecting the production process, in real time. Any deviation from the acceptable range will be indicative of quality issues, but the solution to solve them is not always at hand. OPExS fills the gap between available data and the action needed to be taken by the operator – based on process and coil data analysis – to determine process and quality conditions and provide operational advice and guidance when selecting suitable operational parameters and production processes. The system provides operators with the necessary customised assistance to make quality decisions. Figs 1 and 2 illustrate the heating furnace and the zinc pot, which are closely monitored by OPExS. The proprietary software provides automatic coil grading (Fig. 3). The line model functions as a control chart that

monitors process stability and signals when the charted parameters show unpredicted process drift. It condenses all process data onto one wide screen thus speeding up identification and intervention. This helps the steelmaker to determine whether a produced coil, even though not compliant

Fig 1. (above) Furnace process section Fig 2. (below) Zinc pot section

with set criteria for a specific production run during which it has been produced and thus related to a defined customer, still meets the criteria of another customer. Automatic coil grading, provided through the software, considerably speeds up coil validation and reduces the number of rejected coils – and the cost. The core attribute of the software is its expert know-how, which is linked on-line to the process control system. Data relating to quality coming from the line are recorded, stored, and analysed, allowing for easy and visual best practice sharing, improved equipment utilisation and – eventually – scrap reduction and increased yield, as well as increasing the pace of, say, automotive certification and the implementation of new steel grades. The display on the left hand side is an overall view of the grading of all coils produced, using specific markers indicating whether or not line status has met the required quality standard. A traffic light report helps the operator to visually identify anomalies by produced coil and process section (green = in line/ orange = partially out of line/ red = out of line). Data mapped under the line model details the different process parameters within each of the line’s process sections. This helps identify where the data falls foul of defined criteria settings and where the anomaly occurred. Criteria settings comprise either fixed criteria or tolerance ranges. The expert system While operational indicators are provided via the software, an expert system defines

* Michel DUBOIS and José Callegari are both process experts, CMI INDUSTRY Metals, Seraing, Belgium. www.steeltimesint.com

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TESTING & ANALYSIS

Fig 3. Model screen display example

what action to take, as well as where and when to take it. Such advice is transmitted via a ‘pop-up window’ that opens when the operator clicks on the process parameter that is out of range. All data and instructive guidance is displayed in the form of either indication of corrective action to be taken, additional checks to be conducted, or a library of reference documents or similar events for comparison. Individual pop-up windows are divided into three tabs: expert advice, data and actions. Expert advice indicates what the operator should do, helping him or her to understand underlying process behaviours, as well as prioritise and select the actions needed to restore the nominal quality of the line. It can be submitted in the form of a list of actions by equipment and/or a flow chart indicating the methodology to follow for trouble-shooting and problem-solving (Fig. 4). It can also include supporting

documents, such as 3D drawings, to help the operator visualise the specific equipment on which the problem has been detected, such as photographs related to quality defects, or other instructive documents, like standard operating procedures. Under the data tab detailed, recorded data related to the out-of-line parameter is given, and under the action tab the operator formally acknowledges which actions have been taken. The software provides a weekly analysis of suggested actions versus actions taken, and allows for an operator’s input that can or is requested to be entered, and can be either observations or recommendations. As the pop-up window and related advice are available within minutes of the coil being produced, it guides operators most effectively in day-to-day operations. The software enables a direct link to processing

data from the line and can be accessed online. Statistical process control Another important advantage that the system provides is the correlation of recurrent defaults that impact quality; this is vital to anticipate problems. Orange traffic lights highlight sections that are not fully in line with line parameters over a period of time and are a good indicator of where to take corrective action, thereby preventing anomalies. OPExS also functions as an on-line statistical process control (SPC) system, which, via continuous monitoring and process analysis, provides an important input for lean ‘just-in-time’ maintenance planning. Recorded process parameters can be displayed by process section and are synchronised per running metre of coil, which helps define exactly when a non-

Fig 4. Trouble shooting and problem solving

January/February 2016

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Innovative technologies for the metals industry

Cold rolling ยง Strip processing ยง Chemical processes Thermal processes ยง Mechanical equipment Automation ยง Extractive metallurgy www.cmigroupe.com DE SIG N | ENGINEERING | COMMISS IO NING | TE C H NIC A L A S S IS TA NC E & TR A INING | A F T ER- S A L ES

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TESTING & ANALYSIS

Fig 5. Recorded process parameters can be displayed

conformity occurs, and thus reduces the amount of strip to be eliminated, which leads to decreased scrap and increased yield (Fig. 5). Coil validation Based on defined criteria the system helps to set mechanical and chemical limits by product. During an involuntary slow-down of the line, the system defines the exact slow-down percentage up to where the compliance of the final strip with the given criteria is not affected. OPExS allows the line to be run under criteria set by either a CMI expert or the steelmaker, but it can be easily and quickly updated to reflect any other specifications, like those related to the final customer’s quality needs. It adjustment of the line’s quality specifications – and coil validation – and adjustment based on various final customers’ quality needs and related grading rules. The same processing line can

produce product in accordance with the specifications and requirements of various final customers. The system offers the following benefits: • Translation of final product characteristics into process and product parameters, as well as process steps and tolerances (Fig. 6). • Trial runs when deviating from the process and production path defined by CMI experts if, say, the necessary steel grade is not produced by the steelmaker. Conclusions • OPExS allows optimisation of line settings based on data analysis from processed coils, as well as upstream data analysis and end-event reporting. • The system provides line operators with context information related to the customer’s processing specifications as well as those set by final customers. The corrective or preventive action to be taken

is identified based on this analysis and available within minutes after the coil has been processed. • Markers indicate the origin of problems and specifies required manual intervention when needed. The system displays similar events for comparison. • The system can ‘learn’ and continuously updates its database with acquired knowledge from daily strip processing. • A display of similar cases for comparison is provided along with on-site know-how assistance and expertise and support to secure audits and certifications. • Ease of implementation for single processing lines and lines combining several processes. Here, it helps with the steering of this complexity and helps steelmakers increase production flexibility and produce products according to market requirements – implying the lowest possible capital expenditure. t

Fig 6. Translation of final product characteristics

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