Steel Times International May/June 2015 by Quartz

May/June 2015 – Vol.39 No.4 – www.steeltimesint.com

CRU WORLD STEEL CONFERENCE PROCESS CONTROL STRUCTURAL STEEL

STEEL TIMES INTERNATIONAL – May/June 2015 – Vol.39 No.4

TIME TO GET TOUGH WITH CHINA? may june.indd 1

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SMS SIEMAG AG

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CONTENTS MAY/JUNE 2015

May/June 2015 – Vol.39 No.4 – www.steeltimesint.com

CRU WORLD STEEL CONFERENCE PROCESS CONTROL STRUCTURAL STEEL

STEEL TIMES INTERNATIONAL – May/June 2015 – Vol.39 No.4

TIME TO GET TOUGH WITH CHINA? may june.indd 1

5/14/15 4:41 PM

Picture courtesy of MTAG.

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

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4 Leader 6 News The latest steel industry news from around the world 15 Latin America update Brazilian flat steel distribution 19 USA update You won’t like me when I’m angry 23 China update Time to get tough? Conference report 31 CRU’s World Steel, Rio de Janeiro

Electric steelmaking 42 Comparing hot metal desulphurisation methods Automotive 51 Molybdenum - reducing car weight AISTECH 2015 52 AISTECH 2015 - a great success

Show report METEC 63 The bright world of metals

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AISTECH 2015 Interview 77 Glenn Pushis, Steel Dynamics Inc

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History 84 UK pig iron production in WWI www.steeltimesint.com

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LEADER

No short-term solution for the China syndrome

Matthew Moggridge Editor matthewmoggridge@quartzltd.com

As eight national steel associations from around the world write an open letter to the Chinese government expressing their concern over China’s growing tonnage of exported steel dumped on foreign markets, is it now time to get tough and if so, what can be done to stem the flow and level the playing field? In a press conference in Cleveland, Ohio, at the recent AISTech 2015 convention, Andrew Harshaw, president and CEO of ArcelorMittal USA, said that the only place to solve the problem of China was in Washington DC. “At the end of the day the only thing they’re going to respect is the law,” he said, bringing a touch of High Noon to the proceedings. Harshaw does have a point. While antidumping lawsuits and countervailing duties have their place, the problem – like a hernia – doesn’t appear to be going away and surgery might be the only answer. In fact, if you were in Rio de Janeiro at CRU’s World Steel conference in March, you will probably agree with Harshaw’s argument. In Brazil, CRU’s Chris Houlden told delegates that there were very few silver linings on the horizon; and US-based Wiley Rein’s Alan Price said

that whatever the economies of scale, commercially-driven companies will find it difficult to compete with China. Why? Because China’s largest steel mills don’t have to make a return on capital. The aforementioned steel associations argue that, if nothing else, their open letter will, as the Steel Manufacturers Association’s Philip K Bell told me in Cleveland, ‘continue the dialogue with China and highlight the severity of the situation’. Mario Longhi argued that, after the letter, the Chinese could run, but not hide and that, if nothing else, the letter will ‘amplify the awareness’ of the problem. Whether it will shame the Chinese into solving the problem is debatable. Some argue that it’s water off a duck’s back. Wiley Rein’s Alan Price said that China has built the world’s largest steel industry even though it lacks any comparative advantage in making steel. It’s all very depressing and it gets worse when you hear that US Steel’s Mario Longhi believes that the issue of China will take a long time to resolve. “I don’t see a short-term solution,” he told me. Turn to page 23 of this issue for more...

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6 NEWS IN BRIEF JSL commissions recovery plant India’s largest integrated manufacturer of stainless steel has announced the commissioning of a state-of-the-art metal recovery plant in association with the HARSCO Corporation, a company claiming worldwide leadership in the provision of material processing and environmental services. Jindal Stainless Ltd (JSL) says that the ‘technologically advanced plant is part of a multi-year contract to provide on-site material processing services by HARSCO and will be located at JSL’s fully integrated stainless steel facility at Jajpur, Odisha.

INDUSTRY NEWS

Associations criticise China Eliminate government interference in steel production. That is the message from steel associations around the world to the Chinese government. Eight national and regional associations – including the American Iron and Steel Institute (AISI) and the European Steel Association (EUROFER) – have jointly expressed their concern over China’s recently published Adjustment Policy 2015 which, it is claimed, fails to address the root causes of the country’s current overcapacity problem. Instead, it allows for the

continuity of governmental control and financial support for the steel industry and continues to reflect a top-down and state-dominated approach to industry reforms. According to Alacero (the Latin American Steel Association) the Adjustment Policy 2015 maintains an environment where market forces do not apply. The basic message to the Chinese is eliminate government interference and subsidies and let market forces dictate outcomes. The open letter reads, “China’s new policy continues to reflect a

top-down, state-dominated approach to reforming the steel industry – thereby maintaining an environment where market forces do not apply. The policy continues to allow the Chinese government to intervene in the development of the steel industry and in the management and operation of individual steel companies – from the acquisition and supply of raw materials, to market entry, to the purchase and application of products by end users.” See more in-depth article on page 23 of this issue.

LanzaTech wins Taiwan contract China Steel Corporation, Taiwan’s largest integrated steel maker, based in Kaohsiung, has approved a capital investment of 1400 million TWD (Taiwanese New Dollars) on the development by US-based LanzaTech, of a commercial ethanol facility. The decision to go ahead with the project was based on a demonstration of the US company’s White Biotech demonstration plant in Kaohsiung, which uses steel mill off gases for ethanol production.

Accident kills three at Chinese plant Three employees are dead and three in hospital following an accident at Zhong Yuan Special Steel Co on 3 April. It is claimed that an ‘emergency response plan’ was launched immediately after the accident and that production was resumed at the plant following an investigation. According to the company, the accident will not have a significant effect on its 2015 business performance. Source: China Metals.

Baosteel merger rumour denied Baosteel has denied rumours of a merger between itself and the Wuhan. While many thought such a merger would fit with China’s plan of building three to five ultra-large steel conglomerates by 2025, the Chinese government has not expressed any intentions or held discussions with either company.

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

May/June 2014

Industry News m/j.indd 1

Alacero’s Rafael Rubio

AISI’s Thomas J Gibson

EUROFER’s Axel Eggert

US steel gurus talk China China was very much top-of-mind for senior steel executives in the USA at the recent AISTech convention in Cleveland, Ohio,USA. Andrew Harshaw, CEO of ArcelorMittal USA, told delegates assembled for the Town Hall Forum on 6 May, that while the US economy was healthy, the steel industry was the complete opposite, thanks to cheap foreign imports flooding the US market from South Korea, China and elsewhere in the world.”It’s a difficult market,” he

said, explaining how automotive is strong but is hampered by imports. Nucor’s vice president Michael Lee said he was an optimistic guy and that, where imports were concerned, the US steel industry needed government support. “I’m excited about our future, we have the brightest and the best and we can compete against anybody. Put us on a level playing field and we can kick anybody’s butt,” he said. US Steel’s senior vice president David Rintoul said the US steel

industry had two choices: to be a victim or a player. “And this industry has chosen to be a player,” he said. “We’re innovative and we remain competitive in difficult circumstances. It’s tough out there, there’s no question about that, but we must be as efficient and as effective as we can.” Steel Dynamics’ president and CEO Richard Teets argued that the steel industry was not looking for protection. “We want fairness,” he said.

NLMK promotes efficiency NLMK, Russia’s largest steelmaker, claims to be one of the most efficient producers in the world. The company generated a saving of 437 million rubles (US$8 million) during 2014 by optimising its energy resource purchasing strategy and further claims savings of 800 million rubles (US$15 million) through projects designed to increase the efficiency. NLMK has initiated various projects aimed at modernising the company’s lighting systems; reducing energy loss in the steel

producer’s vapour and hot water supply networks; reducing the repair downtime of generating equipment; and increasing inhouse energy generation. NLMK’s large-scale energy projects includes the launch of a new 50MW turbo generator and an air separation unit at the company’s Lipetsk site. The company claims that these projects drove energy self-sufficiency at Novolipetsk from 52% to 54%. VIZ-Steel has begun start-up activities at its natural gas vapour re-

forming facility for the production of hydrogen, while stage one of a lighting upgrade at Stoilensky has been completed. Alexander Starchenko, NLMK’s group vice president for energy, said, “In the near future, we will focus on installing pulverised coal injection (PCI) technologies at blast furnaces #6 and #7 at the Lipetsk site; modernising bell-type furnaces at Novolipetsk rolling operations; and launching commercial operations at VIZ-Steel’s air separation units,” he said. www.steeltimesint.com

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8 NEWS IN BRIEF NUCOR lawsuit after intern death Nucor is facing a federal lawsuit following the death of an intern, according to a report by the Birmingham Business Journal in the USA. In October last year, 27-yearold Korey Ryan was killed at the company’s Tuscaloosa plant while attempting to change a filter near a crane. His mother filed a wrongful death lawsuit after a gantry crane moving a sheet of steel ran over Ryan’s foot and then dragged him into a steel beam. While Nucor has been fined US$7,000, it is appealing the decision.

ArcelorMittal investigates plant death An investigation is underway at the Burns Harbour steel plant, owned by ArcelorMittal, following the discovery of an independent contractor at the bottom of a lift shaft, according to a report by The Times of Northwest Indiana. Gregory Sebahar, 53 of Schereville, Indiana, worked with Kone Elevators & Escalators and was responding to a service call while working inside the shaft at the time of the incident.

Baosteel to boost e-commerce steel sales Baosteel plans to target 10Mmt of transactions using it’s e-commerce platform during 2015, according to Dai Zhilhao, general manager of the Chinese steelmaker at a recent conference. In 2014 the company’s e-commerce platform generated 1.5 billion yuan of revenue, up 331% year-on-year, with 4.5Mt of sales.

European Commission starts anti-dumping investigation The European Commission has opened an anti-dumping investigation against imports of Chinese High Fatigue Performance (HFP) rebar, a decision welcomed by EUROFER’s director-general, Axel Eggert. According to Eggert, HFP rebar first appeared in the European Union in 2013 and since then has grown its market share, accounting for a quarter of the market. “Like most of its steel trade partners, the EU is acting against unfair Chinese imports which we welcome,” Eggert said, adding that when trade remedies are justified, they should be imposed in a timely and effective manner. May/June 2014

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INDUSTRY NEWS

China cuts 120Mt of iron Between 2010 and 2014 China cut 120Mmt of iron making capacity and 90Mt of steel making capacity, according to the Ministry of Industry and Information Technology. In 2014 the country eliminated 31Mt of outdated steel capacity and in doing so completed the task set by the 12th Five Year Plan of 2011-2015 a year early. While the cuts ease pressure on China’s domestic steel industry, the country’s medium and largesized steel companies are expected to be in the red during Q1 of

2015, according to the China Iron and Steel Association. In February, up to 50% of these companies were in the red and by March, insufficient orders and high stocks added to the financial pressure. While iron ore prices have fallen below US$60/metric tonne, steel prices have plummeted even further, analysts claim, and now that China has implemented strict new environment laws, the mills face rising costs to remain in compliance. There are media reports claiming that in Jiangsu province electricity prices are being raised for

steel mills failing to meet China’s new environmental standards. But it’s not all bad news. Only one of China’s listed steel mills – Lingyuan Iron & Steel Co – suffered a loss last year. Other companies, such as Daye Special Steel, Jiuli Hi-Tech Metals, Nanjing Iron and Steel and Fangda Special Steel Technology recorded profits in excess of 100 million yuan. Others have yet to release their results but are expected to announce gains. Hebei Iron and Steel increased net profits by over 500%. Source: China Metals.

MMK’s environmental plan OJSC Magnitogorsk Iron and Steel Works (MMK) is planning to implement 72 environmental initiatives in 2015. The budget for such an exercise will cost the company an estimated 3.3 billion roubles (US$64 million) and will cover all the mill’s production plants and MMK Group entities. The major projects are aimed at decreasing pollutant emissions and include renovation work on sulphur collecting units at the sintering plant, renovating the coke gas chilling cycle at block No 1 of the coke-chemical production facility, and initiatives focusing on

electrical supervisor departments. Expenditure on air protection measures will amount to over 2.9 billion roubles (US$56 million) while the expected decrease in pollutant emissions will be over 13,000 tonnes in 2015. Over 400 mln roubles (US$7.7 million) will be contribute towards decreasing water consumption, decreasing pollution discharge into water facilities and maintaining efficient operation of water circulation systems and water-treatment facilities, industrial waste utilisation and the re-cultivation of affected land.

MMK claims that it is ‘acutely aware of its responsibility to limit environmental impact within its area of influence’ and has placed ‘reducing negative environmental impact’ among its key strategic goals within its long-term sustainable development plan. “This is affirmed by its Environmental Policy adopted by management, and by the certification of an environmental management system in accordance with ISO 14001, issued by independent international certification organisation TUV NORD (Germany),” claims MMK.

Holistic approach needed Local authorities are the most competent regulatory body for the management of water as policies need to be based on local conditions. This is the view of The World Steel Association (worldsteel) outlined in its recently published position paper on water management in the steel industry. Water management policies suited to local conditions will help the steel industry to reduce its water footprint and improve resource efficiency. “Even though the steel industry uses large quantities of water, very little is actually consumed. Around 90% of water used in the steel industry is cleaned, cooled and re-

turned to source. Most of the loss is due to evaporation. Water returned to rivers and other sources is often cleaner than when extracted,” commented Dr. Edwin Basson, director-general of worldsteel. The position paper explains why

Dr Edwin Basson

a holistic and balanced approach is required for water policies and what should be taken into consideration to achieve the optimal use of water resources in the steel industry. It highlights the need for a local approach and a tailor-made regulatory framework because the nature of water challenges vary significantly between regions and countries. According to worldsteel, high water usage is not inherently negative provided that there is ample water available for all potential users and use does not impact on water quality. Recycling and re-use is a priority for steel producers in arid regions where water is scarce. www.steeltimesint.com

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INDUSTRY NEWS

New UK R&D centre to focus on light steels A deal between Tata Steel and the University of Warwick will help scientists in the development of stronger and lighter steels, claims the UK-based steelmaker. The deal with the university’s Warwick Manufacturing Group is claimed to mark the next stage in the creation of a new UK research and development centre for Tata Steel – Europe’s second largest steelmaker. When the centre opens this coming autumn, it will house over 40 Tata Steel scientists.

MMK supplies Ford in Russia OJSC Magnitogorsk Iron and Steel Works (MMK) has reported that it has been named as a steel supplier to car manufacturer Ford in Russia. While the Russian steelmaker is currently going through the acceptance process for the supply of steel plate to Ford Sollers Holding, two items of ultra-low carbon steel (which is used in the production of car body parts) have already been fully accepted by the car maker for use in the production of the Ford Focus. High-duty ultra-low carbon

steel for Focus hoods has reached the pilot batch approval stage. Several other items of ultra-low-carbon steel are likely to be accepted for the Kuga and Explorer car brands, claims MMK. High-density micro-alloyed and dual-phase steel with galvanised coating plus a cold-rolled uncoated product will also be produced for Ford. MMK and Ford Sollers Holding have been co-operating on automotive sheet production since 2010. The process involves phase-

Brazilian R&D centre opens

Problems for SA steelmaker An inability to meet short-term obligations as a result of historical operating difficulties and sustained financial losses within a capital-constrained operating environment is how Creamer Media’s Mining Weekly describes the reasons behind Evraz Highveld Steel and Vanadium’s decision to file for voluntary business rescue proceedings. The South African steel and vanadium slag producer – the second largest steelmaker in the country and a primary producer of medium and heavy structural sections – produced 149kt of crude steel in the quarter ended 31 March, down 6.9% from 160kt at the quarter ending 31 December 2014. The latest figure was 0.3% down when compared with the same period last year when the company produced 150kt. Despite the fact that the company’s management team had a turnaround plan in place – and had achieved positive results – the local market situation scuppered all hopes of recovery. Evraz Group’s vanadium slag production dropped 2% during the first quarter of the year compared with the prior quarter, due to a 12% drop in South African output on the back of reduced steel production at Evraz Highveld, claims Mining Weekly. For more steel industry news and features, visit www.steeltimesint.com May/June 2015

Industry News m/j.indd 3

by-phase metal acceptance. Phase one is when the car maker receives special qualification sheets for the metal products in plans to purchase from MMK. This includes a production overview of current production for each relevant grade. Following approval Ford places an order for a small pilot batch (less than five tonnes) and if the batch receives positive reviews, a bigger pilot batch is purchased. Once this is approved both parties then agree commercial supplies of the accepted metal.

PT Gunung Raja Paksi (GRP) of Indonesia has placed an order with the SMS group for the full-line supply of a reversing cold mill using CVC – a technology package for profile, contour and flatness control – and featuring a six-high design with skin pass operation mode (above). GRP, part of the Gunung Steel Group, has been operating a Steckel mill supplied by the SMS group since 1996 producing a wide range of hot-rolled flat products. Annual capacity amounts to 1.2Mt.

Steel innovation for the automotive, energy, machinery and white goods industries will be the chief role of a new research and development centre in Brazil. ArcelorMittal Tubarao plans to open the global company’s 12th R&D centre this month. An investment of US$20 million over the next five years will enable the new centre to focus on product and process development and customer services for both long and flat carbon steel. The work to be carried out at the new R&D centre will complement that of existing facilities and will support three strategic pillars of the ArcelorMittal Group: quality; sustainability; and safety. Charles Martins, the new research centre manager, said that the new facility would ensure competitiveness and speed up the implementation in Brazil of innovations and solutions from across the ArcelorMittal group of companies.

Power price cuts in China The price reductions are part of a government package of adjustments designed to reduce business costs and re-ignite the economy, according to a report by China Metals. The price for coal-fired electricity will be cut by two yuan (US$0.33) per 100kWh and commercial power users will enjoy the same power prices as industrial users, it is claimed, after a rate reduction

of roughly 1.8 yuan (US$0.29) per 100kWh. Resource taxes on iron ore will be restored but also reduced from 80% of the taxation payment base to just 40%. Last year 78% of iron ore was imported due to high smelting costs and insufficient production in China’s domestic market. Sluggish prices have adversely affected China’s iron ore compa-

nies since 2014 and today only 60% of iron ore firms are in production. Analysts argue that the electricity price cut will be good news for steelmakers and that the reduction in resource tax on iron ore will improve the profitability of iron ore producers. Source: China Metals For more on China, turn to page 23 of this issue. www.steeltimesint.com

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

August 10-12 Minerals, Metals, Metallurgy, Materials Pragati Maidan, New Delhi Billed as one of the most important events in the Indian minerals, metals, metallurgy and materials marketplace and an ideal business platform for entreprenuers. For further information, log on to www.mmmm-expo.com For more steel industry news and features, visit www.steeltimesint.com

May/June 2015

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INDUSTRY NEWS

A ‘restrained growth outlook’ Global apparent steel use will increase by 0.5% to 1.54 billion tonnes in 2015 following growth of 0.6% in 2014. World steel demand will grow by 1.4% in 2016. The World Steel Association’s Short Range Outlook, which was released on 20 April, is described by worldsteel’s economics committee chairman as a ‘restrained growth outlook’ mainly due to the deceleration of China. “The outlook also reflects the influence of major structural adjustments in most economies, particularly owing to limited investment growth post 2008,” said Kerkhoff, adding that the steel industry can expect a slower pace of growth. Kerkhoff said that the risks implicit in geopolitical instability and international capital flow volatility, not forgetting China’s slowdown, were much reduced but still very much alive.

“We have also started to see some encouraging developments,” said Kerkhoff, referring to signs of ‘firming recovery momentum’ in the Eurozone, increased optimism in India and signs of growth in steel use in some ASEAN and MENA countries. While steel markets in some developing countries exhibit market maturity, Chinese steel demand showed negative growth in 2014 for the first time since 1995. This, claims worldsteel, was due to the Chinese government’s rebalancing efforts having a major impact on real estate and will remain unchanged in the short term. Steel usage in China will show negative growth of -0.5% throughout 2015 and 2016. As China’s rebalancing act continues, there will be continued trade friction globally due to increasing Chinese steel exports.

