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July/August 2014 – Vol.38 No.5 – www.steeltimesint.com
OXYGEN STEELMAKING STEEL PROCESSING PERSPECTIVES
STEEL TIMES INTERNATIONAL – July/August 2014
– Vol.38 No.5
EUROCOKE 2014 PROFILE: CD WÄLZHOLZ
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CONTENTS STI_30_AIT_0110 7/10/14 2:19 PM Page 1
CONTENTS JULY/AUGUST 2014
2 Leader
July/August 2014 – Vol.38 No.5 – www.steeltimesint.com
OXYGEN STEELMAKING STEEL PROCESSING PERSPECTIVES
Front cover image courtesy of Tenova.
EUROCOKE 2014 PROFILE: CD WALZHOLZ
EDITORIAL Editor Matthew Moggridge Tel: +44 (0) 1737 855151 matthewmoggridge@quartzltd.com
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4 News 11 USA update No country for oil country tubular goods 12 Latin America update Investment is crucial 13 India update Resistance to Tata’s mining plan 15 Steel processing US GOES steel production
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 Area Sales Manager Anne Considine anneconsidine@quartzltd.com Tel: +44 (0) 1737 855139
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Oxygen steelmaking 21 Basic oxygen steelmaking 25 Jet process technology from Siemens 30 Company profile: CD Wälzholz
Sales Director Ken Clark kenclark@quartzltd.com Tel: +44 (0) 1737 855117
A global presence in many markets 35 Conference report EuroCoke 2014
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40 Technology A review of the latest new products 42 Perspectives Magnetic Analysis Corporation
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44 History Widmanstätten and alloy steels July/August 2014
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LEADER
They say all is fair in love and war, but is it really?
Matthew Moggridge Editor matthewmoggridge@quartzltd.com
“England is out of the World Cup.� Seven words that I’ve grown accustomed to hearing every four years. In short, we invented football, but we’re no good at it, apart from a brief moment in 1966 when television was monochrome, the Beatles’ Rubber Soul album was at number one for six weeks and John Lennon said that he and his fellow band members were bigger than Jesus. M any disappointing W orld Cups later , nothing has changed. The Beatles have gone; John Lennon is dead and showing no signs of resurrection (clearly not bigger than Jesus) and, unlike American and European steelmakers, Rooney and company can’t really moan about the need for a level playing field. Why? Because football pitches ARE level unless it’s ‘jumpers for goalposts’ and oranges at half time, which is just about England’s level. It’s hard to ignore the phrase ‘level playing field’ if you’re involved in the steel industry, as there are so many examples of how things are closer to ‘jumpers for goal posts’ than state-of-the-art pitches. Uncompetitive energy costs were one factor behind T ata Steel’s recent
announcement concerning potential redundancies at P ort T albot, along with UK business rates being higher than in other EU countries. US Steel is blaming unfairly traded tubular products imported into the USA as a chief reason behind idling two of its tubular manufacturing plants. The American Iron & Steel Institute says US imports of oil country tubular goods were up 55% in May when compared to April – bad news for US steelmakers and slightly unnerving when you read that M ario Longhi, president and CEO of US Steel, believes that American steel companies are being ‘targetted for elimination’. Some would argue that it’s the global nature of business and that, ultimately , there will never be a truly level playing field. Why should there be? If major clothes retailers can rely upon Asian sweatshops where workers are paid peanuts and nobody cares about their welfare – as long as cheap labour can be exploited and huge profits made back home – then surely the Chinese and South Koreans selling cheap OCTGs is just par for the course and only to be expected.
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4 NEWS IN BRIEF Tangshan cuts steel production capacity by 22Mt Iron and steel production in the Northern Chinese city of T angshan has been reduced by 22M mt in an effort to control air pollution and phase out obselete capacity. Tangshan, in Hebei Province, accounts for half of all iron and steel produced in the province. The plan is to cut iron making and crude steel production capacity by 28M t and 40Mt respectively. Hebei Province's annual steel production output makes up one fourth of the nation's total and the province is heavily reliant upon the iron and steel industry. Source: China Metals.
New CEO for Siemens UK Juergen M aier has been appointed as the new UK chief executive of Siemens, effective from 1st July. Mr Maier replaces Roland Aurich, the current chief executive, who will be retiring from Siemens after more than 28 years with the company. He has been a member of the Siemens UK executive management board and managing director of the Siemens UK and Ireland Industry Sector since 2008. “I look forward to shaping our business to meet new domestic and global economic challenges,” M r Maier said.
Gas leak claims six lives Two deputy managers were among the casualties of a gas leak at Steel Authority of India Ltd's (SAIL) Bhilai steel plant on Thursday 12 June. Six people were killed and 30 hospitalised. The cause of the leak was a rupture to the main header of Pump House 2, which supplies water to the gas cleaning plants (GCP s) of the blast furnaces, according to SAIL. There was a sudden loss of water pressure to the GCP s which resulted in blast furnace gas from the scrubbers entering the water pipeline.
ArcelorMittal award The award was presented at the Edison Ballroom in New Y ork at American M etal M arkets ’ fifth annual Awards for Steel Excellence and recognised the steelmaker’s laser ablation process and its role in introducing the industry’s first single-piece, hot-stamped, laser -welded door ring found in the 2014 Acura MDX. Laser ablation is a patented process applied to ArcelorM ittal’s Usibor steel. July/August 2014
INDUSTRY NEWS
US Steel idles OCTG plants US Steel is blaming unfairly traded tubular products imported into the USA as a chief reason behind the company's decision to indefinitely idle two of its tubular manufacturing facilities in M cKeesport, P A, and Bellville in Texas. The move, which will take place in early August, will directly impact upon 260 US Steel employees and will reduce the number of US Steel's tubular facilities from 10 to 8. It will, however, enable the company to operate more profitably. US Steel will continue to produce and finish tubular products at its facilities in
Alabama, Arkansas, Ohio and Texas where it employs approximately 2,900 employees. According to a press release issued by the company , “approximately 45 professional and management employees and 215 represented employees were advised today of the upcoming idling and resulting job reductions and are being issued notices under the W orker Adjustment and Retraining Notification (W ARN) Act.” M ario Longhi, US Steel’s CEO , said that the company remained fully committed to the tubular
products business and to serving its tubular customers. “While these are difficult decisions, they are necessary in order to return our company to sustainable profitability and position us for future growth,” he said, adding that the company would continue to fight unfair trade by foreign competitors. US Steel – along with other domestic producers – has filed an anti-dumping action with the US Department of Commerce to halt the unfair trading and dumping of foreign Oil Country Tubular Goods (OCTG) into the American market.
Second DRI plant for Nucor? A report by American M etal Market, sponsor of the New Y ork Steel Success Strategies XXIX, organised by W orld Steel Dynamics, claims that American steelmaker Nucor Corporation is seriously considering a new DirectReduced Iron (DRI) plant in Louisiana, USA , as well as a new heat-treat line at its T uscaloosa, Alabama, plate mill. John Ferriola, Nucor’s president and CEO, told delegates in a Q&A session that a DRI plant would ‘cost less money [than a new steel
mill] and it would be quicker to put a second DRI facility in Louisiana’. He also said that a second unit would cost between $100 and $150 million less than the first unit and would take between 18 and 24 months to complete. According to F erriola, the necessary infrastructure was already in place at the company's St. James P arish facility and it wouldn't be as expensive as starting from scratch. The St. James Parrish DRI facility in Louisiana cost $750 million to
develop and shipped its first shipment of DRI (2.5Mt) towards the end of 2013. It is possible that Nucor might contract M idrex T echnologies for its second facility despite having opted for Tenova HYL for its first installation. Plans to construct a blast furnace in Louisiana have been put on hold, but Ferriola hinted it was a case of ‘never say never’. He said the company had the technology, the expertise, the drawings and the people in place to build one.
Chinese automotive plant open Valin ArcelorM ittal Automotive Steel Co’s US$852 million advanced automotive steel plant in China opened for business on 15 June. The joint venture between ArcelorMittal – the world’s largest steel company – and Hunan Valin Iron & Steel Co, will produce highstrength automotive steels, that are currently imported, for the Chinese market. The new facility is located in the economic zone of Loudi, Hunan Province, and was built on a greenfield site. It is a major investment project jointly approved by China’s National Development and Reform Commission and the Ministry of Commerce. It took over two years to construct the plant, which will initially create more than 600 highly-skilled jobs.
China recorded a 16% increase in car sales to 18 million units last year, and is expected to account for 35% of worldwide automotive growth between now and 2020. VAMA’s production output will meet rapid growth in demand for advanced automotive steels in China. The annual production capacity will be 1.5Mt, including 800kt of cold rolled coil, 200kt of aluminium-coated coils and 500kt of hot-dip galvanised coil. V AMA covers a large range of automotive steel products, including those for visible structural parts, chassis and wheels. VA M A aims to supply international carmakers and Tier 1 suppliers as well as promote highend solutions to domestic car manufacturers and their supplier networks, including ArcelorMittal’s www.steeltimesint.com
major customers in China, such as Volkswagen, GM , F ord, PSA , Daimler-Benz, BM W , T oyota, Honda, Renault, Fiat and Nissan. It will also service leading domestic manufacturers such as Geely , Chery, Dongfeng, Guangzhou Auto, Shanghai Auto and Changan. Lakshmi M ittal, chairman and CEO of ArcelorM ittal, said at the opening ceremony that the completion of the plant on schedule and within budget was a “remarkable achievement.”
STI news jul aug last_03-20_AIT_0110 7/7/14 10:33 AM Page 2
INDUSTRY NEWS
NEWS IN BRIEF 5 Tata Steel wins green award
NLMK increases efficiency Hot testing of a new turbine generator has begun at NLM K’s Lipetsk production site in Russia. The new equipment will replace the previous outdated generator and will enable the steelmaker to increase electricity generation by 11%, or over 370 million kWh. It will also reduce electricity expenses by 2.1%. Once up and running, the new generator will increase the Lipetsk site’s energy self -sufficiency from 52% to 58%. The installed capacity of the facility’s power station will increase by 50MW to 482MW. NL M K, Russia’s leading manufacturer of steel and HV A
rolled products, has invested approximately US$29.3 million in constructing the new turbine generator, which was manufactured at the Kaluga Turbine Works in Russia. Alexander Starchenko, NLM K’s vice president for energy, said that the Russian steelmaker was not only reducing the company’s environmental impact, but also increasing its production efficiency in line with the company’s key Strategy 2017 objective. NLMK has implemented a range of major investment projects aimed at improving energy efficiency during production and increasing
the proportion of electricity produced from secondary resources. A new 150 M W capacity recovery co-generation plant has been constructed at the Lipetsk site, as well as cutting-edge air separation equipment providing 34,000 cubic metres of oxygen per hour. An air separation unit has also been launched at VIZ -Steel (Yekaterinburg), providing 8,000 cubic metres of nitrogen per hour. The implementation of these and other projects has resulted in energy savings of US$24.9 million in 2013. Specific energy intensity over this period decreased by 1.2%, reaching 5.67 Gcal/t.
MMK boosts revenue by 5% M agnitorgorsk Iron and Steel Works (M M K), a leading Russian metals company and one of the world's largest steel producers, has released its Q1 2014 financial results. The company has announced revenues totalling US$1.8 billion, up 5% quarter -on-quarter, and claims that growth was mainly due to increased sales volumes during the period. Cost of sales was down 0.5% to US$1.5 billion and EBITDA was down 6% quarter-on-quarter. MMK was able to decrease the
cash cost of slab by more than 5% (US$337/tonne) due to a decline in key raw materials prices and announced an operating profit of US$78 million. Total revenue from the company’s steel segment amounted to US$1.7 billion, up 2.5% quarteron-quarter and due to increased sales volumes by OJSC M M K (up 8.6%) and MMK-Metiz (up 2.6%). M M K's Turkish steel operations recorded revenues of US$134 million, which was down US$34 million quarter -on-quarter and primarily due to declining sales
volumes. MMK’s Turkish operation, MMK M etalurj, recorded EBITDA of US$13 million, down US$1 million quarter-on-quarter, and with a margin of 9.7%. M M KM etalurji’s capacity utilisation rate is expected to 'remain at near-maximum capacity' in 2014. Looking ahead to Q2, M M K expects increased production and sales volumes and believes that declining global iron ore prices will be good news for the company’s Q2 2014 results.
Steel the best option for automotive Steel is just as capable of delivering the required weight savings to support new fuel efficiency legislation as other materials and is more cost effective and environmentally friendly , said LakshmiM ittal, CEO of ArcelorMittal. Speaking at the Steel Success Strategies conference in New York, Mr Mittal said: “Steel can provide all the weight reduction that auto producers require to satisfy the new fuel efficiency standards.” “Essentially we need to deliver a 25% reduction in the weight of structural components and www.steeltimesint.com
closures, in other words the bodyin-white. Steel can already do this; and we can do it in a more costeffective and environmentally friendly manner than any other material,” Mittal argued. ArcelorM ittal claims that its advanced and ultra advanced high strength steels developed in recent years are up to the job. “Steel’s strength has multiplied 10 times over the past 20 years from 170 to 1700 megapascals. These are phenomenal changes. And we don’t know where the limit is in terms of product development. Every day we open
up new frontiers and do things that yesterday didn’t seem possible. We understand there is a challenge from other materials, but nobody should doubt that steel remains the material of choice. “The auto sector operates global platforms,” M r M ittal said. “This means they will increasingly make cars exactly the same way in China as they do in the United States. Being able to work with the same supplier in different markets is, therefore, clearly an advantage as they are guaranteed exactly the same product, produced to exactly the same quality standards.”
Global steelmaker T ata Steel was recently awarded the prestigious Jharkhand State P ollution Control Board (JSPCB) award for its environmental protection work. AK M ishra, chairman of the Jharkhand State P ollution Control Board, presented the award to Satish Singh, chief resident executive, Ranchi, and Shubhanand Mukesh, Environment, Jamshedpur, of Tata Steel at an awards ceremony on W orld Environment Day (5th June).
Acroni’s heat treatment line Slovenian steelmaker Acroni has contracted SMS Siemag to supply a heat treatment line and revamp a stainless steel annealing and pickling line. Commissioning is planned for 2016 at the company’s Jesenica plant. SM S Siemag will install its newly developed M ultiFlex Quench system, which is claimed to offer ‘an outstandingly high degree of flexibility’ and high cooling efficiencies during the heat treatment of heavy plate.
Gerdau blast victim dies Larry Releford, who was injured in an incident at Gerdau's steel mill in Knoxville, Tennessee, USA , on M ay 15th, has died. M r Releford suffered burns over more than 50% of his body . Five other Gerdau employees were injured in a blast at the plant. The five injured people were treated and released from hospital. Gerdau has been working with 'the proper authorities' to determine the cause of the incident. A final report will be issued by the Tennessee Occupational Safety and Health Administration (OSHA) within the next two months.
Hyundai plant hits 100Mt Hyundai Steel’s EAF-based steel production facility at Incheon, South Korea, has achieved a cumulative steel output of 100Mt. The plant, completed in 1953, was South K orea’s first steel mill and is now the first of the nation’s steel plants to reach the 100M t mark. In 1956, the Incheon plant produced just 118 tonnes of molten iron in its first year.
For expansion of these stories and other news visit www.steeltimesint.com July/August 2014
STI news jul aug last_03-20_AIT_0110 7/7/14 10:33 AM Page 3
6 INDUSTRY NEWS
Rourkela boosts capacity Modernisation of Steel Authority of India Ltd's (SAIL) Rourkela Steel Plant (RSP) has boosted capacity to 4.5M t/yr hot metal and 4.3M t/yr crude steel. The plant boasts a 150 tonne BOF and a 1Mt/yr plate mill. In fact, the entire modernisation plan for the RSP, which includes a new ore bedding and blending plant, a 360 sq metre sinter plant, 7 metre coke oven battery , 4060 cubic metre blast furnace, 150 tonne B OF, 2,500mm slab caster and a new plate mill is completed and operational. CS Verma, SAIL's chairman, and other senior officials from the company, were present for what SAIL called the 'operationalisation' of the new B OF converter in the plant's Steel Melting Shop ll and the rolling facilities of the new plate mill. Verma said, "The commencement of operation of these two major units at RSP is a shot in the arm of the company towards completion of its ongoing modernisation and expansion plan."
