Steel Times International July/August 2016

ENVIRONMENT

REPUTATION MANAGEMENT

OXYGEN STEELMAKING

PERSPECTIVES Q&A

The world’s greenest steel plant

SSAB Americas claims to be making a world of difference all round

Converter vessel replacement by JSW Steel of India

Carol Jackson, senior vice president, HarbisonWalker International

www.steeltimesint.com July/August 2016 - Vol.40 No.5

STEEL TIMES INTERNATIONAL – July/August 2016 – Vol.40 No.5

CAPACITY RUNS RIOT – THE LOWDOWN ON CHINA STISTI Cover jul ad aug.indd 1 cover 7.2016.indd 1

7/20/16 8:14 4:40 AM PM 6/24/16

We transform … the world of revamps and modernization.

Boost productivity – cut costs.

Excellent engineering services stand out from the crowd … especially when it comes to intelligent revamps. It’s about nothing less than upgrading existing plants to meet future market demands – one of today’s central challenges.

That’s where our whole wealth of experience comes in.

After all, our job is to help you increase your productivity while improving quality. Equally significant here is smart

planning, for instance taking advantage of scheduled maintenance stoppages and minimizing production losses.

Your bottom line: You save time and money.

Countless completed projects prove our quality and reliability as a global specialist in metallurgical plant and rolling mill technology.

SMS GROUP GMBH

Eduard-Schloemann-Strasse 4 40237 Düsseldorf, Germany

Modernisierung_A4_e.indd 1

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

communications@sms-group.com www.sms-group.com

18.12.15 08:10

CONTENTS - JULY/AUGUST 2016

ENVIRONMENT

REPUTATION MANAGEMENT

OXYGEN STEELMAKING

PERSPECTIVES Q&A

The world’s greenest steel plant

SSAB Americas claims to be making a world of difference all round

Converter vessel replacement by JSW Steel of India

Carol Jackson, senior vice president, HarbisonWalker International

Picture courtesy of Midrex.

1

2 Leader

www.steeltimesint.com July/August 2016 - Vol.40 No.5

STEEL TIMES INTERNATIONAL – July/August 2016 – Vol.40 No.5

4 News The latest steel industry news from around the world CAPACITY RUNS RIOT – THE LOWDOWN ON CHINA STISTI Cover jul ad aug.indd 1 cover 7.2016.indd 1

7/20/16 8:14 4:40 AM PM 6/24/16

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

9 USA update Still uneasy over imports

9 15

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

15 India update JSW and protectionism

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

12 17

17 Overcapacity Capacity runs riot

Sales Director Ken Clark kenclark@quartzltd.com Tel: +44 (0) 1737 855117 Managing Director Steve Diprose stevediprose@quartzltd.com Tel: +44 (0) 1737 855164

12 Latin America update Seamless tube production

22

Chief Executive Officer Paul Michael

Oxygen steelmaking 22 Converter vessel replacement 27 Adding sinter to control spitting 30 Reputation management Committed to sustainability

SUBSCRIPTION Elizabeth Barford Tel +44 (0) 1737 855028 Fax +44 (0) 1737 855034 Email subscriptions@quartzltd.com Steel Times International is published eight times a year and is available on subscription. Annual subscription: UK £173.00 Other countries: £247.00

30

2 years subscription: UK £311.00 Other countries: £445.00 ) Single copy (inc postage): £39.00 Email: steel@quartzltd.com

33 Water treatment The world’s first green steel plant

Published by:

36 Maintenance Reducing downtime

Quartz Business Media Ltd, Quartz House, 20 Clarendon Road, Redhill, Surrey, RH1 1QX, England.

Tel: +44 (0)1737 855000 Fax: +44 (0)1737 855034 www.steeltimesint.com Steel Times International (USPS No: 020-958) is published monthly except Feb, May, July, Dec by Quartz Business Media Ltd and distributed in the US by DSW,

33

75 Aberdeen Road, Emigsville, PA 17318-0437. Periodicals postage paid at Emigsville, PA. POSTMASTER send address changes to Steel Times International

Perspectives 38 HarbisonWalker International

c/o PO Box 437, Emigsville, PA 17318-0437.

Printed in England by: Pensord, Tram Road, Pontlanfraith, Blackwood,

40 History Cyfarthfa Ironworks

Gwent NP12 2YA, UK ©Quartz Business Media Ltd 2016

38

38

ISSN0143-7798

www.steeltimesint.com

Contents.indd 1

July/August 2016

7/20/16 4:42 PM

2

LEADER

“Enough is enough. We have to save our steel.”

Matthew Moggridge Editor matthewmoggridge@quartzltd.com

I worry about our so-called ‘political elite’ and its ability to ‘do the right thing’. Like a lot of people I was disappointed with the result of the UK’s EU referendum.

While it’s good to see ‘democracy at work’, the decision to leave the EU appears to be because there are many people living in the UK whose needs and concerns are simply ignored by those in positions of power. June 23 was payback time.

Turning the political status quo on its head appears to be a global trend and one that can be predicted, it seems, simply by working out what would be the worst outcome and then betting on it. So, the UK leaving the EU – not a great idea, but hey ho, it’s happened. The nightmare has become reality. What’s next? Donald Trump – considered a joke candidate to be voted leader of the free world, but guess what? It’s looking increasingly likely.

When it comes to the global steel industry, the common wisdom is that giving China Market Economy Status (MES) would not be a good idea. Last week in Brussels the European Economic and Social Committee (EESC), an influential group whose opinion is valued

by European Commission officials in charge of decision-making, called for the abolition of the lesser duty rule and the need to enhance the effectiveness and efficiency of trade defence instruments.

“Enough is enough. We have to save our steel,” said Andrés Barceló, rapporteur of the EESC opinion on Steel: Preserving sustainable jobs and growth in Europe. He said it was time to ‘restore a level playing field for Europe’s steel industry’.

The EESC believes that granting MES to China would be a ‘serious setback for Europe’s ambitions for sustainable development and the fight against climate change’. But it goes beyond steel. It would affect the aluminium, bicycle, ceramic, glass, motor vehicle parts and paper industries, the EESC claims.

The global steel industry has been making similar arguments for many years, but as the time approaches for making the big decision, I worry. Jean-Claude Juncker and Chinese premier Li Keqiang seem far too cosy for my liking and talk of an ‘EU deal to assuage steel dumping concerns’ makes me wonder whether another big political mistake is looming large.

Liftec Translifters and Cassettes for All Transports in Steel Industry For additional information please contact: Tel. +358 3 3140 1400 | sales@tts-liftec.fi

LIFTEC

www.ttsliftec.com

July/August 2016

Leader.indd 1

www.steeltimesint.com

7/20/16 9:48 AM

Technology should be...

• designed to fit your needs • designed to work reliably • designed to make life easier

DRI Technology is designed

by Midrex to work for you.

There are multiple factors that steelmakers need to consider to stay competitive in today’s changing marketplace. From fluctuating energy costs and raw materials to volatile markets, there are often many variables that can be out of your control. Direct reduction technology should not be one of them.

MIDREX® provides the greatest flexibility of any DRI process technology.

• Feed material flexibility

• Multiple fuel/reductant capabilities

• Low energy consumption

• Independently adjustable metallization/carbon

• High availability, minimum downtime

• Simple & eco-friendly

• Unparalleled turn-up/turn-down ratio

• Simultaneous production of multiple products

Technology helps people to adapt to changing environments. It gives you control, but it should never control you.

Learn more at www.midrex.com

Designed for Today, Engineered for Tomorrow™

© 2015 Midrex Technologies, Inc. Inc. All rights reserved. © 2015 Midrex Technologies, All rights reserved.

MidrexSTIAd4.15.indd 1

3/31/15 9:54 AM

4 NEWS IN BRIEF Going up!

German steel giant ThyssenKrupp has won a major contract to supply Saudi Arabia with lifts and escalators for its Riyadh underground train network.

The company will supply 251 lifts and 390 escalators in a deal that includes development, manufacture, delivery, installation and maintenance.

Tata mine receives Five Star Award Tata Steel’s Noamundi iron ore mine has been given a Five Star Award for undertaking mining activities in a sustainable manner.

The steelmaker’s managing director, TV Narendran, received the award from Narendra Singh Tomar, the Union Minister of Steel and Mines in Raipur on 4th July.

Imports curb boosts growth Indian steelmakers are reaping the benefits of government measures to curb cheap steel imports. During Q1 of fiscal 2017, Tata Steel has recorded 8% growth while Essar Steel India boasted 48% growth at 1.22Mt (up from 824kt last year) and JSW Steel registered 16% growth in crude steel output to 1.35Mt in May. Minimum import prices ranging from $341 to $752 per ton for 173 types of steel were imposed in February this year.

Evraz CFO resigns his post Pavel Tatyanin, chief financial officer for Russian steelmaker Evraz, has resigned to pursue other interests.

He spent 15 years in the company’s mining sector and has handed over his role to Giacomo Baizini, CFO of Evraz Group SA who takes over as interim CFO. According to Evraz CEO Alexander Frolov, Pavel has been an integral part of the company for the past 15 years.

Tomar opens SAIL rail plant Singh Tomar, India’s Minister for Steel, launched a new rail welding complex at Steel Authority of India Ltd’s Bhilai steel plant. The new facility has a production capacity of 1.1Mt/yr and uses the latest technology to produce 260-metrelong rail welded panels.

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

July/August 2016

Industry news.indd 1

INDUSTRY NEWS

TK joint venture for Tata UK? The latest on the sale of Tata Steel’s UK operations is that job cuts cannot be ruled out – according to Tata Steel group executive Koushik Chatterjee.

Tata Steel has reportedly halted the sale of its UK business in order to engage with German steelmaker ThyssenKrupp about a possible joint venture involving the UK operations.

ThyssenKrupp has confirmed that discussions with the Indian steel giant have taken place, according to a report in the Wall Street Journal.

It is argued that a joint venture deal between Tata Steel and the

German steel giant would kick off ‘a flurry of merger-and-acquisition activity to cope with a protracted steel-capacity glut and a wave of inexpensive steel imports from countries such as China…’.

The big sticking point is the Tata Steel UK pension plan, which reportedly has a deficit of £700 million. There is also ‘Brexit’ to consider. Now that the UK has voted to leave the EU, Tata Steel has been forced to assess the impact of that decision on its future business plans in the UK. Anna Soubry, a former British Government Business Minister, recently sacked by Theresa May,

claims that uncertainty surrounding the future of the Port Talbot plant after "Brexit" will not mean plant closure. Speaking of the good relationship that exists between the Government and the Indian steelmaker, Ms Soubry – who voted to remain in the EU – said that there was no cause to be pessimistic. She did, however, disagree with Government ministers who believe that Tata Steel UK will thrive outside of Europe.

The future of Tata’s UK operations is still uncertain. Jobs are at risk even if the ThyssenKrupp joint venture goes through, according to Chatterjee.

Will Baosteel and Wuhan merge?

The prospect of a merger between two of China’s big, state-owned steel producers is generating excitement within the industry.

Overcapacity is the big issue in steel production circles and any efforts to reduce the amount of excess steel being dumped on the

‘rest of the world’ is welcomed, especially as it shows that the Chinese are prepared to do something about the global steel glut that is closing steel plants and reducing profits the world over.

Baosteel Group – ranked fifth in terms of crude steel production in

2015 – and Wuhan Iron and Steel Group, ranked 11th, are the two companies concerned and it is estimated that more details of a deal being struck between the two Chinese steel giants might emerge in September.

Source: Nikkei Asian Review.

PT Gunung EAF plant SMS group has successfully commissioned an electric steel plant with efficient environmental technology and a single-strand continuous slab caster at PT Gunung in Bekasi, West Java province, Indonesia.

The melt shop at the plant features an ARCCESS electric arc furnace and a ladle furnace designed to produce 1.2Mt/yr of steel to be cast into slabs on the plant’s new continuous caster.

SMS group supplied the complete basic and detail engineering, the mechanical and electrical core components and the supervision of erection and commissioning.

SMS group also supplied an X-Pact electrical and automation system including Level 2 automation and commissioning according to the German technology specialist’s tried and tested ‘Plug&Work’ concept.

Carbon-dioxide-free steelmaking A pre-feasibility study into carbon dioxide-free ironmaking will receive funding of SEK 6.7 million from the Swedish Energy Agency.

Swedish steelmaker SSAB, industrial minerals group LKAB and power generator Vattenfall have engaged in a three-phase initiative starting with a pre-feasibility study until end-2017, followed by more concrete research and development in the form of a pilot study until 2024 and then demonstration plant trials continuing until 2035.

The joint initiative was announced in April with a view to

solving the carbon dioxide problem in the Swedish steel industry.

“By using hydrogen in the direct iron ore reduction process instead of blast furnaces using coal and coke as is the case today, the goal is to create a steel process that releases water instead of carbon dioxide,” claims a press release issued by SSAB. Klara Helstad, head of the Swedish Energy Agency’s sustainability energy unit, said that the project could be the starting point of radical change in the Swedish steel industry. “In the long run, it can mean Sweden becoming the

first country in the world to use hydrogen in ironmaking on an industrial scale,” Helstad said.

According to SSAB, its production system is already one of the world’s most efficient in terms of carbon dioxide emissions. That said, existing steelmaking technology means that SSAB is Sweden’s largest single source of carbon dioxide emissions.

The Swedish steelmaker believes that the success of the project will be a major contribution to a fossil-free Sweden. However, major funding is required to ensure the project’s completion. www.steeltimesint.com

7/20/16 9:49 AM

INDUSTRY NEWS

Brexit unsettles stainless market Following the result of last week’s referendum – the decision for the United Kingdom to leave the European Union – questions arise concerning how the stainless steel market will be affected, both in the UK and elsewhere.

The LME nickel price, along with many other commodity values, slipped in the immediate aftermath of the vote, but this is unlikely to represent anything other than a short-term reaction. The same cannot be said for the UK currency. The value of the pound Sterling, relative to other major currencies, has recovered, a little, since its steep drop in the first two days following the vote. However, in the medium term, the pound is likely to remain weaker than its pre-referendum position.

For stainless steel production in the UK, this would result in increased raw material and other input costs, as many of these are commodities, which are, largely,

traded in US dollars. Conversely, lower labour costs, in euro terms, would help to make British exports more attractive to European buyers.

The key element in determining the UK’s future role in the market will be the trade agreement that the exiting nation strikes with the EU. Without allowing free movement of labour, the electorate’s dislike of which appears to have been a major factor in the referendum result, it would be difficult for the UK to secure tariff-free trade with the single market.

Firstly, tariffs would make British-made stainless steel and other manufactured goods more expensive to European buyers, although, as stated above, a weaker pound will counteract this, somewhat.

Secondly, inward investment would be affected. Multinational producers are less likely to invest in the UK if it does not provide free access to the EU market.

This poses a specific threat to UK stainless steel production.

Finnish-owned Outokumpu operates the UK’s only dedicated largescale primary stainless steelmaking facilities. The position of these works, within the group, would be weakened. While Brexit would free the UK from rules preventing state intervention to support domestic industry, it is unlikely that a future British government would act, in the event of any closure.

Whereas the EU moved to protect local stainless steel producers by imposing antidumping duties on Chinese and Taiwanese material, the UK may, with no domestically-owned producer, perceive greater advantage in cheaper imports.

Furthermore, in its new situation, it could seek to develop stronger links with China and other growing global powers.

Source: MEPS - Stainless Steel Review

US consultancy advises ArcelorMittal Grippo, Cappelli & Partners.

The team comprises partners Giuseppe Scassellati Sforzolini and Roberto Bonsignore, counsel Claudio Di Falco and associates Francesco Iodice, Andrea Cazzani and Luca Sportelli.

Cleary Gottlieb is advising the leading steelmaking group ArcelorMittal in the joint bid with Marcegaglia S.p.A. for the acquisition of the assets owned by the Italian steelmaking group Ilva S.p.A., which include the largest steel-

making plant in Europe, located in Taranto.

The bid falls into Ilva’s extraordinary administration proceeding.

Cleary Gottlieb is assisting ArcelorMittal in collaboration with Italian law firm Gianni, Origoni,

What’s in a name?

Wire rod mill modernised

NSMMZ (Nizhniye Sergi), part of NLMK Group’s Long Products Division, has been renamed JSC NLMK Ural. The company operates from three production sites in the Sverdlovsk region of the Urals.

The name and corporate identity of the business has been brought into line with its production profile, its geographical footprint and its role as part of NLMK Group’s unified technological chain.

NLMK Ural is claimed to be a key asset of NLMK Group’s Long Products Division and is managed

by NLMK Long Products. It has production sites located in three cities: Revda (EAF steelmaking), Nizhniye Sergi and Berezovsky (long steel manufacturing) and specialises in rebar production. www.steeltimesint.com

Industry news.indd 2

5

NEWS IN BRIEF China concerned over Indian dumping probe

The Directorate General of AntiDumping and Allied Duties (DGAD) is probing the dumping of colourcoated steel from China and the European Union following petitions submitted by Essar Steel India and JSW Steel Coated Products.