As weak investment activity and unemployment continues to constrain the developed world – and despite growth in steel demand of 6.2% in 2014 – growth will be ‘moderate’ in 2015 because of less favourable steel market environments in the US, Japan and South Korea. Steel demand in the developed economies will grow by 0.2% this year and by 1.8% next year. Continued deterioration in the Russian and Brazilian steel markets have led to low growth in the developed economies of 2.3% in 2014 and will remain weak throughout 2015. However, positive growth can be expected in India, Indonesia, Vietnam and Egypt, countries where steel markets are still developing. Steel demand is expected to grow by 4% in 2016 following growth of 2.4% this year.

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

LATAM imports up 32% There has been an increase in steel production and consumption in Latin America for the first two months of 2015, according to the Latin American Steel Association (Alacero). Regional crude steel production increased 3% while finished steel was up 4% when compared to the same period of 2014. Apparent steel consumption increased 8% (although imports accounted for 37% of regional consumption) and the regional trade balance ‘keeps on deteriorating’ according to Alacero. The deficit in tonnes deepened by 54% and where production was concerned, the Latin America and the Caribbean region produced 10.8Mt of crude steel, up 3% compared with the same period last year. The region produced 9.3Mt of finished steel, up 4% on the previous year, and the largest producer was Brazil with 4.3Mt and a 46% share of regional output. Mexico was in second place with 2.9Mt and a 32% share of regional production. Chile and Brazil witnessed the greatest increases in finished steel production, sporting respective

“There are 24 anti-dumping cases in place against Chinese steel products.

”

Rafael Rubio, Alacero growth rates of 8% and 7%. Venezuela, Colombia and Argentina saw growth rates fall by 15%, 6% and 5% respectively. Regional finished steel consumption was up 8% at 11.8Mt and the largest consumption increases in both volume and percentage terms, were recorded in Peru, up 95% at 464kt, followed by Mexico (408kt, up 12%) and Columbia (83kt, up 13%). Brazil’s rolled steel consumption, however, slumped 181kt and was down 4% while Argentina dropped 11% to 92kt. Regional finished steel imports of 4.4Mt were up 32% compared

with last year’s figure of 3.3Mt. They currently account for 37% of regional consumption and this, claims Alacero, ‘brings about disincentives to the local industry, trade frictions and threatens jobs’. The region exported 1.3Mt, down 1% on last year, and recorded a trade deficit of 3.1Mt of finished steel. “This imbalance is 54% more profound than that observed in Jan/Feb 2014,” said Alacero, when it stood at 2Mt. Where finished steel was concerned, every country in the region recorded a trade deficit. Mexico was down 931kt, Peru 720kt, Columbia 433kt and Chile 255kt. www.steeltimesint.com

5/26/15 9:24 AM

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LATIN AMERICA UPDATE

Brazilian flat steel distribution Brazil’s National Institute of Steel Distributors (INDA) releases monthly figures on the country’s flat steel distribution market and forecasts that flat steel consumption will diminish 4% in 2015 when compared with 2014. By Germano Mendes de Paula* THE National Institute of Steel Distributors (INDA) releases, monthly, comprehensive data on the Brazilian flat steel distribution market. The business community pays a lot of attention to this information because – besides reporting past performance – it provides a forecast for the following month. Moreover, INDA’s president, Carlos Loureiro, frequently speaks about prices, while Brazilian steelmakers prefer to keep quiet about them. When INDA was established in 1970 there were three large carbon flat steel mills in Brazil: Companhia Siderúrgica Nacional (CSN), Usiminas and Cosipa.

As these companies were state-owned enterprises, the government wanted to avoid them monopolising the distribution market as well. In other words, there are guidelines, which guarantee that privately owned firms continue to play in this market. In fact, the beginnings of flat steel distribution preceded CSN’s start-up in 1946, based on imported products. Steel distribution proved to be a very good business, particularly when the country experienced high inflation in the 1980s. At that time, there was a considerable difference between purchase and sale price. In the late 1980s, INDA

5.0

4.0

16 14 12 10 8 6 4 2 0

3.0

2.0 35

1.0

0.0 2001

13 14

Fig. 1 Steelmill subsidiaries’ participation on Brazilian flat steel distribution 2001-2014 (%)

7 6 5 4 3 2 1 0 2006

2006

Fig. 2 INDA’s member sales, 2006-2014 (Mt)

100

80 60 40

20 0

20 2008 2009 2010 2011 2012 2013 2014

Fig. 4 Inventories/sales, 2006-2015

2008 2009 2010 2011 2012 2013 2014 Fig. 3 Import as a proportion of INDA’s members purchases, 2008-2014 (%)

2007

had roughly 100 members. It is worth noting that Duferco (no relationship to the homonymous Swiss company) was among the largest steel distributors at that time. The firm acquired two small steel mills that were privatised. The companies in question were: Cosim (a seamless tube producer in 1988, which had already ended its activities) and Cofavi (a carbon long steel producer in 1989, which now belongs to ArcelorMittal). More importantly, the distributors bought shares in the large steel mills when they were privatised. In fact, they purchased a 4.4% participation in Usiminas (in 1991)

0 2010

2011 Heavy plate

2012 2013 2014 HRC CRC HDG Others

2015

Fig. 5 INDA’s associated sales by products, 2010-2015 (%)

Retail

2010 Machinery

2011

2012

2013

Construction Automotive Appliance

2014 Others

Fig. 6 INDA’s associated sales by sectors, 2010-2014 (%)

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

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16 LATIN AMERICA UPDATE

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and a 12.4% stake in Cosipa (in 1993). The current situation is quite diverse from what was observed in the late 1980s and early 1990s. INDA’s membership has dropped to around 40 (of which 30 submit data on their purchases and sales for INDA’s aforementioned monthly report). Furthermore, instead of distributors retaining stakes in flat steel companies, the reality today is the opposite. Fig. 1 shows the joint participation of subsidiaries controlled by Usiminas, CSN and ArcelorMittal regarding INDA’s sales. This ratio improved from 35% in 2001 to 48% in 2009. After a strong decrease to 39% in 2010, when there was an import surge, it recovered enough to reach 49% in 2014. Consequently, the input of independent distributors in the makeup of INDA statistics diminished from 65% in 2001 to 51% in 2014. There is, however, one distortion. Comercial Gerdau is considered as an independent distributor because its parent company used to produce only long steel in Brazil up to mid2013. However, it started to fabricate hot rolled coil in October 2013. As Comercial Gerdau made up 11% of INDA’s 2014 sales volumes, the share attributed to independent distribution dropped to 40%. However, INDA’s data covered around 75% of total flat steel distribution. The remaining 25% of the market relates to independent distributors; the outcome, therefore, is that steel company subsidiaries account for 48% participation. Fig. 2 shows that INDA’s sales amplified from 2.6Mt in 2006 to 4.5Mt in 2013, but dipped to 4.3Mt in 2014. Bearing in mind that Brazil’s flat steel apparent consumption was 13.1Mt last year, the market share of INDA members was the equivalent of 32.7%. Fig. 3 demonstrates the evolution of the import as a proportion of INDA members’ purchases between 2008-2014. It increased from just 2.4% in 2008 to 14.4% in 2010 and reverted to an 8.5% plateau over the following years. It is crucial, however, to highlight that Aços Cearense (which is considered the second largest flat steel distributor in the country, being fully dependent on imports) is not a member of INDA. This is believed to be the most important drawback to the data provided by the aforementioned trade association. It is estimated that Aços Cearense imported some 400kt of flat steel products last year and that, as a consequence, the import ratio would be adjusted to around 18%, confirming that Brazilian distributors commercialise mainly domestic products. Fig. 4 shows inventories as a proportion of monthly sales. During the period January 2006 to February 2015, the average was 3.0. Nevertheless, it was equivalent to only 1.5 in May 2007 and skyrocketed to 6.4 in December 2008. Inventories were particularly high (3.4) during 2010, which was a quite dynamic year. Last year, with a depressed market, the average was 2.9. Inventory turnover was 3.5 months in February 2015. It is useful to analyse the key products commercialised by INDA’s members. Despite participation dropping from 56% in 2010 to 46% in 2015 (Fig. 5), hot rolled coil continues to be the most important. HDG gained relevance, increasing from 11% to 16% respectively while other products, consisting of coated steel and special flat products, doubled from 4% to 8%. Fig. 6 shows sectorial sales from INDA members. Retail (smaller sellers) improved its share from 25% in 2010 to 31% in 2014. Automotive companies lost seven percentage points, while machinery makers lost three. This trend could be derived from a higher proportion of direct sales from steelmakers to mediumsized metal-mechanical enterprises. INDA forecasts that Brazilian flat steel consumption will diminish 4% in 2015 in comparison with 2014. The retraction is expected to be stronger in H1, dropping 10% below the same period of 2014. In this way, demand will recover in H2, but it’s been a tough year for domestic steelmakers and distributors. t www.steeltimesint.com

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USA UPDATE

You won’t like me when I’m angry Amid uncertainties and plant closures, US steel producers urge Congress to plug the legal loopholes to stop dumping. By Manik Mehta* THERE was, again, an outcry over steel dumping by a number of foreign suppliers who were allegedly wrecking the US steel industry. While in good times such an outcry would be dismissed as unfounded, the steel dumping theory gains credence as the steel industry passes through a lean period. Plagued by uncertainties and the proliferating number of plant closures, the US steel industry urged Congress to plug loopholes which are allegedly exploited by foreign suppliers to dump cheap steel in the US market. The steel industry complained that imported steel was causing overcapacity in the US that could possibly create a collapse of the industry and kill jobs. Mario Longhi, president/CEO of US Steel Corp, was among the steel industry’s top executives to voice concern and urge Congress to change trade policies with a view to creating a level-playing field for US steel producers who were losing business to foreign suppliers of low-cost steel products. The sensitive issue of foreign dumping, which had remained on the backburner when the industry was doing well, has flared up again. Longhi told members of the Congress Steel Caucus that not since the late 1990s had the industry faced such a “torrent of steel imports”. “Total and finished steel products imported into our market by heavily subsidised, command economies increased year-to-year between 22% to 90%,” he said, reminding those present that the last time the industry was at such levels, “nearly half of American steel companies disappeared.” US Steel’s Granite City Works in Illinois has been temporarily closed – and 2,080 workers laid off – as part of the company’s consolidation of its North American flatrolled operations, which face a challenging environment. But the Granite City episode was only one of several. US Steel had announced a few weeks earlier that it was also idling its tubular plant in Lorian, Ohio, resulting in

John Ferriola, chairman/ CEO of Nucor Corp

temporary lay-offs. Longhi urged legislators to expand the purview of material injury under the Trade Promotion Authority, arguing that the focus in the past had been heavily placed on operating margins alone as a proxy for injury, while ignoring other signs of injury such as the suppressive effect on cash flow, production, net income, jobs, R&D, investment in new technologies and growth. Besides Longhi, other steel executives testifying before Congress included John Ferriola, chairman/CEO of Nucor Corp, and Mike Rippey, chairman of ArcelorMittal USA. They said that current steel imports from China, Turkey and South Korea had surpassed the quantity dumped here in the late 1990s that led bankruptcies among steel companies. Rippey said that the challenge faced by the industry was the supply of a “massive amount of unfair steel arriving at our ports every day”. Saying that, as in 1998, the future did not appear bright. He pointed out that China alone was waiting to get rid of some 371Mt of excess capacity. Thomas J. Gibson, president of the American Iron and Steel Institute (AISI), said in a statement that these improvements in the country’s trade laws were long due, and expressed gratitude to the sponsors of the provisions for working with the steel industry to ensure “this critical language” was included in the trade bill. “We applaud Senators Portman,

Brown, Burr, Casey, Coats and Bennet for their leadership in proposing legislation to improve the administration and enforcement of the anti-dumping and countervailing duty laws. Our industry continues to face a flood of imports coming into this country unfairly and at record levels, with finished imports taking the highest share of the US market we have ever seen. If enacted into law, these provisions will ensure that our trade laws remain an effective tool for domestic companies and workers to use to remedy the injury caused by imports benefitting from foreign trade-distorting practices,” Gibson said. He also raised the issue of currency manipulation which, he said, gave unfair advantage to the suppliers by making their exports more competitive. The AISI reported, based on data from the Commerce Department, that steel import permit applications for the month of March 2015 had totalled 3.74 million net tons (Nt), recording a 3% decline from the February volume and a 1% increase over February’s preliminary imports. During the first quarter, total and finished steel imports amounted to 11.8 million Nt and 9.75 million Nt respectively, an increase of 22% and 36% over the same period of 2014. In March, South Korea (618kt Nt, a 29% increase over February) accounted for the largest finished steel import permit applications for offshore countries, followed by Turkey (422kt Nt, up 46%),

Mario Longhi, president/CEO of US Steel Corp

* USA correspondent www.steeltimesint.com

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USA UPDATE

China (241kt Nt, minus 9%), Japan (210kt Nt minus 1%) and India (177kt Nt, up 92%). For the first quarter, the largest supplier was South Korea (1.93 million Nt, up 66% over the same period of 2014), Turkey (1 million Nt, up 115%) and China (705kt Nt, up 24%). Steelmakers such as US Steel and Nucor Steel expressed fears of an economic downturn because of over-production in China, though some economists believe the strength of the US dollar could be contributing to the overcapacity of cheap steel flooding the global market, along with a major decline in crude oil prices. Ahmad Ijaz, an economist at the Center for Business and Economic Research at the University of Alabama – the state of Alabama has witnessed some sharp cuts in steel jobs attributed to economic downturn – recently said in an interview with the Birmingham Business Journal that the US had faced a similar situation in the 1990s, when steel was at an overcapacity. “The steel industry is very cyclical and goes through this every five or 10 years,”Ijaz was quoted as saying. “There was an overcapacity of steel in the 1990s and it worked itself out. It depends a lot on construction, automobile production

and things like that.” However, pundits expect steel consumption to decline this year. Basing their forecast on the World Steel Association’s (worldsteel) short-range outlook report, issued on April 20, they say that steel consumption is expected to drop 0.4% this year over 2014. According to worldsteel, US steel consumption surged 11.7% but the last few months saw a significant drop. Steel consumption has been hit, mainly, by the slowdown in the energy sector, which accounts for some 10% of steel consumption and which has seen a sharp

drop in revenue as oil prices have declined. Demand for oil rigs has dropped by more than 50% since autumn last year; steel demand in the energy industry has been weak so far this year. Companies such as Nucor, Tenaris and other suppliers to the energy industry have been affected as a result of the sharp decline in oil prices. The housing construction sector, the biggest consumer of steel products, has suffered for two consecutive months. Housing construction accounts for over a third of total construction spending. The March figures show a decline of 3.5% in housing spending compared to the year-earlier period; in February the housing sector contracted by 2.3%. The slowdown in housing construction directly affects steel demand. A good indicator for housing demand is provided by the number of building permits issued. For March, however, the increase was a modest 2.9% which, according to experts, was the slowest growth rate for building permits in more than a year. The coming months will provide a more reliable indicator of whether housing growth is really stabilising at a lower level or whether one can expect some improvement in the near future. t

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CHINA UPDATE

Time to get tough? China has been a key theme at steel conferences around the world. Many a distinguished speaker has called for ‘a level playing field’ and some have warned against awarding China ‘market economy status’ because it will open the floodgates to even more exported steel. China is already ‘dumping’ millions of tonnes of steel on foreign markets around the world. While many observers wonder what effect (if any) anti-dumping measures and countervailing duties are having on the situation, there is a growing sense of unease in ‘rest of the world’ steel markets. By Matthew Moggridge*

Thomas J Gibson, president and CEO of AISI calls upon the Chinese government to end its ownership and control over China’s steel producers

WHEN an industry or an organisation resorts to an ‘open letter’, it often means that if things haven’t already gone too far, they’re probably about to tip the scales. Late last month, eight steel trade associations from around the world penned an open letter to the Chinese government expressing their concern over that country’s revised Steel Adjustment Policy on manufacturing and trade, which was released in March. Those who signed the letter were the American Iron & Steel Institute (AISI); the Steel Manufacturers Association (SMA); the Canadian Steel Producers Association (CSPA); Alacero, (Latin American Steel Association); EUROFER (the European Steel Association); the Speciality Steel Industry of North America (SSINA); Canacero (the Mexican Iron & Steel Industry Chamber); and the Committee on Pipe and Tube Imports (CPTI). The steel trade associations argued that China’s policy document failed to address the root causes of the trade imbalance regarding steel imports from China and instead ‘continues a strong role for the state rather than true market forces in the direction, structure and performance of the Chinese steel industry’.

Some opinion formers believe that the Chinese government will largely ignore the contents of the letter, but, nevertheless, the act of sending it will raise the global steel industry’s concerns within the media and highlight a significant problem that will worsen if China is granted market economy status. Continuing the dialogue Philip K Bell, president of the Steel Manufacturers Association (SMA), speaking at an AISTech press conference in Cleveland, Ohio, said that the purpose of the letter is to ‘continue the dialogue with China and highlight the severity of the situation.’ “It creates an environment where every place where any Chinese representative goes the question is going to be asked and that amplifies the awareness at least. Also it begins to introduce a sense of urgency and keeps the issue front of centre,” Mario Longhi, CEO of US Steel told Steel Times International in Cleveland. According to ArcelorMittal USA’s president and CEO, Andrew Harshaw, told Steel Times International that the only place to solve the problem of China was Washington DC. “At the end of the day

the only thing they’re going to respect is the law,” he said. To quote the open letter directly, “China’s new policy continues to reflect a top-down, state-dominated approach to reforming the steel industry – thereby maintaining an environment where market forces do not apply. The policy continues to allow the Chinese government to intervene in the development of the steel industry and in the management and operation of individual steel companies – from the acquisition and supply of raw materials, to market entry, to the purchase and application of products by end users.” Remove subsidies and support It is argued that the Chinese have not departed meaningfully from their previous steel industry policies. The open letter’s eight signatories argue that the only way to make ‘permanent reductions in excess steel capacity’ is to remove government subsidies and support from the industry and allow basic market forces ‘to determine industry outcomes’. The US steel industry has already been very outspoken on the issue of rising imports emanating from China and the Asian sub-continent. Towards the end

* Editor, Steel Times International www.steeltimesint.com

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CHINA UPDATE

EUROFER’S director-general Axel Eggert accused the Chinese of ‘opportunistic trading’. Like most of its steeltrade partners, the EU is acting against unfair Chinese imports

of March, CEOs from America’s largest steelmakers travelled to Washington to put their case to members of the Congressional Steel Caucus and, according to media reports, didn’t mince their words. John Ferriola, chairman, CEO and president of Nucor Corporation, said that the American steel industry was facing a crisis and needed the help of Congress, while Mario Longhi, CEO of US Steel, pointed out that the last time steel imports were so high, ‘nearly half of American steel companies disappeared’. Adam Parr of the SMA said he was ‘extremely concerned’ with the prevalence of state ownership and control within the Chinese steel industry and that stateowned enterprises (SOEs) and statesupported enterprises (SSEs) often received cash grants, below-market financing and other support. “Subsidised and otherwise advantaged by their home governments, SOEs and SSEs may not operate on market principles and, therefore, could introduce anticompetitive behaviour and other market distortions,” said Parr. The SMA believes that the TransPacific Partnership (TPP) and other trade negotiations should include ‘strong and enforceable disciplines’ on SOEs and SSEs and should include a requirement that they operate and make investments solely in accordance with commercial considerations, rather than to advance government objectives. There should also be a provision that ensures they do not receive subsidies and/or other benefits from their governments that unfairly advantage them in competition with US industries. Thomas J Gibson, president and CEO of the AISI told Steel Times International that he hoped the government of China would strongly consider the input of global steelmakers from North and South America and Europe when considering the implementation plan for its Steel Adjustment Policy. “Our goal is to ensure the government of China recognises that, in order to achieve the goals of moving to a true marketbased economic system and reducing overcapacity, the reforms implemented in China must truly allow market forces, rather than government dictates, to determine the future of the Chinese steel industry,” he said, calling upon the May/June 2015