DRI sets new record In 2013, the world’s direct reduction iron (DRI) industry set another new record having produced 75.2M t, according to data compiled byM idrex Technologies Inc. and audited by World Steel Dynamics. The 2013 figure was an increase of 2.8% (or 2M t) over 2012, which is regarded as 'quite remarkable' by Midrex considering the economic forces that affected the industry. Where technology was concerned, MIDREX DRI plants led the way, taking a 63% share of the market, followed by rotary kilns (largely in India) at 21% and Energiron plants (15%). The DRI industry has grown in eight of the past 10 years. Output in 2013 was more than 85% greater than in 2001. Factors that have placed a drag on growth in the preceding years have continued, but were overshadowed by the demand for direct reduced iron. July/August 2014
Chinese crude output up 2.4% Chinese crude steel output rose 2.4% during Q1 of 2014, according to figures released by the National Bureau of Statistics. The crude steel output of China’s major steelmakers rose 3.5% yearon-year, according to the China Iron and Steel Association (CISA). However, the operational revenue of China’s 35 listed steelmakers dropped 2.56% yearon-year due to sliding steel prices. Hot rolled coil and rebar, dropped 150 to 200 yuan/tonne from the beginning of the year. Operational costs dropped by
4.5% year -on-year due to price slumps in raw materials such as coke and iron ore. M etallurgical coke prices dropped 100 yuan/tonne and homegrown iron ore dipped 200 yuan/tonne since the beginning of 2014. Imported iron ore dropped US$30/tonne. China’s 35 listed steelmakers turned a profit of 7.3 billion yuan in 2013, but witnessed a profits slide of 1.1 billion yuan during Q1 of 2014. Fifteen of the 35 were in the red while 19 saw net profits decline. Statistics released by CISA show
that large and mid-sized steelmakers achieved total sales revenues of 868.8 billion yuan during Q1 2014 and net losses of 2.3 billion yuan. During the same period in 2013 net profits were 7.9 billion yuan. During Q1 2014, the cash flow of China’s 35 listed steelmakers dropped to its lowest level since Q4 2011. Profitability is expected to remain weak throughout Q2 2014 as a declining Chinese housing market weakens steel demand. Source: China Metals.
Severstal improves efficiency Russian steelmaker Severstal has re-engaged with global consultancy McKinsey to work on efficiency plans for its Cherepovets Steel Mill. CEO Sergey T oropov said, "Our steelmaking business is where we achieved the greater cost efficiency progress in 2013," and explained that the company was able to save
2 billion rubles in 2013. The new plan will involve making a comparative analysis of CherM K's current basic oxygen steel production performance indicators against industry best practices. It is hoped that the results will highlight areas for improvement and the company will then 'identify key initiatives to
enhance its processes'. M cKinsey has worked closely with Severstal for 15 years and was involved in the development of its procurement optimisation programme. In 1999, following a survey project and a cost reduction programme jointly developed by the two companies, the steelmaker saved 70.1 million rubles.
Recycling – steel’s on top The Association of European Producers of Steel for P ackaging (APEAL) claims that 2.7Mt of steel was recycled in 2012. The figure corresponds to the average European recycling rate of 74%. According to APEAL, steel is the most recycled packaging material in Europe when compared with plastic (35%); beverage cartons (39%); aluminium (68%) and glass (70%). Thomas J Gibson, president and CEO of the American Iron & Steel Institute, said that the steel industry’s internationally recognised energy efficiency , coupled with its recycling rate, is proof of the steel industry’s commitment to sustainability and resource conservation. The Steel Recycling Institute in the USA claims that the overall recycling rate for steel in 2012 was 88% and that nearly 84Mt of steel was recycled, including 1.3M t of tin plate steel (the equivalent of 21 billion steel cans). Tin plate steel achieved a recycling rate of 71% – www.steeltimesint.com
the highest among packaging materials. Where recycling is concerned, steel’s magnetic qualities mean it is easy to separate from waste streams, enabling high recovery rates. It is also 100% recyclable and can be infinitely recycled without loss of strength and other key properties. Comparing recovery rates across a number of key industry sectors, APEAL found that the machinery market achieved 90% in 2007 and is projected to achieve 95% by 2050. Construction and
automotive both achieved an 85% recovery rate in 2007 and are each projected to reach 90% by 2050. Similarly the electrical and domestic appliances market is estimated to reach 90% by 2050 albeit from a lower 2007 base of just 50%. While steel is the most recycled industrial material in the world – 500Mt are recycled annually – in Europe the 2020 goal of 80% means there is still plenty of work to be done, according to Alexander Mohr, APEAL’s secretary-general.
• Over 22 billion tonnes of steel have been recycled globally since 1900.
E10001-M1-Z50-V1-7600
“Others are experimenting. We are producing. In endless mode.” Giovanni Arvedi, inventor of the Arvedi ESP process, trains the next ESP operators in his plant that's operated successfully since start-up in 2009 – implemented with Siemens VAI. siemens-vai.com
Evolution of the ESP process 1992 – Start-up of ISP plant 2004 – ISP caster upgrade by Siemens VAI 2006 – Order for first ESP plant to Siemens VAI 2009 – Start-up of first ESP
After five successful years of operation at the patented ESP plant in Cremona, Italy, the Arvedi ESP technology rollout starts now with the next two installations in China. At these new plants the operators will undergo compre hensive training at the plant in Italy, and Arvedi experts will support a smooth ramp-up to high-quality production in the first year of operation.
Highlights since 2009: • Certified API X70 production • Attested 131.6 kWh/t energy consumption • Only five breakouts per year • 0.1% cobble rate • 98% yield from liquid steel to coil • Thin strip down to 0.8 mm at full width and productivity 2013 – Order for next two ESP plants from Chinese customer
Answers for industry.
STI news jul aug last_03-20_AIT_0110 7/7/14 10:33 AM Page 5
8 DIARY OF EVENTS August 29-31 7th China International Metal Recycling Conference Beijing, China Organised by CISA and MC-CCPIT www.mcchina.org.cn
September 4-7 10th Minerals, Metals, Metallurgy and Materials 2014 New Delhi, India Organised by International Trade and Exhibitions India www.iter.in 10-12 12th China International Coking Technology and Coke Market Congress Organised by CISA and MC-CCPIT www.mcchina.org.cn 10-12 The Coal Association of Canada Conference and Trade Show Vancouver, BC. Organised by the Coal Association of Canada. www.coal.ca 15-17 European Steel
Environment & Energy Conference
Teesside University, UK. Organised by the Institute of Materials, Minerals & Mining www.iom3.org 15-17 Korea Metal Week Organised by Korea Trade Fairs. Advanced metal technologies event. www.kintex.com 24-26 China International
Steel and Raw Materials Conference
Shangri-La Hotel, Dalian, China. Organised by the China Iron & Steel Association. www.ironoreconference.com 24-25 World Stainless Steel
Duplex Seminar & Summit
Palazzo Dei Congresso, Stresa (VB) Italy. Organised by KCI Publishing BV www.stainless-steelworld.net/duplex2014
For more information on steel industry events, visit www.steeltimesint.com July/August 2014
INDUSTRY NEWS
World crude steel up 2.2% World crude steel production for M ay 2014 was up 2.2% when compared with figures from May 2013. China's crude steel production for M ay 2014 was up 2.6% to 70.4M t and elsewhere in Asia Japan produced 9.6M t (down 0.3%) and South K orean production was up 11.4% to 6.2Mt. Within the European Union, Germany produced 3.9M t, up 7.3% and Italy produced 2.3M t,
down 0.8% when compared with May 2013 figures. Crude steel production in France was down 4% at 1.4Mt and Spain produced 1.3Mt, down 2.9%. In Turkey, crude steel production was 3Mt, down 0.7%. Russian crude steel production of 6.1Mt was an increase on May 2013 of 0.6% and in the Ukraine, crude steel production was 2.8Mt, up 2.2%. Crude steel production in the USA was up 1.4% on M ay 2013
with American steelmakers accounting for 7.5M t of global production. In South America, Brazil produced 2.9M t of crude steel, down 4.3% on May 2013 figures. The crude steel capacity utilisation ratio for the 65 countries reporting to worldsteel was 78.5% for M ay 2014, 0.7 percentage points lower when compared to the April 2014 figure and 0.7 percentage points lower than in May 2013.
For a full country by country listing visit: www.worldsteel.org/statistics/crude-steel-production.html
US steel imports up, says AISI The USA imported 4Mt (net tons) of steel in May, including 2.9Mt of finished steel – up 7.4% and 6.4% respectively when compared with April. Year-to-date total and finished steel imports were 17.4M t and 12.8Mt (net tons) respectively – up 32% and 23% respectively on 2013 figures. The annualised total and finished steel imports in 2014 would be 42Mt and 30.8Mt (net tons), which is up 31% and 24% respectively when compared with the previous year. Imports of oil country tubular goods (OCTG) were up 55% in M ay, when compared to April.
Heavy structural shapes were up 44%, tin plate 39%, standard pipe 22% and line pipe also 22%. Hot rolled sheets (and sheets) and galvanised strip were up 21% and 21% respectively. Major products with significant year-to-date import increases versus the same period last year include wire rods (96%), plates in coils (76%), cold-rolled sheets (56%), sheets and strip all other metallic coatings (47%), sheets and strip galvanised hot dipped (40%), hot rolled sheets (39%), mechanical tubing (35%), oil country goods (26%), rebar (24%), cut length plates (up 24%) and heavy structural shapes (20%).
South Korea exported 584Kt (net tons) to the USA , up 45% compared with April 2014, closely followed by China who exported 303Kt (net tons), down 27%. Turkey exported 149kt, up 5% and Japan exported 145Kt, down 31%. Lastly, Taiwan exported 106kt, up 42%. For the five months from January to May 2014, South Korea was the largest offshore supplier of steel to the USA , supplying 2.1M t (net tons), up 42%. China was in second place with 1.2Mt, up 73% and Japan and T urkey followed with 852kt, up 3%, and 760kt, up 19% respectively. Russia exported 501Mt, up a staggering 324%.
Finished steel use grows 1% The Latin American and Caribbean steel market increased by 1% during Q1 2014 when compared to the same period last year , according to the Latin American Steel Association. Apparent steel use between January and April 2014 was 22.2M t, up by 221kt on 2013 figures, and the countries that contributed most were Columbia, M exico and Argentina. Strong drops were recorded by Venezuela, Ecuador and Chile. The Q1 2014 deficit in the regional trade of finished steel reached -4.1Mt, an increase of 7% on Q1 2013. M exico continually presents 'the most marked
unbalance' of -1M t, followed by Columbia (-772kt), Chile (-506kt) and Peru (-502kt). Argentina and Brazil presented deficits of -100kt and -78kt. Regional production of crude steel reached 21.5M t, 1% more than in 2013. Brazil was the main producer (11.1M t) representing 52% of regional output. Crude steel production in Argentina, Mexico and Peru was up 13%, 6% and 4% respectively but was down in Venezuela, Chile and Columbia by -32%, -13% and -2% respectively. Q1 2014 finished steel production was 18.4M t. Brazil produced 8.5M t and had a 46%
share of regional output. M exico produced 5.5Mt and took a 30% share. Mexico's production was up 5% year-on-year. Other countries that increased their production during the Q1 2014 period were Columbia (+19%); P eru (+3%); Ecuador (+3%); and Argentina (+1%). Venezuela and Chile dropped by 31% and -27% respectively. Between January and May, Latin America and the Caribbean produced 27M t of crude steel, which was in line with the same period of 2013. Finished steel production for the first five months of 2014 reached 23Mt, down 1% year-on-year. www.steeltimesint.com
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USA STI_30_AIT_0110 7/7/14 10:55 AM Page 2
USA UPDATE 11
No country for oil country tubular goods Figures from the American Iron & Steel Institute (AISI) show that steel imports into the USA are growing steadily and creating a growing sense of unease in the process. By Manik Mehta* ACCORDING to the American Iron and Steel Institute (AISI), the USA imported a total of 4.0Mt (net tons) of steel in May , including 2.9Mt of finished steel (+7.4% and +6.4% respectively over April). The year-to-date total and finished steel imports amounted to 17.4M t and 12.8M t (net tons) respectively, posting a 32% and 23% growth respectively over the previous year. Even before the numbers were officially released, alarm bells had started to ring, with the steel industry’s Cassandras wailing about the flood of cheap steel imports arriving in the United States. The largest volumes of finished steel imports in M ay were from South K orea (584kt, + 45% over April), China (303kt, 27%), Turkey (149kt, + 5%), Japan (145kt, - 31%), and T aiwan (106kt, +19%). However, during the first five months of the year, the largest foreign suppliers were South K orea (2.1M t, +42%), China (1.2M t, +73%), Japan (852kt, +3%), Turkey (760kt, +19%) and Russia (501kt, + 324%). Russia, with an incredible 324% increase in exports in the first five months of 2014, faced the ire of the US steel industry which, as of writing this update, was considering contesting the trade agreement with Russia on imports of hotrolled steel. The 1999 “suspension agreement” with Russia, as it is called, was ironed out after the Cold War to protect Russian hot-rolled coil (HRC) suppliers against high antidumping duties, and setting a minimum price which many US steel companies have criticised as very low despite an upward revision in 2012. Steel industry representatives are now urging Washington to impose restrictions or completely rescind those exemptions granted under the agreement. A dramatic rise in Russian imports has added to resentment in the US against Russian suppliers. The call to impose restrictions on Russian steel imports comes at a time when bilateral relations, particularly after Russia’s forcible Crimea takeover from Ukraine, are strained. The excessive foreign steel tubes supplied to the oil and gas industry is hurting the US steelmakers supplying this
sector. A cancellation or even a modification of the agreement may benefit US companies, but it would hurt Russian steelmaker Severstal, which could face anti-dumping duties of some 73.59% while other Russian steelmakers, such as Novolipetsk Steel and Magnitogorsk Iron and Steel, would face duties as high as 184.56%. The challenge of global overcapacity was also raised by M ario Longhi, the president/CEO of United States Steel Corp. in his June 25 testimony before a Senate Committee on Finance Testimony. Foreign suppliers were “gaming the system and distorting the markets with products dumped with the sole purpose of undercutting and harming the industry in general, and my company specifically,” he said. Indeed, Longhi alleged that American steel companies are being “targeted for elimination”. As the company’s CEO , he had spent a great deal of his time working to provide good paying, middle-class jobs in America. Touching a nerve
Jobs are the Achilles’ heel of any American politician who faces considerable heat in times of high unemployment. Apparently, Longhi was trying to touch a sensitive political nerve when he addressed the committee, urging it to empower the Customs and Border Protection Agency to take swift action when dumping or countervailing duty orders are evaded through transshipment, misclassification, misreporting or outright falsification of import documents. “A year ago, US Steel and other domestic Oil Country T ubular Goods (OCTG) producers filed a trade case against nine countries based on the enormous 113% increase of imported OCTG products into this market between 2010-2012. South Korean companies are the main violators, but companies from India, Vietnam, Turkey and several others also dump very significant volumes,” Longhi said. “China tried to do the same thing in 2008. W e fought and won an OCTG dumping case in 2009, but not before many facilities were idled, thousands of
steelworkers lost their jobs, and our communities and our families sustained significant and long-lasting injury,” he said. US steel circles are closely monitoring ArcelorMittal’s agreeing to pay $90 million to settle a class-action lawsuit alleging US steelmakers conspired to fix prices between 2005 and 2007. The lawsuit filed in the US District Court for the Northern District of Illinois alleged that ArcelorM ittal, US Steel and several other steelmakers conspired to raise prices by slashing output between 2005 and 2007. AK Steel, Gerdau Ameristeel Corp and Commercial M etals Co previously settled for a total of $15.9 million. Service centres, fabricators or other businesses that bought steel at inflated prices in that period, could claim part of the settlement. The industry had undertaken a dramatic restructuring then, leading to consolidation and resulting in a number of bankruptcies, mergers and buyouts that left ArcelorMittal, US Steel and Nucor as the biggest US steel players. The lawsuit alleged that steel executives met at different industry conferences and discussed the need for greater pricing discipline, resorting to reduction of production at marginal facilities whenever demand softened. M ittal Steel USA , a predecessor to ArcelorMittal, had reduced output to 55% of capacity in July 2005, the lawsuit contends. US Steel went from running its mills at 90% capacity at the beginning of that year to a much lower 75% in the third quarter. M eanwhile, ArcelorM ittal, the world’s largest steelmaker, recently welcomed a potential removal of a near 10-year ban on foreign takeovers of Chinese steel companies. The steel company is one of the few foreign steelmakers to invest in China, the world’s biggest steel consumer, since the ban was imposed in 2005. Lakshmi Mittal, ArcelorMittal’s CEO, who attended the Steel Success Strategies conference in New York in June, described the piece of information as “good news” and a sign that the Chinese Government was moving forward on reforms and liberalisation on foreign investment. ᔢ
* American correspondent www.steeltimesint.com
July/August 2014
LA updapte_30_AIT_0110 7/7/14 10:57 AM Page 1
12 LATIN AMERICA UPDATE
Investment is crucial Excessive installed capacity is one of the most important hurdles that the global steel industry must jump, but while investment is also crucial it can also amplify the problem. In contrast to its relevance, it can be argued that data on steel investment is rare regarding both global and regional industries – an exception being recent figures released by Accenture By Germano Mendes de Paula* AS it can be observed in Fig 1 , the total capital expenditure (capex) of steel enterprises has enlarged from $39bn in 2006 to $67bn in 2008. During the period 2009-2012, it was around $61bn and this can be interpreted as an unexpected outcome, considering the massive impact of the global financial crisis on steel company profit margins. Only in 2013 was a sharper drop in world steel investment recorded, when it was 17% down on the peak year of 2008. Accenture’s information is based on 74 major steel producers, distributors and scrap processors. Regional segmentation is based on headquarter location. The consulting firm stressed that steel capex was lower in 2013 when compared to 2008, for most regions. Indeed, it was reduced by 71% in the CIS, 39% in Europe, 19% in China, 8% in South America and 4% in the NAF TA countries. The only exception was other Asian countries (excluding China), which increased their investments by 23%. According to Accenture, steel capex in South America totalled roughly $3bn in 2013, which is equivalent to some 5.5% of global figures. However , as M exico is considered part of NAF TA and individual data by country is not available, it was impossible to estimate the value for the Latin American region as a whole. Latin American figures
Alacero has collected and published the investment carried out by the Latin American steel industry in its Statistical Yearbook. Despite the substantial effort made, however, there is missing data. In the case of Venezuela, for example, for the years 2000, 2002, 2003, 2010 and 2012, and for Chile, there is a lack of information from 2010 onwards. Sadly , it is believed that Alacero’s information is the most comprehensive data available concerning Latin America steel’s investments. Fig 2 shows that regional investment was maintained in the $1.4bn plateau during the 2000-2003 period, but then climbed to achieve $6.1bn in 2009 before declining partially to an average of $5.4bn between 2010 and 2012. A weaker-than-
expected retraction was observed in the post-crisis period. There have been substantial changes regarding the participation of nations in Latin American steel investment ( Fig 3) . Brazil was responsible for 72.9% of the total between 2000 and 2003, but this decreased to 66.1% (2004-2009) and even to 62.4% (2010-2012). The Mexican slice diminished from 15.7% to 14.0%, but then doubled to 28.4%. The participation, therefore, of Brazil and Mexico varied from 88.6% (2000-2003) to 80.1% (20042009) and 90.8% (from 2010 onwards). Unfortunately, data on V enezuela is incomplete, but it is worth mentioning that its participation reached 24.8% in 2005, dropped to 2.7% in 2009 and then 2% in 2011. This is a strong indication of
the under -investment that has characterised the Venezuelan steel sector since the re-nationalisation of Sidor . Argentina reduced its share from 7% (2000-2003) to 6.5% (2004-2009) and to 5.6% (2010-2012), while the Colombian value amplified from just 0.3% to 1.7% and then down to 1.5%. It is also important to investigate where the money has been employed. In Mexico between 2006 and 2011, Fig 4 shows that the rolling mill has received a considerable amount of resources. In 2010, for example, it was equivalent to 48% of sectorial investment, but on average, its ratio was 31%. Next was the steel shop and caster (15%), raw material treatment (9%) and reduction (7%). Other activities received 39% of total investments. ᔢ 7 6 5
70 60 50 40 30 20 10 0
4 3 2 1 2006 07
08
09
10
11
12
13
0 2000
02
03
05
07
09
11
Fig 1 Global steel capital expenditure, 2006-2013 ($bn).
