July/August 2015
EUROCOKE 2015 PLANT SAFETY
Vol.39 No.5 – www.steeltimesint.com
IRON ORE STEEL PROCESSING
STEEL TIMES INTERNATIONAL – July/August 2015 – Vol.39 No.5
DOES STEEL HAVE A CAST IRON REPUTATION?
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CONTENTS JULY/AUGUST 2015
July/August 2015
Vol.39 No.5 – www.steeltimesint.com
EUROCOKE 2015 PLANT SAFETY
IRON ORE STEEL PROCESSING
STEEL TIMES INTERNATIONAL – July/August 2015 – Vol.39 No.5
DOES STEEL HAVE A CAST IRON REPUTATION?
Picture courtesy of Midrex. ESISCO DRI Plant in Sadat City Egypt. The 1.76Mt/yr plant supplied for Egyptian Sponge Iron and Steel Company (ESISCO) is designed for simultaneous discharge of hot DRI and cold DRI. The plant is in the commissioning stage and is expected to begin operations in Q2 2015. ESISCO is an operating unit of Beshay Steel.
EDITORIAL Editor Matthew Moggridge Tel: +44 (0) 1737 855151 matthewmoggridge@quartzltd.com Consultant Editor Dr. Tim Smith PhD, CEng, MIM Production Editor Annie Baker
SALES International Sales Manager Paul Rossage paulrossage@quartzltd.com Tel: +44 (0) 1737 855116
2 Leader 4 News The latest steel industry news from around the world 9 USA update An anti-dumping frenzy 11 Latin America update Latin America’s installed capacity 13 India update Posco seeks alternative sites Iron ore 14 Combating the scrap steel shortage
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Reputation enhancement 17 Plenty to shout about? Steel processing 22 Up for the challenge!
Area Sales Manager Anne Considine anneconsidine@quartzltd.com Tel: +44 (0) 1737 855139 Sales Director Ken Clark kenclark@quartzltd.com Tel: +44 (0) 1737 855117
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Oxygen steelmaking 27 Productivity enhanced by straight blows during BOF steelmaking
Advertisement Production Martin Lawrence
SUBSCRIPTION Elizabeth Barford Tel +44 (0) 1737 855028 Fax +44 (0) 1737 855034 Email subscriptions@quartzltd.com
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Steel Times International is published eight times a year and is available on subscription. Annual subscription: UK £168.00 Other countries: £240.00 2 years subscription: UK £302.00 Other countries: £432.00 ) Single copy (inc postage): £38.00 Email: steel@quartzltd.com Published by: Quartz Business Media Ltd, Quartz House, 20 Clarendon Road, Redhill, Surrey, RH1 1QX, England.
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Safety 31 Zero accidents, how?
Tel: +44 (0)1737 855000 Fax: +44 (0)1737 855034
Eurocoke 2015 33 It’s not all doom and gloom 34 Increasing demand for coke 36 Vale’s mission in Mozambique
www.steeltimesint.com Steel Times International (USPS No: 020-958) is published monthly except Feb, May, July, Dec by Quartz Business Media Ltd and distributed in the US by DSW, 75 Aberdeen Road, Emigsville, PA 17318-0437. Periodicals postage paid at Emigsville, PA. POSTMASTER send address changes to Steel Times International c/o PO Box 437, Emigsville, PA 17318-0437. Printed in England by: Pensord, Tram Road, Pontlanfraith, Blackwood, Gwent NP12 2YA, UK ©Quartz Business Media Ltd 2015
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Perspectives: Turboden 38 Recovery won’t be quick or easy History 40 The evolution of the blast furnace
ISSN1475-455X
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July/August 2015
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LEADER
A dying elephant with a ‘smoke stack’ image?
Matthew Moggridge Editor matthewmoggridge@quartzltd.com
July/August 2015
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If you work in the steel industry you would be well advised to read Ayn Rand’s Atlas Shrugged. While it would be wrong to say that Rand’s epic novel is all about the steel industry – in essence it expounds her philosophy of objectivism – there are a few choice quotes about the steel industry and one is of relevance to an article, penned by yours truly, in this issue (see page 17). “In view of the critical plight of the steel industry,” said Mouch with a sudden rush, as if not to give himself time to know what made him uneasy about the nature of Rearden’s glance, “and since steel is the most vitally, crucially basic commodity, the foundation of our entire industrial structure, drastic measures must be taken to preserve the country’s steel-making facilities, equipment and plant.” Nothwithstanding the fact that the entire quote resonates when issues such as EU emissions regulations and Chinese exports are considered, it’s the last bit that should be ringing bells in the boardrooms of global steel companies. Rand’s brick-sized tome was published in 1957, but it’s relevance continues today, especially where the reputation of
the steel industry is concerned. While some people argue that a career in the steel industry offers little more than ‘dark grey to black prospects’ and describe it as ‘dying elephant’ with a ‘smoke stack’ image, others are more optimistic. Nicholas Walters, director of communications and public policy at the World Steel Association (worldsteel) comments that, “Steel is central to making modern society sustainable. It is everywhere in our lives and is at the heart of delivering solutions to so many of today’s problems.” There is, to put it mildly, plenty to shout about, but who’s shouting the loudest? Those who see only smoke stacks and black prospects or those, like Walters, with a more positive perspective? My message to steel associations and steelmakers – who are ultimately responsible for improving the image of the industry – is simple: get out there and spread the word that steel is one of the most ‘right on’ products on the planet and remember that today’s steel industry is modern, technology-driven and operates more sustainably than at any time in it’s long and distinguished history.
www.steeltimesint.com
7/8/15 12:03 PM
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4 NEWS IN BRIEF Saarstahl orders new wire rod outlet Saarstahl AG’s Neunkirchen works in Germany’s Saarland municipality has placed an order with SMS Group for a new wire rod outlet. According to SMS the new equipment will enable the company to react faster and more flexibly to customer needs.
NLMK opens new sales service centre NLMK, which claims to be the largest steelmaker in Russia and one of the most efficient in the world, has opened a sales service centre in Russia to serve its domestic and international clients. The new sales service centre was set up to improve service levels and develop stronger consumer interaction with users of the company’s Quend and Quard steel plates produced in Belgium and sold on the Russian market.
Chinese exports remain high Steel products exports are likely to remain high in June, according to commodity information provider Shanghai Metals Market (SMM). The company claims that 30 mainstream building materials factories estimate that their exports will rise by 5% due to sluggish steel prices in China’s domestic marketplace.
TMEIC wins Indiana steel contract A steel finishing facility in Indiana, USA, which prefers to remain anonymous, has ordered a replacement control system from TMEIC for a continuous descaler and tandem cold mill producing special cold-rolled steel for the automotive industry.
INDUSTRY NEWS
World’s largest DRI contract The contract to build the world’s largest multiple product direct reduced iron (DRI) plant has been won by the US-based Midrex Technologies and its partner Paul Wurth S A Technologies. The contract has been awarded by Tosyali Holding, a Turkish steelmaker with 16 production facilities dotted throughout Turkey as well as in Algeria and Montenegro in Europe. The new plant, which will be located in Bethious (Oran) in Al-
geria, will produce 2.5Mt of DRI and will be capable of varying its production to produce hot direct reduced iron (HDRI) and/or cold direct reduced iron (CDRI) simultaneously and without the need to stop production. The new plant is claimed to be the largest single DRI plant to produce multiple DRI products. HDRI will be fed via an Aumund hot transport conveyor to a new EAF meltshop close to the Midrex DRI plant while CDRI can be produced
NLMK’s 700kt briquette plant Russian steelmaker NLMK has received official approval to embark upon the development of a 700kt metallurgical briquettes facility in Lipetsk, the company’s main production site in Russia. The facility, which will cost 2.3 billion rubles, will make the briquettes from iron-making waste, it is claimed. “Iron containing briquettes are a raw material for the smelting of hot metal,” says NLMK. The bri-
quettes will be manufactured from a mix of iron ore concentrate and blast furnace sludge, which is basically waste from the wet blast furnace gas cleaning. According to NLMK, briquette production is an environmentally friendly technology that doesn’t generate dust or gas emissions. Once up and running, the plant will be capable of recycling 350k of blast furnace waste annually. Konstantin Lagutin, vice pres-
Qingdao’s 700t/yr rolling mill
LanzaTech appoints former OSRAM COO Carbon recycling company LanzaTech has appointed former OSRAM global chief operating officer Jean Paul Michel as executive vice president for strategy, finance and operations. At OSRAM, the renowned global manufacturer of light bulbs, Michel was most recently group head for manufacturing and chief operating officer for the lighting company’s traditional lighting business unit.
For more steel industry news and features, visit www.steeltimesint.com
July/August 2015
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for additional on-site use. Overall the new facility will provide Tosyali Algeria with greater production flexibility and enable it to produce high quality, low impurity steels as well as decrease demand for imported scrap. Charging hot DRI to an EAF reduces electricity consumption and increases productivity. “Less energy is required in the EAF to heat the DRI to melting temperature, resulting in a shorter overall melting cycle,” says Midrex.
Qingdao Iron and Steel of Qingdao in Shandong Province in China has placed an order with SMS for a 700kt capacity special bar quality rolling mill. The Chinese steelmaker plans to expand its product portfolio to include high-quality special steels for use in the automotive industry. Liu Tieniu, deputy general manager at Qingdao Iron and Steel, said the new mill will enable the company to enhance its leading market position ‘even further’. Commissioning is scheduled for Q3 2015.
ident for investment projects, said that the facility is part of the company’s Strategy 2017 project aimed at making the production process more efficient. “The new facility will not only increase the efficiency of iron extraction, but will significantly reduce the plant’s environmental footprint,” he said, adding that there were plans to fully liquidate existing blast furnace sludge piles – which date back to Soviet times – by the year 2030.
CCS invests in Tata plant Capital Coated Steel, a leading processor of pre-finished steel has invested £3.5 million in a former Tata Steel plant covering seven acres of the Blackvein Industrial Estate at Cross Keys, South Wales. All of Capital Coated Steel’s group companies – Macward Steel Slitting Services, Brunel Steel Services and Odoni-Elwell – will be located at the new headquarters where a new slitting machine imported from the USA will create 14 new jobs. According to CCS’s managing director Gary Hunt, the new premises will enable the company to meet growing global demand. He said that a great deal of the infrastructure and fittings needed were already in place. By bringing CCS’s group companies under one roof the company will bring 110 jobs to the new site in addition to the 14 new jobs created. Turnover is expected to grow to over £40 million in 2015. www.steeltimesint.com
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INDUSTRY NEWS
DESCO part of US Steel A 700kt electrolytic-galvanising line (EGL) owned and run by Double Eagle Steel Coating Company (DESCO), a company once partowned by AK Steel, is now part of US Steel’s Great Lakes Works following a deal involving USS purchasing AK Steel’s interest in DESCO. The Great Lakes Works EGL, now under US Steel control, will allow customers primarily in the automotive industry to be provided world-class steel coated products for both exposed and unexposed applications. The plant utilises the patented Carosel process to electrolytically apply zinc to steel substrate and is the only North American finishing line capable of providing both EG (zinc free) or EGA (an iron/zinc alloy) coatings. Mario Longhi, president and
CEO of Pittsburgh-based US Steel, said that ‘continuing investment into our operations to provide the highest quality product critical to our customers’ success directly supports US Steel’s ongoing transformation journey’. He said that US Steel seeks to create innovative solutions for its customers and that by increasing the operational footprint of the Great Lakes facility, the company was working to create special synergies with its automotive customers ‘as they seek to reach critical safety and fuel economy standards’. The EGL line at Dearborn, claims US Steel, improves the company’s ability to provide industry-leading advanced high-strength steels (AHSS) including Gen3 grades, which are under development, as
well as high quality exposed steel for automotive body and closure applications. According to US Steel, the Dearborn line's attributes and the superior shape and mechanical properties of AHSS substrate from US Steel's joint venture, PRO-TEC Coating Company, allow the plant and its products to set the standard for coated Advanced High Strength Steels. The deal between US Steel and AK Steel includes a one-off payment of US$25 million for the remaining interests of the joint venture as well as the transition of assets and utilities to US Steel’s Great Lakes Works. The facility will continue to be staffed by AK Steel during a 90-day transition period while US Steel decides upon optimum staffing levels.
ABB increases capacity
Steel Times International’s editor Matthew Moggridge might have jeopardised steel safety practices when he grabbed the controls and attempted to move a slab of hot steel along a conveyor belt. Fortunately for all concerned – and for the industry as a whole – Mr Moggridge was using a simulator on the rather impressive SMS stand at this year’s METEC exhibition in Düsseldorf, Germany.
Chinese exports will be high Steel products exports from China are likely to remain high in June, according to commodity information provider Shanghai Metals Market (SMM). The company claims that 30 mainstream building materials factories estimate that their exports will rise by 5% due to sluggish steel prices in China’s domestic marketplace. www.steeltimesint.com
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NEWS IN BRIEF
In May, China exported 9.2Mmt (million metric tonnes) of steel products, up 7.73% month-onmonth and 14% up year-on-year, according to the National Bureau of Statistics (NBS). During the first five months of 2015, China exported 43.52Mt of steel products, up 28.2% year-onyear, says NBS. Source: China Metals
An upgrade of electrical, control and instrumentation systems at an ArcelorMittal BOF steelworks in South Africa has increased liquid iron production by 12%, claims ABB, a global control technology specialist. When ArcelorMittal South Africa shutdown last year with a view to investing heavily in the relining and refurbishment of its sole blast furnace it decided to renew it’s control system at the plant in Newcastle in the province of KwaZulu-Natal. The project has increased production capacity from 1.7Mmt to 1.9Mmt/yr.
Imports up, says AISI The American Iron and Steel Institute’s (AISI) 2014 Annual Statistical Report shows that US steel production, shipments and imports all increased during 2014 when compared with the previous year. Total and finished steel imports increased to ‘near record levels’ as imports accounted for a 28% share of US apparent steel supply. Shipments increased by 3% to 98Mt compared with 2013 figures and were up by 6% from the most recent five-year average of 93Mt.
WSD praises POSCO US-based World Steel Dynamics (WSD) headed up by the charismatic Peter Marcus, has named South Korean steelmaker POSCO as the world’s most competitive steelmaker – for the eighth consecutive year. WSD ranked 36 global steelmakers by analysing 23 different categories including production capacity, profitability, technological innovation and financial stability.
Singh fills in at SAIL Following the stepping down of C S Verma, Steel Authority of India Ltd’s (SAIL) chairman and managing director, it has been announced that Rakesh Singh, the company secretary, will be filling in until a successor is found. Verma ceased to be chairman and managing director of SAIL on 10 June and had been with the company in that role for five years.
NLMK announces record heat series NLMK’s Kaluga long products division has announced that its next-generation EAF mini-mill has achieved a world record heat series duration of 110 heats in one tundish. The record heat series was set between 18 and 21 May when 77 hours and six minutes of continuous casting led to the production of 13,000 billets at an average heat weight of 126.4 tonnes and hourly productivity of 180.6 tonnes.
Far East dominates global stainless market Markus Moll, managing director of Steel & Metals Market Research of Austria, speaking at the recent World Recycling Convention and Exhibition in Dubai, organised by the Bureau of International Recycling, told delegates that 18/8 stainless steel scrap availability was growing faster over the period 1980 to 2020 than 300 series stainless steel production – the former by 4.6% per annum and the latter by 4%.