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Chinese government to end its ownership and control over China’s steel producers. In Europe, Karl Tachelet, of Brusselsbased EUROFER told Steel Times International that China is facing an unprecedented task in establishing a viable and sustainable steel industry, which remains excessive in size, fragmented in structure and shielded from market forces. “The Chinese government is wellinformed about the internal problems and is undertaking steps to increase the sustainability of the Chinese steel industry,” he said, adding that “as structural change takes time, it is important to ensure that domestic adjustment efforts and costs are not transferred to another country – in the form of closures or reduced capacity utilisation in that country – if the Chinese steel industry exports its excess production instead of reducing domestic capacity utilisation or cutting capacity.” Europe – slow to react? In Europe, some lobbyists accuse the European Union of responding far too slowly to the problem presented by surging Chinese exports when, perhaps, it should be following America’s faster and more reactive example characterised by the imposition of anti-dumping measures and countervailing duties. The SMA’s Adam Parr told Steel Times International that trade cases were a last resort for US steel producers as they were costly and time-consuming and that, very often, the harm has been done long before any relief is realised. “Nonetheless, AD/CVD laws are among the few mechanisms available to protect domestic producers,” he said, adding that the SMA supports any efforts to modernise US laws if they effectively address unfair trade practices. While current anti-dumping and countervailing measures address injury caused to a domestic industry by unfair import surges, they are not designed to change the policy or behaviour of an exporting country, argues EUROFER’s Tachelet. “However, indirectly, the current proliferation of steel trade cases worldwide against Chinese steel imports could prompt China to address the root causes more effectively,” he said. Anti-dumping and countervailing duties are not the perfect instrument, according

to Alacero’s Rubio. “They have some shortcomings like time and money and they focus on single products,” he said, but once a company wins a case against a Chinese product, the duty is effective for five years. In Latin America there are 24 anti-dumping cases in place against Chinese steel products and a further 12 investigations at different stages of the legal process. Chinese companies are facing a growing number of legal cases and investigations around the world. “Of course, you need other actions, like a Customs Agency that enforces customs regulations on quality and technical aspects in an effective and timely fashion,” Rubio said. The European Commission has recently opened an anti-dumping investigation into imports of Chinese high fatigue performance (HFP) rebar. The product appeared in the European Union for the first time in 2013 and now accounts for a quarter of the market. EUROFER’s directorgeneral Axel Eggert accused the Chinese of ‘opportunistic trading’. “Like most of its steel trade partners, the EU is acting against unfair Chinese imports,” Eggert said, adding that he welcomed the latest anti-dumping investigation. “When trade remedies are justified, they should be imposed in as timely and effective a manner as possible – just like our other trade partners do,” he said. Building global alliances For Gibson the key is to continue to build ‘global alliances’ and speak with one cohesive, international voice. He said that anti-dumping and countervailing laws remain important measures to address foreign government trade-distorting policies. “Congress took some action last week to bolster these laws when the Senate Finance Committee passed a trade package that strengthened administration and enforcement of the anti-dumping and countervailing duty laws,” Gibson said. “If enacted into law, these provisions will ensure that our trade laws remain an effective tool for domestic companies and workers to remedy the injury caused by imports benefitting from foreign tradedistorting practices.” Rafael Rubio at Alacero said the goal of the open letter was to point out that www.steeltimesint.com

5/26/15 10:29 AM

CHINA UPDATE

Alacero’s Rafael Rubio said the goal of the open letter was to point out that the objectives stated in China’s revised Steel Adjustment Policy were not matched by the actions and strategies the policy presents

the objectives stated in China’s revised Steel Adjustment Policy were not matched by the actions and strategies the policy presents. “The fact that eight steel organisations share the same comments and concerns and decide to present them jointly is an important achievement,” Rubio said. “This reveals that the issues regarding unfair Chinese steel trading are urgent and have a global scope,” he added. “It is no longer a one-country or company opinion, but a generalised view.” Addressing overcapacity According to Rubio the recently revised Chinese Steel Adjustment Policy makes clear that China is not moving towards a market economy model. He said it was now up to the Chinese to take action on the open letter. Rubio said that the letter enables the steel industry to raise the urgent issue of global overcapacity, particularly in China, and discuss the problem from a political perspective in international forums such as the OECD’s Steel Committee. Around 20 of China’s largest steel mills are government-owned, which Rubio argues is a critical variable. “If the Chinese government aims for a stable, profitable and competitive steel industry free of trade frictions, the current state-ownership situation has to change,” he said. “It is important to understand that the main problem is not the ownership itself, but the high dependency of the Chinese steel industry on the government, which currently acts as a lender of last resort in all senses. That connection should be eliminated in order to move to a new model,” he argued. One Belt, One Road In 2013, China’s president Xi Jinping, speaking in Kazakhstan, introduced the notion of a ‘Silk Road economic belt’, which became known as the ‘One Belt, One Road’ initiative. In essence it’s about

improving and developing transportation and logistics infrastructure along what used to be known as the Silk Road trading route. The aim of the initiative, of course, is to make it easier and more streamlined for Chinese exporters to reach key markets in Northern Europe. “China appears eager to expand its influence as an economic and diplomatic force in Eurasian integration,” said the SMA’s Parr. “This would seem to be a next step in China’s “going out” strategy, which has been characterised by massive overseas investment in raw materials and industries that support Chinese producers,” he explained. EUROFER’s Tachelet said that the One Belt, One Road initiative could further open maritime entry points and stimulate exports of Chinese steel-containing goods and this could increase import pressure on European steel consumers. Alacero’s Rubio believes that such an initiative will call for increased trade integration between the nations lining the route of the new Silk Road and might involve some kind of free trade agreement with China in return for land and sea infrastructure allocation along the way. “It will be interesting to see how China, Russia and India – all major steel producers with excess capacity – manage that integration,” he said. Steel and raw materials prices The most significant impact of China’s excessive steel industry, said EUROFER’s Tachelet, is its effect on steel and raw materials prices – a point not lost on Alacero’s Rubio. In volume terms, China’s steel exports to Latin America grew 17.4% from 2010 to 2014. Prices went from a peak of US$944/ton in 2011 to US$658 in 2014 – a decline of 30% based on prices reported by the Chinese Customs Agency. “While import volumes go up, prices come down: not a very good scenario,” he said. AISI’s Gibson said that China’s massive government-controlled and subsidised

steel industry and its continued significant level of overcapacity are distorting world steel markets and causing dislocations in many markets around the world. He said that China more than doubled its steel exports to the world last year. In the USA, imports of steel from China surged 68% last year, according to Gibson. He said that China’s overcapacity is more than half of the global total and that China manipulates its currency to provide an additional subsidy for its exports. Fraudulent behaviour “Chinese traders are also notorious for advertising ways to get them around the payment of duties in place against them by mislabelling or transhipping their exports,” Gibson explained. “Not only is this type of fraudulent behaviour costing the Treasury [in the USA] revenue, it continues to injure the domestic industry,” he said, adding that the US steel industry supports the ENFORCE Act, which addresses the evasion problem. Record exports According to the SMA’s Parr, China exported 93.78 million metric tons of steel in 2014, a 51% increase over 2013. The impact on global steel markets was immense. The recent lifting of the boron-alloy VAT export rebate created a trade loophole allowing Chinese producers to replace boron with other alloys, such as chrome. The Chinese government has cut power prices for industry to ‘reignite’ the economy and it is clear that a kind of Sorcerer’s Apprentice scenario is developing – rebates are lifted but loopholes created, outdated steel plants close, but newer ones open. Whichever way you look at it, a solution must be found sooner rather than later. According to US Steel’s Mario Longhi, the issue of China will take a long time to resolve. “I don’t see a short-term solution,” he said. t

“China appears eager to expand its influence as an economic and diplomatic force in Eurasian integration”, said the SMA’s Adam Parr

May/June 2015

CHINA UPDATE.indd 3

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CRU WORLD CONFERENCE REPORT

CRU’s World Steel, Rio de Janeiro

As declining commodity prices deepen the trade deficit between Latin America and China – and figures from Alacero show that Brazil receives the lion’s share of China’s LATAM exports – it’s timely that CRU should hold its World Steel conference in Rio de Janeiro. Matthew Moggridge* reports

THERE was no good news for delegates on day one of CRU’s 21st World Steel Conference, held at the prestigious Sofitel Copacabana Hotel in Rio de Janeiro, Brazil (16-18 March 2015). The chairman of the first session, CRU’s Chris Houlden, reminded delegates that, of late, he had opened many conferences with bad news and that this one was no exception. Plunging global demand, prices falling off a cliff and great economic and geo-political risks were still the order of the day, he said, introducing Walter Medeiros, CEO of ThyssenKrupp CSA, lead sponsor of the conference. The day prior to the start of the conference, delegates were treated to a Thyssen Krupp CSA site visit in the Brazilian heat and now Medeiros reminded them of the plant’s 5Mt/yr capacity and described the company as a superior slab supplier offering an outstanding, cutting-edge grade product portfolio and an equally outstanding environmental performance record, not forgetting the logistical strength of a captive port. In terms of CO2 per tonne of steel produced, ThyssenKrupp CSA is 27%

below the world average and saves 500kt of CO2 per year. “And we have a benchmark position on intensity of CO2 emissions worldwide,” he said, adding that the plant recycles 96% of the water it uses industrially. ThyssenKrupp CSA offers a wide portfolio of products – over 200 steel grades of the highest quality and ‘cutting edge competence’ in IF and API with slabs. The company has a strong customer base in the oil and gas and automotive industries and many other markets too. Adjusting to the ‘new normal’ For Medeiros the major challenge facing the global steel industry has been the shrinking fraction of the profit pool since 2007. The global steel industry, he said, must adjust to ‘the new normal’. He discussed the sharp 60% decrease in the price of iron ore over the last two years and said that the trend will continue downwards bearing in mind lower than expected economic growth in China and a significant increase in iron ore supply, mainly from Australia, following the rampup of large-scale mining projects.

Global flat steel demand is expected to grow by just 0.8% between 2014 and 2015, according to Medeiros, and there are additional challenges facing the global merchant slab market, including the limited size of the market, buyer and seller dynamics and the fact that sellers must be capable of responding to specific customer requirements by offering portfolio and technical competence, process excellence and price attractiveness. He said there was tough competition from Russian slab producers who were in a favourable position due to the currency situation in Russia. “We differentiate ourselves through high quality,” he said, explaining how competition in the US market was strong. According to Medeiros, estimated total slab trade volume is 20Mt to 30Mt/yr. Market size is defined by the demand of mills without captive crude steel production or by mills with a structural slab shortage. It’s all about buyer and seller dynamics and having the flexibility to provide a wide portfolio of products offering full market access, strength in special grades, fast

*Editor, Steel Times International www.steeltimesint.com

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May/June 2015

5/26/15 10:34 AM

CRU WORLD CONFERENCE REPORT

ThysssenKrupp CSA, Brazil – 5Mt/yr capacity and an outstanding environmental performance record

reaction times, a superior technical service and a focus on the cost position – all of which ThyssenKrupp can offer, Medeiros claimed. He said ThyssenKrupp CSA was an ideal partner capable of fulfilling longterm demand by offering a wide range of grades, process excellence and cost attractiveness. Optimising performance over the next two years would be a key focus. “We see ourselves well-positioned and we’re still in the last stage of our rampup,” he said. In 2014, ThyssenKrupp CSA produced and sold 4.1Mt in the USA and world markets. “Improving on this will be our focus now,” he concluded. The tricky problem of China A conference wouldn’t be complete without a mention of China. CRU devoted a lot of time to the subject, kicking off with a presentation by John Johnson, CEO of CRU China, who examined trends in Chinese steel exports and anti-dumping actions. Johnson’s presentation was ‘cautiously optimistic’ by his own admission. He said that extremely high levels of consumption and production growth in China were unsustainable in the long term and that, while production had outstripped demand, exports as a percentage of total production stood at just 8% compared with Japan where the figure was 25%. Asia received 60% of China’s steel exports, down from 74%, but 1.8Mt of Chinese metal was arriving at Brazilian ports – a ‘dramatic increase’ and cause for concern. Johnson said that China was increasingly exporting value-added products, such as rail, plate, cold-rolled and hot dip galvanised steel, resulting in a spate of anti-dumping actions in many markets. www.steeltimesint.com

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Higher value exports now account for 68% of China’s total exports. He said there were over 20 related anti-dumping and countervailing duty measures in force or being reviewed and that China was the largest single subject of anti-dumping investigations according to the World Trade Organisation. Johnson said that Chinese finished steel imports are peaking but will remain at high levels for some time. He said that the damage had already been done in Brazil, but that the country must remain competitive, despite the fact that its market share of China’s iron ore imports declined from 26% to 18%. GDP growth in China is expected to decrease by 6% over the medium term as the country rebalances its economy towards less steel-intensive industries and this should matter more to Brazil than China’s slowing economy. Fixed asset investment is the main driver of steel consumption in China but there has been over investment, notably in the real estate market. Steel consumption, however, should be maintained by nonconstruction uses, said Johnson. Will China expand its export markets? China’s economic rebalancing will lead to a significant fall in steel demand growth and while high levels of demand will be sustained for some time to come, there won’t be a peak followed by a dramatic fall-off because of urbanisation and infrastructure growth in China’s western and central provinces. As demand potential runs out of steam, will China expand its export markets? Firstly, Chinese mills going forward are expected to improve their cost competitiveness when compared to overseas mills as they are less reliant upon

scrap than other markets. Johnson believes that China is getting to grips with overcapacity. In 2014, 27Mt of capacity was closed and a further 80Mt will close over the next five years, he said, adding that there are no new projects going forward. “It’s easy to be cynical as to whether they will cut new capacity and it’s important to note that there are no market incentives as mills are not profitable,” Johnson reasoned, adding that exports will decline. He said that mills are aware of anti-dumping activity and closure of the boron rebate, which accounted for 30% of China’s exports. Loopholes are being closed, but there are other loopholes. Tougher environmental laws in China will mean rising costs particularly for coke and sinter plants. Capacity slow-down will raise domestic utilisation rates to levels that should eventually put a cap on exports. With demand slowing and iron ore imports reaching peak demand, Johnson argued that there was scope for scrap to take over from iron ore as the chief raw material for steel production via electric steelmaking. Uncompetitive domestic iron ore production is falling and imported ore will continue to fall too as demand flattens out. Revenues from iron ore are very important to Brazil as they were worth US$12 billion in 2014. Johnson concluded by saying that China was slowing to a sustainable level. However, while demand will soon peak, it will continue at relatively high levels for some time to come – at least until the end of the decade. China’s ‘market socialism’ Alan Price, a partner of US-based Wiley Rein where he is in charge of international May/June 2015

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trade, said that state ownership in China remains dominant despite claims that the country is moving towards ‘market socialism’. He said that 19 to 20 of China’s largest steel mills are government-owned and that since joining the World Trade Organisation, China had added massive capacity in steel, petrochemicals and aluminium based on deliberate support from the Chinese government. “It’s nothing to do with market forces,” said Price, adding that between 2002 and 2013 the increase in Chinese steel production was 87% of the increase in global apparent steel use over the same period, during which time Latin American steel consumption rose by 100%, but production by 17%. Adding capacity Price said that China continued to add capacity despite domestic consumption flattening out and potentially peaking. In January 2015 China exported 1.1Mt of steel to Latin America, 73% more than in 2014. China’s exports to the region represented 11.4% of total exports, making Latin America the second leading destination for Chinese exports behind South Korea. In 2014, China exported 8.4Mt to Latin America, a 50% increase over 2013 when it was just 5.3Mt. Prices of Chinese exports, however, were 6% less than prices in other markets and 19% below the world average in Central America. Flat products accounted for 67% of imports from China and long products 27%. Flat-rolled alloy steels represented 39% of imports and over half of long product imports were wire rod. Latin America accounts for only about 5% of total world steel consumption, said Price, adding that growth in imports has damaged regional production. According to Alacero, the Latin American Steel Association, China’s national strategy is to boost exports to May/June 2015

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Mexico Colombia Ecuador Venezuela Other

Chinese steel exports to Latin America, 2013 and 2014. Source Alacero

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Chinese steel exports to major Latin American markets 2005-2013.

keep plants operating at capacity and avoid unemployment. China has built the world’s largest steel industry even though it lacks any comparative advantage in making steel, said Price. It certainly lacks adequate quantities of high quality iron ore, coking coal, scrap and non-polluting energy. Latin America on the other hand possesses high quality ore and access to capital and technology. That China imports ore from Latin America, produces steel using ‘highly polluting energy’ and then ships back finished steel to Latin America is almost nonsensical according to Price. It certainly shows that market forces are not working properly in the global steel industry. The Chinese government takes an active role in managing the industry, but while corruption is rife, there has been a crackdown and it’s important to remember that what is happening to the global steel industry as a result of China’s actions is being duplicated in other industries too. Price said that corruption may have a direct effect on economic production and employment in Latin America as government officials might siphon off large sums of money into private foreign bank accounts via investment in heavy industry. Chinese government policy, said Price, has led to Chinese steel exports growing 125% by volume and 156% by value between 2005 and 2013. No need for a return on capital Price said that whatever the economies of scale may be, commercially-driven companies will find it difficult to compete with China because it doesn’t need to generate a return on capital. The aluminium industry shows that consolidation is a false hope as large producers can’t compete with Chinese state-owned enterprises and China’s hope that consolidation in the steel industry will solve the overcapacity issue is illusory.

China’s intention to increase indirect exports is worrying. Quoting worldsteel, Price said that China’s net exports of steel (indirect exports minus indirect imports) grew by 220% between 2005 and 2012. While China’s balance of indirect exports and imports of steel in 2012 was ‘strongly positive’ at 56.7Mt, Latin America’s figure was negative at 8.6Mt. Indirect imports are eroding Latin America’s downstream industries and having a negative effect on employment and wages as well as knock-on effects such as declining government tax revenues. In 2011 China accounted for 20% of Latin America’s indirect imports of steel, equivalent to another 4.1Mt of Chinese imports or 50% of China’s direct exports to Latin America. The Brazilian economy – “we face problems” Alexandre Comin, director of the Department for Industrial Competitiveness at the Ministry for Development, Industry and International Commerce (MIDIC) reinforced a lot of the points put forward by Wiley Rein’s Price and added that the Brazilian steel industry had stagnated through lost market share, thanks to Chinese steel exports. Comin told delegates that Brazil faces major imbalances in its steel market and that China has played a leading role in the situation. It was a major source of concern, he said. Going back beyond the last two years, Comin said there had been market growth but that most of it had been lost to rising Chinese exports. He said that Brazil – and the LATAM region in general – was now a net importer of finished steel and will remain so for a while. Between 2009 and 2014 imports of steel sheet from China doubled and the slab market represented the only light at the end of the tunnel. Brazil is a major exporter of slab to the USA. www.steeltimesint.com

5/26/15 10:34 AM

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Higher energy costs… Cristiano Prado, head of infrastructure investment at Firjan, described the Brazilian economic situation as ‘not very positive’. With inflation standing at between 7% and 7.5% he said that Brazil faced problems and that steel companies were facing higher energy costs than anywhere else – four times higher than in the USA and 50% higher than most of its competitors. According to Prado, while electricity costs dropped 20% in 2013 (leading to imbalances in the energy sector) a lack of rain meant price increases and this year energy prices rose 43% and would have to be reviewed upwards. They could increase by 70%, he said. Gas, said Prado, is 3.5 times more expensive than in the USA and labour costs were also much higher. In addition, Brazil’s tax burden was increasing yearon-year. Between 1996 and 2013 the tax burden had risen from just under 26% to 36.8%. Prado said there was no prospect of macro-economic conditions in Brazil improving in the short-term. Furthermore, input costs will not shift downwards in the near future and companies face higher costs. More PPPs required But while the picture painted veers towards a doom and gloom scenario there are positive signs. Prado highlighted three huge investment infrastructure and oil and gas programmes – the US$121 billion Logistics Investment Program; the US$155 billion PAC (Accelerating Growth Program); and the US$220.6 billion Petrobras Investment Plan (2014-2018). Mention of Brazilian oil giant Petrobras, of course, fills the Brazilian business and political community with dread as they are all too aware of the bribery case surrounding the company and the current Operation Car Wash investigation. May/June 2015

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Chinese exports of vehicles and applicances to Argentina, Brazil, Chile and Mexico.