Fig 2 Latin American steel investment, 2000-2012 ($bn).
Source Accenture
Source Alacero
100
100
80
80 60
60
40
40
20
20
0
2000
03
05
07
09
11
13
Brazil Mexico Argentina Colombia Venezuela Others
Fig 3 Latin American steel investment by country 20002012 (%). Source Alacero
0
2000 Rolling mill Reduction
01
02
03
Steel shop and caster Others
04
05
Raw material treatment
Fig 4 Mexican steel investment, by area, 2006-2011 (%). Source Cancero
This article focused on global and Latin American investments. Next month, we will focus upon the Brazilian steel industry.
* Latin America correspondent, professor in economics, Federal University of Uberlândia, Brazil. E-mail: germano@ufu.br July/August 2014
www.steeltimesint.com
India STI_30_AIT_0110 7/7/14 11:00 AM Page 2
INDIA UPDATE 13
Resistance to Tata’s mining plan Tata Steel wants to renew its mineral exploration lease at the Sukinda mine in Odisha state, where 98% of India’s chrome ore deposits can be found. There has been stiff resistance to Tata’s plans from other players in the market based on fears that full allocation to one company will raise raw material prices unnecessarily. By Dilip Kumar Jha*
STIFF resistance from other industry players has put T ata Steel’s renewal of 85M t of chromite mineral deposits in the Jajpur district of Odisha (known as the Sukinda mine) in the doldrums. The mineral exploration lease expired in April 2014. Since the Supreme Court order for closure of all mining exploration activities in Odisha over three months ago, extraction of chrome ore came to a standstill.
Reserves
Remaining resources
Total
Description
Quantity (+10% Cr 2O3)
7.331
Open cast
7.331
Total resources
Underground
0
Probable (identified)
0.174
Open cast
0
Underground
0.174
Probable (incremental estimated)
14.267
Open cast
3.769
Underground
10.498
Feasibility resources
1.914
Open cast
1.914
Pre-feasibility resources
9.160
Underground
9.160
Pre-feasibility resources (incremental) 35.075
The issue
Industry players, including Indian Mineral and F erro Alloys (IM F A), F erro Alloys Corporation (Facor), Jindal Strips and Ispat Alloys, have been very aggressive due to the vast mineral deposits (85M t) at the Sukinda mine in Odisha. These ferro chrome users and exporters have made presentations to the state government with a view to distributing some of Sukinda’s mineral deposits to end users. Tata Steel’s chromite mines in Sukinda are spread over 406 hectares and include a contentious 106 acres of forestland. A 20-year renewal lease expired on 11 January 2013, having been extended for three months last year . T ata was later granted a temporary working permit, which expired on 12 April 2014. Tata Steel has applied for another renewal lease for mineral exploration and clearances have been granted for various stages in the process. “We have received a renewal request from Tata Steel, but it is a long-drawn process. The final clearance is granted by the Committee set up in this regard by the state government. Before that, however , a number of approvals from local authorities are required including that from the District Magistrate, the M inistry of Environment and F orest and other committees and state bodies. We are studying that,” said S K P opli, Special Secretary (Steel and M ines), Government of Odisha. But other ferro alloy producers have now stepped into the picture citing the reserves as being far in excess of T ata Steel’s requirement for captive consumption. In 1993, T ata Steel’s requirement was assessed at 16Mt when the Supreme Court adopted the Sharma
Category Proved
Measured resources
--
Indicated resources
--
Inferred resources
16.396
84.317
Open cast + underground 35.075
Underground
16.396
84.317
Chrome ore resources (million tons)
Committee Report and redistributed part of the then 1261 hectares of mineral deposits held by the company to actual users. A legal judgment in 1999 distributed the entire 1261 hectares held by Tata Steel on the recommendation of the Sharma committee report. Resistance from actual users
Final approval has been met with stiff resistance from the actual users. In fact, IMFA has filed a writ petition in the Odisha High Court protesting against the government’s plan to allocate full access to the Sukinda mine to Tata Steel. IMFA told the court that actual users, including IMFA, should be allowed to extract chrome ore for processing. On 11 June a two-judge bench of the Odisha High Court, comprising justice B K Nayak and justice A K Rath, ordered the Odisha government not to take any final decision on allocation of access to T ata Steel until the court passes an order on the matter. Tata Steel's
chrome ore requirement for captive consumption will be just 16M t, far less than the 85Mt envisaged in the company’s 2013 mining plan. Some observers feel that the government should examine the situation from the perspective of mineral development so that all interests can be served. The State Government should assess afresh the requirement of all large producers in line with the notification dated 3 October 2012, which gives primacy to captive consumption. Conclusion
It is feared that full allocation of the Sukinda chrome ore mine to Tata Steel will raise raw material prices. The last auction conducted in M ay by Odisha M ining Corporation (OMC) saw a 22% increase in chrome ore prices due to limited supply . Even distribution of mineral reserves among diversified industry players will encourage all industry stakeholders and offer equal opportunities to them all. ᔢ
Measurement of chrome ore
Tata Steel
IMFA/ICCL
Facor
Ispat
Jindal
Annual chrome ore requirement
0.69
0.527
0.295
0.250
0.225
as submitted by the parties Considering 20 years period –
16.27
total requirement will be Considering 20 years period – total requirement will be For first 20 years
14.11
6.40
6.70
6.03
For remaining 30 years
31.14
14.13
14.78
13.30
45.25
20.53
21.48
19.33
Total
16.27
Source : Sharma Committee Report
Requirement of chrome ore (million tons)
*India correspondent in Kolkata www.steeltimesint.com
July/August 2014
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06.05.14 11:40
GOES_30_AIT_0110 7/4/14 8:46 AM Page 1
STEEL PROCESSING 15
The demise of US GOES steel production The announcement of new standards for transformer efficiency in the USA and the western world is leading to customers previously loyal to the two US producers of grainoriented silicon electrical steel (GOES) having to look abroad for better grade steel, which cannot be made in sufficient quality or at a competitive price to foreign mills. Import restrictions on GOES demanded by US producers are likely to drive manufacture of transformer core assemblies offshore resulting in job losses in the USA. By Ben Ehmcke*
HAVE AK Steel and A TI Metals, the two American manufacturers of grain oriented electrical steel (GOES) gone too far with their current actions against foreign manufacturers? Will this eventually cost American jobs in the power and distribution transformer industry? And will the USA end up with two manufacturers of GOES that are inferior to the rest of the world? On September 18 2013 AK Steel and ATI M etals filed anti-dumping (AD) and Countervailing Duty (CVD) petitions with the US Department of Commerce and the International Trade Commission (ITC). These petitions requested action be taken against all sources of imported grain oriented electrical steel (GOES). On September 30 2013 AK Steel filed a second petition regarding the importation of non-grain oriented silicon electrical steel (NGO). Neither company expected US transformer builders and foreign mills to react the way they did. History of GOES
The development of GOES was originally an American concept. As Edison, Tesla, and Westinghouse created a demand and a method to generate and distribute electricity, Armco Steel developed the origins of what we now call GOES in an
“With a second efficiency standard revision in four years, the US mills saw their customer base was looking to use the best materials available in the global market.” effort to increase the efficiency of electricity distribution. As the availability of electricity spread, these same companies also shared the knowledge of the materials that form the heart of the transformer. Over the years a select group of steel companies joined this special processing society including ThyssenKrupp, VIS-Stal, Nippon Steel and JFE, as major players in the manufacture and continued development of GOES. During the first half of the 20th Century, demand for power and distribution transformers far out-paced the supply of GOES. As a result close relationships were formed between steel mills and transformer manufacturers. This allowed for the maximum spread of electricity while
allowing the mills to recoup massive costs involved in the manufacture of these ultrathin sheets of high silicon steel, which are then coated to insulate each and cut to make transformer laminations. The demand for transformers continued to grow and the price of GOES remained relatively constant. For the mills, it was the highest margin product that they had in their portfolio. Efficiency standards had still to be determined so the need to invest in major R&D projects was unwarranted. By the mid-twentieth century the nature of the electrical steel and transformer market was beginning to change. Second and third world nations were now able to afford upgrades to their infrastructure, in
*President – Ehmcke Consulting LLC www.steeltimesint.com
July/August 2014
GOES_30_AIT_0110 7/4/14 8:47 AM Page 2
16
STEEL PROCESSING
“The US mills had not invested in sufficient R&D efforts as their foreign competitors. particular, electricity generation and distribution. The basic design of transformers had not changed and more companies building transformers had entered the market such as General Electric, Siemens and Hitachi. Many mills that had wanted to enter the GOES market, but couldn’t justify the initial costs, now saw an opportunity . These included POSCO , Stalprodukt SA , Inox, WISCO (Wuhan Iron & Steel) and Cogent Power. M any of these companies were already manufacturing non-grain oriented silicon steel used in motors. Into the early 90s world demand continued to exceed supply by as much as 200kt/y. AK Steel continued to be looked upon as the leader in the manufacture of high quality electrical steel. However , the Japanese had been working on new grades and investing to keep their mills state-of the-art. The 1990s saw the growing, global importance of the environment. In the USA, Europe, and parts of Asia the need for increased efficiency standards directed at the generation and distribution of electricity became paramount. Emphasis was put on reducing pollution generated by coal-fired power plants and the need to increase the efficiency of power and distribution transformers to meet increased demand for power without the need to construct additional plants. This resulted in US transformer manufacturers testing newer materials from foreign mills, in particular from Japan. By 1994, foreign mills were making major in-roads in both quality and availability of materials. Continued R&D efforts enabled foreign mills to produce improved grades at prices lower than in the United States. Trade dispute
To counter foreign imports, AK Steel and ATI M etals asked the Department of Commerce and the International T rade Commission to implement anti-dumping and countervailing duties against Japanese mills. At that point a 10-year 37% duty was levied against Japanese mills, allowing July/August 2014
AK Steel and ATI Metals to continue their domination of the US market. Worldwide, production of electrical steel had, by then, reached a total of 15 mills. Materials with the lowest electrical losses were available from only US and Japanese mills with the Germans, Koreans, Russians, and Chinese investing heavily to catch up. Meanwhile in the US, the mills were doing little, in comparison, to develop the materials that would be required in the not-too-distant future. In the 90s the predominant grades of electrical steel were, in decreasing efficiency, M2, M3, M4, M5, and M6 with M4 to M6 being the stables of demand. By 1997 the US Department of Energy started to formulate new efficiency standards for liquid immersed and dry type distribution transformers. At the same time, Japan and Europe implemented standards that pushed the limits of the existing grades of GOES. Demand still outstripped supply and a change in the typical mix of products had started. Foreign mills were beginning to see a surge in demand for GOES which could provide lower energy losses, at least as low as those provided by AK’s M 2 product. Outside the Western Hemisphere, distribution transformers do not require annealing, so foreign mills were able to meet growing demand by adding laser scribing to the product. However , transformer manufacturers in the Western hemisphere – but outside the US – were asking foreign mills for better materials which could still provide low energy losses after annealing. Despite anti-dumping duties, many American transformer manufacturers were co-operating with the Japanese and K oreans to test new products. By the late 90s the manufacturing capacity for power and distribution transformers was far greater than demand. In a good year , manufacturers were operating at 60% to 70% of capacity . In the US it was a buyers’ market. In conjunction with this, the price of the major materials that make up a transformer had not fluctuated in the past decade.
2003 through 2006 saw a rash of hurricanes strike the USA resulting in demand for replacement power and distribution transformers, which reached the highest level in 40 years. Demand for GOES in the US was at such a point that AK Steel and A TI M etals reduced their exports and were looking at restricting allocations to domestic customers. Smaller transformer manufacturers were forced to look at foreign sources for M4 through M6 GOES, available from sources in Germany, Russia, and Korea – none of which were impacted by the anti-dumping duties. This gave US mills the opportunity to increase prices. Transformer manufacturers pushed back because at that time there was no mechanism to pass these costs through to the utilities. To counter this, in 2004, the two US mills implemented scrap and fuel surcharges on all grades of GOES. Since surcharges were posted as public record, while the base price was covered under confidentiality agreements that are parts of the contracts, transformer builders could justify this additional cost to the utilities. Transformer efficiency standards throughout the world were advancing faster than in the US. More foreign mills saw the opportunity to enter the higher margin GOES market. POSCO looked to building a new mill in India, NLM K combined with VIZ -Stal in Russia and Baosteel started building in China. None of these mills were affected by the antidumping duties against the mills in Japan, which came to an end in late 2003. With the ending of anti-dumping duties against the Japanese mills, the US mills were able to convince the Department of Commerce to maintain imported grain oriented electrical steel on the F ederal Watch List until December 31, 2013. This date played a role in decisions that followed. By 2007, the Department of Energy had come to a consensus as to the content of what would become the 2010 distribution transformer efficiency standard. With the mandated changes the less efficient www.steeltimesint.com
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18 STEEL PROCESSING
grades, M6, M5, and M4, would no longer be sufficient to meet the revised standard and control both the size and cost of the distribution transformer. With the move to grades of electrical steel offering lower losses being widely accepted as a result of the new US standard, one of the two US mills was exploring ways to increase its GOES capacity. P erversely, they converted a portion of their non-grain oriented electrical steel facility to the production of less efficient M 5 and M 6 GOES, despite customer warnings that this was the wrong course of action. Instead they needed to concentrate on increasing M2 and M3 production. The line conversion was completed in early 2008. During this time the other US manufacturer was investing in the maintenance of its process lines.