Russian rebar certified for Europe Following testing by Technische Universität München in Germany, NLMK’s EAF Kaluga ‘new generation’ minimill, part of the Russian steelmaker’s Long Products Division, has obtained the German national standard DIN 488-1 certification for its 10mm to 25mm diameter class B500B rebar. The company has received a certificate of compliance valid until 2020. July/August 2015
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INDUSTRY NEWS
Output down, exports up China produced 270.07Mt of crude steel during the first four months of 2015, down 1.3% from the previous year according to the National Bureau of Statistics. Over the same period, exports of steel products were up 32.7%. During April, China produced 68.91Mt, down 0.7% year-onyear, and pig iron output was down 2.1% year-on-year to 59.49Mt. Steel products output was up 3.4% to 96.41Mt. China exported 34.31Mt of steel products between January and April 2015, up 32.7% yearon-year. The country’s steel export value rose 7.7% year-on-year during the same period. In April, China exported 8.54Mt of steel and imported 1.2Mt. China imported 307.25Mt of iron ore over the first four months of 2015, up 0.7% compared with the same period last year. In April alone, China imported 80.21Mt of iron ore. The iron ore import value dropped 44.8% year-on-year between January and April of this year. Source: China Metals
Nucor’s quality DRI plant has been repaired Following the restart of a 2.5Mt/ yr Energiron DRI plant in Convent, LA, Tenova HYL has announced the successful repair of the process gas heater with the recommencement of production at Nucor Steel Louisiana, USA. According to Tenova, the DRI plant has demonstrated that it can produce premium quality DRI with metallisation of 96%, carbon ranging from 3.6% to 4.0% and productivity over 300 tonnes/hour. The plant is operating smooth and stable, claims Tenova. “No other DRI plant has ever shown the capacity to produce sponge iron at such class quality at the highest production level in the world” Tenova claimed. For more steel industry news and features, visit www.steeltimesint.com July/August 2015
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Himpe says no to China China does not merit being granted market economy status by the EU, says EUROFER president Robrecht Himpe. Speaking at the recent 5th European Steel Day in Brussels, Himpe told delegates that China does not meet the required technical conditions and its policies continue a strong role for the state rather than true market forces. According to Himpe, China increasingly plays a central role on the world market, not just in the steel industry. Chinese steel exports world-
wide, however, reached an historic peak of 93Mt in 2014, representing 60% of total EU steel consumption. Chinese exports to the EU, he said, grew from 1.2Mt in 2009 to 4.5Mt in 2014 – a fourfold increase. “And it’s exports have been further increasing this year,” he said. Himpe argued that granting market economy status (MES) to China would allow the EU’s manufacturing core to be eroded by unfair trade policies and practices. Making reference to the contro-
versial Transatlantic Trade & Investment Partnership, which may or may not be rubber-stamped by the EU next week, Himpe commented that the EU must align it’s position with the USA and Canada, the latter having recently reversed its decision on granting MES to China. While Himpe praised the European Commission’s ‘more listening attitude’ towards the plight of the European steel industry, he said that the industry’s competitiveness and its profitability were at stake along with thousands of jobs across Europe.
NAS orders SMS rolling mill North America Stainless (NAS) has ordered a stainless steel cold rolling mill and bright annealing line from the SMS Group. The 20-roll cold rolling mill will form part of a modern production facility for bright-annealed stainless steel strip in Ghent, Kentucky and, claims SMS, will be characterised by high efficiency, flexibility and product quality. Commissioning will take place in early 2017 and the plant will boast a capacity of 95kt/yr. A similar installation in Bahru, Malaysia, served as a blueprint for the NAS plant, claims SMS.
MMK’s updates blast furnace Russian steelmaker OJSC Magnitogorsk Iron and Steel Works (MMK) has completed the modernisation of its turbo blowing machine number 8 (TBM-8) and is now planning to overhaul its blast furnace number 9. The modernisation of TBM-8 was completed in May and included the replacement of a steam turbine and all auxiliary equipment, such as reheaters, pumps
and pipelines. The compressor was also repaired and the unit was equipped with an automated control system enabling optimal operational modes for TBM-8. According to MMK, the upgraded equipment will reduce energy input costs in addition to enabling one of the mill’s largest blast furnaces to operate stably throughout the year. TBM-8 provides high quality blast heating to the com-
pany’s Blast Furnace number 10. MMK is planning to replace the cooling units and repair the lining of blast furnace number 9 with a view to increasing pig iron output and reducing cash costs. The Russian steelmaker has been busy overhauling other blast furnaces on-site. Blast furnace number 6 was reconstructed in 2013 while number 8’s overhaul was completed in March this year.
EU invests in Hlsarna project The European Union has agreed to contribute 7.4 million Euros towards Tata Steel’s and Rio Tinto’s Hlsarna project, which starts a six-month test campaign next year at the IJmuiden steelworks in the Netherlands. The test will establish whether the new technology can produce molten iron in a stable way over a sustained period of time. The
EU’s support, claims Tata Steel, represents nearly a third of the 25 million Euro test costs. According to Tata, if the technology is viable and can be scaled up successfully, it would enable further resource efficiency improvements in steelmaking. Karl Koehler, chief executive officer of Tata Steel’s European operations, said: “We welcome
the European Union’s support for this promising and potentially ground-breaking project.” Hlsarna technology eliminates two energy-intensive preparatory stages in iron making. There is no need to cluster fine iron ore into sinter or pellet or to convert coal into coke, as there is in conventional blast furnace ironmaking. www.steeltimesint.com
7/13/15 10:36 AM
INDUSTRY NEWS
DIARY OF EVENTS
World crude down 2.1% Figures released by the World Steel Association (worldsteel) show that world crude steel production in May this year was down 2.1% to 139Mt when compared to May 2014. Chinese crude steel production for May 2015 was down 1.7% to 70Mt while Japan produced 8.9Mt, a decrease of 7% on last year’s figure. South Korea produced 6Mt of crude steel, down 2.6%.
In the EU, Germany produced 3.7Mt of crude steel in May 2015, down 5.4% on the previous year, while Italy produced 2Mt, down 12.6%. France increased production by 5.8% to 1.4Mt while Spain upped its production 1.9% to 1.4Mt. Turkish crude steel production in May 2015 was down 4.3% to 2.9Mt and the figure for Russia was 6.1Mt, down 4.3% when compared with May last year. The
Ukraine was down 23% to just 2.2Mt. In the USA crude steel production dipped 8.5% to 6.8Mt and in Brazil the figure was down 3.8% to 3Mt. In terms of crude steel capacity utilisation ratio, the figure for the 65 countries reporting to worldsteel was 72.1%, 3.4 percentage points lower than in May 2014. In April 2015 the figure was 0.4 percentage points lower.
For a full country-by-country listing visit: www.worldsteel.org/statistics/crude-steel-production.html
27 resolutions against China Alacero, the Latin American Steel Association, reports that there are currently 27 resolutions in force against steel imports from China and a further four investigations in progress in the region. On Friday 19 June the Secretary of Economy of Mexico published a final resolution of an investigation into imports of cold-rolled steel sheet from China and imposed anti-dumping duties ranging from 65% to 103%. The investigation started in December 2013 following applications from Ternium Mexico and AHMSA. Just over a month ago, the government of Peru established a definitive anti-dumping duty or-
der on imports of hot-rolled steel pipes from China and applied anti-dumping duties of between US$60 and US$90 per ton. According to Alacero the problem of rising steel imports from China is serious and affects most countries in the Latin America region, which is the second most important destination for Chinese steel, it is claimed. “During the first four months of 2015, 3.2Mt of Chinese steel entered Latin America, many of them under unfair trading conditions,” said Alacero. “This volume is 29% higher than in the same period in 2014 and represents 39% of the total imports of finished steel of Latin America.”
Paul Wurth’s Salzgitter project In August 2013, Salzgitter Flachstahl GmbH (SZFG), Germany, awarded the Paul Wurth Group with a turnkey order for the construction of a pulverised coal injection (PCI) plant for Blast Furnaces ‘A’ and ‘B’ at its Salzgitter integrated steel plant. As SZFG announced on 4 May, the plant started operation in spring 2015 and now helps to reduce the cost of ironmaking operations. www.steeltimesint.com
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The plant features two coal grinding and drying plants of 50t/ hr capacity each. The injection plants are designed to reach a capacity of 200kg of pulverised coal per ton of hot metal. With the first coal having been injected into Blast Furnace ‘B’ on 23 March and the readiness for operation achieved on 2 April 2015, the respective contractual milestones have been accomplished, claims Paul Wurth Group.
For more steel industry news and features, visit www.steeltimesint.com
Algae combats climate change Tata Steel and Swansea University are developing technology to manage carbon dioxide produced as a by-product of steelmaking operations. ACCOMPLISH – or Algal Carbon Capture and BIOMass-Linked Supply Chain – is part of Swansea University’s wider EnAlgae project and is based at Tata Steel’s Port Talbot steelworks in the UK. The ACCOMPLISH project analyses the capacity for natural algae to use carbon dioxide as a nutrient for growth and contributes towards the steelmaker’s commitment to reducing unavoidable carbon dioxide emissions from its manufacturing operations. Tata Steel’s technical director, Martin Brunnock, said that the company was committed to further improving the sustainability of its processes. “It is projects like this, with leading academic partners, such as Swansea University here in Wales, which are making us leaders in the field of sustainable steelmaking,” he said. The wider EnAlgae project is led by Swansea University and funded by the European Union under the INTERREG IVB North West Europe programme. EnAlgae unites experts and observers from 7 EU member states to determine the potential benefits of algae as a future sustainable energy source.
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August 10-12 Minerals, Metals, Metallurgy, Materials Pragati Maidan, New Delhi An important events in the Indian minerals, metals, metallurgy and materials marketplace. For further information, log on to www.mmmm-expo.com
September 8-10 CIMIE 2015 – the 11th Metallurgy Expo, China New China International Exhibition Centre, Beijing CIMIE 2015 is widely recognised as one of the largest global metallurgy exhibitions. For further information, log on to www.bcime.com 29-01 (October) 14th International Stainless Steel and Special Steel Vienna, Austria. This event offers delegates insights from top-level executives from the industry’s most influential companies. For further information, log on to www.metalbulletin.com
October 20-22 ASM Heat Treating Society Conference and Exhibition Cobo Centre, Detroit, Michigan This popular event targets leading players in the heat treating marketplace. For further information, log on to www.asminternational.org/ 25-27 North American Steel Conference The Westin, Chicago, USA. Organised by CRU. A major conference examining issues affecting the North American steel industry. For further information, log on to www.crugroup.com
November 03-05 MPPE 2015 Leoben, Austria. Organised by the Austrian Society for Metallurgy and Materials (ASMET). This wide-ranging event covers many topics including materials synthesis and processing. For further information, log on to www. mppe.org
For more steel industry news and features, visit www.steeltimesint.com
July/August 2015
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USA UPDATE
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An anti-dumping frenzy In recent weeks, the US steel industry has been beating the anti-dumping drum quite aggressively, with the volume steadily rising as the issue gains momentum in political circles. By Manik Mehta*
SIX leading steelmakers joined forces to file a joint trade complaint in early June, urging the authorities to impose punitive tariffs against what they alleged were “unfair pricing” of steel imported from China, India, Italy, South Korea and Taiwan. This specific complaint concerns steel used in the automobile and construction industries, and is the first of its kind this year by the US steel industry, which wants to stop the record level of imported steel. The six steelmakers are the United States Steel Corp., Nucor Corp., Steel Dynamics, ArcelorMittal USA, AK Steel Corp. and California Steel Industries. Except for ArcelorMittal, headquartered in Luxembourg with substantial operations in the United States, all the others are USbased steel producers. The six companies lament the fact that prices have declined by some 25% since the year opened, even as demand surged. As a result, the companies that produce much of their steel near automobile plants in the country’s crucial Midwest and Southern regions, have had to resort to mass retrenchment of workers and, in turn, close down plants. The companies contend that imports, particularly from China, were responsible for this situation. China has come under
the focus of the US steel industry, which says that China’s economic slowdown and, with it, declining demand for steel, has prompted that country’s steel suppliers to ship surplus capacity to the United States. They allege that China’s steel exports jumped 36% to nearly 30.5Mt during January-April 2015. A statement issued by the legal representatives of the six complainants points out that imports have “devastated
the pricing in the US market, increased their share of the US market by undercutting US producers’ prices and caused injury to US producers and their workers”. With the formal filing of the petition, the US International Trade Commission is required to decide within 45 days whether the US steel companies sustained “sufficient injury” to justify the imposition of punitive duties. The US Department of Commerce, on its part, will pass a preliminary ruling by the end of this year, but the final decisions of both agencies are supposed to be passed by the middle of next year. Duties were also imposed last year on South Korea and other countries for supplying steel to the US steel sector; however, the duties have so far failed to stop or even substantially reduce steel imports. The six complainants will need to support their complaint with evidence that the foreign producers supplied steel at prices below-market prices or took advantage of illegal state assistance to get business and harmed the profits of US steel companies; the latter contend that foreign suppliers benefit from unfair support from their governments. The complainants cited 48 subsidy measures in China as well as 88 in India, 12 in Italy, 43 in South Korea and 22 in Taiwan.