The two companies allege that both the EU and China have been dumping colour-coated/prepainted flat products of alloy or non-alloy steel.

China, it is claimed, has expressed concern over the DGAD decision.

Low targets reflect bad year ahead Gunawan Dianjaya Steel of Indonesia has set low sales targets for 2016 in anticipation of a tough year ahead in local and international markets.

Gunawan, a slab re-roller, has the capacity to produce 400kt/yr of steel plate, but saw its output drop last year from 149.1kt/yr to 115.9kt/yr last year.

ThyssenKrupp steps up UK investment at Vetchbury Vetchbury Steels, the coil processing division of ThyssenKrupp Materials UK, a subsidiary of ThyssenKrupp AG, is pushing ahead with the development of a dedicated, state-of-the-art decoiling, levelling and cut-to-length facility, complementing a new 1850mm wide coil slitting line, which commenced full production earlier in the year.

ArcelorMittal wins award The world’s biggest steelmaker, ArcelorMittal, has been recognised in the 2016 Business in the Community Annual Responsible Business Awards, and more specifically in the UPS International Disaster Relief Award category supported by the UK Department for International Development.

Kobelco Millcon Steel is modernising a wire rod mill in Rayong, Thailand, with equipment supplied by Primetals Technologies. The plant was previously owned by Thai Special Steel Industry.

The project will be completed in May 2017. The plan is to increase the plant’s local supply of special steel products for the automotive industry.

Upgrades include new mill stand gear drives, water boxes, pinch rolls

and laying heads and the latest design step-less reform. Primetals will also install a Morgan Reducing Sizing Mill (RSM) with a quick change feature to produce thermo-mechanically rolled (TMR) products and improve tolerances, mechanical properties and coil packages.

Speed guarantees for the 480kt/yr mill will be 110 m/s, with a maximum rolling rate of up to 120 tons per hour.

Tata Steel spurns £100 million offer Tata Steel UK’s pension prompted the Indian parent scheme to turn down a £100 million plus offer for its UK operations purely as a result of the pensions burden, according to a report by City A.M. Liberty House offered ‘significantly more than £100 million for the assets, rather than a token offer of £1. The two parties were close to striking a deal.

July/August 2016

7/20/16 9:49 AM

6

INDUSTRY NEWS

British Steel in MPI R&D deal The Materials Processing Institute (MPI) has signed a multi-million-pound contract with British Steel, the UK’s second largest steel producer.

The contract, signed on 17 June, will see the Institute providing research and development for up to five years for British Steel’s rail and construction products.

British Steel, founded on 1 June 2016 when Greybull Capital acquired Tata Steel’s Long Products business, has four principal sites, at Teesside, Scunthorpe, Hayange and Skinningrove.

Teesside-based MPI is a not-forprofit company, which works with industrial innovators to conduct research for the rail, materials, process and energy sectors. It also continues to make specialist steel at its Normanton facility.

The new contract with British Steel will see the Institute provide research and innovation to support improvements in productivity and performance. The contract was signed weeks after visits to MPI from steelmakers in Germany, Sweden and Slovakia, all seeking to take advantage of the Institute's expertise.

“We are pleased to see the return of the British Steel brand to the UK,” said Chris McDonald, chief executive of the Materials Processing Institute.

Shanghai Stal signs contract with Fives Global industrial engineering group, Fives and Shanghai STAL Precision Stainless Steel have signed a contract for the design, manufacturing and supply of a 20Hi cold rolling mill for the latter’s new stainless steel line in Shanghai’s Xin-Zhuang industrial zone in China.

STAL, a joint venture between Allegheny Ludlum of the USA and China’s Baosteel Group Corporation, specialises in the manufacture of precision-rolled stainless strips and is aiming to increase its current capacity. The steelmaker has decided to build a new cold

rolling workshop, including a new bright annealing line and 20Hi cold rolling mill, to be commissioned in 2017.

The 20Hi cold rolling mill will boast a production capacity of just over 80,000 metric tons per year.

From input strip 1.5mm thick it will be able to roll strip down to 0.040mm. Maximum strip width is 1,250mm, and it will be able to produce at the minimum thickness on the full width.

Terminal equipment for the mill will be produced locally by Fives’ subsidiary in China.

According to Fives, a mill that

combines ultra-thickness and a full width is currently unique in the world. The new line and mill will produce ultra-thin stainless steel for high-end applications, such as smartphones and tablet computers.

As a specialist in cold rolling mill design – Fives describes itself as a technological pioneer in the field – it supplied Shanghai STAL with its first 20Hi cold rolling mill (at its Huajin plant) in 2006.

Scanmet V attracts global audience SCANMET V, held in Luleå in Northern Sweden, attracted over 300 delegates from around 30 countries.

During the four-day conference, which is held every four years, delegates discussed current research in steelmaking and up to 150 technical papers were presented on topics that included recycling and sustainable production, resource and energy efficiency, and reduction and separation of carbon dioxide.

“With SCANMET we wish to create a forum for industry and

academia where there is scope for the exchange of ideas and knowledge towards the development of future, sustainable steelmaking processes.

This is the fifth time we have arranged SCANMET and interest is great, despite the fact that the industry is facing economic pressure,” says Anna Utsi, business development manager at Swerea MEFOS and project manager for the conference.

This year’s SCANMET included a four-session Process Integration Forum, a conference that was first

arranged two years ago. Process integration is a form of systems analysis that considers the entire chain of production, instead of merely looking at single processes.

“Today, a holistic approach is essential for meeting the industry's sustainability targets,” says Mikael Larsson, department manager at Swerea MEFOS and associate professor at LTU. Process integration is an important tool that can be used by the steel industry to improve both material efficiency and energy efficiency in production systems.

MMK steel POSCO steel Salzgitter contracts Fives for harvesters for LNG ship Russian steelmaker MMK’s Trading House continues to increase shipments of high-tensile steel used in the production of TUCANO combine harvesters at the CLAAS factory in Krasnodar Territory, Russia.

The steelmaker’s Trading House division offers a logistics scheme, which makes it possible to further optimise the minimal level of warehouse stocks.

CLAAS claims that MMK is a ‘key partner’ and wants to reduce its reliance upon steel imports at its Russian factory, according to Ralf Bendisch, general director of the Krasnador factory.

MMK signed a contract in last year to supply CLAAS with coldrolled steel sheet of ‘high flatness and high rolling capacity.’

POSCO will provide its latest Hadfield steel for the building of the world’s largest LNG bulk carrier.

The steel will be supplied to the Hyundai Mipo Dockyard, where the world’s largest LNG propel bulk carrier will be built.

Hadfield steel is claimed to be durable under cold temperatures of up to minus 162 deg C. The new bulk carrier is expected to be around 50,000 tons, seven times larger than the average large LNG bulk ship. It will feature an engine powered by either bunker-C fuel or LNG. The ship is scheduled for delivery by late 2017 and will carry limestone from Gangwon Province to Gwangyang Steelworks in South Jeolla Province.

France-based Salzgitter Mannesmann Stainless Tubes, a leading global manufacturer of seamless stainless steel and nickel-based alloy tubes and pipes, has contracted Fives to design, manufacture and supply a Bronx six-roll 6.CR9.S straightening machine, complete with ancillary electrical and hydraulic control systems.

The company had already ordered a very similar Bronx machine six months earlier – a six roll 6CR10HD straightening machine to process highyield stainless steel tubes up to 280mm in diameter, and at wall thicknesses

of up to 50mm. Both machines will be integrated into an existing space-restricted workshop layout in order to withstand the arduous loads associated with processing such thick-walled tubes and will be installed during the summer plant shutdown in the UK.

July/August 2016

Industry news.indd 3

7/20/16 9:49 AM

INDUSTRY NEWS

Crude production down 0.1% World crude steel production reached 139Mt for May 2016, down 0.1% when compared to May last year, according to figures released by the World Steel Association (worldsteel) and based on figures submitted by the 66 countries reporting to worldsteel.

China's crude steel production for May was 70.5Mt, up 1.8% when compared with May 2015.

Japan was down 0.9% at 8.8Mt; India's crude steel production was up 4.9% at 8Mt and South Korea

was down 3.5% at 5.8Mt. In the EU Germany produced 3.9Mt of crude steel, up 4%, while Italy's figure of 2.2Mt was up 9.3% when compared with May 2015. Spain on the other hand was down 10.6% having only produced 1.3Mt, and France was sporting a drop of 18.8% following production of 1.2Mt. The Turks produced 3Mt of crude steel, up 5.4% while in Russia there was a small increase of 0.4% to 6Mt. The Ukraine pro-

duced 2.3Mt of crude steel, up 5.7%.

Across the Atlantic, the USA produced 6.8Mt of crude steel, down 0.4% while in South America, Brazil's figure was down 13.2% at 2.6Mt. The crude steel capacity utilisation rate of all 66 countries reporting to the World Steel Association was 71.3%, one percentage point lower than in May 2015 and 0.1 percentage point lower than the April 2016 figure.

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

Amazing Facts and Figures “The population of London in the United Kingdom is growing at a rate of 1.5% year-on-year, reaching almost 8.6 million in 2015.” Source: Automotive World.

“Passenger numbers on the London Underground have risen 33% in the past decade and some 1.34 billion passengers use it every year.”

Source: Automotive World.

“London Waterloo is the busiest tube station, handling 95 million passengers annually.”

Source: Automotive World.

“The deepest platform on the London Underground is 58 metres below street level at Hampstead.”

Source: Automotive World.

“About 50% of a typical integrated steel facility’s energy input comes from coal, 35% from electricity, 5% from natural gas and 5% from other gasses.”

Source: Russula.

In its fourth-quarter and full-year financial results, ArcelorMittal announced an overall $7.9 billion loss for 2015, and said it had suffered in North America a $741 million operating loss during Q4 2015, including impairments of $507 million, $200 million of which is related to the intended sale of its three long product mills.

“Steel jobs are also being lost, including those of nearly 15,000 American steelworkers in the past year. From September 2015 to February 2016, 41% of announced closures, cutbacks and layoffs in the global steel industry occurred in the NAFTA countries, and 28% in Europe.” Source: Wiley Rein.

“India’s iron and steel industry owes an estimated 3 trillion rupees ($44.4 billion) to banks. Tata Steel alone carries $12 billion in debt as a result of its outright purchase in 2007 of all of Corus Group’s steel operations in Europe.” www.steeltimesint.com

Industry news.indd 4

Source: Nikkei Asian Review.

“Chinese steelmakers have some 1.2 billion tons of production capacity, with more than 400 million tons of that considered surplus.”

7

DIARY OF EVENTS

August 2016 10-12 Minerals, Metals, Metallurgy, Materials (MMMM Expo) Pragati Maidan, New Delhi, India This event is claimed to be an ideal B2B platform for a variety of decision makers looking to forge meaningful business partnerships For further information, log on to www.mmmm-expo.com

31-02 September IFACMMM 2016, Vienna, Austria This symposium is focused on control, optimisation and automation in mining, mineral and metal processing.

For further information, email contact@ifacmmm2016.org

September 2016 06-08 International Special and Stainless Steel Summit, Intercontinental, Portugal The 15th International Special and Stainless Steel Summit is expecting over 200 players from the industry.

For further information, log on to www.metalbulletin.com/events/

12-14 7th European Coke and Ironmaking Congress, Design Centre, Linz, Austria Sponsored by Primetals Technologies and Paul Wurth (part of SMS group) this event brings together a wide range of experts to discuss various topics surrounding coke and ironmakng.

For further information, log on to www.ecic2016.com

October 2016 03-05 9th North American Steel 2016, Fairmont Hotel, Chicago Organised by CRU, the North American Steel Conference 2016 is a major industry event that will address a range of key issues. – including trade barriers and global threats – central to the success of the North American steel industry. Raw materials, materials technology and cost competitiveness will also be discussed For further information, log on to www.crugroup.com/events/nasteel

For more steel industry news and features, visit www.steeltimesint.com July/August 2016

7/20/16 9:49 AM

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

3269_15-CMI_Metals_Ann A4.indd 1

28/05/15 10:10

USA UPDATE

9

Still uneasy over imports Rising steel imports is the one big challenge facing US steel companies. While overall steel imports into the USA declined 13% last year compared to 2014, according to the American Iron and Steel Institute, the situation has led major US steelmakers to put plants up for sale in the light of major financial losses.

By Manik Mehta*

THE biggest volumes of finished steel imports in December came from South Korea with 235kt (net tons) down 25% from November; Turkey with 167kt (net tons) up 8%; Japan 144kt (net tons) down 13%) and so on. The three leading offshore suppliers in 2015 were South Korea with 4.8Mt (net tons) down 11% year-to-year; Turkey with 2.8Mt (net tons) up 28%; and China with 2.3Mt (net tons) down 25%.

The import decline notwithstanding, the steel industry is still worried and uneasy and is making representations to the administration to curb imports through higher duties or by imposing other restrictions.

According to the AISI, subsidised imports continue to flow into the USA as a result of overcapacity issues. China, which accounts for around half of global steel output, is perceived as a ‘serious threat’ to the US steel industry. The Chinese continue to reel under massive excess steel capacity and the worsening gap between supply and demand with barely any sign of recovery.

With its currency devaluation, China has triggered accelerated steel exports amid shrinking domestic demand and a cooling economy. China’s total steel exports surged 20% year-over-year to 112.4Mt in 2015, according to data released by the General Administration of Customs. Steel exports from the country topped 100Mt for the first time last year. US steel producers have suffered heavily due to high levels of cheap steel imports, reflected in declining orders, idling of mills and lay-offs across the nation.

Low costs of production have enabled foreign producers to sell their products at cheaper rates, leading to an industrywide price decline, hurting the margins of American steel makers.

Meanwhile, two Republican US senators from Mississippi – Roger Wicker and Thad Cochran – joined 23 colleagues in a letter to Commerce Secretary Penny Pritzker calling for an administrative review of a countervailing duties order on governmentsubsidised Turkish rebar to ensure the assessment of accurate penalties against the product.

Complaints against Turkish imports are part of a long-drawn effort by the US steel industry to persuade the US Court of International Trade and the US International Trade Commission to pursue penalties against unfair rebar imports.

“Mississippi steel workers deserve to know that their government is fighting to ensure that unfair trade practices will not be tolerated,” Wicker said. “The administration needs to protect American companies and jobs from being directly undermined by imports of steel rebar subsidised by foreign governments. Taking action now would allow our workers to remain competitive globally.”

Rebar imports from Turkey, despite rulings favourable to the US industry, have doubled since 2010 and continue to grow, accounting for approximately 80% of rebar imports to the US. “We must ensure that our anti-dumping and countervailing duties accurately

reflect unfair trade practices so that US workers and businesses can compete on a level playing field and are protected from unfairly-traded imports,” the letter to Pritzker said.

The Nucor Corporation, with operations in Starkville and Flowood, is a member of the Rebar Trade Action Coalition, which is the primary petitioner filing countervailing duty and anti-dumping cases on imports of rebar from Turkey. Kevin Van de Ven, general manager of Nucor Steel Jackson, noted that the “unrelenting flood of imports” threatened the “livelihoods of our 278 teammates and must be addressed by our government as quickly and strongly as possible”.

On another note, the US International Trade Commission (USITC) held a hearing on 26 May 2016 on the final phase of anti-dumping and countervailing duty investigations on certain corrosion-resistant steel products from India, China, Italy, Korea and Taiwan.

Cheap imports, market contraction and declining earnings plagued US steelmakers last year. ArcelorMittal, the world’s largest steel producer, saw a decline in its earnings in 2015 which it described as a “very difficult year”. Its group earnings in the fourth quarter of 2015 fell by 40% over the previous year’s quarter, due to falling prices and excess capacity in China.

In its fourth-quarter and full-year financial results, ArcelorMittal announced an overall $7.9 billion loss for 2015, and said it had suffered in North America a $741 million

* USA correspondent www.steeltimesint.com

USA.indd 1

July/August 2016

7/20/16 9:41 AM

10

USA UPDATE

operating loss during Q4 2015, including impairments of $507 million, $200 million of which is related to the intended sale of its three long product mills.

The company, which sold its 35% stake in Gestamp Automocion, the Spanish car parts manufacturer, said that it intended to sell three long-steel mills in the USA with a view to cutting debt and containing huge losses.

The three plants are long-carbon facilities, including ArcelorMittal LaPlace, Steelton and Vinton.

“ArcelorMittal is in discussions concerning the sale of certain long product mills in the United States, including Steelton,” a statement issued by the company said.

It was not known, at the time of filing this update, if there was any interest forthcoming from buyers.

A new animal in the global trade jungle causing concern to US steel companies is the Trans-Pacific Partnership (TPP). The TPP agreement was recently signed in New Zealand by 12 member nations of the Asia-Pacific region. The AISI contends that the agreement will come up for voting in Congress after the presidential election in November; however, the AISI President Tom Gibson said that the AISI has not yet taken

an official stand on the TPP issue.