Current corruption investigations have interrupted several big contracts and this has had direct and indirect impacts on companies in charge of important infrastructure and oil and gas contracts. Demand for infrastructure development in Brazil is enormous and of great importance to the steel industry, but Prado believes the key is to open up new markets using Public/Private Partnerships (PPPs). That said, there has been 80 PPPs in Brazil since 2006 and while their worth is estimated at US$43 billion it’s a drop in the ocean compared to the UK where there have been 51 PPPs over the last three years. According to Prado the development of a ‘pipeline of PPPs’ was necessary in order to ensure the continuity of infrastructure projects. The most attractive should be prioritised and accelerated along with those at an advanced stage of construction, he said, adding that there was a serious problem with the tendering process that needed to be addressed. Very few silver linings When CRU’s Chris Houlden returned to the podium delegates were prepared for more bad news and he didn’t disappoint them. Limited growth in semi-finished steel production; 2014 the lowest point for global finished steel demand growth since the financial crash; Chinese growth near 0% and slower demand growth for flat products. China can no longer be relied upon to drive future growth, and recovery elsewhere in the world was looking patchy, he said, adding that the USA offered the most promise thanks to low interest rates, cheap energy and 3% steel demand growth not unrealistic. He said that the global market for semifinished products could expect ‘modest expansion’ and the same is true of the merchant semis market. He said the picture varied between longs and flats.

Things didn’t get any better: excess capacity won’t be disappearing any time soon; utilisation rates won’t climb beyond 85% by 2019 and there are very few ‘substantial new additions’ expected bar those initiated by ArcelorMittal Tubarao, ThyssenKrupp CSA and Ternium Siderar. Last year, Russia and Ukraine accounted for 37% of all slab exports and Russia alone for almost 25%. Where billet and bloom exports were concerned both countries held the lion’s share and the CIS generally dominated supply. Since then there has been a substantial devaluation of the ruble, which is expected to bounce back, and the Ukrainian Hryvnia has collapsed but might make a partial recovery. There has been currency devaluation in Brazil and Japan, but not to the same extent. According to Houlden, depreciation of the rouble by 49% reduces hot-rolled coil costs by 39% – in essence, supply is cheap. CIS semis exporters will remain the most globally price-competitive in the near term despite the headwinds of persistent over supply and Ukrainian cost advantage. Houlton said that demand growth within the finished steel market was limited and that where steelmaking and casting capacity was concerned, supply was not limited. However, due to currency devaluation, supply is cheap and while semis exporters remain the most globally price competitive, challenges lie ahead. The Chinese problem persists and is likely to be a thorn in the side of the global steel industry for some time to come. As Alan Price of Wiley Rein pointed out, commercially-driven companies will find it difficult to compete with China because it doesn’t need to generate a return on capital. With China’s economy slowing down, the problem of overcapacity persists and Chinese steelmakers continue to seek out foreign markets for their products. t www.steeltimesint.com

5/26/15 10:34 AM

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Thriving in a challenging marketplace AIC Steel’s timely entry into the UK structural steel fabrication market has fuelled the company’s optimism for the future. By Matthew Moggridge* SOUTH Wales-based AIC Steel celebrated its one-year anniversary on 17 March this year. Since opening its doors for business, the company has recruited 120 people, invested £12 million into its Newport base and claims to have made real progress towards its goal of being the UK market leader in its field. The company is the UK arm of the international AIC Steel Group, which describes itself as a leading designer, fabricator and erector of structural steel and towers. Operating from a 35,000m2 site and outputting some 25kt of structural steelwork annually, AIC Steel in the UK is headed up by CEO Michael Treacy, a civil engineer by trade and a man who is driving the company forward despite facing challenging market conditions. Increased confidence In an exclusive interview with Steel Times International, Treacy said that the structural steel market in the UK had endured some tough times of late – more so, perhaps, than other market sectors – but that there had definitely been an upturn in the industry’s fortunes. “We’ve timed our entry into the market quite well,” he said, adding that the London market in particular was the first to recover and that increased confidence generally was beginning to generate more regional projects for the company. “In addition the government has pledged a lot of infrastructure works so we’re very optimistic that the market will grow, albeit not at 2006 levels, but it’s going in the

right direction,” he said. While there had been uncertainty surrounding who would be returned to power in the recent General Election in the UK, the fact that the Conservative Party, headed by David Cameron, is now set to enjoy a second five-year term in power, means that a national infrastructure plan outlined by the previous Tory-led coalition government will almost certainly go ahead. Treacy said that there was a fairly established view that infrastructure has to improve in a lot of areas. The structural steel market in the UK is not for the faint-hearted and while

AIC’s CEO Michael Treacy

some industry observers have predicted 9% growth in the market this year, Treacy remains cautiously optimistic. In recent years prices have plummeted and a lot of steel fabricators have gone out of business. “But there’s still a lot of capacity in the market and the fact that a lot of companies are very busy at the moment is very encouraging,” he said. Winning contracts Treacy’s optimism is firmly rooted in the reality of winning contracts. “Probably the biggest job we’ve won so far is the refurbishment of Bristol City Stadium,” he said, adding that the company had also won lucrative work in the heart of London, chiefly the conversion of an old Westminster office block into residential accommodation. “What tends to happen is the atrium gets infilled with steel and they extend parts of the building out. There’s a terrace we had to support and there were a lot of temporary works. It’s very technical work in the heart of London,” he said. Treacy said that AIC was beginning to hit the big players in the marketplace and lays the company’s growing success at the feet of its engineering-led philosophy, its technical ability, quality service and skilled workforce. Last summer the company achieved CE accreditation covering design and manufacturing of steel structures up to and including the highest execution class (EXC 4) of BS EN 1090-2. Treacy is proud of the company’s achievements so far. “As a start-up

* Editor, Steel Times International www.steeltimesint.com

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STRUCTURAL STEELS

business you have no track record and one way to achieve that without doing any work is to prove that you can offer that quality in the products you put out into the marketplace,” he explained. According to Treacy, CE accreditation was business critical. “If we hadn’t achieved it we wouldn’t have been able to put any steelwork out into the market. It’s mandatory that steelwork contractors have that accreditation,” he said, praising the AIC team behind the achievement. For established businesses, achieving CE accreditation is hard because very often they have to change their working practices; not so AIC who followed the CE rule book from the beginning. With turnover predicted to be ‘north’ of £20 million by end December 2015, AIC plans to expand its Newport fabrication base by adding a painting line and expanding within it’s existing structure, meaning more fabrication, offices off-site and maximising its potential by examining other areas allied to steel fabrication. Value engineering In essence, AIC wants to be more involved in the process. While the company has little say on the type of steel it fabricates – this is normally decided by structural engineers – it wants to champion ‘value engineering’ by offering clients the benefit of its technical skill set to interpret drawings and suggest ways of adding efficiencies. “We want to be the partner of choice,” Treacy said. A key facet in AIC’s future development will be Business Information Modelling (BIM) software, which Treacy and his team regard as the next big thing as it enables them to control traceability of materials, work from an integrated management system and be a part of the process earlier on. “We can come up with much more efficient ways of erecting steel structures and different ways of connecting it,” he said. Treacy’s objective is to see projects right the way through to the finished building. “That’s why we’re making such a big thing about our technical ability being high because it can add a lot of value to the May/June 2015

Structural steel AIC.indd 2

Local steel expertise While part of the Saudi Arabia-based AIC Steel Group, AIC UK is very much a standalone business developing its own niche activities in the UK. The company operates independently from the parent.

but also in attracting young talent to the company by talking to local schools, engaging Cardiff University – a leading centre of engineering excellence – and encouraging apprenticeships. “There’s a view that working in a steel plant is like going down the pits, but nothing could be further from the truth,” said Treacy. His plan is to work with various organisations to harness engineering talent and to ensure that a career in engineering is top-of-mind for young people. “The idea is to give people the opportunity to reject our business in the full knowledge of what it is if nothing else,” he said. Looking ahead, Treacy said that winning more contracts was key to moving forward. “It’s making sure that the market allows us to win the work and so far we’ve

“We have a lot of extra design capability overseas that we haven’t called upon yet. It’s something we’re looking to develop going forward,” he said. In the UK, the company is active across a number of key sectors including commercial, residential, refurbishment, leisure and infrastructure and is keen to rely upon local skills in the South Wales region to move the business forward. With the presence of Tata Steel UK in nearby Port Talbot, Treacy is only too aware that South Wales harbours tremendous steel talent and he is anxious to play a leading role not only in changing people’s perception of a career in the steel industry

had a very positive response. It’s a case of spreading the word. As a start-up business you have to gain the confidence of your clients and through projects like Bristol stadium we are succeeding,” he said. “The whole thing is about establishing relationships with the clients.” For Treacy, the engineering phase of any project takes a period of time and the steel fabricator should be included from the beginning so that problems can be ironed out early. “Information flow and building information management is vitally important and must find its way into the project for it to finish on time and on budget,” he said. t

job,” he said, expressing his intention to be involved at all stages through design, detailing and fabrication. “Meanwhile our contracts guys are managing that process to make sure it hits the dates. And when you get on site our guys are managing the actual installation of the steel, managing delivery times and making sure it all goes up in the right place and at the right time.” Being involved in the entire process from start to finish is the way the structural steel fabrication industry in the UK is going, according to Treacy, and he wants AIC to lead the field in this respect.

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Comparing hot metal de-sulphurisation methods Due to quality demands from the market and increasing sulphur content in hot metal, the vast majority of Basic Oxygen Furnace (BOF) steel plants worldwide desulphurise at least part of their steel. While it is possible to desulphurise steel after the converter process, from an economical perspective it is preferable to remove the sulphur from the hot metal before charging it to the converter. By Frank Schrama, Bart van den Berg and Guido van Hattum*

WHILE there are many hot metal desulphurisation methods, three are used on a larger commercial scale: the Kanbara Reactor (KR) process, with lime as a reagent, the Ukraina-Desmag or Magnesium mono-injection process (MMI), with magnesium as reagent and co-injection, using magnesium and lime or calcium carbide (sometimes all three) as reagents. Reagents The reagents that are used in KR, MMI and co-injection are lime, calcium carbide and magnesium. All processes are based on the following chemical reactions: S(fe)+CaO

CaS+O(fe)

(1)

S(fe)+CaC2 S(fe)+Mg

CaS+2C(fe) MgS

(2) (3)

Reaction 3 is three times as fast as reaction 2 and 20 times as fast as reaction 1. This means that magnesium is a much faster agent than the others. After the reactions, the formed CaS and MgS (which have a lower density than the liquid iron) rise to the surface to form a slag layer. When this layer is skimmed off, the sulphur is removed from the hot metal. When the MgS reaches the surface it comes into contact with oxygen, which results in the following reaction: 2MgS+O2

2MgO+2S

(4)

The unbounded sulphur dissolves back into the liquid iron. This is called resulphurisation and can be prevented in two ways – by avoiding contact between the MgS and air, which leads to practical problems (injection and skimming should take place in an inert environment), or by binding the sulphur with calcium to form the more stable CaS: MgS+CaO

CaS+MgO

MgS+CaC2+½O2

(5)

CaS+MgO+2C (6)

The formed CaS and MgO will remain in the slag as more stable solids. Due to reaction kinetics, magnesium is a faster reagent than calcium-based alternatives,

* Danieli Corus, Rooswijkweg 291, 1951 ME Velsen–Noord, The Netherlands May/June 2015

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Kanbara Reactor The KR process was developed by Nippon Steel in 1963. The low availability of magnesium in Japan was the reason to look for alternatives. Lime is used as the main reagent, but sometimes also CaF2 and/or Al2O3 are added. The reagent is either injected into the hot metal through a rotating lance (typical speed is 100-120 rpm) together with a carrier gas (usually nitrogen) or the reagent is added from the top. The stirring lance has four massive rotor blades, which create turbulence in the hot metal. Due to the turbulence, the bubble size of the transport gas is smaller and the residence time of the lime in the hot metal is longer than during static injection. The increased residence time is of major importance to the process, since lime is a relatively slow reagent. The lime in the KR process is used more efficiently, which means less lime is required and lime of a lower quality can be used. The stirring, however, also means that the hot metal needs to be skimmed Fig. 2 Kanbara Reactor

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Mg Ca

[S] in IM

but lime and calcium carbide have a lower equilibrium with the sulphur in the hot metal, see Fig.1. This means that magnesium is required for a fast process, but that lime or calcium carbide is required to reach low sulphur concentrations. The CaS formed in reactions 1 and 2 will remain attached to the reagent particle, which will rise to the slag layer due to upward pressure within a minute. Reaction 3 is a homogeneous reaction, which means that the magnesium first needs to dissolve in the hot metal before it reacts with the sulphur. The formed MgS, therefore, starts as a single molecule and takes much longer to cluster and rise to the slag (about 5-8 minutes). In practice this means that for effective desulphurisation the skimming cannot be stopped earlier than eight minutes after the last magnesium particles are injected.

Time Fig. 1 Qualitative graph of the equilibrium of magnesium and calcium with sulphur

prior to desulphurisation to remove high SiO2 containing blast furnace slag, since it decreases the efficiency of the lime. The impellor and refractory of the ladle suffer from increased wear. Finally the created turbulence requires a larger freeboard (typically 1 metre more than co-injection) in the hot metal ladle. Magnesium mono-injection Between 1969 and 1971 the magnesium mono-injection (MMI) process was developed at the Ukrainian Academy of Sciences. It is still mainly used in Russia and Ukraine, as well as in a few plants in China. Tests with this method in North America failed as a result of the violence of the process. With the MMI process, salt-coated magnesium is injected via a bell-shaped lance into the hot metal. The bell at the end of the lance is used as an evaporation chamber for the magnesium (which has a boiling point of 1107째C) to stabilise the process. However, there are also plants, with larger ladle sizes, where a straight Fig. 3 Magnesium mono-injection

lance without an evaporation chamber is used. In both cases the evaporation of the magnesium causes enough turbulence to ensure good reagent distribution in the hot metal. Supporters of the MMI process often state that lime does not add significantly to the desulphurisation efficiency of magnesium. This is correct, since magnesium is a 20 times faster reagent than lime, an equal amount of lime would contribute less than 5% to the desulphurisation. Conversely, it is claimed that lime actually decreases the efficiency of magnesium especially in cases where the lime is not very well burnt. This leads to the following reactions: CaCO3

CaO+O(fe)+CO

O(fe)+Mg

MgO

(7) (8)

When only magnesium is used as a reagent, re-sulphurisation becomes a major problem. Another problem is the thin slag layer (compared with KR and Fig. 4 Co-injection

May/June 2015

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BOF STEELMAKING

co-injection), which leads to an increased iron entrainment loss during skimming. In order to stabilise the slag and retard the re-sulphurisation, most steel plants add lime, flux and coagulant on top of the slag. Co-injection The co-injection of magnesium and lime combines the advantages of both reagents. Magnesium enables fast desulphurisation while lime allows for low final sulphur concentrations. In the past the lime was sometimes replaced by calcium carbide, which is more efficient, but due to safety issues this option is hardly used in new plants anymore. Co-injection is used worldwide and the process is considered standard practice. The reagents are stored in different dispensers and are mixed in the injection line. The reagents are injected via a straight lance with one opening at the bottom or multiple openings at the side. A transport gas (usually nitrogen) is used to ensure smooth injection. Carrier gas and evaporating magnesium create turbulence, which ensures sufficient distribution of reagent. An advantage of co-injection is that the ratio between magnesium and lime/CaC2 can be modified if required or allowed. For example, if more time is available, more lime and less magnesium can be injected, which makes the process more flexible and cost effective. Technical and metallurgical comparison All methods have their strengths and weaknesses. Specific circumstances and requirements of a steel plant set the priorities. However, the three methods can be compared for essential technical and metallurgical aspects. Time The process times depend on how fast the reagents react with sulphur. Since magnesium is a much faster reagent than lime, the MMI process and coinjection are faster than the KR process. The KR process has an extra time delay, since skimming prior to injection is often required. According to literature, the KR process takes, on average, 10-20% longer than co-injection. The MMI process generally has a shorter injection time than co-injection. However, the gained time is limited since skimming can only be ended when all MgS particles have reached the slag layer (which can take eight minutes). Overall, the MMI process is faster than co-injection with magnesium and lime (about 5%); coinjection with magnesium and calcium carbide is, in general, even faster than MMI. May/June 2015

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Process time

KR MMI Co-injection -

+ +

Iron loss

- -

+ +

Equipment wear

- -

Temperature loss

+ +

- -

+ +

- -

MMI

Low sulphur Flexibility Safety

Table 1 Qualitative comparison Per tonne hot metal

Co-injection

Iron loss

€ 7.50

€ 3.00

Reagent costs

€ 0.70

€ 1.45

€ 1.60

Equipment wear

€ 1.00

€ 0.70

€ 0.41

Temperature loss

€ 0.75

€ 0.25

Total

€ 9.95

€ 5.40

€ 5.26

Table 2 Most important operational cost contributions

Co-injection systems at a BOF plant in China

Iron loss Iron loss during skimming is a major problem. Iron is lost in two different ways. During slag forming, iron droplets are trapped in the slag, forming an emulsion with it. When the slag is skimmed, the trapped iron is lost; this is emulsion loss. In general, about half of the slag is iron in emulsion. This means that emulsion loss can be minimised by reducing the total amount of slag. The other major contribution to iron loss is entrainment loss. When slag is skimmed off, some iron can come with it. Entrainment loss can be reduced by more careful skimming or with more viscous slag, which is easier to rake off. Due to the large amount of slag created in the KR process and the required extra skimming prior to desulphurisation, total iron loss is generally 2-3 times more than for co-injection. The MMI process has the lowest iron emulsion loss, since little slag is created (about seven times less than co-injection). However, due to the lower

basicity, MMI slag can contain more iron in emulsion than slag that contains calcium. The entrainment loss of iron for the MMI process is higher than for co-injection or KR, since skimming is more difficult due to the small slag layer. Also, MMI requires more thorough skimming due to the higher sulphur concentration of the slag and the risk of re-sulphurisation. Nevertheless in some literature very low iron losses are claimed for the MMI process (as low as 0.03%) that seem impossible when taking entrainment loss into account. In reality, iron loss for MMI is similar to that for coinjection: around 1% against 2-3% for KR. Refractory and lance wear High temperatures and the corrosive composition of the hot metal and slag are the chief causes of refractory and lance wear. For the KR process the turbulence created by the rotating impellor is a major wear factor. The impellor is also vulnerable to wear, since the blades can break off and this event reduces turbulence and thus www.steeltimesint.com

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BOF STEELMAKING

Slag skimming – an inevitable part of the desulphurisation process

carbide can be injected as an alternative. Safety Magnesium is a hazardous flammable compound and can catch fire if spilled. In contact with water, magnesium can form the explosive hydrogen gas. When used for desulphurisation, magnesium is therefore coated, in order to retard its hazards. Nevertheless, coated magnesium remains a more hazardous reagent than (burnt) lime. In the MMI process (and sometimes with KR) calcium fluoride may be added to stabilise the process. When calcium fluoride reacts, the highly toxic fluorine gas is created. This, together with the violence during injection (due to vaporising and oxidising of the magnesium), makes the MMI process relatively unsafe for human health and the environment.