* USA correspondent www.steeltimesint.com
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July/August 2015
7/8/15 12:16 PM
10 USA UPDATE
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Imports of corrosion-resistant steel from these five supplying countries have surged 85% between 2012 and 2014 to 2.75Mt, according to the complainants. The five countries in question reportedly exported over US$ 2.2 billion worth of corrosion-resistant steel to the US. All the supplying countries have rejected this complaint, saying there were no unfair trade practices. US labour unions welcomed the complaint by the six companies, with Tom Conway, vice president of the United Steelworkers’ Union – which represents workers at ArcelorMittal and US Steel – even proposing that customers who knowingly purchase “such illegally priced and dumped products” should be taxed. But the US industry is particularly concerned that China, whose steel industry has built up overcapacity resulting from economic slowdown, will eventually find ways to dump its excess steel in the US market. Steel companies in China, according to one report, have high inventories. According to Thomas Gibson, president/CEO of the American Iron and Steel Institute, finished steel imports into the US increased 36% in 2014 over 2013, and captured 28% of the domestic steel market which he described as an “all-time record level of foreign market share penetration”. He also forewarned that this could happen in the current year as well. Meanwhile, Republican politician Mike Bost introduced legislation, the American Trade Enforcement Effectiveness Act, aimed at improving US trade laws that are designed to remedy against allegedly dumped and subsidised imports. Bost’s supporters described his legislation as an effective way to stem such unfair trade besides protecting the jobs of US workers threatened by global competitors who try to circumvent trade laws. The Chinese steel suppliers, as US steel industry representatives have been privately saying, are “probably rubbing their hands in glee” that the US economy is on the way to recovery since the devastating recession, as this will allow them to ship more steel. According to estimates compiled by the Organisation for Economic Co-operation and Development (OECD) and the World Steel Association, there are some 638 million net tons of steel overcapacity in the world. Other factors that are hurting the US steel industry and its export business are the strong dollar, the pressures on pricing, particularly of tubular products for the oil and gas industry, and weak global demand. The earnings of the big US steel and metal companies have remained the same. Moody’s 2015 warning that it is lowering its assessment of the outlook for the US steel industry from “stable” to “negative” has also not helped much. The challenges faced by the industry have also moved politicians to act in a number of states which have a strong steel industry presence. Indiana Governor Mike Pence, for instance, visited US Steel’s plant in Gary, Indiana, where workers have been laid off at the company’s northern Indiana steel mill. Pence underscored the state’s commitment to help the industry grow. The Indiana Governor accepted an invitation from the company and visited the huge plant that stretches some seven miles along Lake Michigan. Hundreds of workers, hired in the last half year, were the first to be laid off. “Indiana is on the side of steel,” Pence was reported as saying and promising that “we’ll do everything we can to ensure the indigenous steel industry remains strong”. The steel industry is one of the biggest employers in the state. The governor also noted that the state of Indiana backed US Steel when it filed what would become a successful case with the US International Trade Commission against illegally dumped steel for the oil and natural gas industries. t www.steeltimesint.com
7/8/15 12:16 PM
LATIN AMERICA UPDATE
11
Latin America’s installed capacity Excess capacity is one of the main hurdles affecting the economic performance of steel companies everywhere. The consensus of opinion is that high idle capacity is a key determinant of low pricing power and, therefore, poor profits. In this context, we examine the evolution of installed capacity generally and in Latin America. By Germano Mendes de Paula*
THE Organisation for Economic Cooperation and Development (OECD) has been collecting and organising comprehensive data on the steel industry’s nominal capacity. This information can be found at: http://www.oecd.org/sti/ind/ steelcapacity.htm. According to the OECD, global rated capacity expanded from 1.06 billion tons per year (bt/y) in 2000 to 2.16 bt/y in 2013 (Fig 1) implying a 5.6% compound annual growth rate (CAGR). Moreover, it forecasts that world capacity will reach 2.36 bt/y in 2017, resulting in a 2.2% CAGR, in comparison with 2013. Since 2000, there has been a massive change where regional participation is concerned. For instance, the joint relevance of OECD members in terms of global capacity dropped from 57.6% in 2000 to 49.2% in 2003 and to 30.7% in 2013 (Fig 2). The steel business has become a game for emerging countries, mainly due to exponential growth observed in China. For the coming years, even with the slowing of Chinese capacity expansion, the OECD estimates an additional retraction for its members to 28.6% in 2017. Fig 3 demonstrates that China’s share of world capacity grew from 14.1% in 2000 to 46.4% in 2013, and is expected to remain roughly the same through 20142017. The relative importance of other Asian nations decreased from 26.2% in 2000 to 18.7% in 2013, but might revert
2000
2007
2013
2017f
Brazil
30,0
39,0
48,1
53,2
Mexico
19,0
21,5
24,0
27,3
Venezuela
4,5
6,1
6,1
7,7
Argentina
5,4
6,1
6,5
7,1
Colombia
0,8
1,6
2,2
2,2
Chile
1,7
1,7
2,0
2,0
Peru
1,0
1,2
1,4
1,6
Trinidad and Tobago
1,0
1,0
1,0
1,0
Cuba
0,5
0,5
0,7
0,7
Ecuador
0,1
0,1
0,6
0,6
Guatemala
0,3
0,3
0,5
0,5
Dominican Republic
0,4
0,4
0,4
0,4
El Salvador
0,1
0,1
0,2
0,2
Paraguay
0,1
0,2
0,2
0,2
Puerto Rico
0,1
0,1
0,1
0,1
Uruguay
0,1
0,1
0,1
0,1
65,0
79,9
94,0
104,7
TOTAL Source: OECD
Table 1: Installed Capacity by Countries, 2000-2017 (Mt/y)
partially to 19.4% in 2017. The European Union (EU-28), North America (USA and Canada) and CIS show a strong collective decline, diminishing from 45.3% in 2000 to 23.7% in 2013 and possibly to 22.1% in 2017. These figures are derived from the author’s calculations based on OECD data, because the OECD uses a different geographical group approach, considering Mexico as part of NAFTA, instead of Latin America. Other nations, including European
2500
60
2000
50 40
1500
30
1000
20
500
10
0 2000 01 02 03 04 05 06 07 08 09 10 11 12 13 14f 15f 16f 17f
Fig 1: World installed capacity, 2000-2017 (Mt/y). Source: OECD
60 2000 01 02 03 04 05 06 07 08 09 10 11 12 13 14f 15f 16f 17f
Fig 2: OECD members’ participation in global installed capacity, 200-2017 (%). Source: OECD
countries outside of the EU-28, the Middle East, Africa and Oceania, also registered a collective reduction from 8.3% to 6.8% over the 2000-2013 period. Nevertheless, the OECD forecasts that they will improve to 7.8% in 2017. Latin America also experienced an involution from 6.1% to 4.3% between 2000 and 2013, with the prospect of preserving this participation up to 2017. Latin America data Latin America crude steel capacity increased from 65Mt/yr in 2000 to 94Mt/ yr in 2013 and will to improve to 104.7 Mt/ yr in 2017. One advantage of the OECD’s data is the availability of disaggregated information within each continent. Table 1 shows rated capacity for all Latin American nations for the selected years: 2000, 2007, 2013 and 2017. During the period 2000-2013, the rated capacity grew by 44.6% in Latin America, but with a considerable dispersion among the various countries of the region: Brazil
* Professor in economics, Federal University of Uberlândia, Brazil. E-mail: germano@ufu.br www.steeltimesint.com
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July/August 2015
7/22/15 9:41 AM
12
LATIN AMERICA UPDATE
(60.3% expansion), México (26.3%), Venezuela (36.3%), Argentina (19.9%), Colombia (175%), Chile (17.3%), Peru (40%) and Trinidad and Tobago (zero). Indeed, the capacity spread is quite substantial, revealing the peculiarity of the investment dynamics in different nations. For those with capacities lower than 1 Mt/ yr, the variation was even bigger. Ecuador, for example, experienced a 637.5% jump, albeit from a low base. Latin American nominal capacity is expected to enlarge 11.4% between 2013 and 2017. Again, a sizeable dispersion will happen within the region: Brazil increasing by 10.5%, México (13.8%), Venezuela (25.3%), Argentina (10%), Colombia (zero), Chile (zero), Peru (12.5%) and Trinidad and Tobago (zero). It should be stressed that Venezuela is the only nation where investments are underpinned by state-owned enterprises (SOEs). Based on the poor performance of the Venezuelan steel industry (STI April 2015, p. 15), such expansion may continue only on paper. In the case of Colombia, after an accelerated broadening during the previous period, there are no plans to increase nominal capacity.
July/August 2015
LA.indd 2
Fig 3: Regional distribution of installed capacity, 20002017 (%). Source: Author’s calculations based on OECD data 2000 01 02 03 04 05 06 07 08 09 10 11 12 13 14f 15f 16f 17f China
Other Asia
According to OECD’s database, installed capacity in the smaller countries will maintain the same level. The author believes that this situation can be explained by the fact that it is more difficult to survive (and to expand) in smaller countries. This is due to the small size of the market being a strong limitation to the exploration of economies of scale. A fierce international steel market environment intensifies the problem. It is predicted that Bolivia, Costa Rica, Panamá and various Caribbean islands will be without steel shops – both BOF and EAF – by 2017. It is important to note that, on a countryby-country level, no reduction of installed
European Union
North America
China
Latin America
Others
capacity in Latin America is expected. This is a general trend for the whole industry as, based on the entire OECD’s database, only Japan and the EU-28 are projected to reduce their rated capacity by 2.0 Mt/ yr each. The slow elimination of capacity, due to high barriers to exit, even in the developed countries, will prolong the overcapacity problem for many years to come. Another way to mitigate excess capacity is to postpone the implementation of additional volume projects. OECD discloses its database, comprising each individual project, but this issue will be analysed in the next article.
www.steeltimesint.com
7/22/15 9:41 AM
INDIA UPDATE
13
Posco seeks alternative sites South Korean steel giant POSCO is looking for alternative sites in India following long delays in the development of a 12Mt/yr greenfield project in Odisha. By Dilip Kumar Jha* FACED with inordinate delays in the implementation of the proposed 12Mt/yr greenfield steel manufacturing project in Odisha, South Korean steel manufacturer POSCO (formerly Pohang Iron and Steel Company) has started looking for alternative sites in India. The South Korean steel giant has entered into dialogue with India’s largest public sector steel mill, Steel Authority of India Ltd (SAIL), for collaboration opportunities including setting up an integrated steel plant in Jharkhand. POSCO had entered into a pact with the Odisha government on 22 June 2005 with a view to setting up the plant with an estimated investment of $12 billion, India’s largest foreign direct investment (FDI). The steel maker's proposed project in Odisha has since been stalled for about a decade on account of regulatory hurdles, including delays in land acquisition. Problems aplenty Acquisition of land has been a major problem for greenfield projects in India. Understanding the need, therefore, the state government roped in Odisha Industrial Infrastructure Development Corporation (IDCO) as its nodal agency for land acquisition for Posco’s project. Interestingly, IDCO managed to acquire only 2,772.05 acres of land to facilitate the establishment of an 8Mt POSCO phase one steel mill. This includes 2,193.52 acres of forest land and 578.53 acres of government land. Of this, 1703.56 acres have been handed over to the company at a deposit of INR542.2 million (US$8.5 million). The company is also in talks with the state government seeking the transfer of additional land. The 12Mt/yr steel project initially needed 4,004 acres. Despite unexpected delays, however, POSCO has denied exiting India unlike ArcelorMittal, which withdrew its 12Mt/ yr proposed steel mill from Odisha. “We would not quit. We have been waiting (for the project) for 10 years”, said Gee Woong Sung, chairman and managing director (CMD), of POSCO India after a recent meeting with state chief secretary G C Pati. Surprisingly, the staff strength for
Posco’s indian journey Timeline
Details
June 2005
POSCO signs MoU with Odisha to set up a 12Mt/yr steel plant
August 2005
Local NGOs oppose the project
August 2008
Supreme Court upholds “in principle” clearance for use of forest land
December 2009
Odisha grants final clearance for diversion of forest land
July 2010
Odisha High Court cancels grant of prospecting license to POSCO for Khandadhar iron ore mines
October 2010
Odisha moves to Supreme Court against the High Court order
January 2011
Government gives conditional environment clearance to POSCO
October 2011
POSCO plans a joint venture with SAIL for 3Mt/yr plant in Bokaro, Jharkhand. Seeks 30-year continuous supply of ore
December 2011
Proposed MoU for Bokaro plants cancelled
March 2012
National Green Tribunal suspends the environment clearance granted to POSCO
May 2013
Odisha government acquires 2,700 acres land to enable the company to start work on the project
May 2013
Supreme Court strikes down the Odisha High Court order; asks Indian Government to take a decision on grant of prospecting license for Khandadhar mines
April 2015
India’s steel minister Narendra Singh Tomar confirms dialogue between SAIL and POSCO for setting up 3Mt/yr project in Jharkhand
the project, which once stood at 80, has been pruned to six and key executives have been shifted back to South Korea. Granting iron ore linkage to its steel plant is another problem the company has faced. Before POSCO announced its intention of setting up a greenfield plant in Odisha, the state government provided assurances that it would provide full iron ore linkage to meet the plant’s proposed capacity. In March 2014, the government recommended granting POSCO a prospecting license (PL) covering an area of over 2,500 hectare (ha) and including the Khandadhar mines, which contain more than 200Mt of iron ore deposits. Of the total area recommended, 650 ha belonged to non-notified areas, or areas not recognised by the state government as a mineral bearing site. While the state government made all possible efforts to honour its commitment, the emergence of illegal mining and the cancellation of allocated mineral linkages to leaseholders put the plan on the back burner. New site To avoid a repeat of the past, POSCO now plans to set up a 3Mt/yr steel plant in Jharkhand, another mineral rich state in India, in collaboration with SAIL. Narendra Singh Tomar, India’s steel and mines minister, said that SAIL and POSCO recently discussed possible collaborative
opportunities including setting up an integrated steel plant. The proposed plant entails an investment of around US$3 billion. According to Indian government sources, both POSCO and SAIL were facing differences over ownership of the proposed project. But, after several rounds of talks, both agreed to an equal 49% share, with the remaining 2% owned by a financial institution. This is not the first time POSCO has joined hands with SAIL. In 2011, both companies signed a memorandum of understanding (MoU) for setting up a 2Mt/yr steel mill in Bokaro, Jharkhand. However, a spat over ownership meant that the plan failed to materialise. Why Jharkhand? SAIL is currently operating four iron ore mines in Jharkhand with massive ore reserves. Once the proposed project comes on stream, the problem for iron ore linkages would automatically be shorted out. SAIL owns 1.84 billion tons of iron ore reserves in Chiria in addition to 500Mt in Rowghat. Processes are underway to allocate more iron ore mines to SAIL out of the state’s total hematite reserves of over 3 billion tonnes. Of the total reserves in the state, 2 billion tonnes are in Chiria, one of the largest single deposits in the world. t
* India correspondent www.steeltimesint.com
INDIA UPDATE.indd 1
July/August 2015
7/8/15 2:43 PM
14
IRON ORE
Combating the scrap steel shortage Steel Times International talks to Basil Botha, Northern Iron’s president and CEO about scrap shortages and the growing popularity of electric steelmaking. By Michael Schwartz* ASKED about the current supply problems affecting scrap steel, Basil Botha, Northern Iron’s president and CEO, speaking exclusively to Steel Times International, said: “This is an open ended question with no definitive answer, but I will do my best to put it into context. If we look purely at ‘prime scrap’, which is used for making high quality steels in Electric Arc Furnaces (EAF), there is insufficient supply in the USA. “When looking at the supply of ‘obsolete scrap’, which is old cars and the like, there is sufficient supply, and this is also consumed by EAFs when making lower quality steels, and is also exported. The problem with obsolete scrap is the high level of impurities, which negatively impact the quality of steel produced. So, when EAFs look to making high quality steel, they have to supplement by using HBI and DRI. Currently in the USA there is insufficient supply of quality scrap.” Northern Iron is working towards producing Hot Briquetted Iron (HBI), a purer, complementary and viable metallic supplement to scrap steel. Although scrap is critical to steelmaking, there is a diminishing supply of quality scrap steel combined with an ever increasing market demand; steel producers around the world will soon be looking to secure supplies of virgin iron units to enable them to improve product quality. Northern Iron owns five iron (magnetite) properties in Red Lake District, Ontario. The company has two near-term developments, the Karas property and the past-producing Griffith mine which produced pellets and sponge iron, ie, Direct Reduced Iron (DRI), from 1968 to 1986, supplying to the Hamilton and Nanticoke steel mills in Ontario.
Preparations at Griffith mine To date, Northern Iron has focused on derisking the project by seeking out potential JV partners, off-take agreements or a combination thereof. More specifically, Northern Iron had completed its magnetic survey and water sampling programme at Griffith mine in mid-April this year, the survey comprising 14 lines over approximately two thirds of the north pit. The raw data acquired will allow for a drill programme after partial dewatering. Water sampling in turn is helping the company’s submission of a permit to dewater another 15 m below the 25 m dewatering permit previously issued by the Ministry of Environment. Transportation infrastructure is currently in place to ship produced HBI into the North American market via rail and lake barges and into Asian markets via rail through the port of Prince Rupert. Other existing infrastructure includes all-weather roads, 115kV power line, natural gas line, rail bed and port facilities. The global market – and why HBI? Basil Botha also commented on the global context: “There are approximately 26 countries that currently ban scrap exports, which gives one an indication of the importance of supply of the product. There are countries that are net importers of scrap steel: China, Turkey, South Korea and a number of others. Eventually the tide will turn and China may well become the largest exporter of scrap globally.” When it comes to why HBI rather than any other technology, Botha continued, “When we refer to HBI/DRI/pig iron, it should be put in the context of the metallics market. There is no confinement to producing HBI alone, as there are producers of metallics in Russia, Trinidad
and Venezuela, and they are the primary exporters of these metallics. There are steel producers in the USA that produce metallics for direct feed into their furnaces and this material is not available for export. As I mentioned earlier, metallics are used to supplement EAFs either to produce high quality steels or reduce the nasties in obsolete scrap steel. Our HBI is expected to contain more than 93% metallic iron with all the other technical characteristics desired by EAF operators. ” And potential customers? Danieli based in Italy has undertaken to take 500kt of Northern Iron’s production and the company is working closely with all the steel mills in the USA and some overseas mills to secure off-take agreements. On a purely local basis, Northern Iron estimates the amount of its production going to Canadian markets as probably zero. Looking ahead Basil Botha also looked to the future, sounding a note both advisory and warning, “In the Western World, there is a move away from traditional Blast Furnace (BF) steel making, to that of using scrap steel and clean metallics in the industry. In the US more than 60% of steel is produced via the EAF route. The primary reason for this trend is pollution, but cost and flexibility are also factors. Another factor to take into consideration is that when the BFs reach the end of their operational life, permits to build new BF plants will not be granted easily, precisely due to this excessive pollution. Emissions from EAFs are approximately 50% less as they are essentially recycling scrap steel; a major attraction in an increasingly environmentally sensitive world.” t
* Mining correspondent July/August 2015
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www.steeltimesint.com
7/8/15 12:25 PM
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REPUTATION ENHANCEMENT
17
Plenty to shout about? Dark grey to black prospects? A ‘dying elephant’ with a ‘smoke stack’ image? When it comes to reputation enhancement, some argue that the global steel industry has its work cut out, but others are much more upbeat. Matthew Moggridge* reports
“Starting a career in the steel industry will perhaps end up in dismissal as a consequence of cost-cutting programs.” Mathias Gierse, CD Wälzholz
“THERE is a view that working in a steel plant is like going down the pits, but nothing could be further from the truth.” These are the words of Michael Treacy, CEO of AIC Steel in the UK, who was putting the case for the steel industry at a time when having a good reputation means everything – ask FIFA. That a career in the modern steel industry can be compared with coal mining is nonsensical, but it suggests that the PR machine is failing to combat the industry’s ‘smoke stack’ image. “The steel industry is doing little against this prevalent opinion,” says Dr. Mathias Gierse, managing director of steel processing company CD Wälzholz (CDW) of Hagen in Germany. The World Steel Association (worldsteel) agrees with Treacy and argues that equating the modern steel industry with ‘going down the pits’ is at odds with reality. “Many modern steel plants are state-of-the-art facilities using cutting edge technology. These days, working in a steel plant is more like working in either a
laboratory or control room,” says Nicholas Walters, director of communications and public policy. According to Walters, people inside the steel industry can be more negative about the industry than major audiences outside of it. “This seems to be an issue of ‘self worth’ and ‘self confidence’. For decades, people working inside the industry have seen the global focus of attention (particularly Government policy) shift to sectors such as IT and telecommunications, automotive and transport, entertainment and retail,” he says. More transparency needed A major global research programme was carried out by worldsteel in 2011 and again in 2014, and found that 63% of respondents – drawn from Government, financial stakeholders, business, media and supply chain – held a strongly positive opinion of the industry compared with only 7% holding an unfavourable opinion attributed mainly to financial performance and the environment.