Aggressively promoted by the US administration as a vehicle for opening new markets and raising the level of fairness

in trade, the TPP members are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, USA and Vietnam.

The steel industry, in its initial reaction, feels that the TPP does not provide a remedy for currency manipulation. Also, the automobile rules of origin in the agreement are less stringent than the North America Free Trade Agreement (NAFTA) rules.

Gibson recently pointed to the lax rules of origin, for example, for automobiles, allowing for a high degree of content from non-TPP countries to produce a vehicle that would be considered a TPP product, and thus creating job losses in the steel and automobile industries.

The AISI will likely take a stance when the legislation comes to a vote, but the TPP could look different by then.

The United Steelworkers union has rejected the TPP. “Whether lacking provisions to adequately address currency manipulation, labour standards and environmental degradation, to limit the anti-competitive actions of China’s stateowned entities, as well as domestic content standards in the automobile sector, the TPP would further shrink a working American middle class and perpetuate growing disparities in income and wealth,” USW president Leo Gerard said in a recent statement. t

Do you receive our FREE weekly newsletter?

Keep up-to-date with the latest industry news and receive the free weekly newsletter straight to your inbox

R e g i ste r o n l i n e at www. ste e l t i m e s i n t. c o m /e - n ews l ette r July/August 2016 STI_Half_Page.indd

USA.indd 2

1

www.steeltimesint.com 03/03/2016 10:57

7/20/16 9:41 AM

12

LATIN AMERICA UPDATE

Seamless tube production Latin America’s share of global crude steel production decreased from 6.0% in 2004 to 4.0% in 2015.

Meanwhile, the region’s relevance where seamless tube fabrication is concerned diminished from 10.6% to 3.5%, respectively. In this context, it is worth analysing Latin American performance in this niche market. In the first of two articles, Germano Mendes de Paula* examines the supply side of the sector FIG 1 shows the evolution of seamless tube production for the period 2004-2015.

The World Steel Association (worldsteel) supplied the original data up until 2014.

However, where Latin American nations were concerned, this information covered only Venezuela, so the figures were adjusted to include Argentina, Brazil and Mexico, based on statistics released by the Latin American Steel Association (Alacero) and the Brazilian Steel Association.

It can be observed, in Fig 1, that global seamless tube output jumped from 24.4Mt in 2004 to 41.7Mt in 2008. After a conjectural retraction to 33.7Mt in 2009, it partially recovered to 39.2Mt in 2010.

Afterwards, it registered considerable growth to reach 46.5Mt in 2014. According to market participants, this volume might have decreased to roughly 42Mt in 2015, mainly due to the unsatisfactory performance of the oil and gas market.

Fig 2 demonstrates that Chinese participation on global seamless tube output amplified from 34.7% in 2004 to 51.3% in 2007, 61.6% in 2010 and 67.5% in 2014. Based on information delivered by China’s National Bureau of Statistics, this ratio remained roughly the same in 2016.

Global seamless tube exports expanded from 14.3Mt in 2010 to 16.9Mt in 2014 (Fig 3), according to the latest available data on the United Nations Comtrade Database, which refers to the Harmonised System Code 7304. It is estimated that this volume decreased to some 12.8Mt in 2015.

Meanwhile, Chinese exports varied from 3.8Mt in 2010 to 5.3Mt in 2014 and 4.5Mt in 2015. Thus, the country’s participation on a global basis increased from 26.6% to 31.5% and to 35.5%, respectively.

Latin American figures Only four Latin American countries have

facilities capable of fabricating seamless tubes and they are: Argentina, Brazil, Mexico and Venezuela. As a whole, the region produced up to 2.7Mt/yr in the period 2004-2008 (Fig 4). This output dropped to 1.8Mt/yr in 2009, but recovered quickly to 2.5Mt/yr in the years 2010-2011.

It is worth stressing that regional maximum production was 2.9Mt/yr during the 20122013 period, ahead of the global industry, which achieved its record figure in 2014.

Latin American output experienced a strong decline to 2.5Mt in 2014 and even 1.5Mt in 2015.

Fig 5 shows how Latin America has been losing its relevance in the global seamless tube industry, plummeting from 10.6% in 2004 to 5.3% in 2009, reviving its share to 7.2% in 2012, but declining to 5.3% in 2014 and 3.5% in 2015 in line with a negative trend towards decline. As a result, Latin American seamless tube producers

* Professor in economics, Federal University of Uberlândia, Brazil. E-mail: germano@ufu.br July/August 2016

LA.indd 1

www.steeltimesint.com

7/20/16 9:38 AM

13

LATIN AMERICA UPDATE 50 60

40 30

16

40

20

12 8

20

10 0

4 0

0 2004

2006

2008

2010

2012

2014 2015e

2004

2006

2008

2010

2012

2010

2014 2015e

2011

2012 2013 World China

2014

2015e

Fig 1. World’s seamless tube production, 2004-2015 (Mt).

Fig 2. Chinese participation in global stainless tube output,

Source: Own elaboration based on worldsteel, Alacero, Brazilian

2004-2015 (%). Source: Own elaboration based on worldsteel, Alace-

2015 (Mt). Source: Own elaboration based on UN Comtrade Database,

Steel Association and market participants. e=estimated

ro, Brazilian Steel Association and China’s National Bureau of Statistics

China’s National Bureau of Statistics and market participants

Fig 3: World and China’s seamless tube exports, 2010-

12

3.0

800

2.0

8

1.0

4

0.0

0

600 400 200

2004

2006

2008

2010

2012

2014 2015e

2004

2006

2008

2010

2012 2014 2015e

0 2010

2011

2012

2013

2014

2015

Fig 4. Latin American’s seamless production, 2004-2015

Fig 5. Latin American participation in global seamless tube

Fig 6. Latin America’s seamless tube exports, 2010-2015

(Mt). Source Alacero, Brazilian Steel Association

output, 2004-2015. Source: Alacero, Brazilian Association, worldsteel

(kt). Source: Own elaboration based on UN Comtrade Database.

2500 2000 1500 1000 500 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Mexico Argentina Brazil Venezuela

Fig 7. Latin American seamless tube production, by country, 2004-2015 (kt). Source: Alacero, Brazilian Steel Institute

have been affected more intensely than their international peers.

Latin American seamless exports climbed from 629kt in 2010 to 748kt in 2010 and to 832kt in 2014, but diminished sharply to 442kt in 2015. The region’s share of global exports, therefore, expanded from 4.4% in 2010 to 5.6% in 2012 and then reduced to 4.9% in 2014 and 3.5% in 2015.

Latin American exports as a proportion of seamless tube production stayed around 26% during the 2010-2013 period.

However, this ratio was equivalent to 33.7% in 2014 and 29.8% in 2015. Nevertheless, in relation to the global industry, the figure hovered around 37% between 2010-2014.

Fig 7 pays attention to production by country. Venezuela’s output was tiny before renationalisation of its only mill (Tavsa, part of Tenaris) interrupted production in 2009.

On the other hand, Mexico’s performance skyrocketed from 673kt in 2004 to 1.06Mt in 2014. Despite the drop to 736kt in 2015, www.steeltimesint.com

LA.indd 2

output was 9.4% higher than the value obtained in 2004.

Argentina’s production was relatively stable from 2004 to 2012. Excluding data for 2009, it oscillated around a plateau of 850kt/yr. Nonetheless, its performance started to deteriorate in 2013, becoming critical in 2015 when the Argentinians only managed to fabricate 360kt.

Excluding 2009, Brazil’s average output of 536kt/yr was verified for the period 2004-2012, but was amplified to 657kt in 2014, dropping abruptly to 388kt in 2015.

Fig. 8 shows that Brazil’s share of regional output has varied by almost 25%.

Restructuring in Brazil It was in the context of a strong decline of Brazilian production that Vallourec announced, in February 2016, the restructuring of its operations in the country. The major steps will be: • The merger of Vallourec & Sumitomo Tubos do Brasil and Vallourec Tubos do Brasil into a new, single entity called Vallourec Soluções Tubulares do Brasil.

• Vallourec will hold a majority stake of 84.6% in this company, NSSMC 15% and Sumitomo Corporation the remaining 0.4%.

• NSSMC will maintain its supply agreement for 300kt/yr seamless tube manufactured at the Jeceaba site.

• The rationalisation of Brazilian activities will lead to the closure of two blast furnaces and one steel mill in Barreiro

100 80 60 40 20 0

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Mexico

Argentina

Brazil

Venezuela

Fig 8: Composition of Latin American seamless production, by country, 2004-2015 (%). Source: Alacero, Brazilian Steel Association

mil (Belo Horizonte city, which started-up in 1954) between 2016 and 2018. Steel production will be concentrated at the state-of-the-art steel mill in Jeceaba, which was inaugurated in September 2011.

• The creation of a single entity will enable Vallourec to generate significant industrial synergies, optimise future investments and realise administrative and tax synergies.

Barreiro has a rolling capacity of 540kt/yr while VSB can produce 600kt/ yr. The combined production of the two plants were 388kt in 2015 – a 66% idle capacity was registered. The announced optimisation will not change the rolling mill capacity, but will concentrate its iron and steel making activities in Jeceaba. Barreiro has been operating for more than 60 years (and is located in a very populated area) while Jeceaba is fairly new. t July/August 2016

7/20/16 9:38 AM

YOUR EPC & EPCF

PARTNER LONG PRODUCTS ROLLING MILL UP-TO 600,000T/YEAR

www.preetgroup.com, info@preetgroup.com Rebar Rolling Mill Division • Wire Rod Rolling Mill Division • Section Rolling Mill Division Gear Box Division • Material Handling Equipment Division • Electrical & Automation Division

USA - UAE - IRAN - INDIA - UNITED KINGDOM - AFRICA - RUSSIA

15

INDIA UPDATE

JSW and protectionism Sajjan Jindal, managing director of JSW Steel, one of India’s largest steel producers, has been the largest beneficiary of the government’s protectionist measures. While competitors await a resurgence in local steel demand before ramping up operating capacity, JSW Steel has announced capacity expansions through the development of both brownfield and greenfield sites. By Dilip Kumar Jha* TO protect the interests of domestic steel mills, the Indian government, over the last year, has raised steel import duty from nonFree Trade Agreement (FTA) countries by 500 basis points to 12.5% on flat products and 10% on long products. The Indian government has also levied a safeguard duty of 20% on certain grades of hot rolled coil (HRC) imports until March 2018 and imposed minimum import price (MIP) for 173 grades of steel imported into India largely from Korea, Japan and China.

Encouraged by the government’s measures, JSW increased its operating capacity and re-started all of its closed blast furnaces in order to ramp up production. The company re-commissioned blast furnaces that were under planned shutdown, opting instead for relining/ modification and capacity expansion at all three of its upstream steelmaking locations – Vijayanagar (Karnataka), Dolvi (Maharashtra) and Salem (Tamil Nadu).

While the blast furnaces at Vijayanagar and Salem were re-commissioned in February, the Dolvi plant was re-started in March 2016. All these additions have enabled JSW Steel to boost installed steel production capacity from 14.3Mt to 18Mt. The company had earlier decided to set up a 3Mt/yr coke oven plant at Dolvi through its subsidiary Dolvi Coke Projects Ltd (DCPL) in which JSW holds a 100% stake through Dolvi Minerals & Metals Pvt Ltd (DMMPL) in which JSW holds a 39.99% stake. This project was kept on hold last year to preserve cash flows. Now, with the completion of expansion projects and installed steelmaking capacity increasing to 18Mt, the existing coke oven capacity falls short of the total requirement of the

company. The company, therefore, has decided to set up phase one of a 1.5Mt coke oven plant at Dolvi through DCPL at an investment of US$300 million.

The company is also proposing to set up a pipe conveyor system for transporting iron ore from the yard adjacent to the mines at the Vijayanagar plant. This will be an environmentally friendly solution and reduce iron ore transportation costs. The proposed plant will cost US$100 million.

Similarly, JSW will build a water reservoir facility to augment the storage capacity of water at its Vijayanagar plant at an estimated cost of US$80 million. This investment is strategic as it is intended to enable un-interrupted operations of the plant. Commercial operation will commence in two years. A US$100 million tinplate mill is expected to come on stream in two years at Tarapur in Maharashtra. The objective of the project is to meet growing demand for tinplate in India.

Higher production As a result of these capacity additions, JSW has been able to record crude steel output at 3.21Mt for the three-month period ended March 2016 compared to 3.04Mt for the same period last year. The output reported in the March quarter indicates a 5% increase from the same quarter last year and a 19% jump from the September December quarter 2015. Similarly, saleable steel sales volume stood at 3.28Mt, a rise of 7% from the same quarter in the previous year and 29% from the last quarter.

Increasing production and sales helped JSW steel to report an increase in profitability, which had been under stress for many years due to the global economic slowdown

JSW in a snapshot • Leading diversified company of US$11billion JSW group.

• 18Mt of crude steel production capacity • Gross turnover for financial year 2015-16 (April – March) US$692 million.

• Steel plants at three strategic locations to

meet customer requirements.

• Small presence in global markets.

and reduced infrastructure spend by the Indian government. “The commissioning of brownfield expansions and an increase in profitability will pave the way for an improvement in leverage for the current financial year (April 2016 – March 2017),” said Kaustubh Chaubal, vice president, Moody’s Investors Service.

JSW posted a 24% increase in its saleable steel volume to 15Mt for the financial year 2015-16 (April – March) from 12.13Mt in the previous year. Interestingly, JSW also switched its product mix with a higher composition of long products, value added and special products.

Outlook Meanwhile, uncertainty looms large over the continuation of MIP beyond the current levy period to August 2016 or its replacement with any other such duty to continue to protect the interests of domestic players. However, JSW forecasts a 25% increase in crude steel production to 15.75Mt for the financial year 2017 (April 2016 – March 2017) and a similar increase in steel sales to 15Mt for the financial year 2016-17 – up from 12.13Mt in the financial year 2015-16. t

* India correspondent www.steeltimesint.com

INDIA.indd 1

July/August 2016

7/20/16 9:51 AM

Guild.STI 2012_Layout 1 7/9/12 2:50 PM Page 1

we l d

Our coil joining equipment will help you tie up all the loose ends.

Guild International can design and build the welding machinery y o u n e e d t o k e e p y o u r l i n e s u p a n d r u n n i n g s m o o t h l y a n d p r o f i t a b l y.

We a r e t h e w o r l d l e a d e r i n s u p p l y i n g c o i l j o i n i n g e q u i p m e n t f o r the steel processing and tube manufacturing industries.

Contact us today to keep your lines always working.

Fully automatic RCM ZipwelderTM is engineered to be the most technically advanced shearwelder available.

w w w. g u i l d i n t . c o m

QM Series SeamweldersTM produce high quality welds no more than 10% thicker than parent material.

NB Overlap Resistance ZipweldersTM produce fast, high strength welds.

+1.440.232.5887 USA

OVERCAPACITY

17

Capacity runs riot If there is one word that has been on the lips of most steelmakers for some time now, it’s ‘overcapacity’.

Very often another word is not that far away: China. In this article, leading US law firm Wiley Rein’s Alan Price*, Christopher Weld*, Laura El-Sabaawi* and Adam Teslik* take an in-depth look at overcapacity in the global steel industry and outline possible solutions to a growing problem

THE global steel industry is confronted with unprecedented overcapacity1, which is severely distorting the world market and threatening the viability of steel producers worldwide. Since 2000, the global steel industry has added more than 1.2 billion tons of capacity, for an estimated total of more than 2.3 billion tons2. Capacity growth surpassed demand growth during this period by nearly 500Mt3. China alone added a massive 990Mt of capacity from 2000-2015 (more than three-fourths of the total global increase)4, leading the European Chamber of Commerce in China to recently conclude that Chinese “steel production has become completely untethered from real market demand.” 5 Capacity has also grown substantially in Turkey, India, Korea, the Middle East, Latin America and Russia6. As a result, recent estimates put excess capacity at a startling 700Mt7. China leads in excess capacity, with a staggering 425Mt8.

Impact of the crisis This “growing gap between global steelmaking capacity and demand has led to deterioration in the financial situation of steelmakers, and has raised concerns about the longer-term economic viability and efficiency of the industry9.” As

countries like China try to export their way out of domestic overcapacity crises, North American steel industries are suffering in particular. US steel imports increased by 61% from 2010 to 201510, and the US steel industry’s capacity utilisation dropped to an alarming 62.1% late last year. Increased imports and overcapacity generally have caused steel prices to collapse, with steel late last year11 “cheaper than at any time in the past decade.”

Jobs are also being lost, including those of nearly 15,000 American steelworkers in the past year12. From September 2015 to February 2016, 41% of announced closures, cutbacks and layoffs in the global steel industry occurred in the NAFTA countries, and 28% in Europe13. Only 10% happened in Asia, even though it has the vast majority of world steel capacity14. In other words, those most responsible for the overcapacity glut are exporting its adverse effects.

Continued increases in capacity The crisis seems set to worsen, with global capacity set to grow by another 103Mt from 2016 to 201815. This growth will continue to outpace demand16, which dropped in 2015 and will increase by only 0.7% this year17.