efficiency. Because of wear problems, a lot of research is done on refractory, especially where KR systems are concerned. The MMI process has less wear problems than the KR process, due to less turbulence. However, since magnesium is used instead of lime, the basicity of the slag is lower, causing increased corrosion wear. Coinjection has less turbulence than the MMI process and a higher basicity in the slag, which explains why the refractory and lance suffer the least from wear in this process. Temperature loss During desulphurisation, the hot metal loses heat. The temperature of the hot metal when it is charged to the converter affects the amount of scrap that can be added and/or the blowing time of the converter. When the hot metal temperature is already too low before desulphurisation, the desulphurisation process has to be omitted completely. This is more common with the KR process. Whether temperature loss in the desulphurisation process is a problem depends on local price differences between hot metal and scrap. Higher temperature losses are caused by longer process times, more turbulence, less slag (slag acts as an isolation material) and the use of reagents that generate less heat (magnesium causes an exothermic reaction and lime does not). The KR process involves longer process times, high turbulence and no major exothermic reactions, which leads to a temperature loss that is typically three times higher than for co-injection or MMI. Co-injection typically takes longer than injection in the MMI process; on the other hand, coinjection is less turbulent and has a thicker slag layer. Therefore, temperature losses for co-injection and MMI are similar. Low sulphur Nowadays hot metal with a sulphur May/June 2015

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concentration of only 10-20ppm can be demanded. Due to magnesiumsulphur equilibrium and the resulting re-sulphurisation, only magnesium as a reagent will not be sufficient to reach such concentrations. In literature, low sulphur concentrations with the use of only magnesium are claimed, but these measurements were taken directly after injection (before re-sulphurisation). In practice hot metal that is de-sulphurised by MMI never has sulphur concentrations below 0.006% when it is charged to the converter. This can be compensated a little by adding fluxes from the top. Co-injection is capable of reaching stable low sulphur concentrations. However, since magnesium is not efficient anymore at low sulphur concentrations, only the injected lime contributes to desulphurisation as soon as the lower concentrations are reached. Due to lower turbulence with co-injection, reaching the lowest sulphur concentrations takes longer and consumes more reagent than with KR. When consistently low sulphur concentrations are required, the KR process is most suitable. Flexibility A desulphurisation station that can respond to changing circumstances, like scarce reagents or lack of time, is beneficial to the overall flexibility of the plant. KR is not flexible concerning process time, since the optimal lime flow and stirring speed are already applied. KR can only reduce the process time by releasing the initial sulphur aim. Availability of reagents is typically not a problem for the KR process. However, magnesium for the MMI process can become scarce, leading to occasional increases in operational costs or even a production stop. The co-injection system has a high flexibility for both process times and a scarcity of reagent, since both rate and ratio are adjustable. Even calcium

Co-injection This was one of the reasons why the MMI process was abandoned in NorthAmerica. Due to the use of magnesium, co-injection is considered less safe than the KR process, provided no calcium fluoride is used in the KR process. For safety reasons, calcium carbide (which can form explosive acetylene gas when in contact with water) is hardly used for new co-injection stations. When compared to KR injection with part calcium fluoride, coinjection (using lime) is a safer option. Economy When considering CAPEX, the KR system is more expensive then co-injection and MMI due to the large structure and support for the lance and motor system. The MMI process is slightly cheaper than co-injection because only one dispenser is required. However, operational costs are generally the most important factor. The most significant contributions to operational costs are described below. Iron loss Iron loss is the most important cost contributor. We assume that the value of hot metal is 300 €/t. Hot metal loss for MMI and co-injection is about 1% and 2.5% for KR. In general the costs for iron loss can be reduced when considering recycling treatment of slag, but this is not taken into account here. Reagent costs It is assumed that magnesium costs 2,500 €/t, lime for co-injection 175 €/t and lime for the KR process (lower quality) 50 €/t. It is estimated that for both the MMI process and the co-injection process 0.5kg magnesium is injected per tonne. With an average ratio of 1:4 (Mg:CaO) co-injection also requires 2kg lime per tonne. The KR process injects 10kg lime per tonne. For KR and MMI, often flux and/or coagulant www.steeltimesint.com

5/26/15 8:55 AM

BOF STEELMAKING

are added as well (approximately 500 kg/ heat, which costs around 80 €/t). The costs for this are estimated at 0.20 €/t. Equipment wear The most important equipment wear is that of the lances and ladle refractory. Maintenance on the rest of the equipment is not taken into account since differences are negligible. The complete lance of the KR system treats on average 30,000 tHM (150 heats of 200 t) and costs around €8,000. The lance of the MMI system treats on average 10,000 tHM (50 heats) and costs around €1,500. The lance of the co-injection system also treats on average 10,000 tHM and costs around €800. The average lifetimes of the lances also include the fact that some break or block during their first heat. To replace the refractory of a hot metal ladle costs around €12,000 (including labour). Since MMI and KR require more freeboard (at least 50cm), the amount of required refractory is about 10% more (thus total costs of €13,200). For a KR system, refractory needs to be replaced on average every 18,000 tHM (90 heats).

For MMI systems the refractory of a ladle needs, on average, to be replaced every 24,000 tHM (120 heats). For co-injection, the refractory of a ladle needs to be replaced every 36,000 tHM (180 heats). Temperature loss With higher temperature loss, less scrap can be added to the converter. The costs of this extra hot metal minus the costs of the scrap are estimated at 0.025 €/°C·tHM. Co-injection and MMI have an average temperature loss of 10°C per heat against 30°C per heat for KR. Certain costs are made for using (nitrogen) gas and electrical power. However, no clear figures are known to compare this. Initial figures show values of around 0.05 €/t of steel which has no major impact on total OPEX. However it is clear that KR requires much more electricity, while MMI requires 5-6 times more nitrogen than co-injection. Also the influence of spare parts costs are neglected, since these are roughly 0.05 €/ tHM. The three leading desulphurisation techniques were compared based on

metallurgical performance and cost. The numbers mentioned should be considered averages and estimates based on experience and literature. Local circumstances and fluctuations were not taken into account. However, some conclusions can be drawn. Conclusions Considering performance and operational costs, the Kanbara Reactor is only a viable option when the main target is to produce low sulphur steel and when process times, temperature loss and hot metal loss are not an issue. When no steel grades with low sulphur concentrations need to be made, resulphurisation is not considered a problem and short processing times are required, magnesium mono-injection is the most effective method. Co-injection with magnesium and lime is the most flexible and reliable option. For a wide range of steel grades (including low sulphur grades and normal grades), co-injection is the most effective and most attractive method from an economical standpoint. t

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Molybdenum – reducing car weight Using molybdenum-alloyed steels in car manufacturing has proved highly effective in delivering weight reduction as well as increased strength and safety at neutral or reduced cost. Furthermore, it reduces GHG emissions and energy consumption. By Tim Outteridge* TRANSPORTATION by road vehicles makes a significant contribution to global energy consumption and greenhouse gas emissions. The EU estimates that around one-fifth of the region’s greenhouse gas emissions arise from road transportation. Reducing vehicle weight is an effective way to lower fuel consumption and emissions, with a reduction of 100kg producing fuel savings ranging from 0.1 to 0.5 litres per 100km, equal to a CO2 emission saving of between 8g and 12g per kilometre. Lightweighting has, therefore, been vigorously pursued over the years as a solution to meet decreasing emission targets, in parallel with other initiatives. The challenge for car designers is to reduce weight while addressing consumer demand for larger, safer vehicles at a competitive price. Steel has been used to construct automotive bodies and chassis for decades. Lightweighting initiatives have largely replaced mild steel with highstrength low alloy steel (HSLA), advanced high-strength steel (AHSS) and press hardening steel (PHS) grades. Unlike lower density materials, high-strength steel is readily processed using established manufacturing technology and knowhow, at a similar or lower cost. State-ofthe-art car bodies and chassis are now mostly constructed from high-strength steel, contributing a weight share of between 60% and 80% of the ‘body in white’. Compared to a conventional car body, the intensive use of high-strength steels cuts body weight by more than 100kg. Making high-strength steel is relatively straightforward. The challenge lies in combining high strength with good formability and weldability, which are necessary for the key processes in automotive manufacturing. Molybdenum alloying plays a crucial role when making many grades of high-strength steel.

Its specific metallurgical effects allow the formation of hard phases that have exceptionally high strength. The mixture of hard and soft phases in the steel matrix provides the desired combination of high strength and good formability. Molybdenum is particularly effective in regulating the co-existence of these different phases in a stable and reproducible manner in a range of production conditions. Such steels can be made in less sophisticated processing lines, lending more flexibility to production and contributing to wider global availability. While similar metallurgical outcomes can be achieved with other alloying elements, molybdenum has the strongest effect per added percentage by weight. The environmental benefits of using molybdenum-alloyed steels to replace key car components were recently modelled using a new production vehicle. Engineers at Ford aimed to produce a body structure with class-leading safety while reducing overall mass. The team replaced the previous press-hardened boron steel B-pillar with a hydroformed part made from a mix of molybdenum-containing DP800 and DP1000 dual-phase steels, resulting in an 8kg weight saving per car. Life cycle assessment (LCA), which assesses total lifetime environmental impact (see Steel Times International, April 2015, p23), was used to analyse the ‘old’ and ‘new’ B-pillars. The composition of the individual steel grades was determined from data provided by steel producers and fuel consumption was estimated using Fuel Reduction Values (FRV) commonly used by the European automotive industry. The study assumed a lifetime vehicle mileage of 200,000km. Analysing lifecycle impact on the environmental metrics most relevant to

the automotive sector indicates that the new hydroformed DP800/ DP1000 B-pillar design has significantly lower impacts than the previous boron steel design. The 8kg weight reduction leads to considerable savings, driving the difference in total impact between the two parts and resulting in a 29% reduction in attributable greenhouse gas emissions. The saving in Global Warming Potential (GWP) for both B-pillars in a car over 200,000km is 165kg CO2e (equivalent) for a petrol drivetrain and 141kg CO2e for diesel. This is equivalent to driving the vehicle for more than 1,000km. Looking solely at the impacts of production, the small increase due to alloying elements is far outweighed by the savings in ironmaking and secondary steelmaking due to the lighter weight of the part. Crucially, these improvements have been achieved while actually improving the crash performance of the B-pillar. Ford estimates that the redesign has yielded a significant cost saving. Overall the results of this study indicate that the switch to a DP800/DP1000 B-pillar design has yielded a benefit on an environmental, economic and a social level – in other words all three pillars of sustainable development. This demonstrates the potential improvements that can be achieved by using advanced high-strength steel grades with innovative manufacturing techniques, and the contribution that molybdenum can make in supporting similar innovations. Molybdenumcontaining steel is highly effective in delivering weight reduction as well as increased strength and safety at neutral or reduced cost.

* Secretary-General, International Molybdenum Association (IMOA). www.steeltimesint.com

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AISTECH 2015

Steel Dynamics’ Glenn Pushis (left) with US Steel’s CEO Mario Longhi

AISTech 2015 – a great success AISTech 2015, a flagship event of the Association for Iron & Technology (AIST) proved – once again – to be a resounding success. Held this year in Cleveland, Ohio (May 4 to 7) the event boasted 7,690 visitors, 541 exhibitors and a total of 515 technical presentations. In addition to a vibrant exhibition floor jam-packed with some of the big name technology providers from around the world, including SMS, Tenova, Danieli and Primetals Technologies, there was also a range of thought-provoking events that featured the cream of the North American steel industry. The annual Town Hall Forum, attracted an audience of 800 and brought together ArcelorMittal USA’s Andrew Harshaw; Berry Metal Co’s George Konig; US Steel’s David Rintoul; Nucor’s Michael Lee and Steel Dynamics’ Richard Teets to discuss

AISTECH 2015.indd 1

the big issues affecting the industry. It goes without saying that China was top of the agenda and while most of the panel talked about a difficult market – Berry Metals’ Konig said: “It’s an absolute war out there” – Nucor’s Michael Lee, a self-confessed ‘optimistic guy’, said that America could compete against anybody. “Put us on a level playing field and we can kick anybody’s butt,” he said. Later, at a press conference, US Steel’s Mario Longhi (pictured above right) said the issue of China would take years to resolve. “I don’t see a short-term solution,” he said, shortly after receiving AIST’s Steelmaker of the Year award at the President’s Award Breakfast, which attracted over 1,000 attendees. Also at the press conference was ArcelorMittal USA’s Andrew Harshaw who said that the only way of solving the problem of China was in Washington

DC. “At the end of the day the only thing they’re going to respect is the law,” he said. On the exhibition floor, it was business as usual, but at the back of most people’s minds was the thought of driving home in a brand new pick-up truck. Everybody with a prize draw ticket stood a chance of winning it and eventually somebody did; John Accurso of Quaker Chemical, one of 10 lucky finalists, was handed the keys. After the official occasions, the awards, the technical presentations and the vibrant exhibition, AISTech 2015 was rounded off with some interesting steel plant tours courtesy of ArcelorMittal, Cleveland; Charter Steel, Cleveland; and Timken Steel Corp’s Faircrest Plant. Turn to page 77 for an exclusive interview with Glenn Pushis, AIST’s outgoing president. AISTech 2016 will be in Pittsburgh, USA. t

5/26/15 8:59 AM

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SPE_Mise en page 1 30/04/2015 15:15 Page 1

PROCESS CONTROL

Precision caliper setting on 2-roll sizing unit by Primetals Technologies

EVO – The new 4-roll reducing and sizing mill Improved metallurgical and dimensional control of special quality bar as well as greater mill productivity as a result of higher flexibility in the family of diameter sizes possible without roll change is achieved in the EVO Mill from Primetals Technologies by incorporating two 2-roll stands for maximum reduction with three 4-roll stands for best tolerances. By Alberto Lainati* THE market for Special Bar Quality (SBQ) long products is demanding but financially attractive. Technical measures and economical returns need to be balanced along the complete processing chain not only in the bar mill, but also by post-rolling processors. The combined requirements of thermomechanical rolling (low temperature rolling, high reduction and metallurgical uniformity) with the high shaping/finishing accuracy of the rolled bar, require a specific group of stands in the mill – namely a reducing and sizing group – arranged in a particular configuration (eg 2-roll H-V or 3-roll Y-λ or 4-roll X) and number of units (eg 2-roll consisting of three stands with rolls orientated horizontal-vertical-horizontal

(H-V-H) or four H-V-H-V; 3-roll group with four or five stands; 4-roll group with one or two stands).

Fig 1 Primetals Technologies’ 2-roll precision rolling sizing mill

These requirements can be satisfied either by 2-roll or 3-roll reducing sizing groups, even with differing levels of operational performance and consistency; but the 4-roll technique has limited application – used only for finishing sizing and cannot cover all the requirements. While the 2-roll groups can provide good finishing and a high rate of reduction which gives greater penetration of strain into the bar and so greater metallurgical homogeneity through the bar section, nevertheless, this configuration is less efficient in shaping, giving greater material spread and lower adaptability for free-sizing in which a range of bar diameters can be rolled without changing the mill rolls. The 3-roll groups provide accurate and

*The author is head of sales, technology and innovation with Primetals Technologies, Italy. Contact: Alberto Lainati, Primetals Technologies Italy Srl, via L. Pomini 92, 21050, Marnate, Italy, +39(0331)741320, alberto.lainati@primetals.com Primetals Technologies is a joint-venture company of Siemens and Mitsubishi Heavy Industries following the merger of Siemens VAI Metals Technologies and Mitsubishi-Hitachi Metals Machinery, Inc (MHMM) in January 2015 www.steeltimesint.com

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PROCESS CONTROL

Fig 2 Comparison between 3- and 4-roll design

Fig 5 The three 4-roll stands are each orientated at 45° to one another

Fig 4 Compact installation of EVO Reducing and Sizing Mill

efficient rolling with reduced material spread but result in less penetration of strain into the bar, thus resulting in a less homogeneous metallurgical structure. 3-roll groups have a wide application for free-sizing although, at the extremes of the family of sizes, the dimensional accuracy is somewhat jeopardised. With over 20 installations, Primetals Technologies has much experience with 2-roll sizing groups, and was also among the first companies to apply the 4-roll concept called PRS (Precision Rolling Sizing) as a complement to 2-roll sizing. In 2011 an R&D project was undertaken to conceive an evolved concept of a reducing-sizing group based on a combination of the 2-roll and 4-roll processing techniques. The result is the patented EVO Reducing and Sizing Mill, which offers a better product quality and increased mill productivity. EVO Reducing and Sizing Mill Primetals Technologies’ 2-roll sizing mill (Fig 1) delivers excellent performances for tolerance. Building on this expertise, the new EVO mill comprises one reducing group with two 2-roll stands for high rolling reduction, and one 4-roll sizing group with three stands for low reduction to give accurate sizing. The EVO mill allows an exceptionally wide product range to be processed May/June 2015

PROCESS CONTROL siemens.indd 2

Fig 3 The core of EVO Reducing and Sizing Mill (rolling direction from right to left – turquoise, two 2-roll stands; blue, three 4-roll stands)

with a given diameter of profiled rolls. Therefore, the number of required roll sets is reduced with evident savings in terms of capital investment and operating costs. Also, as the requirement for roll changes and roll set-up is reduced, utilisation and, therefore, mill productivity are greatly improved. Combining the 2-roll concept with the 4-roll rather than 3-roll was chosen as the preferred combination. This is despite the 3-roll design giving good tolerance and good free-sizing performance, properties, which may compensate for its inherent disadvantages, namely lighter reduction and lower housing capacity – characteristics which may not be so significant if other equipment in the line limits the process speeds and temperatures. A further disadvantage of the 3-roll design is the chance of bar twisting caused by the trilobed geometry, where the resulting vector of forces may not always be compensated (Fig 2). This effect needs to be controlled by using roller guides, with the related issues of cost, guide-setting and risk of surface damage to the bar. Thus, increasing market demands led Primetals Technologies to select 4-roll over 3-roll in the development of a new and more flexible mill capable of incorporating new processing practices at high-speed and lower-temperatures.