“I think that far too often the industry is seen as one that is constantly struggling with overcapacity, shedding its workforce and impacting negatively on local communities,” said Gareth Stace, recently appointed director of UK Steel. Stace argues that more transparency is needed. “The negative impressions can only be combatted by opening up plants to public visits on a large scale,” he says. Room for improvement Some argue that the steel industry has been very ineffective at enhancing its reputation. “After the financial crisis the global steel industry was – as decades before – unable to manage global overcapacities. China tries to solve the problem by increasing exports, the USA implements anti-dumping duties, Europe is suffering from overcapacity and making almost no money…the global industry is in very bad shape so far,” says CDW’s Gierse. Nicholas Walters at worldsteel argues that there will always be room for
* Editor, Steel Times International www.steeltimesint.com
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July/August 2015
7/22/15 2:49 PM
18
REPUTATION ENHANCEMENT
“Industry needs to concentrate on focused media campaigns promoting the good news to the general public and to both existing and emerging supply chains. Gareth Stace, UK Steel improvement. “The industry needs to work harder to promote steel as a vital material. This is particularly true in the context of steel’s position in the circular economy, which demands zero waste, reducing the amount of materials used and encouraging the re-use and recycling of all materials – all key strengths of the steel industry,” he explains. It’s not all the doom and gloom. As Todd Zyra, president of Klein Steel, points out, steel is not only one of the most sustainable industries in terms of recycling and environmental impact, it also offers a wealth of opportunities for those interested in STEM (Science, Technology, Engineering and Maths) careers. “Steel is central to making modern society sustainable,” says worldsteel’s Walters. “It is everywhere in our lives and is at the heart of delivering solutions to so many of today’s problems.” Steel’s ubiquity, therefore, should be seized upon by those charged with the task of ‘bigging it up’. “More emphasis needs to placed on how important steel is for everyone in everyday life and the reliance that every single industrial sector has on steel. There needs to be greater focus on steel as a versatile, cutting edge and vital material,” says UK Steel’s Stace, adding that social media should be used to persuade younger people that steel is very important to society as a whole. “The issue is that the outside world does not fully understand the impact that the steel industry has on everyday lives. People also do not understand the tremendous benefits that the EAF steel industry has for the environment due to its recycling efforts,” says Philip K Bell, president of the Steel Manufacturers Association in the USA. Bell argues that the outside world does not recognise that today’s steel industry is modern, technology-driven, and operates more sustainably than at any time in its history. “Steel represents the infrastructure and prosperity of a nation,” says Bell.
Who is responsible for enhancing the steel industry’s reputation? “All of them together,” says Jean-Pierre Birat, secretarygeneral the European Technology Platform (ESTEP) adding that it’s not simply a matter of the material itself. “Companies are often at the forefront of evening news, when they close a local steel mill,” he says. While steel associations and steelmakers are ultimately responsible for improving the reputation of the industry, worldsteel believes that the role of individual member companies is vital. “The reputation of the steel industry in the areas of credibility, trust, honesty, financial performance, employee satisfaction and safety performance is driven by them,” says Walters. He argues that international, national and regional associations have an important role in ‘appropriately and effectively presenting the strengths of the steel industry and the critical role it plays in our society to key audiences.’ The SMA’s Bell argues that a third component is needed. “We believe in the ‘employee as an ambassador’ concept in which the best steel companies will have their own employees emulate the mission, vision and values the company aspires to in its everyday interactions with the society around them,” he says. “Remember in this industry raw materials, processes and equipment are essentially the same. The differentiating factors are culture and people,” he adds. Innovation CDW’s Gierse says that steel companies should focus on promoting innovation and product development while the various steel associations should consider the importance of the value-added network. “It has to be a combination of both associations and industry,” according to UK Steel’s Stace. “Trade associations need to concentrate on the political level and promoting social and economic benefits to the media through specific events, such
as European Steel Day. Industry needs to concentrate on focused media campaigns promoting the good news to the general public and to both existing and emerging supply chains,” he argues. Klein Steel’s Todd Zyra says that enhancing the reputation of the steel industry cannot be achieved in a vacuum. “It is the responsibility of the steel associations and the companies collectively to raise the industry profile,” he says. “We routinely open our doors for tours with regional business and manufacturing associations and participate in Manufacturing Day on an annual basis so others can see, first hand, the inner workings of a steel company,” Zyra explains. Financial performance and the environment are cited by worldsteel as two key areas in need of improvement. Walters argues that the former is not simple to deliver because of overcapacity in the industry, high production costs, logistics and transparency of pricing. “We have a very strong environmental position on water, air and by-products generated through the steelmaking process,” Walters says. “This is not a question of improving our act, but improving our communication.” Acknowledging that steel is one of the most highly engineered products in the world, the SMA’s Bell believes that the steel industry must remind the outside world that steel is not just a commodity, but an extremely versatile, useful and recyclable product. “We can also do better explaining how sustainable and environmentally friendly EAF steelmaking is,” he says. Klein’s Zyra cites industrial safety, product innovation and employee growth opportunities while UK Steel’s Stace recommends a constant focus on the societal benefits of steel. CDW’s Gierse wants more focus on innovative products and processes. “Meaning for the success of
“We routinely open our doors for tours with the regional business and manufacturing associations.” Todd Zyra, Klein Steel
July/August 2015
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REPUTATION ENHANCEMENT
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“For some steel companies it is very difficult to assess and understand the benefits of investing in reputation building activities.” Rafael Rubio, Alacero industrial production, especially logistics, in the sense of enhancing the flexibility of value chains and networks,” he says. Attracting younger people Opportunities abound for young talent from skilled machinists to engineers and ‘newly minted’ MBAs, says Klein’s Zyra. “The key is to educate them on the shortand long-term benefits of working in the steel industry,” he said. When compared with high-tech industries, steel isn’t perceived to be as enticing. “If you ask today’s graduates whether they would rather take a position with a steel company or a Silicon Valley start-up, my guess would be the latter,” he said. “In today’s world, when the headlines call out mill closures and advertisements tout the strength of aluminium, steel would appear to be a dying industry.” Jean-Pierre Birat of ESTEP argues that young people might not think of steel as the primary sector in which they would like to work and that the general public view the industry as passé. In the UK, apprenticeships are a step in the right direction, but Stace argues that greater publicity is needed. “Getting paid, qualified and obtaining transferable skills is a powerful message to get out to schools,” he argues. According to Stace, attracting younger people will become easier as the UK government increases its focus on vocational training. “The increasing number of apprenticeship places helps, although much more needs to be done, particularly on funding and guaranteeing workplace placements,” he says. Bell says that an increasing number of SMA members are collaborating with local colleges and universities to help develop curriculum and programs tailored to the steel industry. “One program of note involves Commercial Metals Company working with Texas State University to develop a degree program in Manufacturing Technology with a focus
on steelmaking,” he says, adding that worldsteel’s #lovesteel campaign is a great way to showcase the various career options available in the steel industry. “This program is driven by individual companies and uses social media platforms to spread the word about our industry,” he adds. In the USA the problem of attracting younger people acquires greater urgency when you listen to Andrew Harshaw, CEO of ArcelorMittal USA. Speaking at AISTech in Cleveland, Ohio, recently, he told delegates that the average age of his company’s workforce was 57 and that 40% of his employees would be retiring over the next five years. Nucor’s vice president Michael Lee said that the company worked with over 30 colleges and universities, but spends most of its time trying to improve the common perception of the steel industry. Picking up on ArcelorMittal USA’s looming employment crisis, Walters at worldsteel points out that it is not the norm. “Most of our members tell us they are not in this situation,” he says. Zyra believes that Klein’s ‘first-rate reputation in the marketplace’ is largely driven by its own team members and is the company’s strongest recruitment vehicle. “Our continued commitment to and investment in the professional development of our team members has also provided a significant incentive for young people to work at and stay with Klein Steel,” he says. The Klein Steel University offers a range of e-learning and instructor-led courses through what Zyra describes as a ‘robust talent management program’. Role models Ask Zyra for a role model at the cutting edge of reputation enhancement in terms of developed initiatives and he name checks the US-based Metal Service Center Institute. “Among many things, the MSCI has a strong voice in the US especially in advocacy for the metals industry. Leaders
spend a great deal of time at federal government level in an effort to reduce the tax burden, create a common sense regulatory framework, expand access to global markets, enforce trade agreements and more,” Zyra says. “Nucor in the USA is probably the most innovative steel company in the world,” says UK Steel’s Gareth Stace. “It is recognised as being world leader in introducing new technology and the training and empowerment of its workforce.” Credit where credit’s due The SMA’s Bell has good words for ArcelorMittal and Gerdau ‘for combining the optimal mix of CSR, public affairs and corporate communications to guard and enhance their reputations’. He is ‘extremely impressed’ with Steel Dynamics and Nucor for creating and maintaining distinctive corporate cultures. “I was recently at an event where the CEOs of both corporations highlighted how they see their corporate cultures as unique and one of the main factors that give them a competitive advantage in the marketplace,” he says. Nicholas Walters of worldsteel says that the best way to judge who is at the cutting edge of reputation enhancement is to review steel company websites and take a look at their digital social media sites. “Companies like POSCO, Voestalpine, ArcelorMittal and Ternium/Tenaris, to name just a few, have excellent initiatives,” he says. Voestalpine has focused on social media since 2009 and uses it to ‘talk more’ about the company, its stories, employees, products and projects. The primary goal, says the Austrian steelmaker, is not to sell more products but ‘to make the topics and stories about the company more tangible, and to reach out to further target groups’. CDW’s Gierse claims that there is no fresh or young image associated with the steel industry and that, being in
“The industry needs to work harder to promote steel as a vital material.” Nicholas Walters, worldsteel
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July/August 2015
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REPUTATION ENHANCEMENT
survival mode, the steel industry is having difficulty attracting the right people. “Starting a career in the steel industry will, perhaps, end up in dismissal as a consequence of cost-cutting programs,” he says. “Workload will be concentrated more and more to less people and future prospects are dark grey to black as nobody knows which mill will survive and under which brand.” UK Steel’s Stace argues that not enough is being done to fill the recruitment gap because the industry is under constant pressure to reduce costs to maintain competitiveness in an unfair marketplace (high energy costs, unrealistic business rates and an increase in dumping and environmental compliance costs). “Skills and, therefore, recruitment is a key theme of our forthcoming publication, Industrial Strategy for Metals, which will publish this summer,” he says. In the USA, Bell argues that young people are not exposed early enough to the benefits of a steel industry career. He says that community fairs, mill tours, mentoring programs, parental career discussions and more STEM education programmes are the way ahead. Long-term profitability is the only
July/August 2015
Reputation management.indd 4
solution to the problem of a recruitment gap, says CDW’s Gierse. The steel industry has suffered from a major skills shortage for decades and the main stumbling block preventing young people from joining the industry is overcapacity, he argues. Global image Rafael Rubio, general director of Alacero (the Latin American Steel Association) argues that while, in the past, the steel industry never felt the need to engage in reputation enhancement, things changed in the early noughties when increased competition and a greater need to respond to the environmental and social concerns of local communities encouraged the industry to scrutinise its global image. “Currently, we can say that there are leading firms’ communications that respond to the highest international practices in relation to innovation and the use of new technologies,” Rubio explains. However, he argues that, for some steel companies, it is very difficult to assess and understand the benefits of investing in reputation-building activities and developing open and receptive relations with a wider range of stakeholders. Rubio claims that Alacero has generated
greater media interest and awareness of steel, measured in terms of the impact of its press releases and an increasing number of requested interviews. It has also recorded increased interest in its Design Contest for Architecture Students. In 2014 1,300 students from 140 architecture schools in nine Latin American countries developed projects for the event. There has also been increased participation by construction industry professionals in Alacero’s on-line courses. Image enhancement is something steelmakers and steel associations ignore at their peril, especially when there are so many positive messages to convey. Steel, says worldsteel, is an enabler of the sustainable development needed to meet the needs of humanity in the year 2050, when 9 billion people will roam the earth. It is 100% recyclable – without losing its inherent strength – and a staggering 75% of all the steel products ever produced are still in use today. As an integral part of the so-called ‘circular economy’ – which promotes zero waste, re-use of materials and recycling – steel is one of the most ‘right on’ products on earth, so go and tell somebody. t
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7/22/15 2:50 PM
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STEEL PROCESSING
Up for the challenge! Klein Steel, an award-winning, US-based regional metals service centre with global reach, sources 90% of its steel from US and Canadian mills and claims to be a values-based, high performance operation. We talk to the company’s president, Todd Zyra*. 1. How are things going in the US steel processing industry and where does Klein fit in to the market? According to data published by the Metals Service Center Institute (MSCI), year-todate (through April) US shipments are down 3.6% compared with the same period last year. Conversely, Klein Steel is up 14% this year. Klein Steel is a regional metals service centre with global reach. 2. The global steel industry is faced with many challenges since the crash of 2008. How has Klein managed to keep its head above water? At Klein Steel, we pride ourselves on innovation and continuous process improvement. We keep our head above water by maximising productivity and operational efficiencies, reducing waste and managing our inventory turns wisely. In addition, we work hand-in-hand with our strategic partners on joint CPI initiatives to deliver greater value to all stakeholders.
3. The primary steel production industry in the USA is being very outspoken (and understandably concerned) about the influx of cheap steel from China, Asia and elsewhere in the world, but how does this dire situation affect the US steel processing sector in general and Klein Steel in particular? While Klein Steel is always in the market to secure better pricing, the majority of our customers require domestic steel. As such, we don’t typically capitalise on the influx of cheap steel. For metals service centres to thrive, we depend on the health of the mills with whom we partner. Any threat to the financial stability of the mills caused by foreign imports, internal challenges, or weakening markets, such as the recent declines in oil and gas, in turn, poses a downstream risk to service centres and their customers. 4. Klein was recently named Service Centre of the Year by American Metal Market and also
won the Platts Metals Distributor of the Year award in London – how important is it to be recognised by your peers as an innovator and industry leader? Given the commodity nature of our business, we believe that peer recognition is a critical differentiation. Our customers have a multitude of suppliers who would love to land their business; we’re extremely grateful that they choose Klein Steel and remain with us. We’re willing to work hard to gain and retain our customers by meeting their critical needs whether it’s process control, speed-to-market, material availability, product quality, or on-time delivery. Put simply, we are in business to make our customers stronger and more successful. 5. From where does Klein source its steel and what does it buy? Klein Steel is a full-line metals supplier that sources 90% of its steel from US and Canadian mills. We stock over 3,500 lines of carbon, stainless and aluminium including plates, sheets, bars, tubes, angles, channel, and more.