China leads in terms of planned capacity

increases. While China’s government has announced plans to reduce the country’s steel capacity by 100Mt to 150Mt, including during the recent 2016 US-China Strategic and Economic Dialogue18, it is doubtful that even these limited closures will be realised. The China Iron and Steel Association predicts that Chinese capacity will increase again this year19 despite a drop in Chinese steel demand20. Stateowned or -supported producers will be responsible for much of the new capacity, with state-owned producers Baosteel, Shandong Iron & Steel and Guangxi Steel Group starting up new production lines or mills, among others21.

Even if China were to in fact shutter the promised capacity, “[s]ignificant overcapacity [would] remain in China’s steel sector,” as Chinese industry executives acknowledge22. For example, there is the issue of “capacity creep” – steel producers generally increase effective capacity by 1.5% to 2% annually, through process improvements that do not involve expansion of nameplate capacity23. As a result of this alone, China will add roughly 93Mt to 138Mt of effective capacity over the next five years, wholly offsetting China’s announced reductions, even if they occurred.

* Wiley Rein LLP, 1776 K Street NW, Washington, DC 20006, USA www.steeltimesint.com

Overcapacity WILEY REIN.indd 1

July/August 2016

7/20/16 9:58 AM

18

OVERCAPACITY

Much of global steel capacity growth is not market-based Growth in global steel capacity has not tracked demand. After approximately 5% annual growth in the first decade of the century24, steel usage grew by less than 1% in 2014, fell last year, and will grow by less than 1% this year25. Production and ultimately capacity should respond to this marked slowing, but continued steel expansion in certain regions shows just how government intervention “hinder[s] adjustments that would normally occur in competitive markets26.”

China’s capacity growth in particular cannot be explained by market-oriented development cycles. Chinese steel demand peaked in 2013 before dropping by 8% over the next two years27. It will decline by another 4% this year, with similar declines expected at least until 202028.

Steel capacity growth also is not supported by profitability, as the relatively low profits earned by many producers, especially in China, further show the disconnect between capacity growth and market forces. China’s dramatic increase in capacity occurred despite financial returns well below those achieved by other steel industries globally, and even other industries in China29. “China’s steel industry has one of the lowest operating margins compared not only to the steel industries of many other economies, but also relative to other domestic industries.” One recent report estimated that the debt ratio of China’s major steel mills rose in 2015 to 70.1%, bringing the total debt of just the country’s ‘big mills’ to US $499 billion30.

July/August 2016

Overcapacity WILEY REIN.indd 2

Another estimated that the Chinese steel industry has roughly US $520 billion in debt31. Often at government direction, this debt is continually refinanced, expanded and ultimately swept off the books into ‘asset management’ or other state-created firms designed to absorb bad corporate debts and cover losses32.

Capacity continues to grow largely as a result of intervention by governments, many of which significantly subsidise their steel industries, resulting in enormous capacity increases. Political intervention also has acted as a barrier to capacity closures, as governments artificially prevent the market from self-correcting for non-commercial purposes. The most striking example is again in China, where unprecedented capacity growth largely results from massive government ownership and control33.

The Chinese government has ownership interests in nine of the 10 largest steel producers in China34, maintains a high degree of decision-making authority over the industry, and intervenes extensively in the operations of individual companies.

Local governments in China have directly instructed mills to increase exports and foreign exchange earnings35. Through various policies and industrial plans, the Chinese government for decades has directly subsidised its steel producers, creating the world’s largest steel industry.

Even Chinese government policies purportedly intended to decrease steel capacity have had the opposite effect.

For more than a decade, a series of plans claiming to address overcapacity and the extensive environmental degradation it has caused have instead operated as disguised industrial subsidy programmes36.

Rather than encouraging unprofitable and polluting capacity to exit the market, the policies have supported the construction of massive industrial parks and the largescale installation of new capacity under the auspices of “eliminating outdated capacity,” developing a “circular economy”37 and alleged environmental initiatives. The policies have provided subsidies for modernising and even expanding, not reducing, capacity. As a result, steel producers that should have gone out of business have remained and upgraded38.

The plans often have purported environmental goals. Under that guise, they subsidise renovations that upgrade and often enlarge capacity – a net negative for overcapacity and the environment.

For example, a 2005 policy on developing the ‘circular economy’ was couched in environmental terms, but directed authorities to “strenuously develop high-technology industries…; eliminate outdated industrial processes, technology, and equipment; [and] bring about the upgrading of traditional industries39.”

Similarly, a 2006 initiative sought to “promote adjustment of the industrial structure in overcapacity industries” by introducing higher environmental, safety and industrial standards40 and eliminating facilities that did not meet them. But it planned to eliminate only certain small furnaces, while providing support for the renovation of large enterprises. Again, in 2013, China issued a Guiding Opinion on “resolving… serious overcapacity,” which also provided support for industrial upgrading in accordance with the very standards it claimed should force capacity out. It directed financial institutions to “expand support for overcapacity sectors to implement structural adjustments and industrial upgrades” and “for technological renovations41.”

The minimum capacity requirements in many of these plans have only spurred producers to expand capacity above the thresholds42. Such minimums drive a “survival of the largest” approach where, perversely, smaller steel mills are forced to expand to comply with industrial policies and are subsidised to do so. It is more difficult for these super-sized facilities to adjust their output in accordance with market conditions, so their output remains high regardless of actual demand.

China’s 2013 Opinion also explicitly encourages the use of foreign markets as a release valve for excess capacity, through both exports of Chinese steel and relocation of Chinese mills abroad. It calls for “overseas investments and reorganisations to transfer excess domestic capacity” and support for “the transfer of capacity abroad43,” attempting to shift the economic burdens of harmful domestic policies onto trading partners.

The Chinese government also has intervened directly to prevent capacity closures. Four Chinese steelmaking companies that halted operations last year due to staggering losses now plan to restart, after major investments by a stateowned company44. And reports persist that local governments refuse to allow steel mills to close for the sake of local employment www.steeltimesint.com

7/20/16 9:58 AM

OVERCAPACITY

19

and income45. For example, despite 192 billion yuan that Bohai Steel cannot repay, its owner – the Tianjin government – has asked banks to continue lending to Bohai, promising that it will pay the interest46.

Multilateral development banks and national export promotion agencies exacerbate the effects of government interference by loaning steelmakers billions, creating and maintaining capacity.

For example, the Brazilian National Development Bank is providing Companhia Siderúrgica do Pecém (CSP) US$ 1 billion to build a new plant47. As CSP is partially owned by POSCO and Dongkuk Steel, Korea’s Export-Import Bank is also reportedly lending it support. And in the United States, new Arkansas producer Big River Steel received an $800 million loan and export credit insurance from a German government-owned bank and export promotion agency, in return for purchasing German equipment for its mill48.

bank lending on steel projects; • Removing government intervention, including export restrictions, in raw materials markets; and • Removing import tariffs and tradedistorting non-tariff barriers.

Governments must also take additional steps: • Not use foreign markets to relieve the domestic impact of a country’s own overcapacity, through encouraging exports or the relocation of mills.

• Vigorously enforce the anti-dumping and countervailing duty laws to ensure that imports compete fairly, and continue to treat China as a non-market economy, given its government’s continued disruptive intervention in its economy.

• Ensure market-based, competitive home markets, including properly enforcing anti-trust and competition rules and removing import barriers that insulate domestic producers from competition.

are not comprehensively addressed, this crisis and its effects, including unfair trade practices and resulting trade friction, will persist and worsen. Action is critically needed now to address the long-term supply-demand imbalance plaguing the global steel industry and to ensure the continued viability of American steel producers. t

Solutions to the crisis Without immediate action to solve this crisis, the viability of many steel industries around the world will be threatened. Most notably, to achieve a real solution, China must act, and act meaningfully. Given its overwhelming contribution to the crisis, China must shutter a substantial portion of its massive, state-sponsored steel capacity.

China’s current plan to reduce capacity by 100Mt to 150Mt is insufficient – 300Mt to 400Mt of closures are needed to make an appreciable improvement. And it appears unlikely that even the planned closures will occur, given China’s track record and policies that purport to lead to closures, but instead consistently encourage upgrades and expansion.

To achieve the much-needed, permanent closure of capacity, policymakers must eliminate underlying market-distorting practices. Governments may need to facilitate the permanent closure of excess capacity, but otherwise must remove ownership and control, as well as other direct or indirect involvement in the steel industry. This includes: • Eliminating subsidies; • Eliminating policies that prevent or forestall adjustments mandated by the market; • Removing industrial planning and decision-making, including China’s minimum standards; • Prohibiting multilateral and export

Industries with significant excess capacity should commit to consolidation and restructuring. Consolidation and restructuring must be market-based, not driven by government policies intended to promote domestic manufacturing bases or cover the transfer of subsidies to failing enterprises. Consolidation of marketoriented producers will not enable them to compete against companies that can rely on subsidies instead of profits and do not have to generate a return on investments to survive. Restructuring should enable companies to adjust production levels to the market and should include the implementation and utilisation of viable, market-based bankruptcy procedures to ensure a well-functioning exit process.

If the long-term issues associated with overcapacity and other market distortions

overcrowded steel sector, Financial Times (Dec. 4, 2015); European Chamber of Commerce in China, Overcapacity in China: An Impediment to the Party’s Reform Agenda (2016) (European Chamber of Commerce 2016 Report) at 1, 16.

5. European Chamber of Commerce 2016 Report at 1, 16.

6. OECD, Regional Capacity, DSTI/SU/ SC(2011)14 (Dec. 5-6, 2011) at 2, available at https://www.oecd.org/sti/ind/49206333. pdf (OECD Regional Capacity Report); The Land of Steel, The Turkish Perspective (Nov. 2, 2015); Yasin Öcal, Planning Expert, Ministry of Development, Republic of Turkey, Innovation in the steel sector: Turkish Steel Industry (Dec. 5, 2015) at 3; OECD, Excess Capacity in the Global Steel Industry and the Implications of New Investment Projects (2015) (OECD 2015 Excess Capacity and New Projects Report) at 10-11.

7. See OECD, The Capacity Outlook for

www.steeltimesint.com

Overcapacity WILEY REIN.indd 3

References 1. In this article, “overcapacity” refers to the difference between capacity and production.

2. OECD, World Crude Steelmaking Capacity (Mar. 2015), available at http://www.oecd.org/sti/ ind/steelcapacity.htm.

3. See World Steel Association, Steel Statistical Yearbook 2010 at 90; Steel Market Forecast 2015-2025: Future Opportunities for Leading Companies (Feb. 16, 2016).

4. OECD, Developments in world steelmaking capacity, DSTI/SU/SC(2010)14 (Dec. 2010) at 2; Gabriel Wildau, Losses mount in China’s

July/August 2016

7/20/16 9:59 AM

20

OVERCAPACITY

the Global Steel Industry: Preliminary OECD Estimates, Madrid (Sept. 9, 2015); Thomas J. Gibson & Chuck Schmitt, The crisis facing the U.S. steel industry, CNN (Mar. 23, 2016) 8. Rafael Rubio, The Latin American Steel Market in 2015: The New Normal, OECD Steel Committee Meeting - Paris (May 2015) at 10; Richard A. McCormack, Steel Industry Issues Stern Warning Over China’s Desire To Be A ‘Market’ Economy, Manufacturing & Technology News, Vol. 22, No. 13 (Nov. 23, 2015); Ernest & Young LLP, Globalise or customise: finding the right balance: Global steel 2015–2016 (2015) at 13.

9. OECD 2015 Excess Capacity and New Projects Report at 6.

10. Preliminary: U.S. Imports for Consumption of Steel Products January 2011, U.S. Census Bureau News (Feb. 23, 2011) at 1; Preliminary: U.S. Imports for Consumption of Steel Products January 2016, U.S. Census Bureau News (Feb. 24, 2016) at 1.

11. Department of Commerce, Steel Industry Executive Summary: March 2016 at 12.

12. Marilyn Geewax, U.S. Workers Are Skeptical, But China Says It Will Restrain Steel Output, NPR (June 7, 2016).

13. OECD, Background Note No. 2: Capacity Developments in the World Steel Industry, HighLevel Symposium: Excess Capacity and Structural Adjustment in the Steel Sector (Apr. 18, 2016) at 6 (OECD Background Note).

14. Id. 15. Id. at 4.

16. See OECD, World Crude Steelmaking Capacity (Mar. 2015), available at http://www. oecd.org/sti/ind/steelcapacity.htm.

17. World Steel Association, World Steel in Figures 2016 (May 26, 2016) at 16; World Steel Association, Worldsteel Short Range Outlook 2015-2016 (Oct. 12, 2015).

18. U.S. Department of the Treasury, 2016 U.S.China Strategic and Economic Dialogue U.S. Fact Sheet – Economic Track (June 7, 2016).

19. David Stanway and Ruby Lian, Baosteel sees higher 2016 output as world reels from China’s glut, Reuters (Mar. 31, 2016).

20. Jing Zhang, Chinese consumption to fall 4% in 2016: CISA. 21. See, e.g., OECD 2015 Excess Capacity and New Projects Report at 15, 32 and Annex; David Stanway and Ruby Lian, Baosteel sees higher 2016 output as world reels from China’s glut, Reuters (Mar. 31, 2016); Andrew Soergel, Chinese Steelmaker Revs Up Despite Promised Production Cuts, U.S. News & World Report (Mar. 31, 2016). Primetals Technologies, Shandong Iron & Steel orders two continuous slab casters from Primetals Technologies (Jan. 12, 2016); First hot coil on the continuous annealing line built by July/August 2016

Overcapacity WILEY REIN.indd 4

Fives at Guangxi Steel, Fives (Mar. 22, 2016).

22. Tom Mitchell and Christian Shepherd, China says its steel overcapacity will remain, Financial Times (Apr. 10, 2016).

23. See, e.g., Credit Suisse, Global Steel Equities (Sept. 6, 2012) at 9; Steel Business Briefing, Global Market Outlook (Mar. 2016).

24. Morgan Stanley Global Steel Report at 1.

25. Worldsteel Short Range Outlook 2015-2016, World Steel Association (Oct. 12, 2015).

26. OECD 2015 Excess Capacity and New Projects Report at 6.

27. Shiv Mehta, China Steelmakers: Iron Ore Rally Is a Fake (BHP, RIO), Investopedia (Mar. 9, 2016); China’s annual steel consumption drops for first time in three decades, Reuters (Jan. 22, 2015). See also China steel firms suffered $8 bln in losses in Jan-Nov 2015 –assn, Reuters (Jan. 17, 2016).

28. Fan Ruohong, Lu Xiaoxi, Huang Kaixi and Yu Ning, China cuts push coal, steel sectors into corner, Asia Times (Mar. 17, 2016).

29. OECD, Steel Market Developments: Q4 2015 (2016) at 17.

30. Debts rise at China’s big steel mills, consumption falls, Business Insider (Mar. 2, 2016).

31. Jefferies Franchise Note, Metals & Mining (Jan. 13, 2016) at 4.

32. See, e.g., Lingling Wei and Bob Davis, In China, Beijing Fights Losing Battle to Rein In Factory Production, Wall Street Journal (July 16, 2014); Fayen Wong, Steel industry on subsidy life-support as China economy slows, Reuters (Sept. 18, 2014).

33. See, e.g., European Chamber of Commerce 2016 Report at 16; Perverse advantage: A new book lays out the scale of China’s industrial subsidies, The Economist (Apr. 27, 2013).

34. China’s two largest steel producers, Hebei Steel Group and Baosteel Group, are both stateowned and produced 47.1 and 43.3 million tons of steel in 2014, respectively, while the entire U.S. steel industry shipped 89.1 million tons that year.

35. Della Fu, No common export strategy for major Chinese mills in 2016, Steel First (Mar. 24, 2016).

36. See, e.g., Notice of the General Office of the State Council Issuing the Several Opinions of the National Development and Reform Commission and Other Agencies Regarding Checking Blind Investment in the Steel, Aluminium, and Cement Sectors, Guo Ban Fa [2003] No. 103 (Dec. 23, 2003); Notice of the State Council Regarding Hastening and Promoting Structural Adjustment of Industries with Overcapacity, Guo Fa [2006] No. 11 (Mar. 12, 2006) (Guo Fa [2006] No. 11); Notice of the State Council Regarding Promulgating the Several Opinions of the NDRC

and Other Departments Regarding Suppressing Overcapacity and Redundant Construction in Certain Sectors and Guiding Healthy Industrial Development, Guo Fa [2009] No. 38 (Sept. 26, 2009); Notice of the State Council Regarding Further Strengthening Work on Eliminating Outdated Capacity, Guo Fa [2010] No. 7 (Feb. 6, 2010); Guiding Opinion of the State Council Regarding Resolving the Contradiction of Serious Overcapacity, Guo Fa [2013] No. 41 (Oct. 6, 2013) (Guo Fa [2013] No. 41).