Layout and equipment The EVO Reducing and Sizing mill is a group of five units: two 2-roll stands followed by three 4-roll stands (Fig 3). The two 2-roll stands are arranged in an ‘X’ configuration while the three 4-roll stands have a 45° orientation in relation to each other. This configuration effectively grants twist-free rolling and enables an optimised combination of very high rolling reduction and very accurate size finishing. It also favours the compactness of the overall construction and installation, thus reducing charges associated with the mill footprint (Fig 4). The group can, therefore, be implemented as a brownfield installation in existing mills which need to upgrade product quality. Among the typical requirements for SBQ bars there are the needs for a fine grain structure and precise tolerances. While fine grain size is promoted by high reduction, precise tolerances are aided by low reduction. In the EVO mill, high-reductions are applied in the 2-roll stands so that the desired grain size may be obtained. Robust mechanical components and hydraulic capsule control are incorporated in the 2-roll design, increasing its load capacity as demanded by low temperature rolling and high carbon and alloy steel grades. Because of the high reduction ratios, even rough www.steeltimesint.com

5/26/15 9:00 AM

ENERGY CONSUMPTION

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PRODUCTION 60%

PROCESS CONTROL

2-roll method

Spread ratio (%)

3-roll method

4-roll method

-5 5

10 Reduction of area (%)

Fig 6 Relationship between spread ratio and area reduction (ref 1 Kawasaki Steel Co)

tolerance (eg to 1 DIN) of the incoming stock may be effectively corrected by the 2-roll group. Conversely, low reductions are applied in the subsequent 4-roll stands to obtain the desired tolerances. In particular, the final 4-roll stand applies a reduction of only 1-3%, thus granting ultra-accurate size and a smooth surface. In the EVO mill, which is covered by industrial patents, roll grooves are calculated with the help of FEM software, and further tuned and optimised together with the roll gap and speed, by using proprietary software which implements specially developed modelling techniques. Individual motors and gearboxes drive each stand, so that rotation speeds can be adjusted to remove the restraints of the reduction distribution. Correct calculation of the inter-stand distances ensures good stability of the rolling stock. Bar twisting must be avoided due to its associated risks of cobbles, tolerance deterioration and surface damage. Between the two 2-roll stands a roller guide is inserted to precisely drive the oval stock. At the exit pass of the second 2-roll stand a static guide is employed to drive the round stock into the 4-roll group. Special friction-free static guides are employed between the 4-roll stands, where the small inter-stand distance and the balanced forces promote a very stable operation. Features and benefits of 4-roll Spread is harmful to dimensional accuracy, and it limits the possibilities for free-sizing. The relationship between the spread ratio and reduction of area varies according to the sizing design. It is clear that with the 4-roll design there is almost zero spread, suggesting that 4-roll is the most suitable technology for rolling with high dimensional accuracy. The arrangement of the 4-roll stand contributes to limit the stock spread, which is restricted in the 45Â° wedged pass sectors (Fig 5). With the 4-roll design, the diameter size of the finished product has a little influence on the spread ratio, which remains around zero (Fig 6). In fact, as roll forces are applied to the stock from May/June 2015

PROCESS CONTROL siemens.indd 3

Fig 7 Greater homogeneity of deformation of the bar cross-section results in the 4-roll design Free-sizing range

Tolerance din

Fig 9 Tolerances achieved with 4-roll free-sizing

four sides simultaneously, the overall deformation is more efficient than with the other two designs. Consequently, the required specific energy (kWh/t) is expected to decrease by up to 15% compared to the 3-roll and up to 40% compared to the 2-roll designs. Therefore, the temperature rise in the bar is less. This aspect is very beneficial when thermo-mechanical rolling is employed. Deformation in cross-section As calculated by FEM simulation, the deformation in a 4-roll stand is more homogeneous than in a 3-roll stand (Figs 7 & 8). This happens throughout the bar cross-section, from surface to centre. The resulting micro-structure from the 4-roll stand has greater metallurgical uniformity which makes this design ideal for thermomechanical rolling, as well as for obtaining a uniform and fine grain size. Varying entry cross-section Due to the virtually zero spread, the 4-roll design automatically compensates for cross-sectional variations resulting from equipment (rolls and guides) and rolling parameters (steel grades and temperatures). This has been proven by comparing the cross-sectional differences before and after three passes in a 4-roll group. This automatic compensation is one of the reasons why 4-roll design can deliver exceptionally good tolerances. Even an 18% variation in the section area of a nominal 30mm finished diameter bar is fully compensated by the groove geometry of the three 4-roll stands. The same final size with very tight tolerance

Fig 8 Deformation in the cross-section in 3-roll design

is achieved from head to tail of the bar. This is beneficial to the rolling yield, as the amount of end crop is substantially reduced. It also favours some post-rolling operations (eg peeling), as the removal of out-of-tolerance material is reduced. Single-family and free-sizing The single-family concept minimises the number of roll changes in the rolling train, prior to entering the sizing stands, by maintaining a single pass sequence, with all the size changes concentrated in the reducing and sizing mill. With free-sizing the fine adjustment of the roll gap around its nominal value, without adjusting the feed coming from the previous pass, allows a continuous range of finished diameters between the minimum and maximum values of the â&#x20AC;&#x2DC;familyâ&#x20AC;&#x2122; rolled, and always within the required tolerances. The free-size rolling range corresponds to the difference between the minimum and maximum roll gap achievable which results in a maximum value of ovality, defined as the difference between the maximum and minimum diameters at the same cross-section. The free-sizing range provided by the 4-roll design varies according to the required degree of dimensional tolerance, whether precision or conventional (Fig 9). This is a wider range than that provided by the 3-roll design, which is about 10%. It is clear that the 4-roll design makes a wider free-sizing range possible (Fig 10). Single-family and free-size rolling dramatically improve mill utilisation, its flexibility of operation, and the equipment inventory management (rolls and guides), bringing a reduction of operating costs. In the SBQ markets, even very small lots of nonstandard sizes can be produced economically with a minimum impact on mill utilisation, and always within the required tolerances. In short, the best cost-effective mill operation may be implemented. For example, an EVO mill is capable of processing a round product mix ranging from 14mm to 80mm in a single-family pass design, with no changes to the up-stream mill, and free-size it into about 70 finished calibrated diameters using 14 sets of rolls. www.steeltimesint.com

5/26/15 9:00 AM

SOLUTIONS LEADING THE WORLD IN LONG PRODUCTS STRAIGHTENING. Fives Bronx specializes in the latest long product straightening technology for the new, higher grades of rail, sections and round bar currently being processed globally. Installations include the latest in computer-controlled, quick-change straightening technology that improve production capabilities, leading to less down time. Solutions include the complete integration of vertical and horizontal-axis machines along with ancillary equipment to maximize throughput. Fives Bronx ... leading the world in Long Products Straightening. fivesbronx-sales@fivesgroup.com

PROCESS CONTROL

Fig 10 Comparison of tolerance achieved with free-sizing between 2-roll, 3-roll and 4-roll designs

0.30

100 80

0.10 0.00 15

-0.10

3 rolls 23 4 rolls 2 rolls

Tolerance [mm]

0.20

120

-0.20 20

Fig 11 Comparison of wear of roll groove in 2, 3 & 4 roll designs

-0.30 Round [mm]

0 2-roll

Pass sequence The two 2-roll stands employ an ovalround sequence with high reduction ratios resulting in deep and uniform grain refinement from surface to core of the rolled stock, similarly to what a forging operation would obtain. A fine grain is beneficial to mechanical properties, and it also eases the downstream processes, such as peeling, drawing and spring bending, bringing a reduction of corresponding cost. Reducing time of travel As grains tend to dynamically recrystallise between deformation passes, it is important that the time of travel from the exit of the 2-roll group be reduced to a minimum. This is why the 4-roll group is placed immediately after the second stand of the 2-roll group. The three 4-roll stand employs a round-round-round sequence with light reduction ratios in order to obtain precise shape and tolerances. While lower strain tends to make the grain coarse, the 4-roll design can effectively limit this by controlling the spread and uniformity of plastic strain. Set-up of stands The set-up operation of the mill is similar to a machine tool, that is, easy and consistently repeatable over time. Stand and guide preparation are performed in the roll shop in parallel to rolling. This leads to changing times of rolls and stands in accordance with modern operational practices (Table 1). May/June 2015

PROCESS CONTROL siemens.indd 4

4-roll

Dimensional control module @T1< T0

Mill stretch curve [spring characteristic]

@ T0

Zero plays force Actual rolling force

Pass wear One of the most important factors which wear the roll groove surface is the friction generated by the speed differences of roll and stock in the contact areas. Since in the 4-roll design the contact areas are smaller than in the 2- and 3-roll designs, the differential speed is reduced. This differential speed, together with smaller rolling pressures, helps relieving the wear of the roll groove surface (Fig 11).

3-roll

Material gauge

Curve of plastic deformation of rolled material at a certain temperature

T0... T1 ∆ Gap

∆S F(S0;∆(S1;Starget))

∆(S1;Starget)

No load gap Stand spring Material reduction Actual gap

Starget

Fig 12 Real-time gap adjustment with dimensional control module Operations

4-Roll 3-Roll 2-Ross

Size change with free-sizing (gap)

1 min

1min

2min

Stand extraction with free-sizing

3 min

4 min

Group change for a new sizes family Rolls change (1 stand) in roll shop

5 min

15 min

20 min

25 min

Table 1 Typical changing times

Highlights of construction The EVO mill features position and pressure transducers for each roll in both 2- and 4-roll stands. Individual hydraulic capsules are also installed to adjust the positions of the rolls in real time and under-load. Once set-up operations are completed, rolling may be immediately restarted and the desired tolerance obtained right from the first bar without the need of a trial bar. The capsules also provide an anti-jamming function in case of emergency. Likewise, temperature sensors are provided in the group, so that variations of temperature can be monitored along the whole bar. All this information is integrated in the Dimensional Control Module (DCM), along with information on size, shape, temperature, stand stiffness (spring effect), gap and rolling force. Since larger or smaller entry sections, and lower or higher temperatures, respectively increase or reduce the separating forces, the DCM provides the necessary adjustment to the gap of each roll, in real time (Fig 12). t

In summary The EVO reducing and sizing mill combining 2-roll and 4-roll stands provides: • Single-family concept for simplified upstream operation; • Wide range of free-sizing; • Easy rolling of non-standard sizes even in small lots; • Low roll wear; • Reduction of inventory of change parts; • Reduction of times for pass and stand changes; • Excellent control of bar shape; • High dimensional accuracy on the cross-section and along the whole bar; • No trial bars; • Uniform deformation in the cross- section; • Metallurgical uniformity of the micro-structure; • Improvement of yield; and • Compactness of layout arrangement. www.steeltimesint.com

5/26/15 9:00 AM

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

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12.05.15 15:06

METEC 2015

The bright world of metals METEC is billed as the world’s leading trade fair for metallurgical plant making and mechanical engineering. Held every four years in Germany it brings together technology providers and steelmakers from around the world eager to impart their knowledge of metals processing and the latest equipment available. We look at some leading technology providers who are exhibiting in Dusseldorf

Not at METEC

Designing the future efficiently

PANalytical’s Zetium spectrometer PANalytical, a leading supplier of X-ray analysis systems, offers the metals edition of the Zetium spectrometer, which is designed to deliver analytical excellence in the metals industry. According to the company, the Zetium spectrometer incorporates years of experience and the latest technology to meet the strictest process control targets from raw materials through to secondary products. According to PANalytical, the system offers many unique advantages including a reduction in analysis time of up to 50%, identification of unexpected elements in production samples, small spot mapping and elemental distribution analysis of inclusions and heterogeneities. For more information, visit www.panalytical.com

The SMS Group will be exhibiting at both METEC and GIFA/Thermprocess. At two separate booths the company will inform visitors about its entire technology and service portfolio in addition to presenting papers at ESTAD 2015 (European Steel Technology and Application Days) in which they will reference recent projects in around 60 technical papers. Visitors to the METEC stand will have the chance to physically operate a control pulput and control the rolling process and there will be plenty of activity surrounding METEC’s chief theme – Growth Engine Metallurgy: Designing the Future Efficient-

ly and in an Eco-friendly Way. The company will outline its collaboration with Salzgitter Flachstahl and the Technical University of Clausthal in the development of the horizontal strip casting processes, which is known as belt casting technology (BCT). “This process uses much less energy and raw materials than other steel casting processes and the capital investment in a BCT plant is only about one third of that otherwise required,” SMS claims. For more information, visit www.sms-group.com

Speciality graphite products SGL Group – The Carbon Company – will be showing its speciality graphite products and services for casting applications and high temperature furnaces. “Based on this broad material base experts [at SGL] identify the best solution for the special requirements of each customer,” claims the company. “Speciality graphite products … are typically used in applications like continuous casting of non-ferrous metals or the heat treatment of steel components for the automotive industry.” Burkhard Straube, chairman of SGL’s business unit for graphite materials and systems, said: “Our strength is the combination of material and application know-how for casting and high temperature applications based on our comprehensive www.steeltimesint.com

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speciality graphite portfolio.” According to Straube, SGL develops customised, efficient solutions for its customers’ production processes. The company’s C/C material SIGRABOND® Performance is claimed to offer clear advantages when compared with traditional carbon fibre-reinforced carbon. It offers up to 20% higher rigidity and lower porosity and serves as a material base for the design and manufacture of charging fixtures for optimised loading of heat treatment furnaces. For further information, log on to www.sglgroup.com May/June 2015

5/26/15 9:01 AM

METEC 2015

Precise measurement systems

Innovative vacuum solutions

Swiss company Zumbach will be exhibiting equipment and solutions for the precise measurement and monitoring of dimensions and shape/geometry of any bar, pipe or profile, hot or cold. The company claims to offer two sophisticated technologies – Steelmaster and Profilemaster. The former is based on tangential laser scanning and the latter on highly developed ‘light cut’ vision technology. Zumbac claims that both technologies are available in different models and cover dimensions up to 600mm. For cold application such as centreless grinding, peeling, tube welding, drawing, rolling and straightening, Zumbach offers ‘sophisticated and

Oerlikon Leybold Vacuum claims to offer the newest vacuum systems that are ideal for VD, VOD, RH, VIM and other steel degassing processes. “Our state-of-the art mechanical vacuum solutions are extremely robust and compact,” says the company, adding that they offer ‘superior process control’ and the ‘highest uptime’. The company’s systems, which are modular, rely upon the most modern state-of-the-art dry screw and roots technology and offer the lowest power consumption and noise emission, claims Oerlikon Leybold. “The requirements of industrial heat treatment such as annealing and tempering – but also demanding processes like sintering, carburisation, nitriding, carbonitriding or brazing – call for optimised products with high performance in terms of robustness, power consumption, process control and system availability. According to Oerlikon Leybold, vacuum technology paired with engineering know-how and consulting expertise will increase productivity while decreasing energy usage and space requirements.

well-established solutions’ with its ODAC laser scanners and USYS processors for diameter measurement. The company’s new Bendcheck system for the measurement and monitoring of bend (straightness) of bars, rods and pipes will also be on display. For further information, log on to www.zumbach.com

Welding and tempering AHSS steel grades USA-based Taylor-Winfield Technologies (TWT) has developed the AnnWeld induction post-weld heat treatment (PWHT) system. The system was developed in collaboration with several major steel producers and was designed to join and temper AHSS grades. According to TWT, the process improves ductility in the welded joint without sacrificing weld strength by using accurate and repeatable heat cycles, precision temperature control using

pyrometer feedback, automatic load tuning and custom-manufactured coils. The system can be an integral part of the welder or an additional process step. It can be custom-designed to meet unique customer requirements or integrated with any welder in any process line.

Advanced solutions for steel

Drive technology for heavy-duty applications

The French Redex Group will be exhibiting at METEC and showing visitors its advanced solutions for the steel processing industries. The company specialises in machine tool drives, precision strip and wire processing equipment, all of which are manufactured in Europe. The company employs highly skilled engineering teams across the world, with production managed across three European high-tech production plants and research and development facilities in technical offices in France and Germany. Redex is active throughout the world, including China, where it has supplied Ningbo QiYi Precision Metals with an advanced tension-leveling unit to help the company improve product quality and enhance market competitiveness.

Nord Drivesystems of Germany is a developer and manufacturer of drive technology and this year the company is celebrating it’s 50th anniversary. At METEC the company will be showing its drive technology for heavy-duty applications consisting of compact electronics, high-strength gears and bespoke motors, all manufactured in-house.

For further information, log on to www.oerlikon.com/leyboldvacuum

For more information visit: www.taylor-winfield.com.

According to Nord Drivesystems, the motor offer for steelworks includes compact, totally enclosed non-ventilated (TENV/IC410) roller table motors with ring fins or straight fins, and totally enclosed motors with an internal or external fan (TEFC/IC411 or TEFV/IC416). “Nord implements application-specific motor winding patterns to ensure tough torque characteristics with high breakdown torques,” the company claims, adding that shock and vibration-absorbing cast iron housings and reinforced bearings and shafts provide for high maintenance resilience. For further information, log on to www.nord.com

For further information, log on to www.redex-group.com

May/June 2015

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Dino Capitanio - AIC Founder

40 years learning, listening and solving our Customers’ needs. We want to offer the steel industry excellence and constant attention to details in the design of complete systems including command, control and monitoring components.

Hall 5, G03

The result leads to a better performing, safer and more efficient production process. The worldwide experience in engineering metal automation process is all in your hands. AIC Automazioni Industriali Capitanio sites: ® Italy (Headquarters & Workshop) - Phone +39 0365 826333 ® United States of America (Sales & Service) ® India (Sales & Service) aic@aicnet.it - www.aicnet.it

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MAINTENANCE

Keeping an eye on oil quality Global steelmakers are aware of the big issues affecting the industry, but they also believe that a more proactive approach to plant maintenance is needed to retain a competitive edge THE current economic climate is top-ofmind for global steelmakers, according to a recent Steel Times International reader survey in conjunction with ExxonMobil. While the global economy was considered the biggest challenge facing the international steel industry – 37% of those surveyed – another big issue flagged up by only 16% of respondents was the flood of cheap imported steel coming from China and the Far East, the rising costs of raw materials (12%) and increasingly stringent regulation surrounding energy efficiency and the environment. But while the big global issues were unsurprisingly top-of-mind, some steelmakers commented that old, rundown and poorly performing equipment hampered competitiveness going forward and argued that cost cutting, rather than investment, has been the only way steelmakers are attempting to balance the books. In fact, where improving the performance of critical steel plant machinery was concerned, most steelmakers argued that it was most important to take a proactive approach to maintenance and pay more attention to monitoring the quality and cleanliness of lubricants. That said, however, upgrading to a higher quality oil was viewed as the least important aspect of performance enhancement. Where equipment servicing was concerned, 35% of those surveyed claimed that it was contracted out while 24% said they undertook in-house maintenance work and only 17% relied upon OEM (original equipment manufacturer) maintenance contracts. Asked how they selected their chosen lubricant, 37% of respondents claimed that they listened to the recommendation of their OEM, 24% said they bought purely on price and 20% argued that their decision was based on the protective properties of the oils available to them. Energy efficiency was a consideration for 15% of those surveyed while 10% looked for longer lasting oils that required less May/June 2015

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frequent changing. Where reducing the environmental impact of steel production was concerned, 30% of respondents said that reducing oil wastage played a crucial role. Of equal importance, however, was an updated procurement policy aligned with internal sustainability and climate control policy. Purchasing newer and more efficient processing equipment was the solution for 28% of those surveyed and a small percentage claimed that the use of advanced lubricants also helped. While only 9% of respondents claimed their processing equipment was over 20 years old, 47% argued that one of the main challenges facing lubricant suppliers was the age of the equipment followed by 20% who cited water and particle contamination, 16% who flagged up high temperatures and 11% who believed that wear and tear and heavy usage were critical factors at play. Equipment age When asked the age of the processing equipment employed at their plants, most respondents (28%) said it was between five and 10 years old followed by 19% who operated 10-15-year-old technology and 13% whose machinery was between 15 and 20 years of age. Only 9% claimed their equipment was over 20 years old while 10% were unsure. While the current economic climate is the chief concern of those surveyed, 51% claimed that productivity was up. For Jarmo Vihersalo, industrial marketing advisor for Europe, Africa and the Middle East, the fact that many steelmakers purchase lubricants based on price is

cause for concern when a key point is cost reduction. “Price is important, but to buy solely on price is not a good idea,” he said. Engineering expertise Vihersalo said that steelmakers should consider different oils for different pieces of equipment and rely upon the engineering expertise of the lubricant supplier to help them make the right decision. Most reputable suppliers offer an oil analysis service and a full package of options to simplify the selection process. “Plant managers can sometimes underestimate the true power of high performance lubricants. Synthetic lubricants have the ability to prolong the life of equipment and decrease maintenance requirements,” Vihersalo said. “Steel plant managers should adopt a long-term and systematic approach to choosing the right lubricant and remember that leading lubricant suppliers offer engineering support, plan various activities and can provide documented evidence of the achievable savings that can be made simply by using the right oil,” he said. He added that lower-priced, basic mineral lubricants can mean more frequent oil changes and that the solution was a mixture of improving and updating equipment and selecting the right lubricants. Vihersalo said that it is possible for steel mills to save up to 1-2% of energy costs by using higher quality lubricants. He said that longer lasting oils also mean less interaction between man and machine and this can only lead to a safer working environment. While updating older equipment is not always possible, leading lubricant suppliers offer steel plant managers various options to prolong equipment life including lubricants for rolling mills that can repel dust and water. “We have to find a solution for each piece of equipment individually,” said Vihersalo. t www.steeltimesint.com

5/26/15 9:03 AM

ELECTRIC STEELMAKING

Optimising Consteel continuous scrap feeding with roof-fed DRI For EAF furnaces charged jointly with scrap and with DRI through the roof, feeding the scrap via a Consteel pre-heater conveyor rather than by bucket, enables a shorter power-on time, increases productivity and improves all other operating parameters, except carbon injection, resulting in a significant saving in electrical energy. By F Memoli*, J A T Jones** & F Picciolo***

15 10

0 70

Tap of previous heat Electric

Time [min]

Ready to tap Continuous charge

(a) Power on time (red) and charge time (grey) for 40% scrap bucket charge + 60% DRI continuous fed through roof

Power [MW ]

15 10

Tap of previous heat Electric

Time [min]