*President, Klein Steel July/August 2015
STEEL PROCESSING klein 2.indd 1
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STEEL PROCESSING
6. Once the steel arrives on Klein’s premises, what happens next? Once the steel arrives at Klein Steel, by truck or on-site rail line, it is unloaded, scanned and entered into inventory. We have a computer-generated, state-of-theart KASTO automatic storage and retrieval system that contains over 2,300 cassettes of inventory and tracks material by SKU, chemistry, heat number, size, and country of origin. 7. Last year Klein’s Pauline Malone won the Harry L. Erlicher Award from the Institute of Supply Management – can you explain how the supply chain management element of the business works, what challenges it presents and how important a service it is for those customers who choose it? Supply chain management at Klein Steel is one of our consultative services that strategic partners take advantage of to reduce risk – especially those who have experienced issues in the past with supplier performance, logistics, lead times or quality. Klein Steel works hand-inhand with our partners to understand the challenges that they’re facing and what they’re trying to achieve. We handle vendor quality and risk assessments, logistics and the management of interdependent variables across the entire supply chain including mill runs, international shipping dates, vendor lead times, and more. For these partners, we often provide vendor managed inventory, kanban-based releases and just-in-time delivery. 8. Talk me through Klein’s component manufacturing business: is there a specific production site, what kind of components are produced and how competitive is the marketplace? At this time, all of Klein Steel’s valueadded processing services are performed at our Rochester NY headquarters. We use the term “component manufacturing” to define complex, highly engineered parts that meet rigid specifications. Examples of these include frame assemblies, drive shafts, bearing hub assemblies, rocket cradles and tow arm assemblies and mixer blades and hubs. While the marketplace is competitive in this space, it is less competitive than a distribution-only model. When combined with direct-to-welding or direct-toassembly kitting, it allows Klein Steel to provide incremental value to our customers by removing additional steps in their process. 9. Klein materials
claims that true management is a
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STEEL PROCESSING klein 2.indd 2
strategic discipline that many practice and few master. Has Klein mastered the art – I’m guessing it has – and if so what makes a true master? A true master must have the expertise and strategic mind-set of a well-versed management consultant and an external partner who is willing to share critical information.
10. What kind of a resource does a materials management specialist like Klein need to be successful? Looking at the services you’re offering – annual forecasting, purchasing intelligence, analysis of materials usage trends, planning, purchasing, storing and distribution – I’m guessing it all adds up to quite an investment both in qualified staff and storage space. At Klein Steel, our top materials management specialists have decades of experience; some are coupled with an MBA and/or Six Sigma certification. Our people are one of Klein Steel’s greatest differentiators – we’re always willing to invest in top talent and the requisite training to keep their knowledge base current. A focus on materials management on behalf of our key customers requires less storage space than more. It allows Klein Steel to have, on hand, only those materials that are forecasted for a given timeframe. And it enables our customers to improve their cash flow by minimising their investments in purchasing, and housing unnecessary materials in inventory – just in case. In short, we provide customer savings, predictability, availability and ease-of-use. 11. What are Klein’s core competences? Klein Steel is focused on operational
23
excellence wrapped in a values-based, high-performance culture. Our stateof-the-art processing centre won the IndustryWeek Best Plants award in 2011 yet we believe that our people and culture are our true differentiators. We recruit and hire according to our Core Values and reward team members that go above and beyond in living these values. In the spring of 2015, we were awarded a Top Workplaces award from the Rochester Democrat and Chronicle, as voted by our team members in a confidential, thirdparty survey. 12. With so many individual components and items of steel and other metals floating around the premises of Klein Steel’s outlets in Rochester, Albany, Buffalo and Syracuse, I’m guessing that the company is aided by a pretty comprehensive and efficient hitech computer system – what can it do and how does it do it? Klein Steel has invested in a comprehensive ERP system that supports our unique environment (sizes, shapes, materials, locations, processes). More importantly, we employ a strong IT team that builds custom applications which allow us to truly manage the complexity of our hybrid distribution/manufacturing business. From production planning to flexible truck logs and real-time dashboards for manufacturing intelligence, we can achieve our five imperatives: safety, accuracy, quality, on-time performance and productivity. 13. Has Klein entertained the idea of ‘smart manufacturing’? In our five-year Strategic Plan, Klein Steel has identified the need for a fully automated service centre and an automated manufacturing facility by 2019. Among other things, we currently measure and manage processing centre profitability and have a plan in place to move toward greater IT-driven production as we continue to strive for a highly productive, accident-free environment. We are not a high volume, low mix manufacturer; we are a custom manufacturer with a low level of repeatability. As such, we are unlikely to be a lights-out facility at any time in the future. 14. Is Klein planning to expand its operating base going forward both in terms of plant and machinery and premises? Please see responses to questions 13 and 16. 15. Are there plans to extend the business outside of New York State? July/August 2015
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Four significant references out of total 238 VALLOUREC & MANNESMANN Projects including reheating furnaces and four heat treating furnaces with direct and indirect firing systems by means of high-waste gases recirculation fans, completed with in-house developed quenching system for pipes O.D. ranging from 4 to 16”.
Reheating systems
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ACCIAIERIA ARVEDI ITALY Latest generation vertical furnace for DP and TRIP steel strip equipped with proprietary premix burners, self-recuperative burners in 2P Inconel radiant tubes and rapid cooling in controlled atmosphere up to 110 °C/s. Gas consumption 16-20 Nm3/t for commercial steel grades production.
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Pagine 2013 A3 esecutivi 2013_08_08_qxd8_A3 esecutivi 14/01/14 10.12 Pagina 25
DANIELI CENTRO COMBUSTION ULTRA-LOW NOX HEATING SYSTEMS FOR AN EFFICIENT AND SUSTAINABLE STEEL INDUSTRY
State-of-the-art direct and indirect firing, controlled atmosphere heating systems, covering a wide range of industrial furnace applications from reheating to heat treatment processes for steel, aluminum and copper production.
> Temperature uniformity 10 °C > Oxidation < 0.5 % > Emission level 30 PPM
Four significant references out of total 238 VALLOUREC & MANNESMANN Projects including reheating furnaces and four heat treating furnaces with direct and indirect firing systems by means of high-waste gases recirculation fans, completed with in-house developed quenching system for pipes O.D. ranging from 4 to 16”.
Reheating systems
RIVA ACCIAI ITALY 350-tph walking beam furnace for 270-mm thick slabs running coke oven or natural gas equipped with MAB flameless proprietary patented burners. Ultra-low NOx emissions down to 65 mg/Nm3, low gas consumption below 270 kcal/kg.
Danieli Headquarters 33042 Buttrio (Udine) Italy Tel (39) 0432.1958111
ACCIAIERIA ARVEDI ITALY Latest generation vertical furnace for DP and TRIP steel strip equipped with proprietary premix burners, self-recuperative burners in 2P Inconel radiant tubes and rapid cooling in controlled atmosphere up to 110 °C/s. Gas consumption 16-20 Nm3/t for commercial steel grades production.
1914 / 2014 DANIELI CENTURY
OMK RUSSIA Two 230-m-long, roller hearth tunnel furnaces for twin continuos casting lines, with slab handling shuttles. 570 t/h productivity for 80-mm thick, 1570 mm wide slabs in low carbon and HSLA steels.
DANIELI THE RELIABLE INNOVATIVE PARTNER TO BE FRONT RUNNERS
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STEEL PROCESSING
Klein Steel ships worldwide and we are leveraging our nuclear quality assurance capabilities to extend our business outside of New York State by serving out-of-state OEMs and fabricators who require an NQA-1 compliant supplier. We also serve large OEMs who have a New York State presence but facilities nationwide—and partner with them to grow our geographic footprint. 16. In terms of capital equipment, assuming that Klein operates with cutting edge technology, what are the latest technological developments in this respect and will the company be upgrading any of its existing equipment in order to keep apace with the market? Klein Steel has a long history of reinvestment in equipment, which we plan to continue. Over the last few years, we added a vertical lathe and a highspeed drill line to our machining centre. This spring, we added a new burn table with True Hole™ technology and are currently performing the ROI analysis on another. Also under consideration, to meet increasing customer demand, are robotic grinding, a plate processor and another automated saw to handle 60’ structural materials. 17. What’s special about Klein’s existing equipment? Klein’s existing equipment is housed under one roof, which allows for in-house processing among multiple processing centres and complete shipments with shorter lead times. We adhere to a rigorous cycle of routine maintenance to minimise equipment downtime. 18. How does Klein approach worker safety? Safety is the number one imperative at Klein Steel. We measure our OSHA incidence rate (top 25% for our industry), safety loss costs and safety loss ratio – where we are among the top performing members of our insurance captive. We track risk factors based on five-step risk assessments and encourage reporting of July/August 2015
STEEL PROCESSING klein 2.indd 3
preventative actions. Throughout the year, team members attend safety training, conferences and workshops and subscribe to online training. A “Supervisors’ Tip of the Week” is published and promoted. We have “Safety Impact Awards” for those who go above and beyond to ensure a safe environment. Awards are also given on a weekly/monthly basis to team members who answered the “safety question of the week” correctly when polled on the production floor. In 2014, Klein Steel extended its culture of safety by creating a rotational Safety Ambassador program. Ambassadors held responsibility for safe operations in their areas and making recommendations as we measured improvements. Selected team members obtained 10-hour OSHA training certificates. 19. Where does Klein stand on the aluminium versus steel argument? Klein Steel stocks and sells steel and aluminium. Pure and simple, we provide the materials that our customers require. 20. How optimistic is Klein in the short-to-medium term for the global steel industry and for its own sector of the market? Klein Steel remains optimistic about its market opportunities and continued ability to grow its business at a higher rate than the industry average. Based on the economic analysts whom we follow, we expect continued growth in the industrial sector through 2015, but are anticipating growth to weaken for the remainder of the year and strengthen again in 2016. 21. How should the global steel industry react to China? From our perspective, China and other foreign competition are not going to go away. The global steel industry is wellversed in keeping a close eye on what’s happening in the marketplace and lobbying for fairness, wherever possible. All companies, large and small, need to focus on what they can control: abiding by regulations, maintaining safety,
producing the highest quality materials and minimising costs. 22. What keeps you awake at night? Thinking about my critical responsibilities, which I think are: to define and nurture our culture; to set the course and conditions to capitalise on opportunity; and to challenge people and the process to encourage innovation, change and growth. 23. If you possessed a superpower, how would you use it to improve your sector of the steel market? To predict the way the world will look in 10 to 20 years from now and identify ways we can support that evolution today would be a great power to have. 24. How important is it for Klein to be so multi-faceted, ie a steel processor, distributor, component manufacturer and, of course, the company’s stockholder/inventory role? In a commodity world with a multitude of choices, it is critical for Klein Steel to differentiate itself and provide as much value to its customers as possible. The breadth and depth of its offerings are based entirely on how the company can make its customers stronger. As we uncover greater opportunities to help our customers become even more successful, we will add them to our portfolio, as well. 25. Since starting the business in 1971, how have things changed and have they changed for the better or worse? In 1971, a gap existed in the marketplace whereby an individual or a small business could not source steel. Today, the market is much more competitive yet the working conditions are much better. Greater attention is paid to workplace safety. Systems are in place for sales force automation, lead generation, order entry, enterprise resource planning and more. It’s a faster world and we’re up for the challenge! t www.steeltimesint.com
7/8/15 12:29 PM
OXYGEN STEELMAKING
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Productivity enhanced by straight blows during BOF steelmaking While conventional BOF blowing practice requires waiting for sample results prior to tapping to see if a re-blow is necessary, a modified single (straight) blowing practice has been implemented in Steelshop II at SAIL Bokaro in which the quantities of oxygen and flux needed are pre-determined using a static model which has resulted in a 25% increase in productivity by eliminating four stages of activities in the steelmaking cycle. By N K Jha* and Somnath Kumar** THE majority of integrated steel plants across the globe follow the blast furnace – oxygen converter (BF-BOF) route of steelmaking. Blast furnace productivity is largely dictated by the quality of raw materials charged coupled with process control. Steel companies continually endeavour to achieve higher levels of BF throughput. Contrary to this BOF productivity depends largely on the design of the steel shop (including logistics) and steel grades produced rather than input quality. Consequently, over a period of time there has been substantial improvement in BF productivity, but BOF productivity has increased only marginally creating a mismatch in capacities between the BF and BOF. Steelmakers everywhere are thus confronted with the problem of finding other means of improving BOF productivity. Employing ‘Straight Blowing’ –
Blast furnace
Mixer
Scrap charging
Hot metal charging
Ladle furnace
Fig 1: Process route of steelmaking at SMS-II, BSL, Bokaro
Oxygen blowing
Tapping
Slabs Continuous casting
*Ex-CEO, IISCO Steel Plant, Burnpur, Steel Authority of India Ltd. **R & D Centre for Iron & Steel, SAIL, Ranchi, India e-mail nkjha0509@gmail.com (corresponding Author) www.steeltimesint.com
OXYGEN STEELMAKING BOF.indd 1
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OXYGEN STEELMAKING
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Event
Minutes
Comments
Charging scrap and hot metal
5-10
Scrap at ambient temperature, hot metal at ~1300°C