37. “Circular economy” is a term utilised by the Chinese government to refer to a policy of reducing per-unit emissions and resource consumption through technological upgrades, vertical and horizontal integration of related industries and enterprises, and creation of geographically concentrated, top-to-bottom industrial chains in pollution-heavy industries.

38. See, e.g., European Chamber of Commerce Report at 17.

39. Several Opinions of the State Council Regarding Hastening the Development of the Circular Economy, Guo Fa [2005] No. 22 (July 2, 2005) at 3.

40. Guo Fa [2006] No. 11 at 3.

41. Guo Fa [2013] No. 41 at 7-8 (emphasis added).

42. Opinion of the State Council Regarding Resolving Overcapacity in the Steel Industry and Realising Development that Relieves Hardship, Guo Fa [2016] No. 6 (Feb 1, 2016). For example, one Chinese producer received compensation for “dismantling four small blast furnaces [and] spent the funds it received on building a larger one.” European Chamber of Commerce 2016 Report at 17.

43. Guo Fa [2013] No. 41 at 7-8 (emphasis added).

44. China’s big state-owned investor to help private loss-making steel companies, Metal Expert Daily News (Feb. 4, 2016).

45. Tracy Alloway, Why China’s Steel Mills Won’t Cut Back Production, Bloomberg (Nov. 24, 2015); The zombies return: why are steel firms in China coming back from the dead?, South China Morning Post (May 16, 2016).

46. Wu Hongyuran and Yang Qiaoling, Intense Jostling over an Indebted Steelmaker, Caixin Online (Apr. 7, 2016).

47. Brazil: BNDES to grant Vale, Dongkuk and Posco USD 800 million to build steel mill, Global Trade Alert (Oct. 2, 2015); White & Case, White & Case Named Best Infrastructure Law Firm in Latin America by LatinFinance (Oct. 8, 2015).

48. Joe Nocera, Corporate Welfare for the Kochs, The New York Times (Oct. 10, 2015); KfW and Euler fund huge US steel mill, Global Trade Review (July 14, 2015). www.steeltimesint.com

7/20/16 9:59 AM

FURNACE & SPECIAL TRANSFORMERS DESIGNED TO BE UNIQUE IN THE WORLD

MELEGNANO - MI 20077 - Via Cesare Battisti, 43 - ITALY Ph. +39 02 982051

PUNE - MAHARASHTRA 411013 - Magarpatta City, Hadapsar 6th floor Pentagon P-2 - INDIA Ph. +91 775 5950243

www.tamini.it

OSPITALETTO - BS 25035 - Via Seriola, 74 - ITALY Ph. +39 030 6840628

OAK BROOK - IL 2803 - Butterfield Road, Suite 385 - USA Ph. +1 630 368 9907

22

OXYGEN STEELMAKING

Converter vessel replacement Steel Melt Shop 1 (SMS-1) at JSW Steel’s Vijayanagar works has been in operation since 1998 and has gone through several improvements over the years to become one of the most productive shops in the country. To increase capacity from 3.45Mt/yr to 3.8Mt/yr, JSW Steel planned to replace three converters in SMS-1 in 2012. This article discusses the strategy adopted for the complete replacement of the converter and trunnion assembly as a single unit from initial planning through engineering, fabrication, installation, start-up and continuous operation. By C. Dinesh Kumar*, V.S.N Muthy*, K.D Trivedi*, V.R.Sekhar* and G.S Rathore* THE converters of Steel Melt Shop 1 at JSW’s Vijayanagar works were built in the late 1990s and were designed for a heat size of 120 tonnes. Over the years the converter capacity was increased to 130 tonnes by re-designing the refractory lining.

Commissioned in 1998, the old converter-1 in SMS-1 had a tendon suspension system for vessel support.

At this time, there was a problem with high Si and Mn hot metals as a direct result of the non-availability of quality iron ore.

As a result, blowing operations during this period had a severe thermal impact on the converter shell and suspension systems. Over the years, due to continuous 3X3 operation, the suspension systems and vessel geometry reached a critical point. Due to high thermal stresses, the converter vessel was progressively deformed and started touching the trunnion ring during tapping and at the charging pad.

The resulting reduction in clearance between converter vessel and trunnion ring decreased the cooling effect. Detailed investigations have suggested a need for improving the shell material so that it can withstand the prevailing operating conditions. In addition to heat impact, the need to produce critical automotive grades forced operators to improve the quality of tapped steel in terms of temperature, bath oxygen and phosphorus. Online studies established that by intensifying bottom agitation by increasing the number of plugs improved the reaction kinetics. Taking these factors into consideration, it was decided

Fig 1. Sectional view of JSW converter

j a b g

Top cone

D.E Bearing h

N.D.E Bearing

i Barrel

c

k

f

m

to replace the converter during a scheduled shutdown of blast furnace 1. This was the first converter vessel change for JSW steel. The changes planned and expected benefits1 that would result included: 1. Standardisation of the refractory Dimension

Old converter

New converter

a

4700 mm

4700 mm

b

2733 mm

2733 mm

c

3910 mm

3942 mm

d

1832 mm

1932 mm

e

835 mm

773 mm

f

6890 mm

6920 mm

g

9380 mm

9380 mm

h

600 mm

600 mm

i

170 mm

155 mm

j

10800 mm

10800 mm

k

2100 mm

2100 mm

l

850 mm

850 mm

m

2250 mm

2250 mm

n

901 mm

901 mm

Table 1: Comparison of converter dimensions

Lower cone

d

Bottom dish

e

n

lining for reducing the inventory carrying cost in all three converters. (Converters 1 and 2 were from SMS Siemag and converter 3 an old model from Lawnworks, UK).

2. The converter vessel showed signs of stress deformation due to high thermal loads and for this reason some design modifications were required.

3. Vessel suspension has been upgraded to a lamella system from the existing tendon system, enabling vessel size enhancement.

4. Changes to the vessel’s bottom stirring system – from four plugs to eight plugs – improved yield and dephosphorisation.

5. To withstand higher temperatures, vessel construction material was upgraded from P-275NH to P-355NH. 6. Several brainstorming sessions were started with potential equipment suppliers

*JSW Steel Ltd, Vijayanagar Works, India. Email:dinesh.kumar@jsw.in July/August 2016

OXYGEN STEELMAKING JSW STEEL.indd 1

www.steeltimesint.com

7/20/16 12:14 PM

Your Partner for the Primary Stage of Integrated Steelmaking

Leading in Ironmaking Technology PAUL WURTH is one of the world leaders in the design and supply of the full-range of technological solutions in the field of hot metal production, raw material preparation & related environmental technologies: Blast furnace technology and the entire equipment range Coke oven plants & technology Agglomeration plants

Paul Wurth S.A. 32, rue d’Alsace Tel. +352 4970-1 L-1122 Luxembourg paulwurth@paulwurth.com

Direct reduction plants Environmental, energy-saving & recycling technologies

www.paulwurth.com

Subsidiaries: Brazil, Chile, Czech Republic, Germany, India, Italy, Japan, Korea, Mexico, P.R. China, Russia, Taiwan, Ukraine, U.S.A., Vietnam

01 (Advert) Integrated Steelmaking.indd 1

10/03/2016 14:12:51

24

OXYGEN STEELMAKING

and the ideas combined with operator experience to help finalise the project’s scope and develop a practical vessel design that satisfied most of the requirements.

Some of the design changes – such as larger tap weight and faster vessel movement – were expected to increase productivity. The new vessel design had to take into account the physical constraints presented by existing shop facilities and be quick to install. Fig. 1 shows a sectional view of the JSW Converter. Table 1 offers a comparison between the old and new converter dimensions. The diameter of the vessel was not increased, but the barrel and lower cone height was increased to accommodate more hot metal. The volume of the new converter increased by 12 m3.

Other key changes are shown in Table 2.

Shell material was changed to P-355 as this grade is perfect for such high temperature exposure and still has acceptable weldability2.

Timeline and project planning Two out of the three converters were planned to be replaced one after the other.

The entire replacement work for each converter was to be carried out with the other two in operation. A tight time period of less than four weeks per converter was allowed and linked with the scheduled pre-shutdown of blast furnace 1 the steel

Material construction

Top cone

P-275NH

Barrel

P-275NH P-355NH

P-355NH

Bottom cone

P-355NH

P-355NH

Bottom dish

P-275NH

P-355NH

Suspension system

Tendon

Lamella

Bottom stirring system

4 Plugs

8 Plugs

Volume inside lining m3

119

131

Table 2: Comparison of key features

works. Such synchronisation was essential to avoid production loss at the steel making shop. Ambitious solutions were needed as the ambient conditions of the existing equipment and installations presented several challenging problems. Extensive drawings and field verification were needed to identify any potential interference with existing structures, equipment and melt shop facilities.

SMS Siemag was appointed to handle engineering and for the supply of the trunnion ring vessel and suspension.

Innovative techniques in technology, design, project management and construction were Pre-assembly of trunnion work started September 13, 2015 Delivery of converter to site

September 15, 2015

Shutdown of old converter No. 1

February 6, 2015

First heat charged on

March 4, 2015

Final acceptance certificate(FAC)

April 22, 2015

Table 3. Timeline of the 1st converter replacement

Fig 2. Chronology of converter replacement schedule

employed to complete the project on time and make it a success. The chronology of planned events is shown in Fig 2. Project events were planned to hourly accuracy.

Key initiatives The 25-day project duration from the last heat of the old vessel to first heat of the new one demanded perfect preparation and meticulously detailed scheduling of all works and performances3. Details of the various innovative steps and activities carried out during the whole process are listed below.

1. Dismantling of the floor in front of the converter for the transportation of the assembled converter shell with trunnion and suspension system.

2. Minimal removal of the doghouse for the safe replacement of the old converter with the new one. This is essential to revive the doghouse at the earliest opportunity after the new converter is back in position.

3. In-house designed and manufactured vessel transfer car for to and fro movement of the vessel from its installed position to the charging bay.

4. Constraint of crane capacity led to in situ welding of the top cone 5. A pre-assembled converter vessel is fabricated and both DE and NDE bearing blocks are installed on trunnion shafts to reduce installation time.

Dog house 136 h structure 136 h dismantling 156 h 120 h

Min. cumulative

Min. time required 23:40hrs

16 h

Start date: 7th Feb 15

20 h

Max. time required

De bricking.

Dozing

16h 20 h

Removal 136 h of tilt drive 136 h assembly 156 h

2h

120 h

4h

Pedestal bolts opening

138 h 160 h

24 h

Jackig up the 162 h converter around 30 h 190h 450mm

Max. cumulative 48 h 60 h

Converter 64 h lifting car positioning 80 h

48 h 56 h

112 h Removal of slag skirt 136 h

20 h 24 h

Top come cutting

136 h 160 h

120 h Dismantling 136 h 136 h of 9m floor 156 h

8h 12 h

Moving the converter out

170 h 202 h

Lowering the 282h new converter on foundation 72h after alignment 376h

48h

8h

Removal of 178 h top cone 218 h 16 h 24h

194h

30h

232h

124h 148h

Fixing of tilt drive

8h 12 h

406h

24h

524h

36h

4h 6h

July/August 2016

OXYGEN STEELMAKING JSW STEEL.indd 2

Lifting the 202 h converter and shifting 244 h

Testing of tilt drive

430h 560h

8 h Positioning of 210 h

new converter 12 h on transfer car 256 h

52h

482h Relining of converter 620h 60h

24 h Positioning the top 234 h 48 h

12h 16h

cone, alignment 304 h and locking

HTC in and testing

494h 636h

Preheating 498h Expected early end date: 28th Feb 2015 Expected final end date: 7th Mar 2015 of converter 672h

www.steeltimesint.com

7/20/16 12:14 PM

OXYGEN STEELMAKING

25

Fig 3. Pre-assembling of the new converter

Fig 4. Dismantling of the old converter

Fig 6. Transferring pre-assembled converter to installation site

Fig 5. Transferring the old converter to the repair bay using the charging crane

6. Pre-fabricated bottom stirring system piping is installed on the vessel to reduce on-site fabrication and installation time.

7. Pre-fabricated vessel top cone cooling piping is installed on the vessel to reduce on-site fabrication and installation time.

8. Top cone cooling and Argon rotary assembly are pre-installed on the converter before on-site vessel positioning.

Project implementation Micro planning, precise logistics in coordination with the operations team and tight project management were key features for the success of this project.

The equipment and systems to be installed included converter shells, trunnion rings and bearings, converter suspension systems, pedestals, tilting drives, rotary joints, slag skirt, doghouse, off-gas hoods and operating platform.

Manufactured converters were shipped to the harbour facilities nearer to JSW Vijayanagar by sea. Each trunnion ring was delivered in four parts and the converter vessels in three sections. To keep converter downtime to a minimum, on-site preassembly work was maximised. The weight of the pre-assembled converter units was kept under 220 tonnes due to the limitations of the charging crane.

The operating platform of the existing converter’s charging side, along with civil concrete, had to be removed so that the www.steeltimesint.com

OXYGEN STEELMAKING JSW STEEL.indd 3

Converter Parameters

Old Converter New Converter

Comparison time

June-2014

June-2015

Steel output, T/ day

2916.76

3618.00

Average heat size, T

132.58

134.00

Heats per day

22

27

Net increase

702 TPD

Table 4. Comparison of the operational performance of the old and new converters

charging crane could move the converter safely. Because of extremely restricted space, a new, highly compact and maintenancefree converter suspension system was employed to allow use of converters with the largest possible reaction volume. This innovative solution features two horizontal links and eight vertical lamellae that accommodate thermal deformations of converter and trunnion ring.

To minimise total project time, the trunnion ring parts were transported prior to the vessel parts, the advantage being that site welding can start earlier. The majority of the vessel, vessel suspension and trunnion ring assemblies were performed before the old furnace was shut down.

Because the converter had to be changed in the running shop where liquid steel is produced, all activities have to be carefully planned and take into consideration the steelmaking operation – in particular the use of overhead cranes. The charging crane was used for all major and most minor

lifts. For removal and installation, it was necessary to dismount part of the converter platform located at elevation 9.1 metres to enable the old converter vessel to be removed on a special shifting/lifting device.

Given the space available, the primary drives were dismounted beforehand to allow the main gear unit to be pulled off the trunnion pin. The installation of the vessel was closely co-ordinated between the technology supplier, the construction engineer and the installation contractor so that production outage was minimised.

This involved daily co-ordination meetings during installation to minimise interference among the workers. A novel dismantling and installation concept was introduced, using a lifting rig for handling the trunnion ring, vessel, and vessel suspension together.

A special car was designed with suitable hydraulic lifting and shifting equipment for the removal and smooth reinstallation of the converter vessel. This cut the typical revamp time for converters of this size.

Accurate balancing of converter and trunnion ring torques has enabled the existing converter drive assembly to be re-used. The shifting/lifting device was used to insert the converter accurately to the millimetre into the enclosure. Once the converter was aligned exactly and deposited in its final position, the converter gear unit was fitted.

While the job site was a very busy and July/August 2016

7/20/16 12:14 PM

26

OXYGEN STEELMAKING

crowded place, not a single incident occurred during installation. Erection and commissioning engineers stationed on-site maintained a safe workplace.

Another key factor for productivity enhancement was extending the lining life of the converter from 4,200 to 5,000 heats per campaign. This was achieved by increasing the converter’s bottom stirring system lines from four plugs to eight plugs resulting in a flow rate reduction per plug.

Start-up and operational results Converter no. 1 was started on 4 March 2015. A total of 20 heats were tapped from the converter on day one, providing immediate plant availability. After startup, production was ramped up and production targets were being exceeded during week one. The converter shell, bottom plugs, suspension system and auxiliary units worked satisfactorily without any post commissioning shutdowns.

Table 4 shows a comparison of the operational performance of the old and new converters after complete stabilisation.

Fig 7. New converter in operation

Key achievements were an increase in the average heat size by 4 tonnes/heat and reduction in bath oxygen by 150 ppm due to increased bottom plugs. Fig. 7 shows the doghouse and revamped converter in operation.

After converter 1, the shell replacement of converter 3 was taken up and completed in 20 days, surpassing the previous record.

Conclusions JSW steel completed the replacement of a 134-tonne converter in a working shop within a period of 25 days. It took 20 days for converter 3, thanks to the application of innovative and exceptional solutions in design, transportation, dismantling and re-erection of converters. Meticulous pre-planning led to smooth equipment

installation within an anticipated schedule and without injuries or major setbacks.

The new converter with lamella suspension system has adapted to the process-related thermal load. Since installation, both the vessels have operated well.

References 1. Cotchen, J. and Mueller, E. and Fraser, N., Recent Arc Furnace Revamps for Improved Performance, AISTech 2006.

2. Di Napoli D., De Oliveira J.G., Staudinger G., Müller J., Design Aspects of the Ideal LD Steelmaking Converter, AISE Annual Convention 2003, Pittsburgh, Pennsylvania, USA. 3. G. Staudinger, P. Illecker, I. Staniewski, R. Konieczny, S. Cichonski, Implementation of 350-T BOF Converter at ArcelorMittal Poland, AISTech 2014 Proceedings.