New US transformer standards
2009 saw the announcement by the US Department of Energy of the efficiency guidelines that would become effective January 1, 2010. The impact of both the 2010 and 2016 Efficiency Standards are reviewed in The Impact of the Revised Efficiency Standards for both Liquid Immersed and Dry T ype Distribution Transformers, available at www.theimpactpaper.com. To summarise the report, the 2010 standard saw the demand for grades M4, M5, and M6 from the US mills reduced to being primarily an export product. Other than the Chinese mills, which were subsidised, mills making electrical steel were operating at anywhere between 75% and 80% of capacity . M2 was becoming the material of choice by many transformer manufacturers.
transformers to the USA , such as Efacec, Hyundai Heavy Industries and Mitsubishi, started constructing manufacturing plants in the US. This was followed by foreign producers of GOES, such as POSCO-AAPC, starting production in the USA to supply these new plants with the types of materials familiar to power transformer companies. By 2013 the Chinese, Koreans, Japanese and Russians had slowly increased their presence in the United States. Most had established relationships with value added service centres in the US to process master coil for the end user. In spring 2013 the US Department of Energy published their Final Rule Making for a new efficiency standard for Liquid Immersed and Dry T ype Distribution Transformers to become effective January 1, 2016. Again, details of the impact of this standard can be reviewed in the report available at www.theimpactpaper.com. In general the new standard uses M3 GOES as the basis for Liquid Immersed distribution transformers and moved Three Phase Dry T ype transformers away from non-grain oriented electrical steel to M6 and M3 GOES depending on the voltages involved. With this second efficiency standard revision in four years, the US mills saw that their customer base was looking to use the best materials available in the global market. While American materials are noted for consistent quality , it was no longer the most efficient material available. The US mills had not invested in sufficient R&D efforts as their foreign competitors. Less loyal customers
From 2004 through 2008 the price of electrical steel, excluding surcharges, had increased by 350% in the USA . Although prices in the rest of the world had not increased to the same extent, foreign mills were unwilling to import large quantities of material into the US for fear of trade reprisals. The volumes that were imported were priced at what was considered US prices. No one wanted to antagonise either AK Steel or ATI Metals. By mid-2008 the global recession had started. 2009 saw the demand for transformers at a near all-time low not only in the USA but also in most of the developed nations. What for several decades had been a deficit in supply of GOES became a surplus, and soon a glut, with the massive increases in capacity at Baosteel and the addition of new mills at Tinagain and Anshan in China. Prices continued to fall for the next three years. July/August 2014
Trade disputes grow
Prices for GOES were higher in the US than the rest of the world. F oreign mills were willing to work with various US service centres to import and process grades of electrical steel that were not available from US mills. T o enable the two US mills to continue exporting, pricing for exported material was adjusted to meet global levels. In 2011, China implemented antidumping duties against imported GOES from AK Steel. AK took their case to the World Trade Organisation (WTO). In 2013 the WTO ruled that anti-dumping duties against American GOES imported into China should be lifted. To date that has not happened. Also in 2011, anti-dumping duties were invoked against imported power transformers. As a consequence, companies that had previously exported
History has shown that no matter what actions the two US mills took – higher prices, surcharges, actions against foreign competition – US transformer manufacturers had stayed loyal to the two US mills. This has been the result of several factors. In the past the domestic mills had enough capacity for the grades required to satisfy demand. At least one US mill is known for its consistent quality and high customer service. And finally the foreign mills have not been willing to make commitments to significant tonnages in fear of retaliation from the US mills. The 2016 Efficiency Standard has changed this historic picture. Now it has become evident that with a recovering world economy and a hunger for electricity from India and Africa, the US mills do not have either the capacity or the advanced grades of GOES that are now demanded. By 2013 most domestic transformer manufacturers were either using or negotiating with foreign mills for volumes of these lower loss materials to be delivered starting in the second half of 2013. www.steeltimesint.com
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With the Department of Commerce Watch List expiring on December 31, 2013 the Department of Commerce needed to conduct a review to determine if the watch should be continued. It may be coincidental that in midSeptember 2013, AK Steel and ATI Metals filed petitions with the Department of Commerce and the International T rade Commission asking for anti-dumping and countervailing duties against the majority of foreign mills producing GOES. They also filed against the trading companies they use and the service centres they are affiliated with. Two weeks later, AK Steel filed a petition against six foreign mills for anti-dumping and countervailing duties against non-grain oriented electrical steel. The timeline for both of these petitions and determination of any penalty was midM arch 2014 with implementation of duties and tariffs to start October 2014.
“…..major transformer manufacturers all operate at a global level.”
Avoiding trade restrictions
Although on the surface it appears that foreign mills are closing ranks to fight these petitions, this may only be a diversion to cover what is going on behind the scenes. Unlike in the past, the reaction by the mills, the service centres, and the transformer manufacturers has been vastly different. Major transformer manufacturers have made the decision that they are not going to back away from making long-term commitments to using the better grades of GOES even if this means that they change tactics and purchase the transformer core or produce cores at their foreign plants. The value-added service centres are investigating what it will take to open or enlarge facilities in M exico and Canada. The emphasis of the expansions is to add the capability to make both wound and stacked cores, and the ability to anneal wound cores. How would this decision affect the US mills and transformer manufacturers? The US mills stated that they started this petition process to protect themselves from low-cost electrical steel being dumped in the domestic market. This is the same argument that was used back in 1994. There is little evidence to show that volumes being imported had any real effect. Foreign mills have been careful not to sell in the US at prices below the US mills’ base price. US lacks R&D investment
A closer look at the wording of the petitions shows that the real intent is to protect them from any future impact from foreign mills. It was assumed that the intent was protection from low-cost imports of equal or lower quality that could be sold at premium. Not completely www.steeltimesint.com
true as the impact that they are concerned about is that neither AK Steel nor A TI Metals has invested in the electrical steel sections of their business. As a result, they have been unable to keep up with the technical advances being made elsewhere. The imported materials represent grades not available from either US mill without major investments by them in both R&D and processing improvements. The assumption has been that with the 2016 efficiency standards being written around the use of M3, this would result in transformer manufacturers committing to AK Steel and ATI Metals and as a result of the duties and tariffs both companies would be able to slowly increase domestic prices and continue to maintain them at higher than global levels. Unfortunately, today’s major transformer manufacturers – ABB, Cooper , Siemens, GE, and others – all operate globally and are no longer dependent on purchasing from domestic sources. Companies can and will make the move to foreign core manufacturing, either at their own facilities or at foreign valueadded service centres in order to get their preferred materials and avoid expected price increases from US mills. It is unlikely that transformer cores meeting the 2016 standard will be made with material from either AK Steel or ATI Metals. With reduced demand from the domestic market, the mills will have a greater dependence on exports – a market where they are not competitive today. With only their current portfolio products, they find themselves with a shrinking customer base no matter what the selling price.
Moving operations off-shore
The core winding and annealing functions of a typical transformer manufacturer represent the largest expenditure of energy within the plant, and the coil winding area is one of the most manpower -intensive departments. Eliminating core winding and annealing operations in the USA will result in a cost saving within the plant of both fixed costs and labour costs. Whether the transformer manufacturer absorbs the employees into other areas of the company is yet to be determined. The management of one mill has indicated that if transformer companies decided to purchase foreign-made core, even if the cores came from a NAF TA nation, they would look at taking a similar action against imported cores, that they had against imported GOES. If this is the tactic that mills are willing to take, then the logical next step will be for the transformer manufacturers to move coil winding operations off -shore and import a completed core/coil assembly. What was started as a process to protect two American companies from foreign competition may drive many of their domestic customers to foreign markets. In order to control costs and provide the highest efficiency transformers, these international companies will move core production – and potentially core/coil assembly – to other NAFTA nations. Thus, the US loses manufacturing jobs and the US mills seeking protection will continue to lose global market share to the point where they cannot produce GOES at break-even costs. ᔢ July/August 2014
A, Today full page with bleed_A. Today full page with bleed 06/06/2014 09:39 Page 1
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K Walker_30_AIT_0110 7/4/14 11:06 AM Page 1
OXYGEN STEELMAKING 21 Basic oxygen steelmaking is the most prevalent process for making steel in the world. In this article, the process is described in moderate technical depth for those interested in knowing more. By Keith Walker*
A LIT TLE history is worthwhile at the outset, since basic oxygen steelmaking (BOS) is a development of a process invented by Bessemer in the 19th century. People had been extracting iron from its ores for hundreds of years prior to this invention, but the iron produced had a very high carbon content that rendered it quite brittle and, therefore, of little use in many engineering applications. Although it was already possible to produce steel with much reduced carbon content, it was only possible in small batches and took a long time, making it very expensive. Bessemer realised that if air were blown through liquid iron, the oxygen would burn away the carbon, and so his “converter” consisted of a refractory-lined pot which featured ports in the base (tuyeres) through which air could be blown. This made production of steel in larger batches possible and the process was quick, making steel a much more affordable material. In the 1950s, processes for making pure oxygen in large amounts were invented, and it was immediately apparent that using this, rather than air, should make the process even quicker, and so started the development of the basic oxygen process. It is worth noting here that “basic” means the alternative to acid, rather than implying lack of complexity – it refers to the chemical nature of the slag and refractories used in the process. So the purpose of the process is largely to remove carbon from the iron produced by blast furnaces, which unavoidably contains around 4.5% carbon. It also reduces harmful phosphorus to acceptable levels and there is some removal of unwanted sulphur, but since this is more difficult, most steel plants have processes for removing sulphur from the liquid iron before it goes into the BOS converter, often called a basic oxygen furnace (B OF) or simply ‘vessel’. There are many variants of the process, but the most common will be described here. Charging ferrous metals
The process starts with the charging of ferrous materials to the converter , which
Basic oxygen steelmaking has a volume far greater than that required to hold the amount of steel to be produced. The vessel is a steel container , rather like a belly pot, which is lined with refractory bricks, about which an entire article could be written. It is mounted such that it can be rotated backwards and forwards, and it has a tap hole in one side, above the level of the liquid steel when the vessel is vertical, which allows controlled pouring of the liquid steel at the end of the process (“tapping”). Many converters have tuyeres in the base that allow stirring gas, such as argon, to be blown through the liquid steel. This is a process called “bath agitation” and its purpose is to achieve greater homogeneity within the vessel. At the start of the process, the vessel is tilted down to around 45 degrees to allow liquid iron and heavy scrap to be charged. It is important to note that the iron is liquid (around 135°C) when it arrives from the blast furnaces, and the scrap content will be routinely up to 20% of the total charge weight. The liquid iron is charged using a ladle and the scrap is charged using what is called a scrap pan, an open container , and both are picked up and poured into the vessel using a heavy crane. The total charge weight varies between plants, but is generally 250 to 350 tonnes. At the outset, there is an aim temperature to be achieved for the liquid steel at the end of the process, and also an aim chemical composition, both depending on what grade of steel is to be produced. It also depends on what
temperature is required for casting the steel later on. Therefore, it is necessary to achieve both a heat and also mass balance, taking account of all the materials which are added to the vessel. F or many years, this has been done in real time using computerised mathematical models of the process, such that advice can be given to operators. The composition of the liquid iron and its temperature are measured prior to charging and of course both the iron and scrap are weighed. Once charging is complete, the vessel is rotated into the vertical position. If the vessel has bath agitation, this will already be blowing. As quickly as possible, a water-cooled steel lance is lowered into the vessel, through which pure oxygen is already being blown at around 1000m3/minute at a velocity around mach 2. This starts the process. The lance is never submerged in the liquid but remains at least 1m above it during the whole blow, such that the oxygen is blown onto the liquid. An exothermic reaction
Since the scrap is usually steel, with a melting point higher than the temperature of the iron, it doesn't start to melt immediately but remains solid at the start of the process. The oxygen being blown starts to remove silicon contained in the iron first, since it has a stronger affinity for oxygen than does carbon (Fig 1). It is an exothermic reaction which produces a lot of heat, and so the
*Steel consultant. Email keith.walker@steelfolk.co.uk www.steeltimesint.com
July/August 2014
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22 OXYGEN STEELMAKING
temperature of the iron increases quickly as the silicon is turned into silicon oxide (silica) and floats on the metal as slag. Since silica is an acidic mineral, it will attack the basic refractory lining, so at this point lime (and/or dolomitic lime) is added to the vessel, from weigh hoppers and chutes that dispense the material during the blow . This neutralises the slag, and importantly also produces a slag which is capable of retaining phosphorous oxide. Clearly, the mass and heat capacity of the lime additions are taken into account in the heat and mass balance calculations at the outset. Before moving on, it is worth noting that removal of the phosphorus, oxidised out of the iron, is never complete. It “partitions” between the liquid steel and the slag, achieving a chemical balance. Its removal to low levels is exponentially expensive and relies on a highly basic slag and lower temperature. It also relies on what is called a “soft” blow of the oxygen, which means that the lance is kept higher above the bath. This slows down the process and produces a higher F eO content in the slag, beneficial for phosphorus removal but also reducing yield and, therefore, adding cost. Note also that the amount of slag is important –this depends on the amount of silicon in the liquid iron – since a larger amount will retain more of the phosphorus for a given slag composition, such that the phosphorus in the liquid steel will be lower. However, this also adds cost to the process, both at the blast furnace and also converting. Production of very low levels of phosphorus in the final steel (say 0.008%) is only carried out for grades with demanding applications. During blowing, the slag tends to foam, producing a lot more volume, depending on the height of the lance above the bath. It can slop over the mouth of the converter, which is undesirable for a number of reasons. Most plants measure the level of slag either using an audiometer that listens to the noise produced, or by monitoring lance vibration. Corrective action can then be taken.