Refining–blowing oxygen
14-23
Oxygen reacts with elements, Si, C, Fe, Mn, P in scrap and hot metal and flux
Sampling–chemical testing
4-15
Steel at 1650°C, chemistry and temperature analysis
Tapping
4-8
Steel is poured from furnace into a ladle
Pouring slag off from BOF
3-9
additions to form a slag
Most slag is removed from furnace, in some shops slag is used to coat furnace walls
Table 1: BOF steelmaking event times1 Sequence No
Process involved
1
Receipt of hot metal from BF
2
Hot metal desulphurization at external desulphurization station
3
Transfer of hot metal into hot metal charging ladle
4
Transportation of hot metal ladle to charging station
5
Scrap and hot metal charging
6
Setting of blowing and flux addition parameters in terms of quantity, rate and timing based on hot metal analysis and product chemistry
7
Primary blowing (till major decarburization is achieved)
8
Termination of primary blowing, slagging off, sampling and temperature measurement
9
Analysis of sample
10
Setting finishing blow parameters based on results of sample analysis
11
Finishing blow
12
Sampling, temperature measurement
13
Tapping of liquid steel into steel ladle, Ferro alloy addition, bottom stirring (as required)
14
Slag splashing, dumping residual slag
15
Start of next cycle
Table 2: Sub-processes of BOF steelmaking
eliminating the intermittent checking of endpoint parameters – of the BOF is one solution. This article explores the method and pros and cons of straight blowing. Steelmaking at BSL The Steel Melting Shop-II of Bokaro Steel Ltd (BSL) – a member of India’s SAIL group – produces a variety of steel grades through the BOF-Ladle Furnace – Continuous Casting route to meet the stringent quality requirements of customers. SMS-II produces around 3Mt of low carbon aluminium killed cast slabs every year. Varieties of steel grades regularly produced include LPG, EDD, WTCR, SAILMA, HSFQ and IS2062. SMS-II consists of two 2500t mixers, two 300t BOFs with bottom purging facility, two 300t ladle furnaces and two twin strand slab casters. The charge to the combined blowing BOF converters normally consists of around 260-270t of BF hot metal from the mixers and 35-40t of scrap depending on the silicon level of the BF hot metal. Other fluxes used are lime (~12t), calcined dolomite (~7-8t), and dolomite chips (56t). The blowing time ranges from 1617 minutes and tapping under normal conditions takes eight to nine minutes. The average tapping temperature ranges between 1660-1680°C. The process flow of steel making at SMS-II, BSL is shown in Fig 1. Basic oxygen steelmaking uses high July/August 2015
OXYGEN STEELMAKING BOF.indd 2
purity oxygen to oxidise carbon, silicon, sulphur, and phosphorus in the charge lowering each to acceptable levels. A BOF shop capable of treating a heat size of 270280t in about 45-50 minutes is considered optimal. Bath agitation is implemented at the start of blowing or after the main decarburisation cycle, via bottom blowing of argon and/or nitrogen. Slag formation, CO bubbles, and close to equilibrium state conditions, are better achieved by this bottom gas injection. The basic operational steps of the process are shown schematically in Fig 2. This involves receiving hot metal from the mixer – scrap charging – hot metal pouring
– main blow – sampling – corrective blow (if required) – tapping – de-slagging followed by the start of a new charge to repeat the process. Table 1 summarises the main events during BOF steelmaking and the time taken by each. These times vary considerably depending on the chemistry and temperature of the input materials, the vessel configuration and the chemistry and temperature of the steel to be made. Major sub- processes of steelmaking are depicted in Table 2 for conventional BOF practice. The time taken in completing this sequence is known as the cycle time. The key to improving productivity is to reduce the cycle time. Factors affecting cycle time are: e Size of converter vessel; e Shop logistics; e Product chemistry requirement; e Hot metal chemistry and temperature; e Steelmaking method followed. Any effort to increase productivity by reducing cycle time involves changes in one or all of these factors. In conventional turndown practice the furnaces are blown to the ‘endpoint’ to measure the temperature and dissolved oxygen content (in ppm) of the steel bath and to obtain steel and slag samples prior to tapping. In this case the blow finish to tapping start time ranges from 10-14 minutes. In some cases the tap is delayed until the turndown steel analysis is received from the laboratory to ensure a satisfactory level of impurities content. Minor corrections The BOF converter has superior dephosphorylation ability. If the incoming phosphorus in the hot metal is low and consistent, tapping is permitted as soon as turndown tests samples are taken, without waiting for sample analysis2, 4. Any minor
Hot metal from mixer
Scrap charging
Hot metal pouring
Main blow
Sampling
Corrective blow (if required)
Tapping
De-slagging
Fig 2: Steps involved in conventional BOF operation
www.steeltimesint.com
7/13/15 11:08 AM
OXYGEN STEELMAKING
Bomb-secure loop
29
2-wire plug
Bomb head
Rubber-covered electrical cord
Blowing Bomb drop loop
Fig 3: Bomb drop-in sensor
corrections to chemistry can be made in the ladle furnace. Current global status Japan and some European shops achieve sampling and testing times of one to three minutes by using a quick tap procedure. Most of these shops use sub-lances to measure temperature and carbon by the liquidus thermal arrest technique. This is carried out without moving the furnace from the upright position. The success of quick-tap depends on consistently meeting the sulphur and phosphorus specification. This procedure can save three to six minutes of laboratory analysis time. These shops simply proceed immediately to tapping the furnace. Some North American shops have adopted a simplified version of the quicktap practice. A few have sub-lances. Others use bomb drop-in thermocouples (Fig 3) with or without oxygen sensors. Here a heavy cast iron bomb assembly with a specially wound and protected wire coil is dropped into the furnace. The wire lasts long enough to take a reading. The readings are more accurate if oxygen blowing is stopped, but some shops achieve a usable reading even during the blow. Again, tramp elements, S, P and other residuals are assumed to be acceptable and tapping proceeds immediately. Some shops equipped with only two BOF vessels use this technique to minimise production losses when one of the furnaces is being relined or repaired. Development of Straight Blowing Practice Priority was given at BSL to reduce the cycle time of BOF steelmaking so as to increase the productivity of the shop. After thorough investigation and deliberation it was concluded that minimising the time between the finish of blowing to start tapping is an attractive way to reduce the BOF cycle time since changing the charge size of the converter or changing shop logistics would require a large investment in capital and time to implement. To achieve a shorter time between finishing the blow to start of tapping a new process of steelmaking has been formulated. A static model was used to calculate the desired endpoint temperature www.steeltimesint.com
OXYGEN STEELMAKING BOF.indd 3
Sampling and temperature
Tapping
Slag off
Fig 4: Steelmaking by straight blows
Event
Minutes
Charging scrap and hot metal
10-12
Refining–blowing oxygen
15-16
Sampling–chemical testing
4-5
Tapping
7-8
Slag Splashing
4-6
Pouring slag off at furnace
3-4
Table 3: BOF steelmaking activities after implementation of straight blow practice at SMS-II
and composition. Static models are mass and energy balances that account for the initial conditions (scrap and hot metal temperatures and compositions) and the desired end-point conditions of the bath and slag, and indicate to the operator the expected total oxygen and fluxes that are required to reach that end-point. The blow is stopped once the pre-determined amount of oxygen has been reached. In addition to the charge model, the operator relies on other signals, such as the change in the colour of the flame at the mouth of the vessel and a characteristic drop in the steam flow in the fume system cooling circuit, to identify when the carbon has been depleted3. In practice, static charge models have a limited ability to predict end-point because they do not account for process dynamics. End-point accuracy is also affected by uncertainties in the initial conditions (eg mass, temperature and composition of the hot-metal, mass and type of scrap and fluxes added) and by variations in the efficiency of the oxygen lance, not only within a heat as the height and flow of the lance is varied, but also from heat to heat as the lance wears and the geometry of the vessel changes with refractory wear3. In the modified process of steelmaking at SMS-II, the entire amount of oxygen required is blown in one go at a predetermined rate thereby combining the former primary and finishing blows. Activities 8-11 in Table 2 are thus eliminated without altering any other activity. Studies have shown that the cycle time is reduced by 15% to 20% by this process4. The productivity of the steel melting shop increases proportionately4. This process will henceforth be called ‘steel making by straight blows’ in this article. Fig 4 indicates such steelmaking by straight blows.
Pros and cons of straight blows Besides direct impact on productivity, let us now consider other pros and cons of this process which essentially involve change in blowing methodology. Pros- the advantages e Since intermittent slogging off is eliminated, metal out flow along with slag is saved leading to marginal improvement in yield. e In the conventional process finishing blow (post slagging off) is occasionally dry. This doesn’t happen in straight blows. The result is higher lance life. e In theory, a lower FeO content in the slag is expected leading to better yield and higher vessel life (FeO mobility towards vessel walls causes refractory erosion). e In the case of the conventional process, open combustion takes place twice in every cycle as against only once when using straight blows. The following advantages result: a. Higher hood and skirt life; b. Reduced load on gas recovery system due to elimination of one phase of open combustion system; c. Converter gas (fuel) recovery marginally improves; d. Duration of refractory-liquid steel contact is reduced. Cons – the down side e Due to higher opening temperature, the chemistry sometimes goes off specification leading to pressure on secondary refining of the steel. Particular difficulty is faced in dephosphorisation as the chances of phosphorus reversal are higher at higher temperatures. e Difficulty in maintaining higher temperature gradient throughout the blowing period. e Marginally higher consumption of fluxes. e Straight blown heats usually carry higher oxygen content. Hence, more deoxidisers are often required. e An important negative aspect of straight blows is that steel is at a higher temperature and the slag stays in contact with the vessel refractory for a longer period. This reduces vessel refractory life, but a counter factor is a lower FeO in the slag which makes it less aggressive where refractory erosion is concerned. July/August 2015
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30
OXYGEN STEELMAKING
No of heats per day 28.26 26.3
90.81
91
25
90
23.4
24
92.9
92.12
92
27.1
Straight blow %
No of heats per day
27
92.93
93
30
21.3 21
88.6
89 88
88.64
88.34
87.3
87 86
18
85 15 03-04
04-05
05-06
06-07
84
07-08
05-06
06-07
07-08
08-09
Years
Increased productivity After implementation of straight blowing practice, shop productivity has increased by around 25%. The number of heats per day increased to an average of 26.5 heats (2003-4 to 2012-13) from 21.3 heats in 2002-03. A maximum of 29.2 heats per day was achieved in 2012-2013 as shown in Fig 5. The increase in the number of heats was made possible by a significant decrease in the time from blow finish to start of tapping. On an average more than 90% of July/August 2015
OXYGEN STEELMAKING BOF.indd 4
10-11
11-12
12-13
Years
Fig 5: Improvement in number of heats per day after implementation of straight blow practice
Fig 6: Percentage of straight blown heats over a period of time % FeO in turndown slag
% Reblow heats 28
23 22
23
% Reblow
Trial Results The straight blow practice was fully implemented at BSL, Bokaro. In the previous practice, the operator had to decide, before the start of the blow, how the oxygen blow would progress; what and when fluxes would be added during the blow to arrive at the desired endpoint in terms of temperature and composition. In this practice, at the end of the primary blow, the oxygen lance was withdrawn; and the vessel tilted to take samples to check the actual progress of the blow with respect to temperature and composition. Corrections in temperature and composition were carried out by reblowing the bath. Waiting for sample analysis was more time consuming since chemical analysis of the samples by spectroscopy in a separate laboratory meant a loss of several minutes (12-13 minutes). Higher re-blows to adjust temperature/composition thus caused loss of production and had other adverse effects such as lower lining life. On implementing the straight blow practice the entire amount of predetermined oxygen required was blown in one go. Activities of slagging off, sampling and temperature measurement after the primary blow were eliminated. Static control by using computers improved the hit rate of end point temperature and carbon significantly. BOF steelmaking activities after implementation of straight blow practice is summarised in Table 3.
09-10
Fig 7: Reduction in reblows required and unchanged FeO level in BOF slag after implementation of straight blow practice
21 20
18
19 13
18 17
8
16 3
% FeO in BOF turndown slag
02-03
15 02-03
03-04
heats made in SMS-II are now by straight blowing (Fig 6). Re-blows also decreased to a level of less than 5% on average compared to more than 20% before when straight blow practice was not in use. After implementation of the straight blow practice to the desired endpoint, there was no significant over oxidation of the bath and the FeO in the turndown slag did not increase appreciably (Fig 7). Conclusion For SMS-II, BSL productivity improvement of around 25% was achieved after implementation of the straight blow practice. Additionally, further benefits were an improvement in end-point target hit-rate and a reduction in re-blows. On the down side, a previous increase in refractory lining life, gained due to improvement in refractory management, was partially offset by adopting straight blows. Also, there was an increase in ferro alloy consumption whenever the bath became oxidised. In view of the above, it is advisable to make a trade-off considering shop logistics, and the extent of productivity increase required to match the upstream and downstream units of an integrated steel plant. These aspects vary from plant to plant.
04-05
05-06
06-07
07-08
Years
Acknowledgment The authors are grateful to the management of the Bokaro Steel Plant for extending its support to pursue the work. Thanks also to the personnel of Steel Melting Shop-II and R&C Lab for their extensive support and to BSL during execution of the present investigations. The authors are obliged to Shri Pankaj Kumar for support provided and express their gratitude to all who, directly or indirectly, supported this technical work. t
References 1 ‘Oxygen Steelmaking Processes’, T W Miller et al MSTS, The Making Shaping & Treating of Steel, AISE Steel Foundation, pp 475-522 2 ‘Quick direct tap at United States Steel Corporation’s Gary Works Q-BOP Shop’ Yun Li et al Iron & Steel Technology, Nov 2010, page 37-45 3 ‘BOF end point prediction’ Joseph Maiolo and Doug Zuliani, Metal Producing & Processing, Nov/Dec-2008, page 15-18 4 ‘Increasing BOF productivity and profitability by quick-tapping with drop-in sensor’ Stem, R A , Steelmaking Conference proceedings, Vol 78, Publ: Iron and Steel Society/AIME, 1995, page 143-146 www.steeltimesint.com
7/13/15 11:08 AM
SAFETY
Zero accidents? How?