10th

North American Steel Conference 2016 3-5 October 2016 • Fairmont Chicago, Millennium Park, Chicago, USA

Key themes:

Confirmed speakers include:

• What is the outlook for scrap prices and mill spreads in the US? Can current prices be maintained?

• Eddie Lehner, President and CEO, Ryerson • Barry M. Zekelman, Executive Chairman and CEO, Zekelman Industries • Joseph Alvarado, Chairman of the Board, President and CEO, Commercial Metals Company (CMC) • Christopher A. Graham, Vice President, Steel Dynamics Inc and President, New Millennium Building Systems • Santiago Rico Fernández, Marketing Director, ArcelorMittal México

• In what time-frame will improved profitability lead to the currently idled mills being reopened?

• What is the outlook for current and future trade defense developments?

• What are the main challenges and opportunities for the US steel supply chain in catering to multi-metal and global demand needs of car makers?

• Chinese capacity closures – can China cut 150mt of excess iron and steel capacity by 2020 as stated?

• What is the outlook for mergers and acquisitions amongst mills, service centers and scrap companies in the US?

Sponsor:

Lead Association partner:

• Analyzing the outlook for steel intensive manufacturing in Mexico – what are the challenges and opportunities for the US steel supply chain?

• Shale 2.0: The natural gas export boom to Mexico is in full force – what does this means to US steel producers and fabricators?

Supporting partners:

• What is the prospect for further DRI capacity in the US and who will build it?

To book your place visit www.nasteelconference.com July/August 2016

OXYGEN STEELMAKING JSW STEEL.indd 4

www.steeltimesint.com

7/20/16 12:14 PM

27

OXYGEN STEELMAKING

Adding sinter to control spitting A serious problem in BOF operations is the accumulation of lance skull and the build-up of metal in the mouth and cone of the converter due to spitting and slopping. Minimising spitting has been achieved by additions of sinter during the period of spitting, so increasing FeO content and thereby slag fluidity.

However, the resulting increase in slag foaming must be controlled by making small sinter additions over a few minutes and adjusting the blowing rate. By S K Gupta*, A Prasad*, A Chatterjee*, M Kumar**, S Ghosh* & R Datta* STEEL Melting Shop No 1 of the Rourkela Steel Plant, produces 0.5Mt/yr of various special steels including CRNO, tin plate, API, SAILMA and SAILCOR using a 65t BOF followed by VAR/VOR vacuum arc (/ oxygen) refining, a ladle furnace treatment and continuous casting. Production of these special quality steels require precise control of the steelmaking parameters.

Operating a small-sized converter is always challenging to control blowing parameters and also to meet the turn down conditions.

Excessive lance skulling and metal buildup in the mouth and cone of the furnace due to spitting and slopping were seriously affecting shop productivity. Extensive trials were carried out to control and minimise the occurrence of spitting by the addition of iron bearing materials such as sinter. The addition of sinter in short intervals during the peak de-carburisation period was found to be an effective way of controlling spitting

by increasing the FeO content of the slag to improve its fluidity. Improved blowing was observed during trials with regard to spitting, lance jamming, hood jamming, slag formation and initial turn-down temperature.

The main function of the BOF is to decarburise the hot metal from the blast furnace using pure oxygen gas. In the top-blown BOF converter, pure oxygen is injected as a high-velocity jet onto the surface of the molten metal causing penetration of the impinging jet to some depth into the metal bath. The pure oxygen top-blown BOF can decarburise hot metal from 4.3% C to 0.04% C in about 16 minutes. The injected oxygen first oxidises silicon and then carbon. Under these conditions, the elements Fe, Si, Mn and P are oxidised to form slag. Fig 1 shows the evaluation of bath composition(1) and Fig 2 shows the evaluation of slag composition(1)

x103kg

50

5

for a BOF converter. As the blow progresses, lime (CaO) steadily dissolves in the slag and slag weight increases(1) (Fig 3). The oxygen reacts directly with carbon in the hot metal to produce CO and CO2 and escapes in the exhaust gases. A small amount of iron (oxidised or vaporised in the jet impact region) also escapes as oxide fume. The total amount of iron thus lost is usually less than 10kg/t of steel weight, for an efficient process. For an inefficient process, in which slag formation is not well-controlled, iron loss as fumes can be as much as 25 30kg/t of steel. In addition to vaporisation / oxidation of iron, metal and slag droplets are produced due to the impact of the oxygen jet onto the metal bath – called the hot spot. Very fine metal and slag droplets can be carried away directly from this hot spot along with the exhaust gases. Under certain conditions, the slag droplet mixture – usually iron rich – is deposited on the

Wt%S

40

C

CaO FeO

Wt%P

3

0.02

2

0.01

1

0.2

S P

0.1

Mn Si 20

32

30 Wt%S

Wt%C,Mn,Si

40 4

SiO2

20

24

MnO

16

10

8

0 40

60

80

100 %

Blowing time

Fig 1. Evolution of bath composition with blowing time

0

20

40

60

80

100 %

Blowing time

Fig 2. Evolution of slag composition with blowing time

0

4

8

12

16 x103Nm3

02 Blown

Fig 3. Increasing mass of slag with oxygen blown

*R & D Centre for Iron and Steel, Steel Authority of India, Ranchi – 834002, India **Steel Melting Shop No 1, Rourkela Steel Plant, Rourkela, India www.steeltimesint.com

OXYGEN STEELMAKING gupta.indd 1

July/August 2016

7/20/16 10:41 AM

28

OXYGEN STEELMAKING

1630 1625

0.06

FTD Temp, °C

0.057

0.05

1626

1621 1620

FTD P, % FTD S, %

0.053

0.04

1190

0.03

1185

0.02

0.02

0.019

0.01 With sinter

1187,7 1179,3

1180 1175 1170

0

1615

TMI

Without sinter

With sinter

Without sinter

With sinter

Fig 4. Comparison of first turndown temperature for sinter addition during spitting

Fig 5. Comparison of first turndown steel composition i.e. P & S for sinter addition during spitting

Fig 6. Comparison of total metallic inputs for trial heats with sinter addition

mouth of the converter and on the lance.

When the deposit on the lance becomes excessive, the lance is withdrawn and the skull removed, or the lance replaced by a clean one. The skull formed on the converter mouth due to metal and slag deposition is also undesirable and must be cleaned from time to time.

the lance and change the blow rate near the end of the main batch to control the viscosity and chemical reactivity of the slag by raising the FeO content.

The position of the lance is very important for proper functioning of the process. If the lance is too high, the slag will be over stirred and over-oxidised with higher FeO content. This will increase yield losses and lower alloy efficiencies added on tapping due to oxidation losses. Further, the rate of carbon removal is reduced and becomes erratic. Slag volume increases and there is an increased chance of slopping, which is an uncontrolled spilling of slag over the top of the furnace. When the lance is too low, carbon removal increases somewhat, but slag formation, slag reactivity, and FeO content are reduced and sulphur and

When oxygen is injected into an oxygen steelmaking furnace a tremendous quantity of gas is involved, forming a gas-metal-slag emulsion that is three to four times greater in volume than the non-emulsified slag and metal. The chemical reactions take place between the metal droplets, the slag and gas in the emulsion. These reactions take place in the gas phase (primarily CO) that separates the slag and metal and plays an important role in decarburisation.

Oxygen blowing and lance height After scrap and hot metal are charged, the converter is set upright and oxygen supplied through a water-cooled lance. The oxygen is injected in several deliveries, each characterised by a different lance height above the static steel bath and sometimes by a change in blowing rate. These blowing rates and lance heights vary from shop to shop and depend on the pressure and quality of the oxygen supply. A practical limit on the rate is often the volume of the converter and the capacity of the gas collection and cleaning system to handle the gaseous reaction products and fumes.

At first the lance height is high to avoid the possibility of the lance tip touching the scrap charge and to safely establish heat generating oxidising reactions. If the lance contacts the pile of scrap, a serious water leak could result causing a dangerous steam explosion. The lance height is next lowered by approximately 20 to 30 inches (~500-750mm) while delivering oxygen to generate some early iron oxide to increase proper slag formation. Finally, the lance is lowered a further 20 to 30 inches for the main oxygen delivery. The purpose here is to increase the reaction rate and control early slag formation.

During this main delivery most of the action occurs – and this is by far the longest period of blowing. The lance height is an empirical compromise between achieving faster carbon removal and good slag formation. Some shops use more than three lance positions and some change oxygen conditions (blow rate and lance height) almost continuously. Others will raise July/August 2016

OXYGEN STEELMAKING gupta.indd 2

Deposition of skull in converter mouth

phosphorus removal problems often occur.

If the lance is very low, then spitting of metal droplets or sparking occurs which cause severe and dangerous metallic deposits - skulls, on the lance and the lower exhaust gas hood. Obviously, there is a correct lance height. It varies from shop to shop and depends on the converter furnace configuration, lance configuration and oxygen supply pressure or flow rate.

Decarburisation and FeO formation The most important reaction in steelmaking is decarburisation. It not only determines the process time but also the FeO content of the slag, affecting yield and refining.

Slag foaming, slopping and spitting Oxygen is injected through a multihole lance onto the molten bath. Metal droplets are generated as a result of the jet impact and the shearing action of the gas flow from the impact region when the jet strikes the metal surface and the gases are deflected upwards. Molloy(2) described the jet-liquid interaction in terms of three modes: dimpling, splashing and penetrating. The CO/CO2 gases are formed as a result of the oxidation of carbon mainly in the jet impact zone and at the droplet – slag and slag – metal interfaces.

As the reduction of FeO in the slag takes place, generation of CO & CO2 gases foams the slag and causes it to rise. The foam formed is actually a heterogeneous mixture of droplets, gas bubbles, undissolved flux particles (of lime, dolomite and iron ore) and liquid slag. The intensity of foaming in top-blown converters is sometimes so high that the foam comes out through the mouth of the converter. This phenomenon is technically termed ‘slopping’. The control of foaming and slopping is important for a steady operation.

The foaming steadily increases after 25% of the blowing time and attains a maximum value around the middle of the blow. The foam begins to fall back after 75% of the total time. During the 25-75% period of the blow, the basicity of the slag steadily increases from 1.2 to approximately 2 while the FeO content of the slag is almost constant (between 5% and 8%). www.steeltimesint.com

7/20/16 10:41 AM

OXYGEN STEELMAKING

BOF Operating Parameters

Without Sinter addition

With sinter addition

Hot metal charge, kg/tcs

1076.9

1090.8

Scrap charge, kg/tcs

110.8

88.5

Calcined Lime, kg/tcs

63.7

64.5

Calcined Dolo, kg/tcs

15.4

13.7

53.3 (49.2 - 55.4)

55.0 (49.2 - 61.5)

FTD temp, oC

1626 (1601 - 1655)

1621 (1600 – 1681)

FTD temp analysis

Oxygen consumption Nm3/tcs

C %

0.04 (0.03 -0.07)

Mn %

0.021 (0.02 - 0.03)

0.04 (0.03 - 0.07) 0.02 (0.01 - 0.03)

P %

0.02 (0.014 - 0.028)

0.019 (0.012 - 0.032)

S %

0.057 (0.044 - 0.08)

0.053 (0.042 - 0.076)

Slag composition

FeO %

28.6 (27.5 - 29.3)

CaO %

10.31 (9.86 - 10.6)

10.28 (9.58 - 11.62)

SiO2 %

46.76 (44.34 - 48.5)

47.02 (45.6 - 48.76)

MgO %

27.01 (25.6 - 29.33)

3.91 (2.51 - 5.71)

3.62 (2.33 - 4.2)

Al2O3 %

0.7 (0.4 - 1.1)

0.49 (0.35 - 0.62) 0.77 (0.6 - 0.9)

TiO2 %

0.69 (0.56 - 0.85)

P2O5 %

2.41 (2.13 - 2.6)

2.38 (2 - 2.48)

0.17 (0.11 - 0.23)

0.17 (0.15 - 0.18)

S %

tcs = tonne cast steel

Table 1 BOF operating data with and without sinter additions (Av & range)

Lance height has a great effect on foaming because it affects the rate of generation of metal droplets as well as the recirculation of slag and gas within the vessel. Lance height adjustment can be used as a tool to control the foaming of slag; if the height is decreased then foaming decreases and, therefore, during slopping, the lance is lowered.

For the reduction of FeO in the slag to continue, it is essential that the slag remains in a fluid state because the reduction kinetics of FeO in the slag is controlled by mass transport of FeO in the slag. Due to the fall in FeO content, however, the melting point of the slag increases and it may become viscous. Another main reason for the increase in the viscosity of slag could be the precipitation of dicalcium silicate due to the reaction of lime with silica in the slag.

Thus, a delicate balance of the amount of FeO in slag and slag viscosity is needed. For example, if more FeO is reduced and is not adequately compensated with FeO received from the jet impact zone (via the oxide formed on the surface of metal droplets) then the conditions for foaming do not remain favourable, and the slag becomes viscous. Once the reduction of FeO stops (or slows) due to increased slag viscosity, oxygen begins to accumulate in the slag.

During this temporary period of viscous or dry slag formation, ‘spitting’ (ejection of liquid metal droplets due to the impact of the oxygen jet on the metal surface) may even reach the mouth of the converter.

Prolonged spitting can cause skulling of the lance, burning of the lance tip, and www.steeltimesint.com

OXYGEN STEELMAKING gupta.indd 3

Converter blowing

deposition of a slag-droplet mixture at the mouth and inside the converter hood.

As the blow progresses, the slag melts due to a rise in temperature, and the carbon in the droplets then reduce the FeO. The resultant surge in the reduction rate of FeO may again result in slopping.

This is why a brief dry slag period is often accompanied by slopping at around 75% to 90% of the blow time.

Plant trials At the Rourkela Steel Plant, during oxygen blowing, excessive ejection of metal droplets (spitting) which stick to the converter hood was a regular problem and frequently caused jamming of the hood and lance requiring frequent shut downs for cleaning. This lowered shop productivity and as a result, the following modifications were initiated to improve BOF blowing parameters.

29

• Early formation of a fluid slag: Due to the high operating slag basicity (~4), delayed dissolution of fluxes lead to formation of a viscous/dry slag. The material charge balance was modified to optimise the basicity in the range of 3.0 – 3.2.

High hot metal temperature and charging small light scrap retained slag practice and provided favourable conditions for producing a fluid slag at an early stage.

• Addition of sinter: The addition of sinter was carried out in 2-4 batches of 50-100kg each during the de-carburisation period (ie between 7 and 16 mins). The typical composition of sinter was Fe(total) 55%, CaO (10%), SiO2 (5%), Al2O3 (2.5%), MgO (6%). To obtain the desired tapping condition, the heat balance was adjusted by reducing the scrap charge.

• Adjustment of lance height during spitting: During severe spitting conditions, increasing the lance height for a short period provided extra oxidation of iron.

• Heavy bottom build-up: If this occurs, the addition of bottom flux is decreased by 50% of the normal amount and the balance later adjusted during the blow.

• Optimum lance height: During oxygen blowing it is essential to control spitting. To ensure the correct lance height, regular lance height measuring for correction of bottom build-up or erosion is practiced.

An extensive trial was carried out to optimise the BOF blowing conditions with the addition of sinter during the middle segment of the blow, ie the rapid decarburisation period. The BOF operating data were collected and compared with the heats where no sinter was added (Table 1, and Figs 4, 5, & 6). A comparison of the BOF operating data for both categories was analysed to understand the effect of sinter addition on control of spitting, reducing hood jamming and also on metal refining. Improved blowing conditions were observed during the trial.

Comparing results, with sinter addition, the average temperature following first turn down was lowered slightly by an average of 5°C (1621°C as compared to 1626°C). An improvement in blowing was observed during steel refining in terms of dephosphorisation, a decrease in total metallic inputs, control over spitting, fewer incidents of lance and hood jamming. The addition of sinter during the peak decarburisation period was found to be an effective method to control spitting.  32 July/August 2016

7/20/16 10:41 AM

30

REPUTATION MANAGEMENT

Committed to sustainability When it comes to sustainability, steel producer SSAB Americas is making a world of difference. From an industry-leading safety record to community giving to a commitment to the environment, the company consistently demonstrates ongoing care and commitment to its employees, communities, customers and the environment.

SSAB Americas is one of the largest North American producers of steel plate and coil, serving many industrial markets including energy, construction, agriculture and transportation. SSAB has five stateof-the-art facilities strategically located in key regions across the US and Canada.

The company’s steel can be found in the infrastructure that builds and moves the world – in heavy machinery, ships, wind towers, rail cars and more – playing a vital role in people’s daily lives.

“With steel playing such a vital role in our daily lives, our vision at SSAB is to create a stronger, lighter and more sustainable world,” says Chuck Schmitt, president of SSAB Americas. “That means we have a responsibility not only to operate with integrity, but to be good stewards for our environment. For SSAB, sustainability isn’t something new; it’s built into who we are and how we operate.”