Reducing carbon content
Returning to the blow, in which practically all of the silicon in the iron has been removed, the oxygen begins to burn the carbon, phosphorus and manganese (also contained in the iron). The carbon content is reduced from 4.5% in the iron (there is usually only a small level in the scrap) to around 0.05% at the end of the process, so it can be seen that a great quantity is burned off. This is also very exothermic and the temperature increases greatly, melting
sealed) hood is lowered to the mouth of the vessel, from which ducting takes away the gas using powerful fans. Since it is essential that no air is sucked into the hood, which would cause the gas to burn, and the amount of gas being produced varies greatly during the blow , pressure and flow sensors in the ducting control a variable venturi that maintains the pressure to just above atmospheric. This prevents air from being sucked in, and produces a characteristic puffing in and out of the gas and dust between the mouth of the vessel and the collection hood during the blow. Complex engineering
the scrap. Note that there is no heat applied in the process – all of the necessary heat comes from burning off the elements in the iron. Unlike the other elements that are removed, which are trapped in the slag as liquids, carbon is removed as a mixture of gases, mainly carbon monoxide, but with some carbon dioxide within it. This gas is a valuable fuel and many plants collect it for firing the re-heating furnaces in the rolling mills downstream. To achieve this, the converter is fitted with off-gas collection. A close-fitting (but not
5
Fig 1
Clearly, the engineering is complex, since the lance must come through the ducting and so must the dispensers for the lime and other additions. However, the gas is valuable and justifies the complication. The blow generally takes around 20 minutes to complete. Fig 1 shows how the main elements are removed from the iron, with an, at first, puzzling rise in manganese which is produced when the scrap melts (manganese is a very common alloy element in steel). The temperature will be between 165°C and 170°C depending on the plant and details of further processing. When around 90% of the total oxygen to be blown is complete, the sub-lance is used to check the temperature and carbon content of the liquid steel. The invention of the sub-lance was a major innovation and benefit, being a lance alongside the oxygen lance which is lowered into the liquid steel during the blow. It contains a thermocouple to measure the temperature and cell which determines the carbon content by actually measuring the solidification temperature of the steel. This is directly related to carbon content. F rom these measurements, the amount of oxygen that is still required to be blown can be more precisely adjusted to achieve the desired end point. Prior to the invention of the sub-lance, it was necessary to blow all the planned oxygen and rotate the converter to take Vessel horizontal - tapping
Weight/% in bath
4
3
2
Slag
Steel
Silicon Manganese Carbon
Bricks
1
Shell 10 Time in blow/minutes
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20
Fig 2
Tap hole
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OXYGEN STEELMAKING
the measurements manually through the mouth, interrupting the blow and sometimes then requiring further blowing, especially because the sample had to be sent for chemical analysis, causing a delay. This slows down the process and, therefore, reduces the production capacity of the plant. When the blow is complete, the oxygen lance is removed, gas collection ended and the sub-lance is lowered again with a slightly different probe. A thermocouple is used again to check the temperature, but at the very low carbon content in the steel right at the end of the blow , it is not possible to use the solidification temperature to measure carbon content. Instead, a fuel cell measures the oxygen activity in the steel, which can then be related with carbon content. This is the final check, although it is worth noting that samples are still sent for chemical analysis, which is a lot more precise. Tapping commences
The liquid steel can then be tapped, or poured into a ladle for further processing and casting. The vessel is rotated so that the steel runs through the tap hold in its side into a ladle below . It is essential for
www.steeltimesint.com
23
and for this reason a new tap hole can be fitted quickly without re-lining the whole vessel. This is not completely effective every time, and many plants have equipment that detect slag by analysing the light coming from the tapping stream. The vessel is rotated upwards very quickly when it is detected, stopping the tap. quality and cost control downstream that none of the slag floating on the liquid comes through, and a number of devices are deployed to prevent it. The most common is a slag dart ( Fig 2 ). When tapping commences, with the vessel rotated onto its side, a machine places the dart into the tap hole through the vessel mouth. The stem locates the dart in the correct position. The clever part is that the head of the dart is produced with a density between that of the slag and the steel, such that it floats on the interface, submerged in the slag. Then, the head seals the tap hole when all the steel has been tapped out, preventing any slag from coming through after it. Tapping generally takes around six minutes, but it varies due to tap hole wear,
A 45-minute process
Finally, the vessel is rotated upside down and the slag is poured from its mouth into a slag ladle below it, which has replaced the steel ladle. It is variable, but for a general impression around 10% of the total weight of material in the converter at tapping is slag. It contains an amount of entrapped steel, and is often processed to recover it for adding back into the process. The total operation to produce a heat of around 300 tonnes takes around 45 minutes (the so-called “tap to tapâ€? time). This can be compared with around 24 hours for the BOS process predecessor, the Open Hearth Process, and resulted in a revolution in steel production, requiring far fewer steelmaking sites and a public perception in many countries that steel production was in decline. ᔢ
July/August 2014
Steel Times Internationam Mag FIVES 210x297mm_VECTO.indd 1
18/02/2014 17:26
jet process oxygen_30_AIT_0110 7/4/14 10:33 AM Page 1
OXYGEN STEELMAKING 25
Jet Process for highest converter input flexibility Decreasing prices of scrap and Hot Briquetted direct reduced Iron (HBI) together with attempts by steelmakers to further reduce the CO2 footprint of the steelmaking process heap pressure upon integrated steelmakers to increase the scrap or HBI rate charged to the converter. Flexible solutions that allow varying the scrap or HBI rate according to market conditions are required, as prices have become increasingly volatile in recent years. By G Wimmer1, A Fleischander2, K Pastucha3 and J Spiess4* energy was used to heat up the off -gas and no heat was transferred to the bath. Note that part of the heat from post combustion is used to heat up the hot blast to bath temperature in a first step and is not available for heating up the bath. In order to ensure high PCD and HTE, efficient mixing is required. This is achieved by a hot blast blown with a lance from the top onto the bath. The hot blast is air enriched with oxygen to about 30% and heated up in a pebble heater to 1300°C. The velocity of the hot blast at lance exit is slightly below the velocity of sound, which is around 700m/s at this temperature. Due to the high speed and high volume of the hot blast, a jet with a very high penetration Fig 1. Typical material sources for steel making and length is formed and a lot of surrounding corresponding standard production processes media is sucked into the jet and this leads %CO refers to the percentage of volume to an excellent mixing inside the converter. of CO from the total volume of gas leaving CO coming from the bath is mixed with Principles of the Jet process the converter mouth. Besides high PCD, it the oxygen in the hot blast and The Jet process comprises a bottomis vitally important that the heat generated combustion to CO2 takes place. Due to the blowing converter with coal and lime in post combustion is transferred to the injection combined with a hot blast high mixing energy of the jet, droplets lance[1]. The coal injected via the converter liquid bath, otherwise only the off -gas from the slag and the steel path are generated. Because of the high surface-tobottom is dissolved in the hot metal bath would be heated up. The so-called Heat Transfer Efficiency (HTE) is used to describe volume ratio the droplets are easily heated and together with the carbon of the hot up and make a significant contribution to metal is combusted in two steps. Step one which ratio of the energy available from is combustion to CO in the bath; step two post combustion is transferred to the liquid the heat transfer from the hot gas to the liquid bath. State-of -the-art simulation is post-combustion to CO 2 outside of the bath, . tools were used to optimise the lance tip bath. A simplified picture of this process is m◊Cp◊(Tg Tb) Hg Hb ◊100=1 ◊100. and position as well as the PCD and HTE. HTE=1 given in Fig 2. HpCav HpCav Two thirds of the chemical energy stored Fig 3 illustrates the typical velocity of the Where Hg and Hb are the energies of the gas flow in a converter, showing how the in the coal is released in the second step of . the combustion process. In order to use Jet, with its long penetration length, is entire off -gas volume flow m after post the coal efficiently it is essential that most combustion at off-gas temperature (Tg) or hitting the bath surface and intensively of the CO is combusted to CO 2. The ratio bath temperature (T b) and H PCav is the mixing the entire volume above the bath. Another result of the numerical of CO combusted is defined by the soenergy of post combustion available for called Post Combustion Degree (PCD): transfer to the hot bath. An HTE of 100% optimisation is shown in Fig 4. Gas flow is refers to a perfect heat transfer as the gas deflected off the converter wall. Large %CO2+%H2O leaving the process has the same particles hit the wall while small particles ◊100. PCD = temperature as the bath. An HTE of 0% follow the gas flow and are sucked back %CO+%CO2+%H2+%H2O refers to the worst case scenario: that all into the jet again. This leads to good mixing HBI
Hot metal
Scrap
IN Fig 1 typical materials and processes for steelmaking are shown, one of these processes is the LD (BOF) process. The energy available in a standard LD converter depends upon the hot metal properties and the process parameters, such as the blowing pattern and target temperature. In average cases, enough energy is available for melting up to 20% of solid materials. F or higher rates, additional energy for heating and melting of the solid charges is required. Additional energy can be provided by electrical power, which is common in electric arc furnaces (EAFs) or direct use of the chemical energy of coal, silicon or others. For efficient direct use of this chemical energy without any conversion losses for the generation of electrical power , the Jet Process was developed.
* Siemens VAI Metals Technologies GmbH, Turmstrasse 44, 4031 Linz, Austria 1. G. Wimmer, Tel:+43-732-6592-5472, Email: gerald.wimmer@siemens.com. 2. A. Fleischanderl, Tel:+43-732-6592-77125, Email: alexander.fleischanderl@siemens.com. 3. K. Pastucha, Tel:+43-732-6592-75319, Email: krzysztof.pastucha@siemens.com. 4. J. Spiess, Tel:+43-732-6592-2998, Email: johannes.spiess@siemens.com. www.steeltimesint.com
July/August 2014
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26 OXYGEN STEELMAKING
Cold air + O2
Hot blast high
1300°C Energy in hot blast Carbon post combustion CO + _ O2 _ CO2
low Heat transfer to bath
O2, coal, lime
Carbon combustion CO + _ O2 _ CO C-H cooling
Fig 2. The Jet process consists of a bottom-blowing converter and a hot blast lance. Intensive mixing allows for the efficient use of the coal injected
Fig 3. Typical flow inside the converter, bath surface represented by solid wall with CO inlet
Particle size 1µm
20µm
2s
0s Small particle get trapped
Large particles hit the wall
Fig 4. Particle flow inside the converter due to intensive mixing. Small particles are sucked back into the jet (left), large particles hit the wall (right)
Fig 5. Converter bottom equipped for injection of coal and lime ready for operation. Picture from CAD model (left), photo from installation (right)
and heat transfer and keeps dust emissions and iron losses via the off-gas low. Intensive mixing with the hot blast ensures PCD of up to 60% and HTE of up to 90%, leading to an average off -gas temperature at the converter mouth exit of about 150°C higher than in the steel bath.[1]. The total efficiency of coal used in the Jet process for the melting of solid charges is above 50% – much higher than that achieved if coal is used for electric power generation and if melting takes place in an EAF where losses occur during electrical power generation and transfer. Operation of the Jet process is a twostep procedure. In step one, during converter tapping and charging of the next heat, the pebble heater is re-heated with natural gas for about 20 minutes. The energy is then stored in the pebble bed and used during the blowing period – the second step – to heat up the oxygenenriched air for another 20 minutes. Consequently, for one converter only, one pebble heater is required. Oxygen in the hot blast is mainly for combustion of CO to CO2 and only a small part of it is used for decarburisation of hot metal (HM). Oxygen for decarburisation of HM is blown via
tuyeres in the converter bottom, which act like flame cutters and can melt large pieces of scrap fast and efficiently . Bottom blowing leads to excellent mixing of the bath; hence all reactions are close to the equilibrium. This increases productivity and yield and, as less iron oxide is generated, the risk of slopping is low and the total amount of slag, as well as the iron content of the slag, is low. The process is easily adapted to different scrap or HBI rates charged to the converter by adjusting the amount of coal injected. Theoretically, rates from 0% to 100% can be realised with the Jet process. Up to 30% of scrap means that no coal injection is required; the latent heat of the hot blast plus the post-combustion of CO coming from HM decarburisation provides enough energy. F or scrap or HBI rates close to 100%, step-wise or continuous charging of cold additions and hot heel operations where parts of the steel remain in the vessel at tapping, is required. Such hot heel operation, of course, reduces the productivity for a given converter size but can be an interesting option for periods of blast furnace relining or in cases where prices and availability of electrical power
July/August 2014
for operation of an EAF are not in an economically attractive range. Comparing he Jet process with the EAF shows that for standard situations and average market prices it will be economically more attractive for HM rates above 50%. The EAF will be the best solution for HM rates below 50%. The Jet process requires a bottomblowing converter and a hot blast system. The bottom blowing converter itself is well known and several steel plants all over the world are successfully operating them. In the photograph below, the under side of a bottom-blowing converter (Fig 5) is shown together with a picture from CAD. The tuyeres have a pipe-in-pipe design and are cooled and protected with natural gas or other hydrocarbons. By regulating the amount of natural gas blown, the cooling effect and the wear of the tuyeres can be controlled. One of the most relevant points for operation of such a converter is converter lining wear , especially at the converter bottom with its injection tuyeres. Nowadays wear rates of around 1mm per heat can be reached. In combination with hot bottom exchange, a vessel lining lifespan of between 2,500 and 3,500 heats www.steeltimesint.com
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OXYGEN STEELMAKING 27
Pebble heater
Fig 6. Main components of the hot blast system
Main blower Hot blast duct
Burner chamber Hot blast lance Burner blower
Modular design for highest flexibility
Fig 7. Modular design allows installing a normal converter bottom with stirring elements and normal oxygen blowing lance, meaning that the converter can also be operated in standard LD mode
1800 Oxygen
5,0
4,00 3,00 2,00 1,00
Gas flows, Nm3/min/t
Carbon, %C
EoB Stir Tapping Desl
Lime injection Coal injection
6,0
5,00
0,00
Main blow
HM
Hot air Nitrogen
4,0
1600
Argon LNG 1500 Carbon content
3,0
Temperature
2,0
1400 1300
1,0 0,0 0
1700
5
10
15
20
25
30
35
40
Bath temperature, °C
Scrap
6,00
is achievable, depending on operational practice. In Fig 6 the hot blast system and its core component, the pebble heater , are shown. The pebble heater is a very efficient, regenerative heat exchanger that [2]. The uses pebbles to store energy pebbles have a very high storage power and are ideally suited for short-term heat storage. This, in combination with their high storage density , leads to very compact design.
1200 45
processing time, minutes Fig 8. Typical process pattern for a charge mix of 50% hot metal and 50% scrap or HBI
Standard LD 20% scrap
M&E costs 11$/ton* Low M&E costs due to simple process and minimum consumptions (oxygen, no coal)
Jet process 50% scrap
M&E costs 24$/ton* Higher M&E costs due to additional energy input (coal, oxygen, natural gas)
EAF 50% scrap
M&E costs 35$/ton* Costs of electrical power and other consumptions (electrodes, oxygen, coal)
Fig 9. Media & Energy costs per ton of steel tapped for steelmaking with different processes
www.steeltimesint.com
A modular design is used for all the equipment required for the Jet process. Most important are the converter bottom and the lance system with attached piping and valve stands. These components are designed in such a way that, for the converter bottom, a normal bottom with stirring elements can be installed. The same is done for the lance system where instead of a hot blast lance there is a normal oxygen blowing lance for the LD process. This allows switching back from the Jet process to normal LD operation if required. Such a change can be done during relining, but also during regular converter bottom exchange and takes no longer than half a day . The automation system fully supports both operational modes. Modular design brings additional flexibility and investment security as the entire process can be easily adapted to the actual market situation. If , for example, scrap and HBI is getting more expensive or enough HM is available for normal LD operation, it is easy to switch to the most economical mode of operation. Converter steelmaking with Jet process In Fig 8 a typical pattern for the Jet
process for a heat with a charge mix of 50% HM and 50% scrap or HBI is shown. Values are calculated per ton of liquid steel tapped. Note that all oxygen for decarburisation of the HM – and combustion of the coal injected via the converter bottom – has to be blown via the bottom tuyeres. Oxygen in the hot blast is for post combustion only and will hardly react with the steel bath. During the main blowing phase, oxygen is blown via the converter bottom and hot blast is blown from top. The oxygen blowing rate via the converter bottom is rather low in this phase to ensure that velocities at the converter mouth are not too high, giving enough time for post combustion and heat transfer. After coal injection and main decarburisation, hot blast blowing is stopped and the oxygen-blowing rate via the converter bottom is increased to standard rates for normal bottom-blowing converters. July/August 2014
jet process oxygen_30_AIT_0110 7/4/14 10:33 AM Page 4
28 OXYGEN STEELMAKING
LD Jet Charge Mix
process
80% HM + 20% Scrap
50% HM + 50% Scrap
Scrap charging
2 min
3 min
Hot metal charging
5 min
4 min
Oxygen, hot blast blowing
18 min
22 min
Sampling, waiting for analysis
3 min
3 min
Tapping of steel
6 min
6 min
Slag off
2 min
2 min
Average service time
3 min
5 min
39 min
45 min
Average Tap to Tap time Heats per day
37
31
Tapping weight
180t
180t
Lining life time
4’500 heats
3’000 heats
Relining's per year (5 days)
2,84
3,1
Heats per year
12’794 heats
11’112 heats
Annual production
2’300’000t
2’000’000t
100%
87%
Areas of application
Table 1. Typical process times and productivity for standard LD (BOF) process and Jet Process
Ore, Coke
HBI, scrap
3,7mt
4,6mt steel
0,9mt
Ore, Coke
HBI, scrap
2,3mt
4,6mt steel
3mt
Fig 10. Modification of the process route for maximum HBI or scrap rate. Original process 20% scrap (top) and modified process with 50% scrap and HBI (below)
LD Coal Injection
Jet process
Jet process
EAF
EAF
No
No
Yes
Yes
Yes
20%
32%
50%
50%
100%
PCD
12%
60%
60%
not considered
not considered
HTE
not considered
90%
90%
not considered
not considered
Yield
92%
94%
94%
91%
91%
M&E costs
11$
15$
24$
35$
55$
1600kg CO2/t
1250kg CO2/t
1000kg CO2/t
900kg CO2/t
500kg CO2/t
Scrap Rate
CO2 emissions
Table 2. Main data for Jet Process and comparison to LD process and EAF
Two potential sources for nitrogen pickup have to be considered: the nitrogen used as carrier gas for coal injection and the nitrogen in the hot blast. The fact that the hot blast is not in intensive contact with the steel bath means that the nitrogen pick-up from this source is rather low. The nitrogen used for coal injection is partly removed by stirring with CO from decarburisation and coal combustion. Final nitrogen content of 20 – 30ppm can be achieved. The natural gas used for cooling of the tuyeres brings some July/August 2014
180 tonnes, up to 2Mt of crude steel can be produced per year. Comparison shows that the tap-to-tap time for the Jet process is about six minutes longer than for the LD process. This is mainly caused by the longer blowing time and increased average service time, which is required for bottom service (maintenance and hot bottom exchange). Due to the shorter lining lifetime for the Jet process, more re-linings per year are required compared with the LD process. Longer average tap-to-tap time and more time for relining results in a 13% reduction of maximum productivity per year when compared to LD process productivity. Note that this number is based on the assumption that the productivity of the LD converter was fully utilised.