31
Aerial view of ThyssenKrupp Gerlach
Frustration, helplessness and resignation are not unusual when accident rates at work are high. If you have already tried everything, what else is there left to do? German drop forge ThyssenKrupp Gerlach (TKG) resisted this conclusion by carrying out a radical overhaul of its safety culture together with DuPont Sustainable Solutions AT its site in Homburg near Frankfurt, ThyssenKrupp Gerlach GmbH (TKG) produces forged crankshafts for the global automotive industry. Together with the international production sites of the ThyssenKrupp Forged & Machined Components business unit, the company is the world leader in this field. Noise, vibrations, heat and dirt significantly impact the working environment of drop forges. For years, TKG tried to improve its safety performance, but although the company had managed steadily to reduce the frequency of its accidents, a rate in 2010 of 20 accidents at work per million man hours worked still seemed high to Dr. Franz Eckl, one of the members of the executive board. Eliminating an accident culture “At the time, we not only had relatively high accident figures, but also some serious accidents with long-term effects,” he explains. “Our solution approaches were purely focused on technical and organisational aspects. There was no awareness among employees that accidents at work could be prevented. The attitude one frequently heard was ‘There’s just nothing one can do about some accidents. They are the result of behaviour.’ “We realised that we had to change our culture and our behaviour with regard to work safety. But we didn’t know how to go about that in an effective and structured way. Work safety was important to us and we had done a lot for it. Many of us wondered why that wasn’t enough.” www.steeltimesint.com
Thyssenkrupp safety 2.indd 1
Frustration with the topic, uncertainty and an acceptance of the situation began to become widespread. Accidents that could not be prevented by technical or meaningful organisational means were of particular concern. If an employee ran in front of a forklift truck, for example, or reached through safety barriers into hazard zones, there were no specific, ThyssenKrupp Gerlach success factors
Visible senior management commitment and interest
Clear definition of the rules Good communication of targets and expectations
Adherence to the rules is
controlled via an escalation model
Regular safety talks with a new monthly topic
… and results 356 days without accident Reduction of incidents or recorded accidents by nearly 20% Senior management and employee behaviour change Productivity gain of 20% Improvement of all other noteworthy operational key indicators (quality, supply, costs) Employees, labour representatives and senior management are all proud of what they have achieved together Experienced that a vision can become reality
routine measures that TKG could take. “Employees expected that the company or the supervisor would solve any safety issues,” Dr. Eckl remembers. “The supervisors in turn were generally of the opinion that only the safety department was responsible for safety. And yet, 75% of all accidents were caused by the victim of the accident.” Self-criticism is tough After discussing the topic with various specialists, TKG recognised that the company would have to invest more time in looking at work safety. It decided to call in external support in the initial phase of the project. In February 2011 DuPont was invited to evaluate the situation and asked to identify focal points based on their analysis, as well as define strategic goals together with TKG and help them in implementing the corresponding measures. Dr. Gerhart Arnold, senior consultant at DuPont, recalls the kick-off event with senior managers at TKG in March 2011. “It was quite interesting. I gave feedback on how we saw TKG and we discussed how TKG saw itself. The discrepancies became apparent as we talked. With regard to its safety culture, TKG saw itself one step further on the Bradley Curve than we did.” The company immediately wanted to do something to change the situation. Dr. Arnold noticed some typical unsafe behaviours and situations, but had also observed many good practices. Based on the outcome of the evaluation, DuPont proposed to immediately implement July/August 2015
7/22/15 9:45 AM
32
SAFETY
Internal Motivation COMMITMENT Felt leadership, Leading by Example Influence>> Commitment
External Motivation CONSENT Rules, Processes, Protocols
Fig 1: DuPont Bradley Curve
Dependent
Reactive Satefy by natural instinct Compliance is the goal Delegated to safety manager Lack of management involvement
Management commitment Condition of employment Fear/discipline Supervisor control, emphasis and goals Value all people Training
Independent Personal knowledge, commitment and standards Internalisation Personal value Care for self Practice, habits Individual recognition
“I follow the rules because I have to”
Help others conform Others' keeper Networking contributor Care for others Organisational pride
“I am responsible for my own safety” “I follow the rules because I want to”
Number of accidents ≥1 Day lost work time) Start of project 25 “Work safety cultural transformation”
25
20
20
30
30
15
15
Interdependent
Accident frequency (Accidents ≥1 Day lost work time per 1m hours worked)
20,7
15
10
13,1
10 6
5
4 1
0 2009/10
2010/11
2011/12 2012/13
2013/14
6,2
5 0
2009/10
2010/11
3,5
2011/12 2012/13
0,9 2013/14
Fig 2: Accident frequency development graph
so-called Quick Wins, such as a list of safety rules for senior managers, which they signed and displayed as a symbol of their commitment. “Visible management commitment is the most critical step in achieving sustainable work safety.” Appraisal and progression Dr Eckl says: “The significance of Quick Wins soon became apparent. It was also very helpful to understand the interplay of different elements of safety management when it came to gaining an overall view of the task that lay ahead. Today, these elements also help us with many other key operational tasks such as quality, maintenance and cost control. If an organisation is able to internalise these elements and live by them, that will not only improve work safety, but also increase competitiveness.” DuPont views safety management like a jigsaw puzzle. Every step that has to be taken influences the other elements in different ways depending on its characteristics and implementation. No element can be viewed in isolation. Involving all employees and working July/August 2015
Thyssenkrupp safety 2.indd 2
continuously on all elements is the only way to achieve a sustainable result. In order to keep these components top-of-mind for the new safety culture at TKG, a steering committee was set up to meet on a monthly basis and whenever required. The steering committee consists of executive board members, all business unit heads, a production line manager, the works committee chair, the safety manager and the project manager. The committee develops concepts jointly with sub-committees who are responsible for different areas such as training, incident investigation, audits and safety talks, contractor management, motivation and communication. The business units and divisions are responsible for implementation. Senior management commitment to the new safety culture is clearly communicated on-site through posters, on noticeboards, via a DVD about work safety for all employees, through a brochure listing the 10 safety principles, but above all through regular on-the-spot safety talks. These days, around 65 TKG senior managers conduct monthly safety talks
with employees. The aim is to recognise and eliminate hazards, increase safety awareness, raise safety standards, motivate employees, demonstrate appreciation and commitment, assess the effectiveness of training and constantly re-evaluate one’s own effectiveness. What has changed? For TKG employees a lot has changed over the last three years. In the past, the majority thought the number of units produced had precedence. Frank Nissen, team leader of press line 14, comments: “Today, it’s clear that work safety and staying healthy are top priority, but it isn’t a sure-fire success that happens of it’s own accord. It requires constant vigilance.” Dr. Eckl commented: “Work safety has its price, but our Homburg site has not had a single accident to record for nearly a whole year. And what is even more important is that the safety behaviour of our senior managers and employees has really improved. That has also benefited other change processes. Compared to the period before the work safety project, we increased productivity by 20% in our last financial year despite a lower production level.” Frank Weis, head of work safety projects, explains: “In 2011 we began with a target of zero work accidents. We have nearly reached that. Zero injuries are no longer a vision of the future, but our new goal at TKG. Before I took over the project in May 2014, I spent years working in operations as a line manager. I have also had to learn to change my attitude to and behaviour with regard to work safety. For this reason it is now my job to achieve a similarly positive attitude among all employees.” For 2015 TKG has decided to put a socalled “Head of the Household Principle” on the agenda. This deals with the question of who is responsible for safety. Over the next six months, TKG wants to make plain that everyone should take on responsibility for their surroundings, just like they do at home. TKG has been very successful with its safety project, but Dr. Eckl says it is by no means completed. “Culture change requires time. If we didn’t do anything for a year now, it is likely that everything would disappear. Our credibility would also suffer. We will continue on the path we started. All employees should be aware of the fact that this is a general, lasting development for the company.” That this is the case also becomes obvious on the first page of the work safety brochure that TKG produced for its employees. There it says: ‘Do it right! Everyone and every time!’ Why that is so important is summarised on the last page of the brochure: ‘Gerlach safe = Gerlach strong!’ For TKG the link between safety and performance is quite clear. t www.steeltimesint.com
7/22/15 9:45 AM
33
CONFERENCE REPORT: EUROCOKE 2015
It’s not all doom and gloom If you’re averse to bad news, stay away from business conferences as invariably there will be blood – or at the very least doom and gloom. But it’s not all bad news, certainly not at the recent Eurocoke 2015 convention in Amsterdam. Matthew Moggridge* reports. In Summary…
Jeroen Vermeij
• Indicators pick up speed.
• Robust performances from the automotive sector.
• Low oil price and weak Euro = positive impact on
• Slight growth in steel demand.
exports and domestic demand.
• Imports a key threat.
• Quantitative Easing programme and Junckers
• Positive outlook for BOF steelmaking.
Investment Plan – creating positive sentiment.
• Coke consumption under pressure.
• Still plenty of uncertainty. • Construction sector on road to recovery but driven by residential building.
EUROFER’s Jeroen Vermeij, director of market analysis and economic studies, told delegates that, for the past few years, the economic recovery in the EU had failed to gain momentum and that underinvestment was holding back growth. There had been a 50% drop in investment and a 20% dip in spending on construction and it was ‘holding back growth and steel demand’. Weak confidence and difficult access to credit are holding back investment not only in Europe, but globally. However, following a ‘flatish’ period in Q4 2014 indicators suggest consumer confidence is returning and showing some strength. For a start, oil prices have reached an 11-year low, which is good for consumers as they pay less on energy bills and fuel. It also means increased spending power, which is good for business, and lower transportation costs, which stimulate the economy. A weak Euro against the US dollar is good for exports and the European Central Bank’s quantitative easing program and the Junckers Investment Plan are all potentially good news. There are positive trends on European labour markets: employment is improving and growth might reach 2% this year. But don’t forget Greece, Vermeij said, and the fact that some major Eurozone economies – such as France and Italy – are lagging behind in terms of labour market, banking and tax reforms. Spain has made strong efforts to improve on certain structural imperfections in its economic system and offers ‘extraordinary growth potential’. But there are uncertainties – specifically
Source: EUROFER.
geopolitical strife in Ukraine and instability in the Middle East – as well as slowing growth in China. Whether the ECB’s quantitative easing program and the Junckers Investment Plan will trigger private investment in the region of 300 million Euros remains to be seen, argued Vermeij. “Let’s see about that,” he said, adding that it might lead to a broader, more robust recovery base. Where steel is concerned, Vermeij said he expected continued improvements in growth of activity in steel using sectors thanks to the low oil price and Euro depreciation. “We see better sentiment levels and we expect the EU investment climate to improve,” he said, adding that access to finance – the engine oil of recovery – was steadily improving. Construction accounts for almost 40% of steel consumption in Europe, claimed Vermeij, adding that a 20% fall in investment between 2009 and 2013 was having a real impact on steel consumption today. The construction industry is characterised by modernisation, renovation and residential buildings at present, he said, which are not steelintensive activities, but there should be more optimism around infrastructure building in 2016. Together with construction, automotive and engineering account for 75% of consumption. While automotive is soaring in terms of sales, engineering is a little weak at present, but Vermeij expects an improvement next year. On a country-by-country basis, Vermeij highlighted strong dynamics in Central
Europe, particularly the Czech Republic. He said that Germany was making steady progress – with all sectors back at or above pre-crisis levels – and that France and Italy would improve in 2016 having put in weak performances this year (2015). Steel demand grew 3.3% in 2014 with imports up 12%, finished products up 19% and flat and long products up 15% and 33% respectively. According to Vermeij, China was responsible for a distortion of international trade flows. He highlighted steel imports, predominantly from China, claiming they caused domestic deliveries to move sideways as EU mills lost share. China continues to export its surplus production – an ongoing trend, says Vermeij, that will depress profit margins and jeopardise the sustainability of the steel community longer term. He expects a steady improvement in steel demand of around 3% over the next two years and highlights improving activity in steel using sectors and an improvement in long products demand owing to a ‘construction rebound’. BOF output was up 2.9% but showed little in the way of progress since 2010 and there was still a 26Mt production gap when compared with 2007, Vermeij said, adding that there was also a widening price gap between iron ore and scrap. Vermeij said that BOF output over 2015 and 2016 would rise by 2-3%, that hot metal production levels would not return to pre-crisis levels and that specific coke consumption would be reduced by increasing injection rates of PC, oil, gas and tar. t
* Editor, Steel Times International www.steeltimesint.com
EUROCOKE Vermej.indd 1
July/August 2015
7/8/15 3:56 PM
34
CONFERENCE REPORT: EUROCOKE 2015
Increasing demand for coke Coke demand is expected to increase over the next five years on the back of hot metal production and increased imports from India, South Korea, the USA, Germany and Taiwan. Speaking at Eurocoke 2015, CRU’s Ben Orhan said the European and US markets will remain difficult for Chinese coke producers. By Matthew Moggridge* METALLURGICAL coal prices have moved sideways over the past year, according to Orhan. “This ‘flat-lining’ is due to weakening demand in China, where there are vast reserves,” he said, adding that demand for imported coal in China had slipped over the last couple of months along with prices. In some cases coal has been turned back from the port. Producers have found other ways of maintaining margin – mainly by cost cutting. Seaborne exporters have been aided by falling oil prices and CIS producers have gained from exchange rate depreciation. Mine productivity has been improved and capital expenditure reduced in order to improve margins, but the latter can only be a temporary measure and ‘not something that can continuously happen’, according to Orhan.
enabled them to compete with global producers. According to Orhan, the benchmark met coke price has recently fallen below US$200/tonne on an FOB China basis and showing no signs of improvement, although it exhibited signs of strength towards to the end of last year and currently hovers around US$160/tonne. Rising exports Since China re-entered the export market, the benchmark coke price has been closely aligned with Chinese domestic coal prices and this has enabled CRU to make judgements on the coke market. While coke prices in China have fallen, exports have increased in line with the removal of export taxes, reaching an all-time high in January 2015.
“The European market is reasonably well insulated from Chinese exports and we haven’t seen large volumes enter the market yet, but that’s not to say it won’t happen,” he said. Chinese coke prices Coke prices have been driven significantly lower due to plentiful Chinese supply and this has allowed producers to export at prices unimaginable a couple of years ago. Oversupply of met coal in the Chinese market has led to a difference in price between Chinese and international coal prices and this has enabled the Chinese to export coke products profitably, Orhan explained. Chinese coke exports will remain strong year-on-year over the next five years, according to Orhan, but most growth will
Ramping up production While mine closures are expected this year, so are new and already committed mining projects based on historical decisions. “They are ramping up production at a time when prices are seriously low,” said Orhan. “So expect an increase in supply from Australia and Mozambique, but globally the met coal seaborne market will tighten in the coming years.” Over the past 18 months, Russian producers have made significant cost savings through currency depreciation. Most Russian mines are in the top half of the cost curve and have become the lowest cost producers on a dollar basis, claims Orhan.
Realisation of “committed” projects in Australia and Mozambique will drive supply growth in 2016-2018. Change in exports of metallurgical coal, in selected countries y/y, Mt. Data: CRU
Tightening supply Seaborne exports this year are likely to drop, driven by falls in Australia and the USA and are likely to tighten supply and prompt marginal price rises in the latter half of the year. Lower met coal prices have led to significant drops in coke prices over the past three years. Chinese met coke producers have been trading predominantly within Asia, pushing up global seaborne trade as lower domestic met coal prices have
Key Chinese markets have been Japan, India and Brazil. With coke prices so low, Japan has taken the opportunity to refit a few coke batteries and thereby reduce the volume of its Chinese coke imports. India has increased its volume but the figure dipped slightly due to port congestion. China’s trade within Asia increased significantly at the end of 2014 and this has increased overall trade globally, but Orhan says the impact has yet to be felt in Europe because of the distances involved.
30 Australia
Mozambique 20 10 0 -10 -20 -30 11
12
13
14
15
16
17
18
have been seen in 2014 and 2015 and it won’t grow unabated. He told delegates to expect a ceiling on growth as concern for the environment will play a strong role in future development. Consumption growth in the CIS and Europe will peak next year from a low base as both regions have suffered over the past two years. Consumption in the CIS has been reduced dramatically, but growth is expected due to a predicted stronger construction market and greater
* Editor, Steel Times International July/August 2015
CONFERENCE REPORT Ohran.indd 1
www.steeltimesint.com
7/23/15 8:40 AM
CONFERENCE REPORT: EUROCOKE 2015
20%
350
15% BOF
10%
EAF
Benchmark hard coking coal
250
Chinese hard coking coal
150 100 Correlation
14
4 Se pt 14 No v1 4 Jan 15
Jan
13
-10%
Benchmark coal vs Benchmark coke: 0.93
Ju l1
0
Chinese coal vs Benchmark coke: 0.98
14
50
M ay
-5%
14
2019
M ar
2018
3
2017
Jan
2015 2016
No v1
2014
3 Se pt 13
2013
13
2012
Ju l1
2011
13
2010
M ay
2009
M ar
0%
Benchmark metallurgical coke
300 200
5%
35
-15%
Global crude steel production growth by process, y/y, %. EAF growth to outstrip BOF integrated growth.
industrial production. “This will drive steel consumption and, therefore, coke consumption,” he added. Orhan said that Taiwan, the USA and Germany will all see their share of consumption from imports grow over the period 2014 to 2019. Asian imports will definitely come from China. “For other regions there is a chance of Chinese exports, but that’s not necessarily where we’re saying they will come from,” he
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Benchmark metallurgical coke prices, $/t. Chinese hard coking coal, FOR Shanxi, $/t During 2013-14, coke prices have become more closely aligned with Chinese coal prices.
added. Going forward there might be a price recovery “…but nothing too strong due to low steel demand in China.” Prices remain low While the USA and Europe will be largely insulated from Chinese exports they won’t be completely sheltered. If Chinese coal prices continue to fall it is more likely that exports will reach those regions. Prices will remain low and will track fairly closely
with input costs, keeping margins low. Crude steel production will continue to grow out towards 2019 but will be driven by growth outside of China. The met coke market will be tight due to increased production growth and while prices are expected to rise eventually, there won’t be a sharp improvement. In the CIS and Europe met coke consumption will grow off the back of weak growth in previous years. t
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CONFERENCE REPORT: EUROCOKE 2015
Vale’s mission in Mozambique Mozambique is a well-known exporter of cashew nuts, but is on the brink of establishing itself on the international coal market, thanks to a challenging open-cast mining project by Vale. Matthew Moggridge* reports WITH a mission to transform natural resources into prosperity and sustainable development and a vision to be ‘the number one global natural resources company’ in the world, I was surprised to hear Vale’s Dr. Oliver Scholes claim that some delegates at Eurocoke 2015 may not be familiar with the international mining company. Despite being one of the biggest global mining companies, Vale accounts for only a small percentage of the coal market and has only been mining coal in recent years, according to Scholes. He told Steel Times International that steel industry is familiar with Vale because of its iron ore business, but the coal industry is less familiar with the company. Vale, headquartered in Brazil, is a leading iron ore mining operation and the second biggest producer of nickel. It produces copper, manganese, ferro alloys, cobalt, platinum and now coal, the latter currently making up a small percentage of the company’s overall business. Dr. Scholes was here in sunny Amsterdam to discuss Mozambique, an African country with a population of around 25 million people and defined by its history. A Portuguese colony until 1975 Mozambique gained its independence and dive-bombed into almost 40 years of civil unrest. Vale has embarked upon a coal mining project focused around the Moatize mine, which is close to Tete, Mozambique’s 9th largest city. It has a population of 130,000 and temperatures that can reach 50 degrees C. “It’s a hot place to work and a relatively poor country,” said Dr. Scholes, explaining how the African country is a famed exporter of cashew nuts – as well as cotton, sugar, prawns and aluminium – and now looks set to make a name for itself on the international coal market. Vale has been shipping coal from the Moatize mine since 2011. It has coal interests in Australia and some joint ventures in China, but the jewel in Vale’s coal crown is the Moatize facility.