SSAB Americas operates as a division of SSAB, a global market leader in steel production, based in Stockholm, Sweden.

SSAB Americas’ more than 1,300 employees work together to lead the company not July/August 2016

sustainability SSAB.indd 1

only in environmental responsibility, but in all aspects of corporate social responsibility, from charitable giving and community partnerships to ensuring employee safety.

EcoSmart for a smarter tomorrow To demonstrate its commitment to the environment, on April 22, Earth Day, SSAB Americas announced the launch of EcoSmart, a new awareness programme aiming to let customers know about the company’s commitment to environmental sustainability.

The EcoSmart programme emphasises

both the key product and process attributes of steel produced by SSAB Americas. It was developed as a way to let customers and other external audiences know that SSAB Americas’ steel is, and always has been, environmentally sustainable.

To produce its steel, SSAB Americas uses recovered scrap metal – 97% recycled materials to be exact. This is material that has been diverted from landfills, everything from discarded appliances to old car parts.

And, SSAB’s steel is 100% recyclable. In short, the company makes planet-friendly products using a planet-friendly process.

That’s what makes it EcoSmart.

With SSAB producing, processing and selling high-quality steel across North America, the company is constantly working to improve the way it does business to ensure it’s making a positive impact to benefit its employees, communities, customers and the environment.

“To align with our vision at SSAB is to create a stronger, lighter and more sustainable world. We developed the new EcoSmart programme to demonstrate our past and ongoing commitment to the www.steeltimesint.com

7/20/16 10:51 AM

31

environment,” says Chuck. “Our customers are learning the ways in which all steel made by SSAB Americas is superior in its minimised environmental impact, and why it’s their smart choice.”

SSAB’s EcoSmart steel is notable in many ways. The steel’s durability and strength make it long-lasting, adding years to the life-cycle of products made using it.

EcoSmart steel is used for applications such as transportation, where end users can enjoy reduced fuel consumption, and in the energy sector, contributing to cleaner, more renewable energy resources.

EcoSmart steel is made with the least possible environmental impact. Aside from using recycled metals, SSAB also uses more than 600,000 recovered scrap tyres per year as a raw material substitute for carbon in the production process – more than five million scrap tyres to date.

SSAB also recycles millions of gallons of water each year, diverts nearly a million pounds of refuse from landfills every year thanks to its refuse recycling process, and utilises renewable electrical energy in its manufacturing process, particularly wind energy. The company’s electric arc furnacebased production process also results in 66% fewer CO2 emissions compared to the 2014 US steel industry average.

“Customers know they are making a smart choice in buying our EcoSmart steel,” says Schmitt. “This is high-quality steel that is strong, long-lasting and helps reduce environmental impact. We’ve won numerous awards for our work in sustainability and have woven these ideals into our steelmaking process for decades.

The new EcoSmart programme is simply our way of demonstrating our past and ongoing commitment to the environment.”

Beyond EcoSmart In addition to its sustainable steel products and production process, SSAB Americas has achieved great success in other aspects of environmental sustainability. The company designed and built a world-class research and development facility in Iowa, which opened in 2010 and has earned LEED designation. SSAB Americas won the 2015 AMM Award for Steel Excellence in the category of Environmental Responsibility and Stewardship, and has received three Return on Environment awards from GE Power and Water (2003, 2009 and 2015).

Lastly, the company was recognised by the Steel Manufacturers Association with an www.steeltimesint.com

sustainability SSAB.indd 2

Achievement in Environmental Stewardship and Recycling Award in 2012.

Making a world of difference to communities Beyond its environmental efforts, SSAB Americas strives to make the world a better place through its commitment to the community in which it operates, demonstrated by a number of initiatives in which hundreds of employees participate every year, from fundraising for the United Way to donating to local food drives.

In locations where SSAB Americas operates, it plays a significant role in the local and regional community as an employer, tax payer, buyer of regional goods and services, and charitable benefactor.

SSAB is also an important partner for local educational institutions and research.

The company invests in educating the future workforce, supporting all levels of education from elementary schools to universities.

SSAB Americas has a long tradition of community involvement, demonstrated not only in the form of financial contributions, but also through a number of initiatives in which hundreds of employees participate every year, from fundraising for the United Way to donating to local food drives. SSAB Americas also supports its employees in

their charitable endeavours. Examples include sponsoring a team of employees from its Lisle, Illinois, headquarters in an annual Bike MS event to benefit the National Multiple Sclerosis Society, or giving employees time off to volunteer at Feed My Starving Children, a non-profit that provides

food for malnourished children around the world.

“We focus on being a good neighbour to our surrounding communities,” says Chuck. “Not only do we provide monetary support, but also our time. Our employees devote countless hours to local charities and groups.”

Mobile, Alabama In early 2015, SSAB Alabama donated $110,000 to the University of South Alabama (USA) to establish the SSAB Scholarship Endowment Fund. The scholarships benefit full-time junior and senior students in the University’s College of Engineering.

SSAB Americas also supports primary education in Alabama through the SSAB Foundation for Education. Every year, 10 local schools each receive donations of $10,000, for a total of $100,000. Funding for the Foundation comes from the money saved by using recycled scrap tyres, nearly July/August 2016

7/20/16 10:51 AM

32

REPUTATION MANAGEMENT

$1 million since the programme’s inception.

The Foundation also supports ‘Fill the Bus,’ a campaign to collect school supplies that are donated to children in need at more than a dozen local schools. SSAB Alabama is also a major sponsor of the Boys and Girls Club, Junior Achievement and Big Brothers Big Sisters.

donations of $20,000 plus money raised from an annual Bowl-A-Thon event hosted

by SSAB employees, the company has contributed nearly half a million dollars to JA over the last 13 years.

In addition, dozens of SSAB volunteers have dedicated their time to classroom training and other JA events to help teach Iowa children real-world business and financial skills. SSAB Iowa employees also sponsor and support the Make-a-Wish Foundation, an organisation which aims to realise the dreams of sick children. Support in Montpelier also goes to The Community Foundation of Greater Muscatine, which supports smaller organisations and charitable projects in the region, as well as Living Lands & Waters, an organisation focused on the clean-up and conservation of our nation’s waterways.

Montpelier, Iowa (Quad Cities) In Iowa, SSAB has a long history of supporting Junior Achievement (JA) and has embraced the organisation’s mission to inspire and prepare young people to succeed in a global economy. With annual

Safety first While employees appreciate numerous opportunities to get involved in the community, everyone actively participates in the most important internal initiative at SSAB Americas: safety.

SSAB Americas’ mills both have obtained OHSAS 18001 certification for occupational health and safety. The company has retained the certification for many years, with intensive work to maintain standards and be ready for an audit at any time.

The team also runs a safety observation programme, which allows employees to present their ideas for improvements, as well as a housekeeping programme, which is a chance for employees from other departments or worksites to tour the mill and look for areas of opportunity.

Leading for the future “I get the opportunity to work with and lead a terrific team of highly diverse and skilled individuals,” says Chuck. “We all work together to achieve our goal of operating a world class facility. I am incredibly proud of the work we’ve done and continue to do every day. We strive to make the least possible negative impact to our environment, while making the greatest positive impact to our employees and communities. I truly believe we are creating a better world for tomorrow.” t

 29 Adding sinter to control spitting Sinter has a chemical composition similar to lump ore. However, the oxide in sinter is in a pre-reduced condition and a fluxing agent is added resulting in a slightly different effect compared with ore additions. The iron oxide and flux in the sinter helps in early formation of a more effective slag and the chilling of the bath is less compared to ore additions. It has been noticed that adding sinter gives a greater slag foaming tendency than lump ore, which results in increased slopping if added in high amounts, but these conditions are very conducive for meeting lower turn down phosphorus as shown in Fig 5. Sinter can also be used as a replacement for iron ore when lump ore is wet.

Sinter charged to the BOF improves the slag condition by increasing FeO content thereby increasing its fluidity. The cooling effect of sinter is about three times greater than that to melt the same quantity of scrap. The main challenge with high sinter use is to control excessive slag foaming due to the reduction of FeO to oxygen and iron. A merit is that this additional oxygen becomes available for carbon removal thus July/August 2016

sustainability SSAB.indd 3

speeding up the overall reaction. Slopping is likely caused by the greater slag volume and the increased reaction rate. The blowing pattern is the key controlling parameter for sinter addition and, therefore, under hard blowing configurations it is essential to minimise slag foaming. Thus sinter additions in small batches in intervals of two minutes provide precise control over temperature and slag volume(3). A lowering of total metallic input of ~8 kg/t has been Converter SMS-I, RSP

observed due to recovery of ~75% of the iron in the sinter, the remainder contributes to the iron oxide in the slag. This increases the FeO content and improves steel dephosphorisation.

Additions in small batches of 50-100kg in two or three charges of sinter over an interval of about two minutes provides precise control over the temperature and slag volume. Improved blowing was observed during the trial by control of spitting, lance and hood jamming. Further advantages were improved steel refining and a decrease in total metallic inputs. The addition of sinter during decarburisation was found to be an effective method for minimisation of spitting.  References 1. B Deo & R Boom, Fundamentals of steelmaking metallurgy, Prentice Hall International (UK) Ltd, (1993) 2. Molloy, N A, J Iron Steel Inst, October, 943-50, (1970) 3. D S Kumar, G Prasad, P K Ghouri & M Ranjan, Iron Making & Steel Making, 35, 7, 539-544 (2008) www.steeltimesint.com

7/20/16 10:51 AM

Decanting basins contact water circuit

WATER TREATMENT

33

The world’s first green steel plant At the end of 2015, Gusa Nordeste, part of the Ferroeste Group, commissioned its steelmaking plant.

Located in the city of Açailândia, in the western part of Maranhão state in Northern Brazil, the new meltshop adds 420kt/yr of billet production to Brazil’s steel sector.

RUSSULA supplied the complete water treatment solution, which consisted of both pre-treatment and process water treatment.

From October 2015 onwards, a Russula engineering team was on-site to supervise the water trials. Hot commissioning began when the first billet was cast in Gusa Nordeste’s three-strand continuous caster machine (CCM) towards the end of December.

Russula successfully delivered the entire water treatment solution on schedule. All of the equipment, basic and detailed civil, mechanical and electrical engineering, installation supervision, commissioning support and training were included in the scope of supply.

What does it mean for steel plants to go green?

Usually companies strive to be number one, except in the case of CO2 emissions.

The iron and steel industry is the largest industrial source of CO2 emissions in the world due to the energy intensity of steel production, its reliance on carbon-based fuels and reductants, and the large volume of steel produced.1 About 50% of a typical integrated steel facility’s energy input comes from coal, 35% from electricity, 5% from natural gas and 5% from other gasses2. The production of one ton of pig iron using coking coal in a blast furnace emits on average 1.8 tons of CO2.3 As world economies attempt to wean themselves from fossil fuels, companies will have to improve energy efficiency and harness power from alternative sources such as

waste heat from factories. Gusa Nordeste has done just that. This is the first steel project in the world that is authentically ‘green’ because fossil fuels are not used at any time during the production process.

Gusa Nordeste has invested heavily over the years to build its Green Steel plant with the main objective of reusing the wastes generated during its steelmaking process. In 2006, the company acquired a pulverised coal injecting plant that reuses the fines generated during charcoal sieving, which in turn reduces the consumption of granular charcoal required by the furnace.4 In the long-term the injection of pulverised particles of charcoal from biomass through blast furnace tuyeres, Bio-PCI, has the potential to reduce CO2 emissions by 1840%.5 In 2008, Gusa Nordeste installed a thermoelectric co-generation plant to recover the sensible and latent heat from the two blast furnaces and convert it into electricity. The CO leaving the blast furnace is allowed to combust by letting large amounts of air enter the exhaust hood. The resulting hot gas from the combustion is then used in a heat recovery boiler to produce high-pressure steam.6 This technology produces low-cost energy while reducing CO2 emissions. With the acquisition of Thermoelectric Central, Gusa Nordeste became a net energy producer, having a 10 MW co-generation electric energy capacity.

In 2009, Gusa Nordeste acquired a slag grinding plant to process all of the slag

generated in the blast furnace to be used as co-products in the manufacture of cement and fertilizers.7 In the same year the company launched its AVB (Aço Verde do Brasil) project. Russula was one of the key suppliers to assist Gusa Nordeste in taking an important step towards becoming a long product steel producer.

Optimising energy efficiency/ minimising water consumption Russula’s water treatment solutions focus on two important aspects of green technologies, optimising energy efficiency and minimising water consumption. Much energy and water savings can be achieved by supplying efficient equipment and increasing the internal re-use of water.

In line with the Green Steel energy saving philosophy, Russula installed high-efficiency motors driven by variable speed drives as required by operations or motor power.

The end result was a reduction in power consumption as well as the CO2 footprint.

Capitalising on Russula’s 28 years of experience in steel mill automation, the water treatment solution is fully automated.

Minimising manual operations on an auxiliary system such as water treatment allows the operating staff to dedicate more time to steel production.

Additionally, the water system was designed to recover as much blowdown and discharge water as possible. This reduces the consumption of water and chemicals required, which helps Gusa Nordeste to be less dependent on

*Mary House, Russula www.steeltimesint.com

Russula.indd 1

July/August 2016

7/20/16 11:08 AM

34

WATER TREATMENT

Pre-treatment system ring filters

external water sources. Reducing water consumption is a means of addressing the global water crisis and protecting the environment.

Green Steel project The melt shop consists of a BOF type converter to convert 50 tons of molten pig iron into steel by injecting oxygen, with a 36-minute “tap-to-tap” time, operating 300 days per year. For secondary refining in the melt shop a 50-ton ladle furnace has been installed.

The three-strand CCM has an initial production capacity to produce 420kt/yr of billets. In future, an additional fourth strand will expand capacity to 500kt/yr. An Air Separation Unit (ASU) is installed for the production of oxygen, nitrogen and argon, and a BOF Gas Recovery Unit has a capacity of 30,000 m3 gas and is equipped with a gas meter.

Gusa Nordeste is also planning to install a 120 ton/hr rolling mill with two outlets, a bar and wire rod line. Russula designed and sized the water treatment plant to incorporate all future expansion projects.

No additional changes to the water treatment plant will be required when the 4th strand of the caster and rolling mill are installed.

Scope of supply Russula’s water solution for Gusa Nordeste treats a total flowrate of approximately 7500 m3/hr. The water pre-treatment and process treatment is divided into three separate systems that are described in detail in the table below.

Russula provided all the necessary mechanical and electrical equipment.

The mechanical equipment is comprised of pre-manufactured and painted pipe, steel structures, valves as well as all the main mechanical equipment cited in

the table above for each system. The electrical supply consists of medium voltage panels, transformers, and a motor control centre with removable switchgears, instrumentation, a PLC and I/O remotes.

Water pre-treatment The make-up water system extracts raw water from the Piquiá River and deep wells.

The percentage of water taken from each source depends on the seasons and weather conditions, as there is usually a higher volume of water in the river in the winter.

Ring filters

Description

Flowrate (m3/h) Equipment

System 1

Make-up water system

700

Flocculation chambers, lamellar decanters, ring

filtration and reverse osmosis system

Scrubber water

388

Sludge thickener tank, filter press and spiral de-waterer

Ladle and reheat furnace

630

Cooling towers and ring filtration

non-contact water

Melt shop, emergency

1152

Cooling towers, plate heat exchangers and ring filtration

water and industrial

water utility non-contact water

System 2

Rolling mill non-contact water

1615

Cooling towers and ring filtration

CCM and rolling mill contact water

2434

Scale pit, longitudinal decanters, bridge, scrapers, oil

System 3

Oxygen plant non-contact water

552

July/August 2016

Russula.indd 2

Total flowrate

Cooling towers, plate heat exchangers and ring filtration

7471 m3

www.steeltimesint.com

7/20/16 11:08 AM

WATER TREATMENT

35

Spiral dewaterer designed by Russula

Pre-treatment make-up water system

The pre-treatment system automatically adjusts to the water mix to maintain the correct water quality all year round.

Russula included in the main equipment supply flocculation chambers, a lamellar decanter for removing coarse particles and other elements from the river and ring filtration to ensure proper water quality and remove small particles. In order to obtain demineralised water a reverse osmosis filter is part of the main equipment supply to provide an optimum water quality for certain circuits of the process, such as the molds and the oxygen plant.

Process water The scrubber water system treats sludge coming from the BOF. First the water goes into the spiral dewaterer and then falls by gravity into an open sludge thickener tank, where the solids settle. Afterwards the sludge is dewatered and compacted into bricks by a filter press plate. These bricks can be re-utilised in the manufacture of cement. The joint alliance between Masaveu and Grupo Forreste produces compound cement from blast furnace slag, coined ‘green cement’.

The non-contact water treatment for the ladle/reheat furnace, rolling mill and melt shop are three separate closed looped circuits. To meet stringent water quality and temperature requirements, all circuits have ring filtration and cooling towers. The melt shop circuit, however, also includes plate www.steeltimesint.com

Russula.indd 3

Gas cleaning circuit

heat exchangers.