hydrogen to the bath. As soon as oxygen blowing through the converter bottom is stopped, cooling with natural gas is not necessary anymore and simple cooling with nitrogen or argon, if required, is enough. (See also process diagram Fig 8. The remaining hydrogen in the bath can be reduced to values below 3ppm by intensive stirring). The typical process time for the Jet process is shown together with values for the standard LD process in Table 1 . The values show that with a converter size of
Several economically attractive market opportunities for the Jet process exist; most important are the benefits from cheap scrap or HBI, benefits from reduced initial investment; and from the reduction of CO2 emissions. Production cost per ton of steel tapped from converter or EAF are split in three parts: costs for materials charged (scrap, HBI and HM ); media and energy costs (M&E) for operation of the process – the most important being oxygen, coal, electrical energy , nitrogen, argon, lime, dolomite and refractory. Other important costs are personnel, financing, buildings and infrastructure. The latter are almost identical for all processes discussed and are, therefore, not considered here. In Fig 9 M&E costs for the standard LD process with 20% scrap, Jet process with 50% scrap and EAF with 50% scrap are shown. Cost comparisons show that the LD process is cheapest as it is the simplest process and no additional energy is required to melt solid charges. The Jet process is more expensive as additional energy is required to melt the additional 30% of scrap. Costs are even higher if the same charge mix is melted in an EAF as the electrical energy used is more expensive than the coal used in the Jet process. F rom the perspective of pure operational costs, the Jet process only makes sense if the scrap or HBI charged is cheaper than the HM . Considering average market prices, the calculations show that at a price difference between scrap or HBI and HM of US$40 the Jet process becomes beneficial. Fig 10 is an example of what such a modification of the production process in an integrated steel plant would look like. In the original situation two 180t converters are operated, 20% scrap is charged and total production is 4.6Mt of crude steel per year . If HBI and scrap become considerably cheaper than HM , www.steeltimesint.com
jet process oxygen_30_AIT_0110 7/4/14 10:33 AM Page 5
OXYGEN STEELMAKING
29
one blast furnace could be switched off. Charging part of the HBI to the remaining blast furnace increases hot metal production by about 25%. This hot metal is then converted to crude steel in three converters using the Jet process, each charged with 50% HM and 50% scrap or HBI. Such changes in production would allow increasing the HBI or scrap rate considerably while keeping total output of the steel plant constant. Equipment that must be modified includes the remaining blast furnace, which has to be adapted for high HBI rates, the two existing converters, which have to be revamped for the Jet process, and one additional converter that has to be installed from scratch. The second opportunity where the Jet process might be beneficial are scenarios with an HM bottleneck – this could be a planned increase of total production or the blow-down of a blast furnace. In such cases the Jet process can be used to increase total converter output while keeping HM consumption to a minimum and avoiding costly investments for an increase of HM production capacity. The only investment necessary is for the adaption of existing converters to the Jet process, which is much cheaper than building additional HM production capacity including coke and sinter plants and a blast furnace. The same is true not only for new capacities installed, but also for major revamps, such as a new de-dusting system or a blast furnace revamp. The third opportunity for application of the Jet process is the reduction of CO 2 emissions. The coal-based process for HM production in a typical integrated plant, generates 1600kg of CO2 per ton of steel tapped. Scrap is a recycled material and doesn’t carry the CO2 burden. For this reason, replacing part of the HM with scrap reduces CO2 emissions per ton of steel tapped from the converter , although coal is used to melt the scrap in the Jet process. With a charge mix of 50% HM and 50% scrap, total CO 2 emissions are reduced to 1000kg per ton. This allows plant operators to reduce emissions significantly or increase production while keeping emissions constant. A summary of the CO2 emissions of different processes is given in Table 2. Summary and conclusion In Table 2 a summary of the facts and figures discussed above is
given – for reference, the values for the standard LD process and for EAF are presented. The comparison shows that the Jet process allows for a considerable increase of the scrap or HBI rate charged. M &E costs increase due to the additional energy required for melting these solid materials. Economically attractive opportunities for application of the Jet process are, therefore, cases where scrap or HBI prices are low . Benefits from savings on the initial investment are generated or savings are achieved due to the reduction of the CO2 footprint. In recent years Siemens Vai has acquired all the relevant patents and knowledge for the Jet process and has developed and optimised it for full industrial application. With the Jet process, the company has completed its portfolio for special converters with a process ideally suited to medium and high scrap or HBI rates. Due to the direct use of the coal inside the converter, conversion losses for the generation of electrical power are completely eliminated, making the process very efficient and productive.
References
1. Brotzmann K. Gunther C. New applications of hot blast jets in metallurgical processes, Stahl und Eisen, Germany, 2003, vol 123, pp 67. 2. Stevanovi D. Brotzmann K. Pebble-Heater technology in metallurgy, Metalurgija, 2004, vol 10, pp 19-36. www.steeltimesint.com
July/August 2014
PROVEN APPLICATIONS IN A 65 YEAR HISTORY
FOR THE IRON & STEEL INDUSTRY
company profile_30_AIT_0110 7/4/14 2:48 PM Page 1
30 STEEL PROCESSING: PROFILE
A global presence in many markets CD Wälzholz is a leading, family-owned steel processor with global reach. Headquartered in Germany it has a strong presence in Europe, North and South America and Asia and is a popular choice for major international automotive OEMs sourcing special steel grades for car manufacturing. The company’s strategy of serving multiple industrial sectors has paid dividends and its customer-oriented philosophy has seen it ride out the recent global downturn and looking ahead with confidence. Matthew Moggridge* travelled to Hagen to meet managing director Dr. Matthias Gierse.
FOR almost 200 years, Hagen-based C D Wälzholz of Germany has been a leading supplier of cold-rolled steel products to global markets. M anaging director Dr . Matthias Gierse attributes the company’s longevity to its customer-focused approach and its wide and varied product portfolio. He explained how the business has always been on the cutting edge in terms of production output and the processing technologies it employs. “If we look at cold-rolled products, we are able to produce almost an extremely wide range of specialities everything in this area and this is an asset for our customers, even our big customers” Dr . Gierse told Steel Times International. C D Wälzholz sources its raw material from around the world. Most of the steel it processes in Europe comes from European producers. The company boasts strong links with the world’s leading
steelmakers and regularly sources material from China, the United States and South America. “We try to source material locally,” said Dr. Gierse, adding that certain products require a specific type of steel – such as medium strip – which C D Wälzholz sources 10km from its headquarters in Hagen from Hoesch Hohenlimburg. “It is the only medium strip mill in the world that could reach our required quality level, so there are some products that have to use this material, even in Brazil, the USA and China,” he added. Where sophisticated applications need innovative solutions , C D Wälzholz has left no stone unturned. “We think we are unique because all of our competitors more or less focus on certain areas of cold-rolled products. W e are also specialised, technological leading especially in the various types of high-
strength material, but the scope of our capabilities is much wider than that of our next biggest competitor ,” Dr .Gierse explained. Processed steel from C D Wälzholz can be found in many different products. In addition to automotive, they are used as blades for garden shears and can be found in vacuum cleaners, lawn mowers, the power springs of seat belts , pull-out rails for drawers, steel caps for safety shoes and many other day-to-day products. Having fingers in so many pies has been a long-term and successful strategy for C D Wälzholz. The company had a good year in 2013 and, looking ahead, Dr . Gierse expects 2014 and 2015 to be fruitful too. “We feel quite sure that the market will develop well. Our success is very much linked to light vehicle production, which is looking good over the coming years,” he said.
CDW and is also the first company in China capable of producing high-performance, cold-rolled steel. “For the next three to five years, we will be the first and the only,” said Dr. Gierse,
* Editor, Steel Times International July/August 2014
www.steeltimesint.com
company profile_30_AIT_0110 7/4/14 2:48 PM Page 2
32 STEEL PROCESSING: PROFILE
In recent years, C D Wälzholz has invested heavily in developing production facilities in China. In April the company opened a new cold rolling mill in Taicang, near Shanghai. The new mill represents one of the largest investments the company has made and is designed to meet estimated future annual sales volumes in the Asian market of up to 80kt of cold rolled steel strip. Since laying the foundation stone in December 2011, the Chinese plant has expanded by 10,000 square metres and is going to employ 200 people. It boasts a four-high rolling stand and several high convection batch-annealing units in addition to its existing slitting and cut-tolength lines. What was once a service centre focused on warehousing, slitting and the supply of steel strip from Europe has been transformed into a complete cold rolling mill, primarily servicing the automotive sector but also the electronics and cutting tools industries. When C D Wälzholz first ventured into the Chinese market in 2007 with a subsidiary company , its Asian business represented only 2% of sales. By 2011, when the decision to reconstruct its Taicang plant was taken, sales had increased to 6% of total sales and this figure is expected to reach 10% in the nottoo-distant future. The Taicang mill is the first of its kind in China’s Jiangsu province. Other recent investments have included the modernisation of the company’s central rolling mill in Hagen-Fley . According to Dr. Gierse, C D Wälzholz is constantly looking at potential modernisations and new material processing tools. On average, 50% of C D Wälzholz’s capital expenditure is spent
on further equipment development and upgrading. The remainder is spent on buying new equipment. In addition to the new T aicang cold rolling mill, C D Wälzholz has four longestablished sites in Germany – at Hagen, Plettenberg, Oberkochen and Iserlohn. M artensitic hardening and tempering takes place at the company’s HagenHohenlimburg facility. It is here that basic material testing and process development take place in addition to the manufacture of ski edges – a process finished at the company’s Gotzis plant in Austria where stamped and folded steel parts made from steel strip and profiles (or hardened and tempered steel strip and profiles) are produced.
The production of cold-rolled carbon steel strip takes place at the company’s Hagen-Fley plant, which comprises Fley North and Fley South. In Fley North a push-pull pickling line handles wide and medium-width hotrolled strip, which is cut on a hot-rolled steel slitting line and rolled by the company’s four-high tandem rolling mill. Heat treatment follows using HICON batch-type annealing furnaces. The production process continues at Fley South where there are two four-high skin pass mills for final rolling followed by slitting and packaging lines and not forgetting an automated finished goods warehouse with an automated high-shelf system. Fley South also houses a continuous annealing furnace with a 450 m processing section where electrical steel is annealed and coated on one or two sides, at individually adjusted speeds, to optimise electromagnetic properties such as magnetic polarisation, core loss or permeability. In Plettenburg the company manufactures Sorbitex ®, used in the production of springs, and PT band, which allows specific forming despite high tensile strength. Sorbitex is a specially heat-treated product. “It’s also a highly tempered material and is processed by specialised rolling facilities,” Dr . Gierse said, explaining how the automotive industry is a big user of the product. PT band and Sorbitex are manufactured using continuous annealing furnaces and 20-roll mills to achieve a very high tensile strength. RAWAEL presents another member of the high-strength materials of C D Wälzholz.
“We try to source material locally,” said Dr. Gierse, adding that certain products require a specific type of steel – such as medium strip – which CDW produces 10km from its headquarters in Hagen.
July/August 2014
www.steeltimesint.com
company profile_30_AIT_0110 7/4/14 3:15 PM Page 3
STEEL PROCESSING: PROFILE
Because RAW AEL offers ‘enormous stiffness’ combined with high workability and thus allows weight savings by using thin thicknesses, it is an ideal product for the automotive industry, claims CDW, but outside of car manufacturing, cold-rolled high carbon steel has wide applications in other industry sectors. Plettenberg also produces cold-rolled medium and high-carbon steel strip, specially annealed and rerolled, which are appropriate for fine blanking operations. Individual profiles up to a rolling width of 150mm can be produced using the plant’s profile rolling mills. Phosphated steel strip is produced at CDW’s Oberkochen facility . Otherwise known as bonderised steel strip, it is performing well for the company and is used in the production of very complex parts, used mainly by the automotive industry. According to Gierse, the product’s growth rate is comparable with that of the global light vehicle market. Strip thicknesses range from between 0.2 to 4.5mm with widths of up to 410mm. C D Wälzholzs Iserlohn service centre – close to Hagen –is specialised in small batches and short delivery times. The company’s service centres – there are two more in Cleveland, Ohio, USA , and in Thiers, France – can slit and store products. “We normally produce and deliver mother coils to service centres,” Dr. Gierse said. In South America, Brasmetal Waelzholz SA annually produces 100kt of cold rolled, hardend and tempered and also surface refined high and low-carbon strip. Established in 1974 Brasmetal followed Volkswagen and Bosch into Brazil, first as part of a joint venture, but now as a fully owned subsidiary. CDW exports more than 50% of its production output. Europe is the company’s biggest market followed by the USA where demand hovers between 550Mt to 600Mt of cold-rolled products per annum. The German domestic market accounts for 1Mt. The Chinese market for high quality steel strip is largely covered by Japan, South K orea and Europe because there is no company in China that would receive the necessary approval rating from OEMs like BMW, Audi or Daimler. “All our shipments to Asia and everywhere are containerised,” said Gierse. “And that is comparable with our service centre businesses in the USA and Iserlohn. Until we started production of our new rolling and annealing facilities in Taicang, China, this spring, we only shipped mother coils to Asia and only the slitting and logistical activity was handled by Waelzholz New Material (Taicang) Co Ltd, one of two subsidiary companies near Shanghai,” he added. While the global primary steel industry views the Chinese with concern – thanks www.steeltimesint.com
33
C D WÄLZHOLZ – PRODUCTS
C D Wälzholz claims market leadership in cold-rolled and tempered steel strip. Its products can be found in many end-user markets, but mainly the automotive sector. The company produces seven different lines: • Cold-rolled high carbon steel strip. • Hardened and tempered steel strip. • Electrical steel strip. • Cold-rolled low carbon steel strip. • Bonderised steel strip. • Narrow steel strip. • Profiles. largely to overcapacity issues – in coldrolled steel and precision strip there is no over-production. “No cold roll in China could be approved so all the material that could be used in high performance cars is imported from Korea, Japan and Europe,” Dr. Gierse said. C D Wälzholz was the first cold rolling company to receive approvals from big automotive part suppliers. C D Wälzholz is also the first company in China capable of producing high-performance, cold-rolled steel. “For the next three to five years, we will be the first and the only ,” said Dr . Gierse, mindful that there is no room for complacency. A big worry for Gierse is the likely cost effect of EU climate policy on steel production in Europe. “W e are buying – more or less – only speciality steels and companies like Thyssen Krupp Steel Europe or ArcelorMittal Europe [and other leading European steelmakers] can produce a huge variety of these products,” he said. Getting the right products from elsewhere in the world – including from steelmakers in the USA – has proved problematic for C D Wälzholz, highlighting the importance of a strong and functioning steel industry in Europe, from where the company sources most of its raw materials.
Dr. Gierse is also concerned about Chinese overcapacity and the big danger surrounding the possible export of excess steel to European markets – another major threat to the profitability of the European industry. “If the European steel industry dies, we will suffer,” he said. Looking ahead, Dr. Gierse believes there will be a spate of mergers and acquisitions within the European steel industry, driven by Asian steelmakers looking for a European footprint. “In my opinion the steel industry in Europe will survive, but maybe the names will change,” he said. That said, he is optimistic for the next decade, bearing in mind the global growth potential of the light vehicle industry and C D Wälzholz’s close association with the automotive sector worldwide. He believes in the importance of developing a global sourcing base to overcome the potential pitfalls that might be encountered by the European steel industry, but is equally aware of the dangers surrounding knowledge sharing in terms of the production technologies associated with special steel grades. “On the other hand, you need local production to be competitive in the market,” he said, adding that C D Wälzholz is a global player and will continue to grow internationally. ᔢ July/August 2014
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eurocoke_30_AIT_0110 7/4/14 11:16 AM Page 1
EUROCOKE 2014 35
Insightful presentations at EuroCoke 2014 According to CRU’s Anna Fleming, integrated steelmakers are the most cost efficient because they use metallurgical coke produced ‘in-house’. However, as coke prices fall, many Japanese steelmakers have found that they are producing coke at costs above the Chinese FOB price and could, therefore, replace in-house production with cheaper imported coke from China. This is just one of many viewpoints expressed at EuroCoke 2014 in Edinburgh recently. By Matthew Moggridge* Dr. Neil Bristow of H&W Worldwide Consulting
countries account for over 5% of total production, although there are seven nations dominating if Poland and Austria, both accounting for 5% of production, are included.
Gujarat NRE Coke’s Arun Kumar Jagatramka
High labour and energy costs
GLOBAL crude steel production has levelled off, according to Becky Hites of US-based Steel Insights. She highlighted historical cyclical growth patterns involving growth spurts followed by periods of consolidation and then more growth spurts and argued that the developing world continues to grow while the developed world contracts. The developing world is no longer dependent upon the developed world, Hites argued, and the old colonial model of supply no longer holds water as half of global crude steel production takes place in developing world countries. The global steel industry has doubled in size, explained Hites, and the top 20 steelmakers hold a 30% to 40% share of production. China accounts for around half of world crude steel production, but is not over-exporting relative to its size. China has nine of the top 20 steelmakers within its borders, but is not as consolidated as the rest of the world. Hites highlighted five EU countries that dominate crude steel production: Germany (27%); Italy (15%); F rance (10%); Spain (9%) and the United Kingdom (7%). These
High labour and energy costs and the fact that there is no internal raw material source in the region are major challenges for European steelmakers. Committing to the environment will result in high production costs, but massive closures are not likely as there’s still nationalistic pride in possessing a steel manufacturing base, Hites believes. The operating environment for EU steelmakers will remain challenging ‘for the foreseeable future’ and producers will need to evaluate markets and products to determine if past strategies still work. “There will always be a low-wage, highgrowth country somewhere in the world,” said Hites. “ And economic activity will always migrate there.” She said that business will move out of China and into places like M exico, P eru, Latin America and the entire Indian sea basin. Met coke – price deterioration
CRU’s Anna Fleming discussed the price deterioration of metallurgical coke over the past four years and wondered how producers can survive under such circumstances. She argued that prices had fallen below 2009 lows of around $200/tonne and had declined sharply since the beginning of 2014 when the price plummeted from roughly $260/tonne to around $190/tonne.