Product attributes “The Moatize product can produce high strength coke and because it has a lot of vitrinite, it can absorb a lot of semi soft coal as the higher fusable content gives it a good carrying capacity.” Dr Oliver Scholes, Vale. The Moatize coal offers the following attributes:• High hot strength (CSR) • High cold strength (Micum Drum) • High vitrinite combined with good fluidity • High quality hard coking coal alternative to Australia • Rank/Volatile matter and CSR sits close to optimum coke oven coal blend targets. • Excellent caking properties.
The main challenge in Mozambique is logistics-related and with this in mind the company is investing heavily in rail and port infrastructure as the mine is several hundred kilometres inland. Multi-billion dollar investment The fact that Vale has invested a cool US$7bn in the Moatize project illustrates the importance the company attaches to its ‘high quality, large, long-life and expandable asset’. “In a few years time the market will need coal from new supply regions and, most importantly, it’s not just volume of coal that the market requires, it’s hard coking coal, and Moatize can provide it,” Dr. Scholes said. There is an estimated 1.4 billion tonnes of reserves at Moatize spread over a concession area of 226 sq km. When fully commissioned there will be two wash
plants processing 55Mt/yr of run-ofmine coal to generate 22Mt/yr of export product. It will then be transported 912km along a new railway line – the Nacala Corridor railway – to the port of Nacala. The Moatize project embraces two development phases. Phase one covers the development of the first wash plant, getting it up and running and then shipping coal through the port of Beira. While the wash plant has a 12Mt/ yr capacity, the most product that can travel this route is 6Mt/yr, meaning that, currently, Vale can produce double what it can get out of Mozambique. Moatize is an open pit mine with a relatively low strip ratio and a low gradient, meaning it’s suitable for strip mining. “We use a combination of shovel loaders and off-road trucks to get the coal out,” said Dr. Scholes.
* Editor, Steel Times International July/August 2015
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CONFERENCE REPORT: EUROCOKE 2015
Coal inventory and mine sections
Reserve statement 2014 (million Mt) Reserves
Proven Probable Total
276 1,148 1,424
Resource
Measured Indicated Inferred Total
296 1,428 762 2,486
Legend Vale License Limit River Rai Road Road
Mining in Section 2A since 2011 Sections 1&4 will be producing from 2016 Life of mine plan currently exhausts coal from Sections 5&6 in 2046 Sections 2B, 2C, 2D & 2E have recognised coal deposits, suggestive of significant additional resources to increase mine life beyond 2046
There are six coal seams within the Moatize basin. Coal is extracted from the Chipanga seam to produce low-mid volatile matter, prime hard coking coal products and an export thermal coal product. The Chipanga seam is a little bit over 30m thick, says Dr. Scholes – which is a phenomenally thick seam when compared to others around the world. “We will also be accessing coals from seams above and below Chipanga.” The concession area has been subdivided into six mining areas. The aforementioned wash plant has a 4,000 tonnes/hr capacity and contains four separate modules with a feed rate of 1,000 tonnes/hr. When a second wash plant is added the overall capacity of the mine will rise to 55Mt/yr of raw coal – making it the largest preparation plant in the southern hemisphere, claims Vale. At present Vale is only mining from section 2a of the mine (see map above) but following completion of infrastructure works and the pre-stripping of overburden from sections one and four – which will be completed in 2016 – new products will be extracted from these areas of the mine. “After one and four we move further north to sections five and six. At the moment the ‘life of mine’ considers only section 2a, sections one, four, five and six,” says Dr. Scholes. He said that reserves in these highlighted areas will be depleted around 2046 from producing 22Mt/yr of product. According to Dr. Scholes other areas of the mine – sections 2b, 2c, 2d and 2e plus section 3 – have recognised coal deposits, suggestive of significant additional resources, potentially offering several decades of additional mine life. www.steeltimesint.com
CONFERENCE REPORT Vale.indd 2
“Multi-billion dollar projects anywhere will take a long time to get to profit margins given the capital spend,” said Dr. Scholes. He explained that Vale is instead counting its successes to date in other ways. Up until the start of 2015 the mine had shipped 9Mt of product out of Mozambique, including 8Mt of coking coal and 1Mt of thermal coal. “The coking products have been tested by major steel companies around the world and they have provided generally positive feedback,” Dr. Scholes added, explaining how steelmakers have been able to substitute Moatize coal for premium mid-volatile and lowvolatile coals at reasonable rates without degradation in coke quality and, in some cases, seeing an improvement. Local workforce Vale is employing over 10,000 people in Mozambique, ‘putting money in pockets and giving them training’, according to Dr. Scholes. He said that 90% of the workforce was from the local area and for a lot of the people it’s their first mining job. In addition to providing local employment, Vale has initiated a number of environmental programmes as part of its licence to operate in Mozambique. The company’s environmental plan comprises 27 programs for all aspects related to its activities, such as water and air quality monitoring. There are also a number of social projects focused upon local community health and education initiatives. “Having gone to Mozambique over the last three years, I’ve really seen an increase in the standard of living there. The quality of the roads has improved, there are new buildings, communications, restaurants –
a lot of social change is taking place,” said Dr. Scholes. Looking ahead… In 2014, Moatize produced 4Mt of coal and shipped it out through the port at Beira. This year the plan was to double last year’s shipments by opening up the Nacala Corridor and port. In 2016, a further volume increase will follow the commissioning of a second wash plant and by 2017/18 – with all equipment and systems commissioned and fully operational – the mine will be able to supply 22Mt of product. Currently, the plant, which is a greenfield project, is 80% complete and largely on schedule. Within the next two months Moatize will be shipping thermal coal out of the Nacala port. According to Dr. Scholes, Vale’s Moatize project has successfully entered the market and its various expansion projects are largely on target. Next year Vale will open up new sections of the mine in order to supply some low-volatile hard coking coal. “It should be valued for its intrinsic quality and it’s a good supply diversification away from Australia and I’ve also mentioned that the high vitrinite is one of the key characteristics of this coal,” said Dr. Scholes. The road ahead is all about commissioning the Moatize expansion operation safely over the next 12 months and then having a large-scale mining operation working effectively in Africa, which will mean intensive training of the local workforce. “For me personally the challenge will be around defining and bringing some new and different products to the market over the next 1224 months,” concluded Dr. Scholes. t July/August 2015
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PERSPECTIVES: TURBODEN
Recovery won’t be quick or easy Alessandro Foresti*, Turboden’s senior advisor, has been in this industry long enough to know that the recovery won’t be quick or easy, but he hopes the crisis will be overcome sooner rather than later
1. How are things going at TURBODEN? Is the steel industry keeping you busy? We are quite busy both in our traditional markets and applications like small-tomedium-sized biomass co-generation systems where we have nearly 200 plants mostly in Europe, but also in more innovative use of ORC (Organic Rankine Cycle) technology in industrial heat recovery with power generation. We realised our first plants for prestigious clients in cement and glass and this helped us to approach the steel industry by convincing steelmakers that ORC was a good option for waste heat recovery. Our activity in steel today is a small portion of our business, but it is bound to grow.
5. Can you discuss any major steel contracts you are currently working on? We are currently working on a second project in EAF waste gas heat recovery similar to the plant in Riesa. This new installation will be up and running before the end of the year at the ORI Martin EAF steel melting plant in Brescia, generating power and exporting heat to the large district heating network serving the city of Brescia.
2. What is your view on the current state of the global steel industry? The steel industry is going through a critical transition period. Overcapacity and lower prices are forcing important changes in the most competitive markets. As in the past, the most forward-looking steel producers will find good opportunities to overcome the crisis. 3. In which sector of the steel industry does TURBODEN mostly conduct its business? We are active in rolling mills (reheating furnaces) and in electric steelmaking. This last application is especially important. Our breakthrough reference in waste heat to power at the Elbe Stahlwerke Feralpi EAF in Riesa (Germany), started up in December 2013 and is being followed by similar installations at scrap-based minimills in Europe and elsewhere. 4. Where in the world are you busiest at present? We are busy in Europe starting with Germany, but also in Turkey and further afield in places like Western Canada.
6. “Aluminium will always outperform steel on a weight basis; and on the stiffness issue alone it will carry the day,” said Alcoa’s chief technology officer Ray Kilmer speaking about aluminium usage within the global automotive industry. Where do you stand on the aluminium versus steel argument? The growing competition of aluminium and composites for car body applications, once covered only by steel, is constantly pushing steel producers to develop innovative steel products to better serve the automotive industry.
7. It is always claimed that aluminium is the ‘greener’ metal when compared to steel. What’s your view? The greener solution is the one that allows higher recycling. This is the most important factor. Steel, aluminium or composites can be more or less ‘green’ depending on how thoroughly they are recycled in practice. 8. “…any hint of doubt when it comes to predictions of climate doom is evidence of greed, stupidity, moral turpitude or psychological derangement.” This is a quote from Bret Stephens writing in The Wall Street Journal. Do you sympathise with his view? Radical tones, one way or another, do not overshadow the basic truth about climate change and the need to take further corrective actions. 9. In fact, talking of ‘green issues’ and emissions control, how is the steel industry performing in this respect? The steel industry has taken important steps in the right direction in most countries. National governments and international development banks should give more support in terms of policy and financial efforts to the large investments necessary to reduce further GHG emissions. 10. In your dealings with steel producers, are you finding that they are looking to companies like TURBODEN to offer them solutions in terms of energy efficiency and sustainability? If so, what can you offer them? Steel producers approach us for our ORC solutions, which are well-proven in different applications. They also engage more specialised steel industry plant manufacturers for critical processes. Turboden often cooperates with complementing technology suppliers to guarantee the performance of all new installations.
* Senior advisor, Turboden July/August 2015
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PERSPECTIVES: TURBODEN
11. 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? The steel industry is ready in principle to respond positively to green policy issues. However, often there are insufficient financial resources or the payback time for heat recovery installations is longer than three to four years and this prevents new investment. 12. Where does TURBODEN lead the field in terms of steel production technology? We supply ORC systems, which are key components for waste heat to power conversion, enhancing energy efficiency in energy intensive industries like steel. Our ORC system for recovering waste heat from Electric Arc Furnaces’ waste gas is a breakthrough solution for an application that seemed impossible until recently. 13. How do you view TURBODEN’s development over the short-tomedium term in relation to the global steel industry? I believe that our first ORC plants running and those being installed at electric melt shops in Germany and Italy, will be followed by other ORC-based heat recovery systems outside Europe. Europe is our “domestic market” and our best showcase for advanced EAF technology.
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14. China dominates global crude steel production and is accountable for almost half of the world’s total. How should the industry react to this situation? Fair competition is the name of the game. 15. What is TURBODEN’s experience of the Chinese steel industry? We still have limited experience, but see many opportunities and challenges. 16. Where do you see most innovation in terms of production technologies – primary, secondary or more downstream? Our applications are focused on primary production technologies with special emphasis on steel scrap recycling. 17. How optimistic are you for the global steel industry and what challenges face producers in the short-to-medium term? I have been in this industry for too many years to believe that the recovery will be quick and easy. I do not know how or
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where the present steel overcapacity will be reduced first. I expect and hope that the crisis will be overcome, maybe somewhat faster than what the pessimists think. 18. What exhibitions and conferences will TURBODEN be attending in this year? Turboden took part in several exhibitions and conferences on energy efficiency, energy intensive industries and renewable applications, like Power-Gens, OMC, Made in Steel, AISTech and METEC. 19. TURBODEN is based in Italy, but what’s happening steel-wise in the country? The extremely difficult situations in Taranto and Piombino have marked the most recent years. The crisis is far from over. Do we have signs that the situation will start to improve (especially in Taranto) in 2015? We must hope so. 20. Apart from strong coffee, what keeps you awake at night? Thinking about the short time left to complete pending tasks. 21. If you possessed a superpower, how would you use it to improve the global steel industry? Giving steel producers and bankers the magic vision to see that investments in heat recovery and energy efficiency are their best option – notwithstanding long payback returns – to be more sustainable and more competitive in the future.
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HISTORY
The evolution of the blast furnace Fathi Habashi* examines the evolution of the blast furnace through the ages from the first use of coking coal through to the introduction of the steam engine and beyond THE blast furnace for producing molten high-carbon iron developed gradually from the early hearths in which only wrought iron was produced. Air was blown through bellows at the bottom. The development consisted in increasing the height of the furnace and introducing the charge at intervals through the top. The new type of furnace was built of masonry that enclosed a vertical chamber in the form of two truncated cones placed base-to-base. The iron ore, flux, and charcoal were then charged into the top of the shaft, while air under relatively low pressure was blown into the furnace through tuyeres near the bottom. The extension of the stack was to provide increased draft, drying, and pre-heating of the charge. The demand for increased production was also a motivation for this change. A hole was provided in the wall at the bottom of the shaft for extracting the molten products. The hole was closed by clay torn out each time a batch was removed. Charcoal was the only fuel and large water wheels were used. The use of coke The iron industry in Britain was developed as a direct result of the influx the industrial and trading classes from Normandy, following the Battle of Hastings in 1066 and the encouragement provided to both domestic industry and the immigration of artisans during the reign of Edward III (1327-1377). The Forest of Dean became the centre of charcoal blast-furnace operations until deforestation became a serious problem. In 1584 all iron making in the area was curtailed by royal decree in order to save timber for the British navy. In 1618 the practice of using coking coal instead of charcoal in the blast furnace was started by Dud Dudley (1599-1684). However, it was not until the middle of the 18th century that coke came into general use and this was down to Abraham Darby (1678-1717) who successfully used it in a blast furnace in 1709. By 1796 charcoal blast furnaces had been almost entirely abandoned in Great Britain. In the USA, towards the end of 18th century, anthracite was used until 1914.
An early blast furnace with large bellows and a large water wheel
John Wilkinson (1728-1805) was the first business man to exploit Darbyâ&#x20AC;&#x2122;s coke smelting process on a large scale and one of the first to use Wattâ&#x20AC;&#x2122;s steam engine (1775) instead of a water wheel to work the bellows of his furnaces. In 1779 Louis XVI of France ordered the construction of his Royal Foundry at Le Creusot, Burgundy, and invited Wilkinson to built the plant, which would be used to make cannon. The use of the steam engine In the early 1800s, steam engines were used to introduce air into the furnace instead of relying on bellows and a water wheel. A change in warfare technology and iron making, meant that casting of cannon from molten iron became the dominant industry and blast furnace size slowly increased. Closed top The adoption of the closed top was a later development involving the invention of a bell-and-hopper arrangement that kept the top closed except when the bell was lowered to charge materials into the furnace. This principle was extended in 1883 with the use of a double bell and hopper that made it possible to charge materials without opening the furnace top. Heat economy Eventually, attempts were made to use the heat of the burning gases to pre-heat
the blast air. A steam engine operated a compressor to blow air in the furnace. The air being heated in stoves and the steam for the engine are generated in boilers using hot gases from the furnace. James B. Neilson (1792-1865) introduced the first hot blast oven, the design of which underwent several changes in order to overcome mechanical failure of the heating tubes and provide fuel economy. Stoves that were a combination of furnace and regenerator were introduced by Edward Alfred Cowper (1819-1893). Gases leaving a blast furnace at a moderate temperature have a high calorific value due to their CO content. They are first purified of their dust and then burned in stoves where the combustion heat is used to heat the fire brick chambers. Once the stoves are hot, the blast furnace gas is switched over to another stove and air is introduced in the hot stove to take away the heat before entering the furnace. The cycle is repeated. A typical stove is 7â&#x20AC;&#x201C;8m diameter and 36m high with a domeshaped top and consists of two parts: the combustion chamber where blast furnace gas is burned, and the refractory chamber where combustion gases pass before exit. Automation Blast furnaces became more complex: Charge preparation, material handling, rapid chemical analysis and automation became necessary. A large furnace today produces 10kt of iron per day. t
*Laval University, Quebec City, Canada Fathi.Habashi@arul.ulaval.ca July/August 2015
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