The contact water treatment for the CCM and rolling mill is an open circuit that follows Russula’s four-step process. Primary sedimentation occurs in the scale pit where particles > 200 microns are removed by a clam shell bucket. Secondary sedimentation occurs in the longitudinal decanters when drag causes the small particles that have passed through the scale pit to collect on the bottom. Sludge, oil and grease are removed by a dual-function bridge scraper. The particles that have managed to pass through the longitudinal decanters and have a density higher than water are eliminated at the ring filtration. The filtered, clean water is pumped to the cooling towers where it is cooled before returning to the process.

The oxygen plant water treatment system is non-contact water, closed circuit that includes the same equipment and functions similar to the melt shop water circuit.

A greener future Russula was honoured to be part of the Green Steel team at Gusa Nordeste. The project was an emblematic example of how a steelmaking plant can improve energy efficiency by harnessing alternative nonfossil fuel technologies that significantly reduce its CO2 emissions. In the global race to lower CO2 emissions, the Green Steel ABV project paves the way for other steel producers to begin adapting their current

Meltshop refrigeration circuit

integrated steel mills with the best available technologies. t References: 1. IEA Clean Coal Centre, February 2012, IEA Clean Coal Centre is a collaborative project of member countries of the International Energy Agency.

2. Energy intensity project report and energy intensity system, worldsteel, energy fact sheet 2014.

3. Sustainable steel at the core of a green economy, worldsteel. Calculated using routespecific CO2 intensities for three steel production routes: basic oxygen furnace, electric arc furnace and open-hearth furnace. It is a weighted average based on the production share of each route.

4. Grupo Ferroeste web page, www.ferroeste. com.br/en/o-grupo/empresas/gusa-nordeste.

5. Economic Assessment of Charcoal Injection in the Ironmaking Process (BIO-PCI),Bruzual, Cristobal Feliciano and Mathews, John A, February 2014.

6. Industrial Efficiency Technology Database, www.ietd.iipnetwork.org/content/bof-heat-andgas-recovery.

7. Sustainable steel at the core of a green economy, worldsteel. Calculated using routespecific CO2 intensities for three steel production routes: basic oxygen furnace, electric arc furnace and open hearth furnace. It is a weighted average based on the production share of each route.

July/August 2016

7/20/16 11:08 AM

36

MAINTENANCE

Reducing downtime The competitive nature of the steel industry means that companies are continually looking to maximise productivity and reduce unscheduled downtime and costs. While accounting for a small percentage of total maintenance spend, high performance fully synthetic lubricants have the potential to reduce planned and unplanned downtime by extending oil drain intervals and improving the lifespan of machinery. By Jarmo Vihersalo* STEEL mill machinery is subjected to extreme operating conditions. High temperatures, heavy loads and high levels of external contaminants can all have an effect on the in-service lubricant. It is important to use robust lubricants, specifically designed to offer reliable equipment protection, even such harsh conditions.

Advanced synthetic lubricants can offer advantages that mineral oils simply cannot match. Able to maintain viscosity and film thickness even at high temperatures, they have the potential to better protect machinery components in steel mills. They can also cope with heavy loads, meaning oil drain intervals can be extended, helping to reduce maintenance frequency.

Performance in the field An example of a company to benefit from fully synthetic lubricants is a hot rolling steel mill in Germany, which more than tripled the equipment lifespan of its gear spindles. Previously, the gear spindles were grease lubricated. Under severe operating conditions, however, grease has a tendency to bleed more oil and remove grease from the contact zone – this meant that the service life of the grease lubricated spindles was about nine months.

Following close work between the oil supplier and the original equipment manufacturer, it was suggested that the steel mill switch the gear spindles to a fully synthetic oil lubricant that had been developed to meet the demands

of machinery operating in extreme temperatures to help better protect components so that oil drain intervals can be extended and productivity improved.

As a result of the switch, gear spindle maintenance was reduced and annual savings of approximately €1,000,000 were generated. The gear spindles’ lifespan increased by 250% with no failures or unplanned spindle maintenance in 32 months. There was also a reduction in oil waste generated for disposal.

Proactive maintenance While lubricants have the potential to protect equipment for longer and, as a result, extend oil drain intervals, it is important that this is done safely. One way to safely achieve oil drain interval goals is to use proactive maintenance programs, such as used oil analysis. By monitoring the condition of equipment and oil through a series of tests, operators can make more informed decisions about optimal and safe oil drain intervals.

An Italian steel mill had been using a mineral oil in the hydraulics of its bridge cranes, which degraded rapidly, forming deposits and sludge in the oil. This was causing two to three unscheduled production stops annually and resulting in oil drain intervals of only 4,000 hours.

The steel mill in question switched to a fully synthetic lubricant offering ‘outstanding oxidation and shear stability, excellent rust and corrosion protection, and keep-clean performance’, which, it

Jarmo Vihersalo

is claimed, extended the service life of machine components. In conjunction with the new lubricant the steel mill relied upon oil analysis to monitor oil condition and secure safe increases of oil drain intervals.

By adopting a dual approach – new lubricant and used oil analysis – the Italian steel mill was able to safely increase its oil drain intervals by 700% to 32,000 hours.

The resulting reduction of maintenance decreased oil consumption and led to a reduction in downtime, creating savings of approximately € 9,800.

The increasingly competitive nature of the global steel industry had forced steel mills to pay close attention to their choice of equipment lubricants. While only a fraction of operating costs, lubricants have the power to extend oil drain intervals and better protect equipment and this enables operators to improve productivity goals through reduced scheduled and unscheduled downtime. t

* Industrial marketing advisor, EAME, Exxon Mobil July/August 2016

exxon.indd 1

www.steeltimesint.com

7/20/16 11:14 AM

38

PERSPECTIVES: HarbisonWalker International

‘Folks know and trust our brands’ HarbisonWalker International is expanding its operations globally. The company offers a ‘broad portfolio’ of refractory products and services supporting a range of steel production needs. According to Carol Jackson* ‘folks know and trust our brands’ 1.

How are things going at HWI? No day is boring when you’re a participant in the steel industry supply chain. It continues to be a very competitive global marketplace where aggressive cost-saving initiatives are a given while, at the same time, our customers expect the same or greater levels of innovation to meet their refractory needs.

priorities and focus on the markets where we have the greatest opportunities.

5.

Can you discuss any major steel contracts?

We are actively engaged with current as well as prospective customers on a range of opportunities. As a matter of policy, we do not publicly disclose our current prospects.

2.

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

Unsettled. Global over-capacity coupled with weak demand from the largest consuming regions has resulted in an extraordinarily competitive marketplace where geographic boundaries are meaningless. Indications are that we’re likely to experience a protracted recovery with many fits and starts.

Certainly enforcement of import regulations is helpful, however, nothing will supplant the imperative for all steel producers to advance initiatives to fundamentally and sustainably improve their competitiveness.

3.

Where does HWI mostly conduct its business?

Our broad portfolio of refractory products and services support the range of steel production needs from commodities to specialities, and we are equally strong in both the primary and secondary operations.

6.

Where do you stand on the aluminium versus steel argument? it’s not our place to “take a stand” per se on the aluminium versus steel argument, but rather it’s our job to be an engaged technology partner with both industries as each pursues its full potential.

4.

Where in the world are you busiest at present?

In more established markets, as well as in those that are emerging, folks know and trust our brands. As a result, we’re busy for different reasons wherever we participate.

Our challenge is to continue to establish

7.

“While there will be increased aluminium penetration, vehicles will continue to be predominantly steel,” said Ducker Worldwide’s Dick Schultz. Is he right or wrong?

Mr. Schultz’s projection is not incorrect at least in the short term. Prevailing industry

sentiment is that steel continues to be the strongest, most affordable material for the automobile’s skeletal structure.

Based on evidence of the industry’s conservative nature, its speed of adoption of alternative technologies, and the mere fact that roughly 65% of every vehicle is made from steel today, the prognosis of a supply balance in favour of steel for the foreseeable future is not unreasonable.

8.

“Within the next 15 years or so there could be a nearly even split between steel, aluminium and carbon fibre content in the average North American produced light vehicle.” So said the Centre for Automotive Research. What’s your view?

The innovative contributions of steel, aluminium, and carbon fibre to the lightweighting equation are all significant. Time and lots of testing will tell which emerges as the ‘winner.’

At this point, the HWI challenge is to remain, not only relevant, but a necessary partner at the table of our customers’ innovation processes.

9. It is often claimed that aluminium is the ‘greener’ metal when compared with steel. What do you think?

The important thing to remember is that the ‘green’ equation doesn’t start at the recycler. It’s critically important to view the entire life cycle of the product from the varied inputs including raw materials and energy to produce the virgin product.

Looking at all the factors, I would only submit that there are pros and cons in both stories.

* Senior vice president and general manager, HarbisonWalker International July/August 2016

perspectives.indd 1

www.steeltimesint.com

7/21/16 9:37 AM

PERSPECTIVES: HarbisonWalker International

10. Talking of ‘green issues’ and emissions control, how is the steel industry performing?

Safety and sustainability are stated priorities for leading, reputable steel producers. Many have shared details on significant investments made to optimise the production process, reduce emissions and lower energy consumption. That said there’s a strong argument to be made that the global industry, on aggregate, must continue to do more. This includes necessary investments by lower cost country producers who may be behind their peers in these investments.

11. Are steel producers, looking to HWI for energy efficiency and sustainability solutions?

Our products and service solutions for steel applications are designed to reduce heat loss and enhance the optimisation of our customers’ process energy efficiency (our KAST O LITE and INSWOOL products). Our working lining products help our customers run longer periods of time without interruption throughout all applications (PHANTUM, COMANCHE, IRONMASTER, D-CAST, DOSSOLITE).

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

There is evidence of progress. We see it in the evolution of the production process, which steel producers would argue greatly reduces emissions and increases the recyclability of steel.

13. Where does HWI lead the field in terms of production technology?

We are well positioned in all the major applications with the exception of flowcontrol (an area the company exited some time ago).

14. How do you view HWI’s development over the short-tomedium term?

We have made a significant investment by imbedding our talent (sales and service professionals) and our equipment at our steel customers’ sites to support their www.steeltimesint.com

perspectives.indd 2

needs 24/7/365. These professionals are further backed by an unparalleled group of technical marketing and R&D professionals.

Our customers rely on us to not only provide the product, but also the process, installation and innovative equipment solutions.

15. In a similar fashion to the aluminium industry, China dominates global crude steel production and is accountable for almost half of total production.

How should the industry react to this situation?

China’s increasing participation in the global steel industry is an inevitability with which the industry must contend. The issue in my mind is whether or not that participation is on a level playing field in terms of the business practices in which the steel companies engage.

For example, HarbisonWalker International supported the review of the Section 337 complaint filed by United States Steel Corporation, which alleged the existence of certain illegal actions concerning entry and sale of imported steel into the US. It is our position that if business is transacted as the result of theft of trade secrets or illegal conspiracies to fix prices or fraud by false labelling and transshipment of steel, for example, it is not a level playing field and the consequence is potential industry disruption worldwide.

Short-term sanctions may be required.

However, as the industry advances and the competitive bar is raised, no one is going to be able to rely on sanctions as a panacea.

39

All steel industry players are going to be required to become more efficient and competitive in every way for the rest of time.

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

We see innovation at all stages.

17. How optimistic are you?

I’m optimistic for the future of the global steel industry. Calibrating the available capacity with global demand over time is going to be a critical factor in the strength and sustainability of the industry long-term.

Part and parcel with that calibration will be the rationalisation of sub-optimal capacity and the pursuit of efficiencies across the board.

18. What exhibitions and conferences will HWI be attending in 2016?

Folks can meet us in person at several shows across different industries we serve.

19. What keeps you awake?

My bulldog’s snoring. In all seriousness, things are tense right now. It’s not just the steel industry. A number of the industries we support are challenged right now for a variety of reasons. We’re a strong company with great people. My greatest concern is engaging our folks in such a way that they remain focused on delivering on the ‘intensity’ promise to our customers, our communities, and all our constituents. t July/August 2016

7/21/16 9:37 AM

40

HISTORY

The Cyfarthfa Ironworks in Wales Cyfarthfa Ironworks in Merthyr Tydfil, South Wales, won the accolade of world’s largest ironworks in1807 and, in 1823, the UK’s largest, producing 24.2kt of iron from its eight furnaces. By Tim Smith* The casting arches of the Cyfarthfa ironworks remain extant and can be explored from the Taff Way at the junction of the A470 & A4102 in Merthyr Tydfil (OS grid ref SO 0371 0682)

FOUNDED in 1765 by Anthony Bacon – a London merchant supplying ordnance – and his partner, William Brownrigg of Cumberland, the early works were constructed by Charles Wood as a waterpowered site, with the commissioning, in 1767, of a single charcoal blast furnace. In addition, a forge made wrought iron using the potting and stamping process, and a boring mill drilled out solid cast cannon, by then the only technology permitted by the Admiralty.

In 1794, Richard Crawshay and partners acquired the lease of the complete works from Bacon’s son. Crawshay’s descendants were to run and expand activities for the next 108 years.

Following Crawshay’s acquisition, a second furnace was built, both now operating with coke, but blowing cylinders and a rolling mill were all powered by water wheels, the largest with a diameter of 56’ (17.0m) and width 6’ (1.8m).

By 1791, steam engines were introduced to provide the blast and each of the two furnaces were producing 1400 tons a year.

Water power remained in use for the forge, mill and hammers.

Casting and boring cannon was still a profitable activity, but the importance of producing wrought bar iron was recognised. At first this was made by the potting and stamping process, but rolling the product rather than stamping (hammering) it. In Crawshay’s own words: ‘ …we make use of Air furnaces instead of finerys, when the metal is brought to nature, instead of hammers, we put it between a pair of rolls and crush it like a paste about ¾ inch thick – then break it into small pieces, pile up 60 – 80 pounds

weight on a cake of baked clay, heat 20 of those piles at a time in another air furnace, then shingle them under the hammer of 1200 lbs weight……. This was followed by reheating and rolling followed by planishing under a light hammer.

In 1794, attempts were made to refine the grey pig produced using Cort’s puddling process with eight hearths introduced. However, the quality of product was poor and it was not until an additional refining process was introduced (the Welsh Method) that success was achieved. This required remelting the cast pigs in an airblown refining furnace to oxidise impurities.

Scrap iron, broken sandstone and coke – for fuel, were added to the charge and melting and refining took place over about two hours. The molten ‘finers metal’ was then run out into a launder extending outside the refinery and cooled from below by a cast iron tank of water and from above by playing water onto the surface which was covered with slag. The resulting iron could then be successfully puddled.

Initially, the blast furnaces used the local ironstone ore, a carbonate associated with coal seams. To make one ton of iron it took 3.5 tons of ore, three tons of raw coal to make sufficient coke, and one ton of limestone.

By 1796, three furnaces were producing 7204 tons a year, and in 1797, a fourth furnace was added.

In 1801, a sister ironworks, Ynysfach, was built nearby to supply Cyfarthfa with additional finers metal via a canal. The initial twin furnace was followed, in 1805, by two larger separate furnaces blown by two beam engines providing an iron output of 10,460 tons a year. The finery was also

enlarged. By 1807 there were six furnaces at each site and Cyfarthfa was believed to be the largest ironworks in the world.

The end of the Napoleonic wars brought a decline in demand with output falling to 9,600 tons in 1814 with only three furnaces in blast, but this improved to 14,191 tons in 1817. By 1823, eight furnaces were operating producing 24,200 tons that year, with a ninth furnace added in 1824 giving an output of 29,000 tons in 1830 and in 1864, output reached 50,000 tons.

Water wheels still drove the rolling mills, but a steam engine was added to pump water back into a higher reservoir to enable a continuous water supply. Water power, however, was insufficient to drive a larger mill required to meet the demand for heavier beams, so in 1840 a steam-powered rail mill was added and another in 1857.

By 1865, puddled iron output reached 1,200 tons a week and 5,000 employees worked at Cyfartha producing wrought iron bar and railway rail, much of which was exported.

However, problems with unions and a fall in demand for wrought iron forced the works to be run down in 1875. It was restarted in 1879, but closed again in 1881 for a complete rebuild of the furnaces, including the addition of hot blast, and the introduction of two eight-ton Bessemer converters for steelmaking, commissioned in 1885.

The works continued to operate as the Crawshay Brothers until acquired in 1902

by Guest Keen & Nettlefolds – who owned Merthyr’s earliest ironworks at Dowlais (1759). Cyfarthfa closed in 1910, but was reopened in 1915 for the war effort, finally closing in 1919.

* Member of the Historic Metallurgy Society July/August 2016

History July aug.indd 1

www.steeltimesint.com

7/20/16 11:17 AM

AS ONE We are stronger

Two powerful companies in the metals industry have forged together. Mitsubishi-Hitachi Metals Machinery and Siemens VAI Metals Technologies have united to become the new global force in metals technologies.

Creating the future of metals as one. primetals.com

AD_210 x 297.indd 1

01.09.15 09:28