On China’s situation, Fleming said export prices had been sensitive to the domestic market since the removal of China’s export tax. Market oversupply had led to a drop in price. W ith India’s import growth stagnating, the Chinese have looked toward Japan as an export market. Fleming said that coking coal prices have been declining for months. Since April 2009, when the spot price (FOB Australia) was roughly $120/tonne, the price rose to $350/tonne and then fell to just over $100/tonne in April 2014. Once again, oversupply has kept producers in business and they have shipped excess tonnage to China, which has led to a worrying inventory build-up. Loss making has been minimised by strong cost reductions, which have maintained positive margins for coal producers. The premium for coke over coal has been narrowing, claimed Fleming. Spot prices for hard coking coal in April 2014 were roughly $110/tonne (FOB Australia) compared to $200/tonne for merchant coke (FOB China). In mid-2008 the difference was staggering: $700/tonne for
* Editor, Steel Times International www.steeltimesint.com
July/August 2014
eurocoke_30_AIT_0110 7/4/14 11:17 AM Page 2
36 EUROCOKE 2014
290
800
230 210 190 170
2000 1800
Gr ow th sp urt
1,600 1,400 Million metric tonnes
1,200
600 400
Apr 14
Feb 13 Aug 13 Feb 14
1600 1400
Period of consolidation
Global crude steel production. (Steel Insights - B Hites)
merchant coke compared to $400/tonne for hard coking coal. Integrated steelmakers are the most cost efficient because they use metallurgical coke produced ‘in-house’. However , as coke prices fall, many Japanese steelmakers have found that they are producing coke at costs above the Chinese FOB price and could, therefore, replace in-house production with cheaper imported coke from China. At present, global coke production costs are fairly close-knit with product from the USA and Ukraine coming in at under $200/tonne and P olish, Columbian, Japanese and Chinese coke roughly $250/tonne. The price of Chinese metallurgical coke is most likely to experience the greatest cost rise and this will weaken its competitive position. Chinese labour costs are also expected to increase two-fold by 2018, although China will remain dominant in the market. While there is international pressure for China to reinstate its export tax, it is unlikely to make a return. Between 2013 and 2018 there will be a steady rise in coke exports from China, due to a lack of new merchant investment. Fleming said international coke prices are heavily influenced by the Chinese domestic price, adding that any price trend in coking coal will be mirrored by metallurgical coke.
Other developing Africa
1000 800
rt pu hs t w Gro
0 1935 1939 1943 1947 1951 1955
Currently developed
1200
India
600 400
200
July/August 2014
Feb 03 Aug 03
Aug 01
Metallurgical coke prices have fallen below 2009 lows in a sharp decline during early-2014. Benchmark metallurgical coke prices (1), $/t. (CRU - A Fleming)
Historic anthracite consumption. (Blaschak - G Driscoll)
800
Feb 02 Aug 02
Data: CRU (1) Prices Jan 2009-Mar 2010 and Jul 2011-dec 2012 are based on coke from sources excluding China. All other dates how China FOB, (2) Assessments taken mid-month. (CRU - A Fleming)
Metallurgical processing 20%
1,000
Feb 14
150
0
Dec 13
Lime kilns 5%
270 250
Oct 13
Water filtration 10%
700 600 500 400 300 200 100
June 13 Aug 13
Power generation 55%
Apr 13
Space heating (Residential 3%, Industrial/commercial 7%)
200 2011
0 2012 2016
China 2020
2024 2028 2032 2036 2040 2044
2048
2050
Total coking coal consumption to 2050 (based on prior steel demand forecast). (HW Worldwide - N Bristow)
While China’s competitive edge will be blunted over the next five years, its penetration of the global market will strengthen and monthly spot prices will continue to be set by the Chinese. Metallurgical coal markets
Jim Truman of Wood Mackenzie said that China’s average GDP growth would average 7.5% and would remain true to 2020, while India’s will rise to 6.6% by 2015 and maintain an average of 6.5% per annum to 2032. Truman said that global hot metal production will grow at 1.4% per annum to 2025 and then decline to 43Mt by 2035 as production shifts to electric steelmaking. Steel production growth will average 1.9% to 2025 and then slow to 0.6% as Chinese steel intensity falls. By 2035, total demand for seaborne metallurgical coal will reach 380M t from current levels of 300Mt. Asia accounts for 70% of growth (69Mt) while Europe, the M iddle East, Russia and the Caspian Sea region (EM EARC) will make up 20% of growth, the Americas 10% and Brazil 7%. China produced 775Mt of crude steel in 2013. In 2014 output will continue at an annualised rate of 4.4% over last year’s figure and was strong in January , but declined in February. Based on the first two months of 2014, output will achieve an
annualised rate of 809Mt. Curtailments to address air pollution will impact Chinese output, Truman said. With China’s export tax lifted, Chinese coke exports increased considerably throughout 2013 with Japan, India and Brazil accounting for 70% of purchases. Chinese total exports by December 2013 were going at the annualised rate of 9Mt and January 2014 levels remain high. Truman said Australia would play a key role in seaborne supply growth and meet the highest proportion of new demand. Other countries – namely M ozambique, Indonesia and Columbia – were poised for significant growth, but will experience challenging development and infrastructural issues. Chinese domestic production was relatively flat and declining slightly, Truman said, adding that coal quality will deteriorate and less hard coking coal will be produced. The volume of semi-soft and PCI (pulverised coal injection) will increase, creating a heavy reliance upon the seaborne market. While exports from Queensland, Australia, reached a new peak of 13Mt in December 2013, adverse weather conditions in early 2014 stalled exports. Australian producers are showing a focus to gain market share to Europe. Australia exported nearly 25M t in 2008 and experienced a big drop in 2009. The www.steeltimesint.com
eurocoke_30_AIT_0110 7/4/14 11:17 AM Page 3
EUROCOKE 2014 37
Ɂ
Total demand will rise from the current level of ~300Mt to 380Mt 400
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Metallurgical coal seaborne trade by region to 2035 (Mt).
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Infrastructure is the largest consumer of steel, >60% and expected to remain so
Engineering & fabrication Packaging
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10%
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63%
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2035
The increase in infrastructure is set to raise steel demand by >40 MTPA during FY13-17
Asia-Pacific
10% comes from the Americas - Brazil will increase by 7Mt
Sector - wise steel consumption FY12 Chinese and Indian demand continues to lead massive shift in seaborne metallurgical coal trade toward Asia. (Wood Mackenzie - J Truman)
Key steel consumers in India. (Gujarat NRE - A Jagatramka)
Feedstock (COG)
following year it recovered to 20Mt and is currently exporting 17.5M t less than in 2008.
Oxygen Fuel
US exports remain strong
Despite falling prices, US exports have remained strong, according to T ruman, while Asian purchases fell during 2013. European shipments remained steady. He said there had been steady export growth since mid-2013 and that F ebruary 2014 exports – annualised – would total 60Mt, although he expects a decline as the year progresses. In 2011, US exports to Asia grew to 18Mt following floods in Queensland. In 2012, Asian sales grew to 20Mt in the face of an Australian recovery, but the US lost 4M t as Australian mines continued to increase output. Last year Canadian exports averaged 2.8M t/month, but fell to 1.7M t due to adverse weather conditions. In F ebruary, purchases increased in China, South Korea, Japan and the Netherlands. DRI provides good ROI
Ian Cameron, senior director (iron and steel) for Hatch, said that investment in DRI plants in North American integrated steel works can provide a good return on investment when internal iron ore resources are used. He said there was potential to reduce purchased scrap costs at fixed steel output or increase steel production by charging DRI to the blast furnace. Cameron said that T enova’s Energiron system can process significant amounts of coke oven gas (COG) to reduce the cost of natural gas and that M idrex and Praxair were developing a Thermal Reactor System to process greater amounts of COG. DRI plants are unlikely to replace traditional BOF steelmaking, said Cameron. Anthracite
Greg Driscoll, president and CEO of the USA-based Blaschak Coal Corporation, discussed the environmental advantages of www.steeltimesint.com
Hot oxygen Praxair’s hot oxygen burner (HOB) oxygen jet
Thermal reactor systemTM concept. (Hatch - I Cameron)
Ɂ
HOB jet rapidly entrains COG for partial oxidation
ᔤ reforming methane ᔤ breaking down heavy hydrocarbons ᔤ destroying BTX Hot syngas exits at >1300°C
No catalyst used
High temperature (>2000°C)
Ɂ
High velocity (>900 m/s)
Ɂ
High momentum
anthracite, highlighting global availability and claiming that the best quality can be found in Siberia where both Ultra High Grade and High Grade varieties are mined. Driscoll said that 125Mt of anthracite is mined in Asia followed by Russia and the Ukraine (23M t); Europe (11.5M t); subSaharan Africa (3.5Mt); and North America (3Mt). Power generation was the biggest market for anthracite (55%), mainly in the Far East, followed by metallurgical processing (20%); residential/industrial/commercial space heating (10%) and a similar percentage for water filtration and then lime kilns (5%). Anthracite, said Driscoll, offered a premium source of carbon for multiple high value applications and significant environmental benefits in terms of product quality, carbon stewardship, beneficial uses and the restoration of surface and water resources. Anthracite from P ennsylvania, said Driscoll, is an emerging source of carbon supply with significant growth potential. M ining in the region is ‘daylighting’ old workings (previously deep-mined properties) producing ultra high-grade product and restoring exploited mines to pristine condition. Anthracite ‘measures’ in P ennsylvania cover 300,000 acres in eight counties and 22% of existing measures are permitted, with only 12% actively worked. With $300 million of new investment in Pennsylvania’s anthracite industry since
2009, Driscoll argued that it is ‘reemerging as a structured, professionally managed, well-financed, high-performing industry’ based around multiple producers alongside 30 smaller family -owned businesses. Mining – an ever-changing world
Dr. Neil J Bristow of H&W W orldwide Consulting told delegates that mining in 2050 would be unrecognisable from what it is today . He highlighted environmentalism as a key driver going forward and argued that issues surrounding sustainability, recycling and re-use will be crucial in the years ahead. Dr. Bristow argued that easily developed resources had already been found and that rising government rules and regulations, as well as rising resistance from local populations, will make life more challenging for tomorrow’s mining industry. He said that access to resources would be more difficult for the above reasons, but also because of increased environmental restraints and the need to find reserves in difficult or remote terrain. Bristow said that the mining industry must improve its public relations skills and should promote the benefits of mining to local communities and become ‘good environmental citizens’ by developing green, low-energy mines using state-of the-art technology. Dr. Bristow went on to look at M ozambique, M ongolia, Indonesia and Russia. He said that Mozambique offered July/August 2014
eurocoke_30_AIT_0110 7/4/14 11:17 AM Page 4
38 EUROCOKE 2014
large reserves in the T ete province, but highlighted infrastructure issues, arguing that an expanded port at Nacala or a new deepwater port was essential. An existing port at Biera was limited to 10Mt/yr and could only take handy-sized vessels. Exports from Mozambique could rise to just under 20M t/yr by 2016 if Nacala is expanded, but could rise to over 90Mt by 2050 with further new ports development. Extensive reserves of coking coal
Indonesia is a mineral-rich nation, said Dr. Bristow, but coal is found in the Kalimantan region where exports will rise steadily to 2025. By 2016, over 400Mt of thermal coal and 10Mt of coking coal will be exported, rising to 500Mt thermal and 19Mt coking coal by 2025, dropping back to 400M t of thermal coal in 2050 but rising to 38Mt of coking coal. Dr. Bristow said Russia has extensive reserves of coking coal, but most of it is underground and a long way from the coast. The reserves are mainly owned by the steel industry. While many new projects are underway, some are restricted by the weather (they can’t ship during the winter months) and others suffer from a lack of infrastructure.
Russian seaborne coking coal exports have risen steadily since 2012 (10Mt) and are expected to be roughly 45Mt by 2050. The current figure, claims Bristow , is roughly 15Mt. While political factors have delayed and, in some cases, stopped many coal projects in Mongolia, the country has many more in the pipeline and extensive reserves of a wide range of coking coals, according to Dr. Bristow. Between now and 2016, coking coal export volumes are roughly in the region of 12Mt to 18Mt with seaborne exports of 1M t/yr in 2020 and 2025 and possibly 2Mt/yr in 2050. Reaching tidal waters is crucial for Mongolia. Strictly for the Chinese market
According to Dr. Bristow, Mongolia is likely to be restricted to China, which will indirectly affect the seaborne market. However, M ongolia, Indonesia and M ozambique all have potential for significant volume increases, but only if prices justify investment. Mozambique, he said, was ideal for India’s growing coal and coke market and that, in all the abovementioned regions, port and rail infrastructure will play an important role.
An Indian summer
Gujarat NRE Coke’s chairman and managing director Arun K umar Jagatramka, said that the Indian economy was expected to improve late in 2014 with IM F GDP growth of 5.4% this year and 6.4% in 2015. He said the fundamentals of the economy were strong and that a rising Indian middle class will mean an increase in steel consumption. Infrastructure is the largest consumer of steel in India and is set to raise demand by 40Mt/yr to 2017. Infrastructure represents 63% of consumption, engineering and fabrication 22% and automotive 10%. The remaining 5% is taken by packaging (3%) and transportation (2%). Additional capacity
Jagatramka said that an additional 36Mt of capacity will be added over the next five years and that all current capacity additions are on track. “Stagnation has not dented the confidence of existing steel producers,â€? he said. According to Jagatramka, India will have an additional metallurgical coke demand of between 20-25Mt, primarily from the steel industry, over the next five years. ᔢ
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panalytcal_30_AIT_0110 7/10/14 2:34 PM Page 2
PROCESS CONTROL
39
Automated chips collection system
Typical chips sample for gas combustion analysis
The inside of the automation unit showing the robot, milling heads, a sample in the clamp and the collection cup held in the sample holder ready to catch chips
Netherlands-based Panalytical BV has developed a chips collection system to automate the process of sample collection for gas combustion analysis. ACCORDING to P analytical, the system mills and collects chips from within the laboratory automation unit and thereby eliminates manual handling and the risk of contamination which, it claims, is associated with other automated chip sample collection systems. The company’s automation products focus on provision of customer-specified automated metrology laboratories for the cement and steel industries. Where steelmaking is concerned, it offers automation solutions for X -ray fluorescence (XRF), X-ray diffraction (XRD), optical emission spectrometry (OES), gamma or beta radiation measurements and gas combustion analysis. The company claims it has succeeded in integrating a neat and simple chip collection system at the heart of an automation unit to address contamination www.steeltimesint.com
Close-up of the inside of the automation unit showing the milling heads, a sample in the clamp and the collection cup held in the sample holder ready to catch chips
issues associated with sample handling for gas combustion analysis. The metal chips used for gas combustion analysis are often created by drilling a hole in a representative steel sample block. Traditionally the chips test sample is collected manually from the lab sample by drilling a hole in the steel block and then collecting the chips. Automated systems mostly use vacuum methods within CNC milling machines. However , those methods suffer from potential
contamination from chips getting stuck in the vacuum pipes. Panalytical has developed equipment and a different method to collect chips by exploiting a milling machine that is already integrated within the laboratory automation unit. The primary purpose of the milling machine is to prepare the test sample for XRF and OES analysis by removing the oxide layer from the surface of the test sample. In the new system, the sample enters the automation unit, is picked up by a robot and undergoes the first milling procedure as usual. A dry milling principle is used in order to avoid contamination of the sample with lubricants. Then the robot places a standard cup in a specially designed cup holder. The milling machine executes a second milling cycle, again without addition of any coolant or lubricant. The purpose of this cycle is to create gas combustion chips, which are free of any oxide layer contamination. In this milling cycle the mill launches the chips into the cup. The robot picks up the cup from the milling machine and transports it out of the automated system were the lab operator can put the chips in the gas combustion analyser . The remaining sample is milled again, so that its freshly milled surface can be used for analysis. The sample is automatically transported for XRF and OES analysis. Meanwhile, the chip collection cup is cleaned ready for reuse. In this way the chips for gas combustion analysis are collected without any contamination. ᔢ July/August 2014
products_30_AIT_0110 7/4/14 8:57 AM Page 3
40
TECHNOLOGY
Siemens’ LiquiRob for ArcelorMittal Gent
Enhanced noise protection Earplugs featuring a softer, more comfortable fit and enhanced noise protection compared to other cylinder-shaped earplugs have been introduced by Honeywell. The Howard Leight firm earplugs, claims Honeywell, have been newly engineered to enhance the wearing experience for those who prefer a firmer fit in order to feel their earplugs in their ears. Honeywell claims that lab tests by Michael & Associates show that its new Firm Fit earplugs offer better noise protection and are 40% softer than most cylinder shape earplugs on the market. The new earplugs are available now through leading industrial safety distributors. For further information, log on to: www.honeywellsafety.com
ArcelorMittal Gent has ordered a LiquiRob casting platform robot from Siemens Metals Technologies. It will be installed on the company’s continuous slab caster CC2 and will perform a number of potentially dangerous tasks automatically , including taking samples, measuring temperatures and hydrogen levels at the distributor and ladle lancing. Looking ahead, the Belgian steelmaker plans to manipulate the ladle shroud with the aid of the LiquiRob system. The system will go on stream by September this year and, claims SM T , will ‘improve working conditions’ at the CC2’. ArcelorM ittal’s Gent facility is an integrated production plant and part of the Flat Carbon Europe Division of the world’s biggest steelmaker. It produces 5M mt of flat steel annually for use mainly in the automotive and domestic appliance industries. Steel is produced in LD converters with a tap weight of 300 metric tonnes and is cast by two continuous slab casters. The CC2 casting plant produces 3Mmt of steel slabs with a thickness of 220mm in widths ranging from 950 to 2,000mm.