Continuous charge [t/min]

off time and no consequent energy loss; e With Consteel, simultaneous charging of scrap and DRI starts right from the beginning, but with bucket charging a suitable amount of scrap needs to be first melted before feeding DRI: the transition between two different melting steps implies temporary inefficiencies. e Simultaneous feeding of DRI and scrap from the beginning of the heat enhances the arc cover by slag due to good slag foaming resulting from high CO evolution when charging DRI. This provides increased arc stability and arc efficiency throughout the entire heat: lower power-on time and lower electric energy consumption. e DRI chemical composition results in CO-rich fumes, resulting in enhanced scrap preheating. The Consteel EAF with continuous scrap charging can accommodate any proportion of scrap in the charge and balance it with DRI through the roof. In contrast, a bucket-charged furnace suffers constraints if charging more than 25% DRI. For full version of this article visit http:// www.steeltimesint.com/contentimages/ features/Tenova_web_res.pdfWEB] t

Continuous charge [t/min]

Why use DRI There are two reasons for an EAF to add DRI as part or all of its iron units: residual element control and lack of premium grade scrap. Scrap availability is limited in certain regions of the world. The pressure on the scrap market from minimills forces scrap users to turn to lower grade sources, such as obsolete scrap. The problem with obsolete scrap is its quality. Growth in electric arc steelmaking has led to an unavoidable faster turnabout of scrap and consequently, to increased contamination

by other elements. Residuals such as Cr, Ni, Mo, Cu and Sn, range from 0.15% to 0.75% depending on the type of scrap. Residuals have adverse effects on mechanical properties of the resulting steel. Thus, using scrap-only charged EAFs for the production of quality steels as well as low carbon steels is generally avoided. Another problem for scrap-only based EAFs is nitrogen. The N content of EAF steels is higher than BOF steels. Consequently, steel grades produced in an EAF generally have poor ageing characteristics, which make them unsuitable for sheet production intended for deep drawing or other severe forming applications. The two figures (a & b) compare the power on time (red) and the charge period (grey) for (a) 40% scrap bucket charged + 60% DRI continuously fed and (b) 40% scrap charges via Consteel + 60% DRI continuously fed. If scrap is continuously charged using Consteel for 40% scrap plus 60% cold DRI a significantly higher productivity (+7.2%) is achieved for the same amount of electrical power as well as better KPIs. This is for the following reasons: e No bucket implies a shorter power-

Power [MW]

WHILE some conventional EAFs charge direct reduced iron (DRI) as a source of virgin iron in the charge, the use of DRI in a furnace equipped with a Consteel continuous scrap preheater has not yet been adopted on a large scale. Those plants which have started using DRI in Consteel furnaces report promising results. Process investigations, metallurgical calculations and practical tests have been carried out to determine the optimum balance between Consteel continuous scrap charging and continuous charging of DRI through the furnace roof. The composition of the DRI is important and impacts furnace parameters such as yield, flux additions, slag weight, energy, injected carbon and feeding rates as well as oxygen use. The composition of DRI varies depending on the source and analysis of the ore used. The process method used for DRI production and the choice of operating parameters also impact the DRI chemistry. DRI produced via the HYL process has carbon that can exceed the carbon content of blast furnace pig iron (~4%), reaching values up to 6%. This carbon will yield more than 37kWh/tls for each 1% of carbon in the DRI.

0 70

Ready to tap Continuous charge

(b) Power on time (red) and charge time (grey) for 40% scrap via Consteel + 60% DRI continuous fed through roof

*Tenova Core Inc.100 Corporate Center Drive - Coraopolis, PA 15108-3185. +1 (412) 262-2240 francesco.memoli@tenova.com **Continuous Improvement Experts Inc.8 Trotter Lane, Clinton PA 15026 +1 (716) 998-1932 jeremy.jones@cixllc.com ***Cape Cate (Pty) Ltd. 3 Nobel Blvd, Vanderbijlpark 1911, South Africa +27 (16) 980-2121 picciolof@capegate.co.za May/June 2015

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5/26/15 9:05 AM

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PROCESS CONTROL

Developing a drift detection system Reproducing quality is crucial if profitability and customer satisfaction are to be realised. With this in mind, various technologies have been developed and they are being used increasingly on processing lines around the world. By Michel Dubois* As more and more processing lines rely upon measurement systems to gauge quality there is a corresponding loss in operator skill when it comes to quality issues and how to resolve them. Less experienced operators can lead to a situation where production problems are not detected and, therefore, go undetected due to operating conditions moving away from the normal and expected conditions without a warning message being issued. CMI, a specialist in cold steel strip processing lines, has enhanced its product portfolio with the addition of some key tools to ensure that not only coil grading, but also the final quality of the finished coils is replicated. The company is working on the development and perfection of dedicated tools to help identify those slight drifts before production problems occur. Continuous lines processing steel sheet have become very complex, hosting many different items of equipment and various processes that must be tightly controlled to ensure that the finished products are the desired quality. Instrumentation is used to input process parameters into a closed loop system to ensure that the process follows the desired path resulting in a coil grading procedure based upon checking key process data. However, the detection of slight drifts in the process window or in the equipment itself, can be challenging in an industrial environment. Usually, the drift is not identified until it is too late and the line has to be stopped. A lack of predictive

identification leads to a situation where “nothing is working and nobody knows why”, and this increases over time. Dedicated tools developed by CMI, are based on recorded process and equipment data to help identify slight drifts. The concept is similar to the SPC approach, tracing some typical quantitative data such as the heat balance of the zinc pot, gas consumption per ton for specific steel grades, rolling torque in the SKP, or tension differences between the drive and operator sides of the line. In this article, the current state of affairs concerning the development of galvanising lines, as well as some difficulties encountered, are reviewed. The approach While the goal was the development of an automatic tool enabling easy tracing of key process parameters in correlation with a target process window, the approach used by CMI is based on using the available process data recorded by existing line computers and applying procedures to connect them with physical principles such as heat balance and mass conservation. This method has a lot of advantages since it is simple and easy to run, does not requires specific skills, uses available data and is based on theory. Selected key data are recorded every one to 10 seconds depending on the process involved and averaged over a period between five minutes to two hours. Pre-conditioning is, however, required to avoid inconsistent data and reject transitory conditions. This may lead

to a low effective yield (more than 80% of the data may be rejected) but this is not a problem due to high availability: quality is preferred to quantity. The final file is recorded for future reference or processing but direct graphs may also be drawn for quick analysis. Some examples are included in this article. The present development is addressing three key processes used in galvanising lines, pursuing the following objectives: • Zn pot Heat balance: validate the true entry strip temperature in the pot and eventually detect a transversal nonuniformity • Gas consumption in annealing furnace: identify possible changes in combustion efficiency • SkinPass: highlight changes in the process window, quantify the scatter in the mechanical properties and monitor changes in left and right tension, as well as load, due to modification of the equipment geometry. Heat pot balance The heat pot balance is computed for a period of two hours, using a sampling rate of every two seconds, for coating weight, zinc pot temperature and level, steel mass flow and its temperature. All data out of range when compared to the defined process window are rejected. Any data rejection leads to the invalidity of the complete two-hour period. This may happen, for example, when the coating weight is out of the set 30-250g/m² range, the line speed below 40mpm, or the Zinc level unstable. An unbalanced

*Senior Process Expert - CMI Metals 1 Quai Greiner B4100 Seraing Belgium. michel.dubois@cmigroupe.com www.steeltimesint.com

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PROCESS CONTROL

300

200

100

0 -100 -200

-300 5

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-300

Fig 1. Heat pot balance variation with steel mass flow

1x103

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850 875 900 Heating zone temp °C

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15 20 Mass flow (kg/sec)

Fig 3. Nm3/ton of natural gas versus line productivity

Exit fume temp

520 480

24 22 20

18 800

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Fig 2. Heat pot balance variation with strip width

26 Consumption Nm/Ton

Consumption Nm/Ton

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Balance (KW)

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Fig 4. Correlation between gas consumption and zone temperature

Fig 5. Relation between heat consumption and strip width

Fig 6. Final exit fume temperature versus total gas consumption

heat input versus the heat output means that some of the recorded data is incorrect or shows non-uniformity, such as pyrometer settings, heat loss estimate, strip temperature, coating weight measurement and others. The described method is used on all CMI CGLs in the meantime, and proved to be very relevant, as it gives access to parameters that are very difficult to quantify, like variations in the true temperature reading for the steel grade, variations in heat losses, especially for the snout, and most importantly transversal temperature non-uniformity. Based on our experience, for a typical automotive line, running at 60-70 tons/ hour, the entry strip temperature can be identified at +/-2°C. Fig 1 plots variations of line productivity: In the shown example no significant temperature variance across the strip width has been detected. A dependence on the balance would mean an offset in the entry strip temperature reading. Fig 2 plots variations of the balance and strip width: In case of an interdependence, a non-transversal temperature uniformity can be suspected.

corresponds to about half an incoming coil. Only periods with a process speed above 50mpm have been considered. In order to only select stable conditions, CMI had to further adjust the method and add a number of additional intelligent filters. One example where these are mandatory, to allow for relevant results, are annealing furnaces in Europe, with an average order weight of below 100 tons, which typically converts into three to four coils. Frequent adjustments of line speed and strip specifications – which result in a fluctuating mass flow and changing

heat cycles – affect zone temperature. In other words, an annealing furnace is in a transitory condition most of the time. Data processing is based on the computation of the heat in the strip, fumes and global heat yield. Operating parameters such as annealing temperature, O2 in fumes, number of burners in operation and zone temperature are also integral parts of the analysis. Analysis shows that, even for the same strip specification and under stable conditions, gas consumption per ton varies significantly for reasons not yet

Furnace gas consumption For this process, a data sampling rate of every 10 seconds has been selected and the computation of heat consumption has been done over a 10-minute period, which May/June 2015

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PROCESS CONTROL

Delta tension drive-op

1.5x103

0 -500 -1x103

350

YS 150

300

YS 220 YS 350

250 200 150

300 250

YS 150

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100

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Fig 7. Tension difference drive operator side, all steel grades

11 12

0.50

Fig 8. The load elongation map for selected months

350

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300 250

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1.90

400

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350

250

0.90

Fig 9. Load versus elongation for the three steel grades, month 1

400

300

0.70

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400

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Consumption Nm/Ton

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150 100

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50 0.50 0.70 0.90 1.10

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Elongation (%)

Fig 10. Load versus elongation for the three steel grades, month 2

Fig 11. Load-elongation, month 2, thickness 0.8+/-0.1mm

Fig 12. Load-elongation, month 2, thickness 1.2 +/-0.1mm

completely identified. An example is plotted in Fig 3 which refers only to the 790-810°C peak annealing temperature. One possible explanation is the strong interdependence of various parameters, like furnace zone temperature and line production rate which again depend on speed and strip width. The thermal inertia of the furnace during transition periods also affects stable production periods. The main results corresponding to a threemonth period are shown in the Figs 3 and 4. Unfortunately, it is difficult to identify

a drift in peak temperature measurement only by checking heat consumption. The analysis, however, is ongoing and once finalised will allow us to comprehensively evaluate the practicality of this indicator. The results in Fig. 5 show no interdependence between strip width and specific gas consumption per ton of steel and this is significantly different from the traditional view and expectation. Promising results have been obtained by looking at combustion quality. Tracing fume temperature and total gas

consumption in natural gas per hour, independently of the heat cycle, has identified a correlation between the two parameters. These results lead us to expect drifts in combustion to translate into data deviating from this correlation (Fig 6). Gas consumption per ton for defined reference specifications is another indicator that will be elaborated over the coming months. CMI has decided to build a “Roll Wear Index”, an additional, important indicator related to the heat cycles endured by the furnace rolls and their eventual faster wear by frequent changes of the thermal regime of the furnace. The decision is based on the observation that the furnace roll profile changes over time. A first analysis led us to suspect that heat cycles induced by frequent changes, either in strip width or peak annealing temperature, are one of the main reasons. While all of the above indicators will be followed over the coming months, in order to evaluate their feasibility and possible use for the detection of slow drifts, the collected reference data itself is already partially addressing the lack of history in order to help more effectively address problems when they occur. Skin pass Where skin pass mills are concerned, the sampling rate is set at every 10 seconds with data averaging for every valid five

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PROCESS CONTROL

minute period, which corresponds to about a quarter of an incoming coil. CMI has exclusively retained periods with a line speed over 50 metres/min, a constant elongation, and the same steel grade and specification.In such situations, mechanical properties are compared in order to avoid the data being confused with other materials. Presently, only first results are obtained. A comprehensive analysis of different data obtained is under way to define the most appropriate indicators to trace. It is known that on the continuous galvanising line (CGL) used as a ‘pilot plant’, the load is identical, but the left and right tensions differ (Fig. 7). After preliminary analysis, the difference is suspected to increase with the strip width because one strip edge is longer than the other due to a defect within the line or already present on the incoming coil. Typical results Currently, CMI is building an indicator on a month-by-month basis, following the evolution of the load-elongation parameters for selected steel hardnesses and possibly for different strip thicknesses. Typical results for expected yield strengths of 150, 220 and 350Mpa +/-10MPa are shown in Figs 8, 9, 10,11 and 12. Fig. 8 traces the month-by-month load per width unit while Figs 9, 10,11 and 12

map load elongation for selected months. Conclusion CMI’s objective of developing a data processing system capable of detecting slow process drift and anticipating problems, resulted in some well defined indicators and tools for heat pot balance and requires more tuning in terms of furnace gas consumption and skin pass mills. At this point, the anticipation of quality problems is even greater when looking at an ageing continuous process line, where problems occur more frequently. As the developed methodology helps detect slow drift in measurements and process windows used, it is not only relevant and easy to implement for new processing lines, but also ageing lines as the system is flexible; uses process data recorded on existing line computers; makes averages for various time periods depending on the process; and filters results to only consider stable and consistent conditions. So far, the methodology is and has been used on three important processes of a specific continuous galvanising line. Those processes are: Pot heat balance, furnace gas consumption and skin pass. The development stages for all three processes differ, especially identification of the main indicators to build and trace over

time. The present status obtained on the pilot plant can be summarised as follows: • The heat pot balance is working well and efficiently detects errors in the pot entry strip temperature, including transversal uniformity as well as snout insulation modification. • Furnace gas consumption per ton for a defined heat cycle varies by +/-10%. This will probably not allow the detection of drifts in annealing temperatures. However, an eventual deviation from the identified correlation between total gas consumption per hour and fume temperature will indicate a change in the combustion system. • Skin pass pressure-elongation maps for defined strip strengths and elongations have proven to be a promising indicator for the detection of changes in the process window. In addition, tension variations, load or roll torque between drive-operator or top and bottom are easily obtainable. CMI still needs time to finalise the development work, mainly by continuing data collection and analysis in order to map real drifts. With this information, the efficiency of the applied methodology, compared with the initial target by process and indicator, needs to be validated to finally and comprehensively evaluate the overall performance of the approach.

Steel Times International Buyer’s Guide and Directory The Buyers’ Guide and Directory is the essential guide to steel manufacturers, producers, suppliers of plant equipment and services to the steel industry. It provides comprehensive company listings, product information and key contact details. For information on how to be listed contact esmehorn@quartzltd.com For advertising contact paulrossage@quartzltd.com anneconsidine@quartzltd.com

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INTERVIEW

An enjoyable year in office Outgoing president of the US-based Association for Iron & Steel Technology (AIST) Glenn Pushis, talks exclusively with Steel Times International about foreign imports, aluminium and energy efficiency

1. Have you enjoyed your year as president of AIST and what have been the highlights of your term in office? The past year has been quite an enjoyable one for me. The opportunity to talk with so many AIST members at various Member Chapters was a particular highlight. I am particularly proud of the efforts we are making in workforce development. We are matching $500,000 in grants this year to assist our Foundation with their efforts to promote steel industry careers to the next generation. I am also proud of how we have strengthened our Young Professionals programme to engage more people less than 30 years of age in our industry and in our Association, as we look to replace a retiring workforce. We’ve also worked to add technical training curricula for DRI production and tube and pipe rolling, both representing key elements for the energy sector here in North America. Finally, we continue to bolster our international outreach strategy to make AIST the global sources of technology and networking for our members around the world. With this effort, we have surpassed 18,000 professional and student members for the first time in AIST’s history, making us the largest and most globally diversified group in the steel industry. 2. What advice would you hand on to AIST’s incoming president for 2015/2016? My advice to our next president is to nurture and grow AIST’s global perspective. AIST needs to continue its collaborative outreach to other steel associations to increase the networking opportunities and the dissemination of knowledge to encourage a sustainable industry. AIST membership has grown domestically in the US and internationally. With our rapid growth, it will be important for our next leader to balance programming for North America and the other regions where AIST members work. AIST has an arsenal of more than 30 training programmes that we deploy www.steeltimesint.com

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throughout North America. We also have international programmes that we conduct such as our International Steel Academy which includes the 100, 200 and 300 series courses. We also have international study tours and forums in addition to our marquee events: AISTech and MS&T and we’re expanding the AIST Process Benchmarker service to create legitimate benchmarks for establishing world-class steel manufacturing performance.

4. The Americans have always been pretty vocal and (understandably) reactive on the issue of Chinese imports into the country. How are things going and what is your view going forward? It’s not just Chinese imports, but also countries such as Korea, Russia and Brazil that have significantly increased exports to the US. When imports overwhelm the domestic steel industry, the cascading negative effects on downstream end markets can be meaningful to the supply and demand balance. At what point do we ask ourselves, “Is America willing to buy its next aircraft carrier from China?” 5. What is the current situation with regard to trade cases in the USA and how effective have past rulings been in stemming the flow of under-priced steel imports? Companies in the US have to prove injury when filing trade cases, which as currently defined is too late for many to offset the very problems the actions are meant to avoid, such as idling steelmaking and finishing facilities, reduction in the steel industry’s workforce, and, just as importantly, pressure on shareholder value. The domestic steel industry is working to change those definitions.

3. What’s your take on the current state of the US steel industry – and what are the main challenges for American steel producers over the next 12 months? The US steel industry is struggling under the weight of imports and a strong US Dollar. Imports in certain sectors have doubled over the past year as the industry has been inundated with OCTG and plate products from abroad. Conditions are anticipated to remain challenging unless changes occur in US international trade policy. That said, the availability of affordable energy coupled with the significant reduction in raw material pricing for iron ore and scrap will help ensure our US domestic steelmaking industry returns to the status of a low cost producer.

6. American steel is both green and low cost according to Porter, but ArcelorMittal USA’s Mike Rippey said the industry isn’t vocal enough about its many plus points. That was last year – have things changed for the better? We do need to improve our PR campaign… that’s for sure. The US steel industry continues to explore new technologies to lower its impact on the environment and improve energy efficiency. With EAF production at 65%+ of US steelmaking production capacity, we lead the world with energy efficient steelmaking assets, we continue to recycle more scrap, and we continue to reduce carbon dioxide emissions. This combination makes us a very sustainable enterprise relative to the rest of the world. May/June 2015

5/26/15 9:14 AM

INTERVIEW

to a sustainable enterprise.

7. Americans believe in free trade but, as CMC’s Tracey Porter said last year, there’s a big difference between free and fair trade. The Americans want fairness but will they get it and if not are they likely to close their markets? We will continue to fight for fair trade. Until that day comes, we will never give up our efforts to ensure the global industry operates according to the laws put in place to ensure fair trade.

11. How has fracking helped the USA’s domestic steel industry and will it continue to be good for business going forward? Fracking has resulted in a game-changing steel demand environment for the US steel industry. For the first time, there is a belief that the US can be energy independent. That is good for the nation and for the steel industry.