Posco pleased with SMS PT Krakatau-P osco Company of Indonesia, in conjunction with SM S Siemag, has installed a converter vessel changing system involving a 300tonne change vessel, changing car and environmental technology for the converter shop at a new integrated steel plant in Cilegon, W est Java. SM S Siemag developed the concept for the converter vessel changing technology and delivered the tilting gear unit for the converter, the changing car (which has a working load of 1,200 tonnes) and the X-Pact electrical and automation system. According to SMS, the new plant at PTKP uses ‘the latest generation of SMS Siemag’s dry type converter-gas dedusting technology’, which is being used for the first time. It includes a gas conditioning tower and a dry -type electrostatic precipitator. PTKP seems happy enough. The company’s Lee Jung Bee is reported as saying that the decision to go with SMS was ‘the right choice’ and that the system installed was ‘the most economical solution’. PTKP is a joint venture between P ohang Iron & Steel Company (P osco) of South K orea and PT Krakatau of Indonesia.
Converter vessel-changing car from SMS Siemag has a working load of 1,200 tonnes.
July/August 2014
Heavy-duty bulk bag filling system
UK-based Flexicon has developed a heavy-duty bulk bag filling system for mining applications. The system, which comprises a swing-down bulk bag filler and a Flexicon pallet dispenser and powered chain conveyor is claimed to enable ‘safe, high-capacity filling of bulk bags of all popular sizes’ including bags with wide-diameter spouts for handling irregular materials. According to Flexicon, the system can handle filter cake, aggregates, abrasive minerals, dry chemical additives and other ‘difficult-to-handle’ products. When a filling cycle is initiated by push-button or contact closure, a pallet dispenser mechanism
The tasks that will be handled by the LiquiRob system were previously performed by plant personnel, meaning that safety at work should improve. Siemens has engaged with ArcelorMittal Gent before. Last year the company modernised the plant’s slag stopper system on two of the steelmaker’s LD converters. It also modernised the drive technology of the finishing train of the hot rolling mill. For further information, log on to: www.siemens.com/metals
lowers a stack of pallets onto a chain conveyor , releases the bottom pallet, and raises the remaining pallets, allowing the conveyor, which is equipped with photoelectric eyes, to move dispensed pallets into position below the filling station. The bag connection frame of the swing-down bulk bag filler lowers and then pivots to a vertical position, allowing a floor level operator to attach bag straps to automated latches, slide the bag spout over a wide-diameter inflatable spout seal, and press a spout seal inflation button. The system automatically pivots the bag connection frame back to horizontal, raises the fill head, inflates the bag to remove creases, fills the bag, finishes filling accurately at a trickle-feed rate, deflates the spout seal, releases the bag loops, raises the fill head to disengage the spout, rolls the bag out of the filling area, and rolls a new pallet into place to begin another cycle. An annular gap inside the fill head spout directs air displaced during the filling operation to a single vent for applications requiring connection to a dust collector. For further information, log on to: www.flexicon.co.uk
Automatic positioning system for inline slitting An automatic positioning system with material web tracking for inline slitting has been developed by the German company Dienes. The system is based on a modified version of its SIM U-FLASH slitting system, which allows for a simultaneous and fast slit width change. In
essence, the knife holder positioning system enables the knife holders and the bottommounted knives to follow the decreasing size of the material web. If cuts have to follow a print, coating or the material edge for foil, paper, label or non-woven material, then this system is claimed to be ideal, according to Dienes. The system was recently supplied with a minimum slit width of 30mm with 40 cuts. For further information, log on to: www.dienes.de www.steeltimesint.com
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SUSTAINABILITY AND EFFICIENCY IN CORE SECTORS Participation requested for Technical Papers, Delegates, Sponsor s, Manufacturer’s Presentation and Exhibition Stalls Manufacturer’s Presentation & Exhibition Why Attend SECS 2014 Get current information in sustainable technologies in core sector industries Listen to eminent speakers and be aware of opportunities for introducing energy efficiency in process lines Network with partners for collaboration/ business development
Conference Topics Will address salient issues related to important core sectors li ke, steel, coal, mining, power, oil and gas, infrastructure, communication, transport etc. : Technological advancements in sustainable industrial operations Energy efficient designs Challenges and opportunities for Green Technology applications Resource optimisation and utilisation Mechanisms and policies for energy efficiency and reduction in carbon footprint
Organised by Bengal Engineering & Science University Alumni Association, Ranchi Chapter
Manufacturers and Technology Providers are invited in the Confer ence to disseminate technical information on products /services/ inno vations being offered to core sectors through Presentation and/or Exhi bition
Venue
: MECON Community Hall, Ranchi, India
Date : September 13-14, 2014 Contact : Mr. Subir Chattopadhyay (Tel.: +91-9431701609; FAX: +91-651-2482194) Mr. Rammohan Chattopadhyay (Tel.: +91-9334426724; FAX: +91-651-2411171)
e-mail : secs14sc@gmail.com, secs14forbesu@gmail.com Important Dates Receipt of Abstract
20th May, 2014
Communication to the Author of Accepted Paper
15th June, 2014
Receipt of full text of paper
15th July, 2014
In Association with MECON Limited (A Government of India Enterprise)
Bureau of Energy Efficiency Ministry of Power, Government of India
perspectives.QXP_30_AIT_0110 7/4/14 11:20 AM Page 1
42 PERSPECTIVES: MAGNETIC ANALYSIS CORPORATION
The playing field leveller If Joseph Vitulli, CEO of USA-based Magnetic Analysis Corporation (MAC), possessed a superpower, he would use it to try and level the playing field so that innovation, more than inexpensive labour, would determine the winners and losers.
1. How are things going at M agnetic Analysis Corporation? Is the steel industry keeping you busy?
Since MAC is in the business of providing test solutions to the steel industry , our business is one step removed from the actual industry trends. Use of our equipment will increase when production demands increase, however , new business is generally related to expansion. Within the US this has been fairly steady as suppliers upgrade their quality and invest in some expansion. Outside the US it varies significantly by geographic region. In general we have seen positive growth.
5. Can you discuss any major steel contracts you are currently working on?
I can say that there is significant activity in Korea for tubing with steady interest in the US as customers upgrade their systems, and an increasing amount of activity in the US for bar.
3. In which sector of the steel industry does M agnetic Analysis Corporation mostly conduct its business?
Currently, testing stainless steel tubing is usually our largest market. This has varied from year-to-year as manufacturers have expanded into OCTG, power generation, and lighter weight-higher quality automotive parts. 4. Where in the world are you busiest at present?
M AC has an international presence of subsidiaries, representatives, and most importantly, field engineers to provide superior service and support to all of our customers. So, with that said, we like to think we keep ourselves busy worldwide. July/August 2014
8. In your dealings with steel producers, are you finding that they are looking to companies lik e M agnetic Analysis Corporation to offer them solutions in terms of energy efficiency and sustainability? If so, what can you offer them?
Since MAC is a provider of test equipment, not manufacturing equipment, we are rarely involved directly in the energy efficiency issue. Our customers are certainly concerned, but since our equipment is mostly electronics, that is not usually their primary focus. However, our systems are designed to run efficiently and at very high speeds depending on the type and condition of the material being tested. In one instance, for example, an out-dated straightener took 24 hours to straighten enough material to feed our NDT system for eight hours of operation.
2. What is your view on the current state of the global steel industry?
Overall, the majority of the focus has been in the OCTG area as manufacturers compete for the new oil and gas pipelines being built overseas, and in the US where the ongoing interest in fracking is driving greater demand for tube and pipe as well. However, there has also been an increased demand for higher testing specifications in the bar industry, especially for product to be used in the automotive industry. This is becoming particularly more obvious within the USA.
conclusion must be that, on a world-wide basis, we should be thinking about our future.
6. “…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 W all Street Journal. Do you sympathise with his view?
I believe his intent is to raise awareness. From that perspective, I agree that we have an obligation to try and be more “green”. I suspect that “climate doom” is too strong a conclusion to be reached. 7. In fact, talking of ‘green issues’ and emissions control, how is the steel industry performing in this respect?
I do not believe that a general conclusion can be made. Certain countries have significant controls in place, while others do not. Each steel plant may be more or less “green” depending upon its age. The
9. 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?
Battles are won, but do not determine the outcome of the war . W ithin the US we have different standards than the EU or China. It is probably safe to say that the requirements in the EU are stricter than those in China. Yet the crude steel output of China is 48.5% of the world’s supply while the EU is 10.3%. These would be the top two in the world. 10. Where does M agnetic Analysis Corporation lead the field in terms of steel production technology?
We are a total supplier of test equipment with the capability of testing from the initial billet to the final tube, pipe, rod, bar, wire, and parts. MAC has ultrasonic, eddy current and flux leakage as our core
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perspectives.QXP_30_AIT_0110 7/4/14 11:21 AM Page 2
PERSPECTIVES: MAGNETIC ANALYSIS CORPORATION technologies. Together with a world-wide field staff for servicing and installation, we have a significant competitive advantage. 11. How do you view M agnetic Analysis Corporation’s development over the short-to-medium term in relation to the global steel industry?
M AC develops solutions, and operates independently of highs and lows in the industry. Our R&D staff is always continuing to improve our products. What will vary is our production of equipment, but our leased equipment base helps smooth out those variations. As demand for higher quality steel increases, producers will look to NDT suppliers that are capable of meeting these higher standards. M AC is a unique company in the sense that every system ordered is customised in one way or another to meet those demands. No one system is the same and not many other NDT suppliers can say the same. 12. In a similar fashion to the aluminium industry , China dominates global crude steel production and is accountable for almost half of total production. How should the industry react to this situation?
China is the world’s leader in manufacturing and consumption. As long as this balance exists, other manufacturers will need to be aware, but not panic. They need to constantly focus on improving their margins and reducing costs, as everyone else in business does. An investment in an NDT system that can
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reduce scrap material and increase quality is one step in that direction. 13. The Chinese still rely heavily upon W estern steel production technology. What is M agnetic Analysis Corporation’s experience of the Chinese steel industry?
The products that we supply to China are the same as we supply throughout the world. At this time, Chinese quality can be as good as anyone else’s in the world. 14. Where do you see most innovation in terms of production technologies – primary, secondary or more downstream?
In general, testing and finishing tends to be the bottleneck in most operations. Therefore, in line with what we see, the pressure is on companies like M AC to speed up testing, even while testing to higher standards, and to minimise downtime. This is where a lot of the innovation will be occurring.
15. How optimistic are you for the global steel industry going forward and what challenges face global producers in the short-to-medium term?
The global economy means that we are all connected. Thus political unrest has far reaching effects. I am optimistic that there will be continued growth, but it will vary geographically based upon local events. 16. What exhibitions and conferences will M agnetic Analysis Corporation be attending in 2014?
43
M AC will be presenting a paper on Magnetic Flux Leakage testing at “Pipe & Tube Houston” as well as holding a tabletop at the event. We are also, for the first time, hosting our own seminar in Shanghai, China. Both events are this coming September. The seminar is by invitation only and will have several presentations as well as a demonstration of our latest mechanical design for inspecting spinning tube and tube ends using ultrasonic methods. The seminar will also have our Rotomac® eddy current rotary and coil inspection methods on display. It should be an interesting day full of food, beverages, and hands-on presentations. 17. Magnetic Analysis Corporation is based in the USA , but what’s happening steel-wise in the country?
In the US we are seeing small areas of expansion, across a variety of products, including a sizeable amount for automotive end users.
18. Apart from strong coffee, what keeps you awake at night?
The uncertainty of countries co-operating with each other for the common good. For example the current situation with Russia and the Ukraine. 19. If you possessed a superpower, how would you use it to improve the global steel industry?
I would try to level the playing field so that innovation, more than inexpensive labour, determined who were the winners and losers. ᔢ
July/August 2014
HISTORY_30_AIT_0110 7/4/14 11:21 AM Page 1
44 HISTORY
Widmanstätten and alloy steels Aloys von Widmanstätten was widely recognised by his contemporaries as the discoverer of the etch pattern of iron meteorites. By Fathi Habashi* THE deliberate addition of certain elements to steel to obtain enhanced properties began in 1819 when Michael Faraday (1791-1867) ( Fig 1) investigated the properties of alloys of iron with a large number of other elements including nickel. He was inspired by the fact that meteorites, which do not rust, contained about 8% Ni. He did not, however, pursue the matter, being occupied by his research into electromagnetic induction. He left records of his work and a large number of specimens, which were analysed in 1931 by the metallurgist Robert Hadfield (18581940), who pointed out that had Faraday continued his investigation, the Alloy Steel Age would probably have started 50 years earlier. The work of Aloys von W idmanstätten (1754-1849) was the basis of diffusion of knowledge about meteorites. He was the son of a printer, studied natural science at the University of Graz, and in 1806 he sold his inherited printing business and moved to Vienna where he was appointed director of the newly founded Imperial Technical Museum, which is now one of the best in Europe. In 1808 Emperor F ranz (1768-1835) sent him the meteorite that fell in Agram (the present Zagreb in former Yugoslavia; at that time it was part of the Austrian Empire) in 1751 for study. Widmanstätten polished, etched, inked the surface, and made a print on paper ( Fig 2 ). When he noted the characteristic pattern, he then studied other meteorite samples in the collection. In 1810, he examined a specimen from Siberia and one from Mexico that had been sent to the Emperor from Berlin by German chemist M artin Klaproth (1743-1817). In 1812, he examined a large meteorite from Elbogen in Bohemia, and finally in 1815 he examined a piece of a Carpathian meteorite. The discovery of this structure is a result of innovation in typography, i.e. the direct printing on paper using printer’s ink and the meteorite itself . This unique pattern proved to be of utmost importance in the understanding of the origin of meteorites. A background to this innovation is the fact that Aloys' family owned a printing shop, and, therefore, the printer's ink was known to him for experimenting. In the days before photography, the invention of a method of copying metal structures by
Fig 1: Michael Faraday (1791-1867)
Fig 2: Widmanstätten pattern. Reproduction of direct typographical imprint from the etched surface of the Elbogen iron meteorite (Schreibers, 1819)
Fig 3: Ernst Chladni’s second book published in 1819 contains the first imprints made by Aloys von Widmanstätten and collected by Carl von Schreibers as a supplement to the book
printing was itself a great advance. Widmanstätten never published his work but he was recognised by his contemporaries, as the discoverer of the etch pattern of iron meteorites. That is why his name does not appear in scientific journals. German physicist Ernst Chladni (1756-1827) (Fig 3) wrote a book in 1794 on meteorites, expressing the opinion that these are small bodies circulating through space, becoming visible through incandescence on entering the Earth’s atmosphere. Chladni’s work pioneered the study of meteorites. He visited Vienna in the spring of 1812 and witnessed the printing of the meteoritic patterns. He included in his book Feuer M eteore published in 1819 in Vienna, a number of lithographed illustrations of whole and sectioned meteorites made directly from the etched surface. The front page of the book included Carl von Schreibers’ name as director of the Imperial M useum in Vienna and the contributor of Ten P lates of Mineral Sections and Their Explanation. Schreiber was co-worker and successor of Widmanstätten. The W idmanstätten pattern was explained later by the mineralogist Gustav Tschermak von Seysenegg (1836-1927) in Vienna. It was these mysterious prints that aroused the interest of researchers in many branches of the physical sciences and prompted them to study meteorites, throwing some light on these space probes and carriers of information from the far cosmological past of our solar system. At the same time, the study of meteorites introduced the Age of Alloys. Iron meteorites are pieces of once molten metallic cores in asteroids that were subsequently eroded and fragmented by impacts after slow cooling. Their nickel content is about 8% and are characterised by the W idmanstätten structure. The remarkable mesh-like arrangement revealed by a polished and etched surface of a meteorite was also the beginning of the new science of metallography, which deals with the study of the structure and constitution of metals and alloys and their relation to the physical and mechanical properties. ᔢ References
F. Habashi, Meteorites. History, Mineralogy, and Metallurgy, Interdisciplinary Science Review 23 (1), 71-81 (1998).
*Department of Mining, Metallurgical, and Materials Engineering, Laval University, Quebec City, Canada. Email: Fathi.Habashi@arul.ulaval.ca July/August 2014
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