8. How has the US steel industry approached the automotive industry in relation to the ongoing ‘battle’ between steel and aluminium? The steel industry and the research organisations associated with it are creating steel grades that can be rolled thinner yet with improved strength. It

12. Climate change, the environment, emissions control and saving the planet are big themes of the moment throughout the world. What kind of regulatory environment has been created for US-based steelmakers and does it balance ideals with science and reality?

is through partnerships such as the Colorado School of Mines, the Missouri University of Science & Technology, the Purdue University Calumet and others that steel research is expanding again in North America. The industry understands that without funding for research, these lighter, thinner, stronger steels would not exist today. It is fundamental to our efforts to remain the leader among the various engineered materials used today in manufacturing. 9. Where do you stand on the aluminium versus steel argument? These is no comparison, steel will always win this debate when you look at all the facts. These facts include energy intensity, carbon footprint, strength–to-weight, recyclability and cost. 10. Does the global steel industry lacked the ‘kill and win’ attitude needed to take on aluminium? I perceive a renewed spirit within the steel industry to ‘kill and win” as you say. Competition among materials is necessary and beneficial, as it leads to innovation, and innovation is another key component May/June 2015

aistech.indd 2

I believe that with enforcement of international trade agreements, the reduction of inefficient steelmaking assets and the steel industry participants learning from one another through the work of such organisations as AIST, the global steel industry will provide a sustainable, energyefficient product for the benefit of society.

13. The former director-general of EUROFER, Gordon Moffat, argued that the European steel industry has gone as far as technology will allow it in terms of reducing GHGs. Is it a similar story in the USA? I believe the story is quite similar. Millions of dollars are spent to research more energy efficient and more environmentally conscious steel production. At the end of the day, carbon is still the most efficient way to remove oxygen from iron oxide to create the elemental iron necessary for steel production.

15. How’s things going at Steel Dynamics? Some significant industry shifts have taken place that was fundamental to the domestic steel community. We believe others are still occurring. Steel imports and scrap price volatility created a challenging operating environment. Steel import levels remain high; lower scrap and raw material prices allowed steel product pricing to decline to globally competitive levels, which we believe will result in decreased steel import activity in the coming months. With that being said, our teams are making tremendous progress in automotive and construction-related products, as well as utilising the benefit of existing SDI customer relationships. With the benefit of having our Columbus, MS mill on a direct rail route to the Mexican steel market, we are making good progress with potential Mexican export opportunities. We continue to further diversify our product mix in order to mute the market volatility and optimise financial returns. Overall, while external challenges create a turbulent environment, all of our employees continue to demonstrate their passion for excellence, driving operational and financial metrics that maintain our leadership position among our peer group, and doing so safely. Our more significant recent organic projects include the addition of premium rail to our product portfolio (which allows us to become the pre-eminent rail supplier in North America) and our expanded capacity at our engineer bar products mill is in full operation producing high quality smaller diameter bars. Both of these expansion projects have provided product diversification into higher value steel products. We are focused on providing exceptional value to our customers, committing to the highest levels of quality and timeliness, partnering with them to create value and deliver what they need today, and anticipating what they need for tomorrow. As we look ahead, we continue to be optimistic regarding our future. We believe we are also fully prepared to take advantage of the opportunities that lay ahead. t

14. How optimistic are you for the global steel industry? I am very optimistic about our future.

Glenn Pushis is vice president, sheet products, Steel Dynamics Inc, Flat Rolled Division, Butler, USA.

The US steel industry continues to work with all regulatory agencies to improve our environmental footprint. It is challenging; however, the key point for all of us, globally, to realise is that environmental protection is a global concern. Importing steel from under-regulated industries in other countries is not a responsible solution.

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5/26/15 9:14 AM

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PERSPECTIVES: HyGear

Energy-saving solutions HyGear generates plenty of interest globally for its on-site gas generation systems. The company is currently very busy in Russia and Turkey and will be exhibiting at Thermprocess (GIFA) in Dusseldorf in June. Petra Barelds, the company’s corporate marketing and communications manager 1. How are things going at HYGEAR? Is the steel industry keeping you busy? We receive many inquiries from all over the world for our on-site gas generation systems and will be signing several big contracts with important global steel customers very soon. Hy.Gen is used in the sintering and annealing processes. HyGear offers stand-alone generation systems for the metal industry to generate hydrogen, nitrogen and oxygen on-site. The systems increase the reliability and save costs. More and more customers are becoming aware of this competitive solution that overcomes gas supply by road transportation and, therefore, things are going very well.

gas production technologies that make transportation of hydrogen, nitrogen and oxygen obsolete. Depending on the customer’s requirements we can extend our services to engineering, detailed design, construction and operation of the entire gas supply system.

2. What is your view on the current state of the global steel industry? The global steel industry has had, or currently still has, a difficult time due to political issues and the economic crisis and needs to save costs. Also, more countries are setting environmental regulations. The industry can reduce costs and emissions by saving energy through generating gases on-site and recovering used process gases. 3. In which sector of the steel industry does HYGEAR mostly conduct its business? We offer our technologies as packaged systems or turnkey as part of an integrated gas system for the entire metal production process. A reliable supply of industrial gases plays a vital role in annealing and sintering processes. The most common are hydrogen and nitrogen for creating a stable gas atmosphere in metal treatment processes. Currently, these gases are mainly supplied by electrolysis or road transportation of compressed or liquefied gas. Decentralised gas production by HyGear offers a safer, more reliable and cost attractive alternative to conventional hydrogen supply. HyGear offers a package of on-site May/June 2015

Q&A HYGEAR 1.5 p.indd 1

4. Where in the world are you busiest at present? Russia and Turkey. “…any hint of doubt 5. when it comes to predictions of climate doom is evidence of greed, stupidity, moral turpitude or psychological derangement.” This is a quote from Bret Stephens writing in The Wall Street Journal. Do you sympathise with his view? The world is consuming 85 million barrels of oil per day and demand is growing exponentially. We have started to consume more fossil fuel than is being discovered. The growing gap between production and consumption will lead to scarcity and, therefore, high prices and political conflicts. Furthermore, the impact

of burning fossil fuels is already clearly noticeable in climate change. HyGear is, therefore, developing clean technologies that increase energy efficiency, decrease emissions and utilise renewable energy sources. 6. In fact, talking of ‘green issues’ and emissions control, how is the steel industry performing in this respect? There are still lots of energy saving opportunities left, like gas recycling, onsite gas production or waste heat recovery. 7. In your dealings with steel producers, are you finding that they are looking to companies like HYGEAR to offer them solutions in terms of energy efficiency and sustainability? If so, what can you offer them? HyGear can offer solutions that save energy and utilities and, therefore, reduce costs and emissions. Our lead product is a line of gas generation systems that produce industrial gases on-site. The system is based on proprietary and highly efficient steam reforming and highly effective PSA technology. Decentralised gas production by HyGear offers a safer, more reliable and cost attractive alternative to conventional gas supply by tube trailers. HyGear’s Gas Recovery System (Hy. REC) recovers the gas mixture used in sintering and annealing, removes particles and purifies the mixture into high-quality hydrogen and nitrogen that can be blended back into the gas system. 8. How quickly has the steel industry responded to ‘green politics’ in terms of making the production process more environmentally friendly and is it succeeding or fighting a losing battle? Mostly, it takes financial investment to take environmental measures. This is often only done if there is a short return of investment or if there are strict environmental regulations set by the www.steeltimesint.com

5/26/15 9:15 AM

PERSPECTIVES: HyGear

government. Bit by bit, the steel industry is making the production process more environmentally friendly and we believe that it can win the battle. However, if competitive steel production companies from other countries are not subject to these environmental regulations, the industry is doomed to lose the battle. Environmental regulations have to be set globally. 9. Where does HYGEAR lead the field in terms of steel production technology? We offer cost effective gas supply and gas recovery technology for the steel production industry. 10. How do you view HYGEAR’s development over the short-tomedium term in relation to the global steel industry? Depending on customer requirements we can extend our services to engineering, detailed design, construction and operation of the entire gas supply system. Because gas supply is vital for steel production, it is essential to provide a reliable gas supply service to our customers.

11. China dominates global crude steel production and is accountable for almost half of total production. How should the industry react to this situation? Environmental regulations – together with safety regulations and working conditions – have to be set globally to prevent unfair competition. 12. Which breakthrough technologies will have a revolutionary impact and will it be something that is ‘one size fits all’ or a number of different technologies? HyGear can offer solutions that save energy and utilities and, therefore, reduce costs and emissions. We offer a line of gas generation systems that produce industrial gases on-site. The systems are based on proprietary and highly efficient steam reforming and highly effective PSA technology. Decentralised gas production by HyGear is safer, more reliable and cost effective than conventional methods. There is also HyGear’s Gas Recovery System (Hy.REC) to recover the gas mixture used in sintering and annealing.

The Hy.REC system removes particles and purifies the mixture into high-quality hydrogen and nitrogen that can be blended back into the gas system. 13. What exhibitions and conferences will HYGEAR be attending in 2015? We will be present at Thermprocess (GIFA) Dusseldorf, Germany from 16-20 June and at China HeatTreatment in Beijing from 8-10 September 2015. 14. HYGEAR is based in Arnhem, The Netherlands, but what’s happening steel-wise in the country? Most of our customers are located abroad. 15. Apart from strong coffee, what keeps you awake at night? The inefficient use and waste of energy. 16. If you possessed a superpower, how would you use it to improve the global steel industry? I would let all steel companies have energy efficient production technologies including on-site gas generation systems and gas recovery systems.

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May/June 2015

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PERSPECTIVES: TMEIC GLOBAL

TMEIC’s superpower? Its engineers Declan Daly*, general manager of US-based TMEIC Global, says that the company’s engineers may think they’re only building steel mills, but in reality they are building better economic engines around the world 1. How are things going at TMEIC? Is the steel industry keeping you busy? The steel industry does keep us busy with a focus on automation and motor and drive solutions that streamline processes, increase production and save energy. Client demand has our metals business unit experiencing a transition from predominantly new facility construction, to a mix of facility upgrades, mill modernisations and new facility expansions. From 2003 to 2013, TMEIC provided the majority of automation and electrical equipment for hot and cold rolling mill projects in China from its global engineering centres in Japan, USA, India, and China.The transition to modernisation requires a different engineering perspective from the technical proposal preparation stage through to project execution. 2. What is your view on the current state of the global steel industry? The current global steel market is still trying to establish equilibrium between overcapacity and demand/supply market levels. The steel industry is truly globalised, with export trade levels and flows of steel directly responding to foreign exchange rates, government trade protection, and raw material price levels. Though steel producer consolidation is providing stable price levels in certain regions, overcapacity in China continues to depress world benchmark price levels. 3. In which sector of the steel industry does TMEIC mostly conduct its business? TMEIC’s metals business unit is focused on automation and electrical equipment for rolling mills. Additionally, we provide electrical equipment for auxiliary support systems. TMEIC’s process technology solutions provide our clients significant added value in yield and productivity. Our team is in constant communication with our clients throughout technology deployments, from project inception

to final acceptance testing. Today, we continue to expand our portfolio of process automation and electrical equipment to meet our clients’ need to deliver to new steel standards and provide higher grades of steel. 4. Where in the world are you busiest at present? TMEIC’s business currently serves 86% of the total world market. The Asia-Pacific region currently provides the largest volume of new facility expansion, while our global clients in North America, Japan and Eastern Europe are investing in facility upgrades and modernisation solutions. 5. Can you discuss any major steel contracts you are currently working on? At the moment we’re driving industry in China with the start-up of new rolling facilities for both steel and aluminium clients. Additionally, TMEIC has finalised contracts for two major rolling mill upgrades and facility expansions in North America. Finally, we’re continuing to see interest in process consulting and have contracts in place to provide production and product quality analysis to provide clients the data needed to determine their future investment strategy for key production mills.

6. “Aluminium will always outperform steel on a weight basis; and on the stiffness issue alone it will carry the day,” said Alcoa’s chief technology officer Ray Kilmer speaking about aluminium usage within the global automotive industry. Where do you stand on the aluminium versus steel argument? The decision process used to pursue increased aluminium usage in the automotive market was driven by the US Government’s revised CAFE standards. The major automotive manufacturers have each established very different business plans to approach the new vehicle and fleet requirements. I believe the true benefit of aluminium will require the industry and consumers to look at the total cost of ownership over a typical automobile life cycle. 7. “While there will be increased aluminium penetration, vehicles will continue to be predominantly steel,” said Ducker Worldwide’s Dick Schultz. Is he right or wrong? The automotive industry supply chain, support network and scrap processing is well established to optimally manage a vehicle fleet with a high steel content. The automotive industry was able to handle the transition of select automotive components to plastics with limited disruption. Aluminium will introduce additional training, speciality equipment for repair and added complexity in the scrap handling process. 8. “Within the next 15 years or so there could be a nearly even split between steel, aluminium and carbon fibre content in the average North American produced light vehicle.” So said Jay Baron, president of the Centre for Automotive Research. Who is closer to the truth – Dick or Jay? The automotive manufactures will have to investigate and deploy multiple materials plans to find the right balance to achieve

* General manager, TMEIC Global May/June 2015

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PERSPECTIVES: TMEIC GLOBAL

the CAFE requirements. Aluminium and carbon fibre content will increase throughout the next 15 years and I think an even split may be realised over a longer time period. 9. It is always claimed that aluminium is the ‘greener’ metal when compared to steel. What’s your view? Aluminium is a very energy-intensive metal to produce from raw material to finished product. The “green” aspect aluminium presents is provided by its high recycle rates. Steel also requires significant energy to produce from raw material to finished product, but the cost of this conversion continues to be reduced year after year with improved technologies and mill modernisation solutions. 10. “…any hint of doubt when it comes to predictions of climate doom is evidence of greed, stupidity, moral turpitude or psychological derangement.” This is a quote from Bret Stephens writing in The Wall Street Journal. Do you sympathise with his view? Arguments surrounding climate change contain a multitude of political perceptions and scientific reasoning. The basic truths are that all people desire an environment that will not harm their families and one that supports a good quality of life. TMEIC engineers design solutions for both. 11. In fact, talking of ‘green issues’ and emissions control, how is the steel industry performing in this respect? The steel industry continues to reduce energy consumption per ton of produced steel year over year. 12. Are steel producers looking to companies like TMEIC to offer them solutions in terms of energy efficiency and sustainability? If so, what can you offer them? Steel producers maintain a strong focus on energy efficiency and sustainability. Over the past several years, the investment from producers has diminished as facility utilisation levels and global completion reduced capital budgets. When the cost of energy became a significant portion of the cost of steel production, TMEIC invested in the development of energy savings recovery solutions and the design of energy reduction technologies. We deployed several systems with key clients that provided the forecasted energy savings and today we continue to expand our process automation and energy reduction technologies to meet our clients’ needs. www.steeltimesint.com

PERSPECTIVES .indd 2

13. Where does TMEIC lead the field in terms of steel production technology? TMIEC is a recognised leader in process automation and electrical equipment for rolling mills. We have significant market share on a regional and global basis. Our business measures are determined by our success in attracting follow-up business with current clients and the establishment of new clients seeking out TMEIC solutions because of client recommendations.

with a partner steel producer to advance the development to full-scale operation.

14. How should the global steel industry react to China? The original forecast on Chinese steel production was that it would remain contained in China. However, the reported production levels and the forecasted containment have not been valid and this has been detrimental to the global steel industry.

facing steel producers is finding and developing employee resources. In developed economies the steel industry may not be looked upon as an exciting career, whereas in developing economies there is significant interest, but a relatively high attrition rate.

15. The Chinese still rely heavily upon Western steel production technology. What is TMEIC’s experience of the Chinese steel industry? Between 2003 and 2013, TMEIC provided the majority of automation and electrical equipment for hot and cold rolling mill projects in China from our global engineering centres in Japan, USA, India, and China. Today, we are continuing to support those past clients with production and quality improvement projects. 16. Where do you see most innovation in terms of production technologies – primary, secondary or further downstream? TMEIC, along with university research departments and several steel producers, has been investing in the development of process automation to delivery technology for achieving accurate material properties. We have deployed a development system

17. How optimistic are you for the global steel industry going forward and what challenges face global producers in the short-toMy outlook for the global steel industry is very optimistic; it is the material that countries and economies are built upon. The industry will continue to find its new equilibrium, once the China overcapacity issue finds resolution. One key challenge

18. What exhibitions and conferences will TMEIC be attending in 2015? TMEIC participates strongly in AISTech in North America and at several of its international units. We will be attending METEC in Düsseldorf. 19. What keeps you awake at night? Reviewing the future needs of global business and the demands of local markets requires significant evaluation of the skills and capabilities of our engineering teams. The investment to expand those teams and establishing the right training process for new engineers keeps me awake. 20. If you possessed a superpower, how would you use it to improve the global steel industry? TMEIC’s superpower is its engineering teams. They may think they are only building steel mills, but in reality they are building better economic engines around the world. t May/June 2015

5/26/15 9:17 AM

HISTORY

UK pig iron production in WWI Dwindling ore imports from Sweden and none at all from Spain meant that the UK relied upon domestic ore during the Great War. By Tim Smith*

DURING WWI, the total number of blast furnaces standing remained almost constant at 495 in 1913 and 491 in 1918, but the number in blast fell by 4%, from 340 to 325 over the same period. Typically, around two-thirds of the furnaces were in operation at any time. The need to use lower grade domestic ore as imports of ore from northern Spain ceased – and from Sweden dwindled – was a chief factor behind the falling output. North East England remained the region of greatest iron output during the war years, accounting for 37% of total pig production in 1914, falling to 33% in 1918 as output increased from North West England, here growing from 14% to 17%. Significant production was also accounted for by Scotland and South Wales (Table 1). The average output of each furnace was greatest in South Wales, but output here fell from 74.1kt per furnace per annum in 1913 to a low of 51.9kt in 1917. Smaller furnaces were generally the norm in other regions of the UK. For example, in North Wales, output per furnace averaged just 14.73kt in 1913 and fell to a low of 11.17kt in 1916. Elsewhere, average annual outputs ranged from around 14kt in Scotland to 43kt in North East and North West England. According to a report in the Proceedings of the Cleveland Institute of Engineers the working life of a furnace could be as long as 38 years. For example, the Cleveland (North East Yorkshire – south of Middlesbrough) No2 Ormesby furnace Year

North East

North West

Scotland

Year

Forge & Foundry

Bessemer Hematite

Basic

Spiegle Eisen & ferro alloy

Total

1911 4012.99

3519.78 1771.77 268.64 8889.12

1912 3431.72

3408.38 1771.77 277.24 8889.12

1913 3943.13

4057.70 2125.68

3430.44 1914

3235.40 2003.69 336.35 9005.89

355.39

10481.91

Source: British Iron & Trade Association

Table 2 Production of pig iron by type (kt)

was blown in May 1876 and finally blown out in May 1914. During its lifetime it produced 1.365349Mt of iron. The coke rate during this time was close to one ton per ton of iron. Local ironstone (siderite) was the charge at around 3.3tons per ton of iron. The dimensions of the furnace were height 90 feet (27.4m), Bosh 28ft (8.5m), Hearth 8ft (2.4m), diameter at nose of tuyeres 6ft (1.8m) at start but increased to 10ft (3.0m) by 1890. Prior to the war, the majority of pig iron was produced from hematite ore – mainly imported. Figures for production in 1913 and 1914 show the growing output of basic pig iron compared to pre-war output as higher phosphorous domestic ores had to be increasingly sourced (Table 2). Furnaces previously making hematite iron were converted to make basic iron. In the Midlands, for example, Stanton Ironworks Co Ltd, near Nottingham, started to produce basic iron from local ore in the nine furnaces they had in operation. Of the 8.919469Mt of pig iron made in 1916, 4.319096Mt (48.4%) were produced from imported ore. t South Wales

Derbyshire

Lincoln

North Staffs

One of 11 blast furnaces at Dorman Long & Co Ltd, Clarence Iron Works, Middlesbrough, N E England

South Staffs

Northants

Yorkshire

North Wales

1913 38 13 13 9

7 5 4

5 4 3

1914 37 14 13 8

7 5 4

5 4 3

1915 34 15 13 10 6 6 4

5 3 3

1916 35 16 13 10 6 6 4

5 3 3 1

1917 35 16 12 8

6 6 4

5 3 3

1918 33 17 12 10 6 6 4

5 3 3

1919 34 16 12 8

4 3 3

7 7 4

Source: British Blast Furnace Statistics 1790-1980 P Riden & J G Owen Merton Priory Press 1995 extracted from Table 1.1

Table 1 Share of pig iron output by UK region (%)

* Consultant editor, Steel Times International May/June 2015

HISTORY m/j.indd 1

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