– Vol.36 No.5 – www.steeltimesint.com No.5 – Vol.36 July/August 2012 2012 July/August NEWS LONG PRODUCTS PROCESSING INDIAN STEEL SUPPLEMENT STEEL SUPPLEMENT INDIAN STEEL PROCESSING PRODUCTS LONG NEWS

STI jul aug COVER_Layout 1 7/10/12 3:19 PM Page 1 Page PM 3:19 7/10/12 1 COVER_Layout jul aug STI STEEL TIMES INTERNATIONAL – July/August 2012 – Vol.36 No.5 Jul aug contents_Contents_STI_Mar10 7/11/12 3:18 PM Page 3

July/August 2012 Contents Vol.36/No.5

Front cover image July/August 2012 – Vol.36 No.5 – www.steeltimesint.com NEWS LONG PRODUCTS STEEL PROCESSING INDIAN STEEL SUPPLEMENT courtesy of Fives Bronx, world leader in long products straightening technology – SBQ installation located in the USA

EDITORIAL Editor Tim Smith PhD, CEng, MIM Tel: +44 (0) 1737 855154 [email protected]

Production Editor Annie Baker

SALES International Sales Manager Indian steel supplement – Page 19 Long products – Page 43 Paul Rossage [email protected] Tel: +44 (0) 1737 855116 Area Sales Manager Anne Considine [email protected] Tel: +44 (0) 1737 855139 Sales Director Ken Clark [email protected] Tel: +44 (0) 1737 855117 Marketing Executive Annie O’Brien [email protected] Tel: +44 (0) 1737 855012 Advertisement Production Martin Lawrence [email protected]

Steel processing – Page 49 Know your steel – Page 66 SUBSCRIPTION Elizabeth Barford Tel +44 (0) 1737 855028 Fax +44 (0) 1737 855033/034 Email [email protected]

Steel Times International is published eight News times a year and is available on subscription. News – European steelmakers appeal to policy-makers for value chains 4 Annual subscription: UK £155.00 Other countries: £222.00 (US$342) (€269) Statistics & Events – May 2012 crude steel at 130.5Mt 8

2 years subscription: UK £279.00 USA Update – US politicians receptive to steel ’s complaints in an election year 10 € Other countries: £399.60 (US$615.60) ( 484.20) Latin America Update – CAP – Change to ore as its core business 12 Single copy (inc postage): £35.00 Email: [email protected] China Update – China’s steel market generally cornered with industrial losses this year 14 Update – Moderate growth of Indian steel in FY’12 16 Published by: Indian steel supplement Quartz Business Media Ltd, Quartz House, 20 Clarendon Road, India rising: Can India’s steel industry deliver on promise? A special report by Global Business Reports 19 Redhill, Surrey, RH1 1QX, . Tel: +44 (0)1737 855000 Tough ride ahead for Indian ore miners 31 Fax: +44 (0)1737 855033/855034 Electric 33 www.steeltimesint.com ’s accelerated hot strip mill shutdown 36 Steel Times International (USPS No: 020-958) is published monthly except Feb, May, July, Dec by Quartz Business Media Ltd and distributed in the US by DSW, 75 Aberdeen Long products Road, Emigsville, PA 17318-0437. Periodicals postage paid at Emigsville, PA. POSTMASTER send address changes to The experience of hot charging an Ecoplant minimill at Tung Ho Taiwan 39 Steel Times International c/o PO Box 437, Emigsville, PA Hot billet charging saves energy and improves mill productivity 43 17318-0437.

Printed in England by: Pensord, Tram Road, Pontlanfraith, Blackwood, Gwent NP12 2YA, UK Steel processing ©Quartz Business Media Ltd 2012 Toll processing in USA sees an upturn 49 Improving the performance of strip guiding on the DCR at Bokaro Steel India 54 Others Scanmet IV – How the emphasis has changed from Scanmet I 58 Metallurgy-Litmash reflects massive investments in Russian steel 62 The Basics of iron and steelmaking Part 3 – Secondary steelmaking and continuous casting 66

History: Zinc from India – The protector of iron 72 ISSN 0143-7798

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News in Brief World News www.steeltimesint.com

Taiwan signs MoU for EAF plant in India European steelmakers appeal to China Steel, the Taiwan’s largest steelmaker has signed a memoran- dum of understanding (MoU) with policy-makers for value chains the state government to set up an electric steelplant in Gujarat. On the occasion of the 2nd Europe by 2050’, which is looking and puts the credibility of the sys- The plant proposed to be build at European Steel Day, the European at a more comprehensive approach tem at stake; Dahej in the south of the state will steel industry appeals to European including the whole life cycle of – A set-aside will lead to a further cost around $178M to build. policy-makers to embrace a policy steel. distortion by the ETS within sec- Production is scheduled for 2014. framework that puts the competi- “Climate change targets for our tors. Some steelmakers will have tiveness of industrial value chains industry cannot be built just on no unused allowances from the Nucor acquires Skyline Steel LLC at the heart of decision making. visions. As long as breakthrough 2nd trading period when the 3rd US steelmaker Nucor Corp has com- President of the European Steel technologies are not available – period starts in 2013. These – hav- pleted the acquisition of Skyline Association (Eurofer) Wolfgang and this has a long way to go – ing had a high degree of capacity Steel LLC for approximately $605M. Eder said: “The European steel steel is not able to reduce further utilisation during the crisis – would Skyline Steel LLC is a steel distributor industry, together with other man- its direct emissions.” On the other be punished by an artificial serving the US, Canada, Mexico and ufacturing industries, was, is and hand, studies prove that innovative increase of the carbon price, and; the Caribbean. will always be the basis of Europe’s steel applications save more CO2 – A set-aside will lead to an Skyline has 21 sales offices and a economy and the prosperity of its in the EU than the entire EU steel increase in power prices and by robust infrastructure comprised of people. Breaking even one link in industry emits” said Mr Eder. this further jeopardizes the com- processing and fabrication facilities, these value chains endangers the Eurofer is concerned about the petitiveness of electricity intensive dozens of stocking locations, an chain as a whole. We need policy continued discussions on new, sectors such as electric arc fur- efficiently-coordinated supply chain, which will secure the conditions so more than ambitious unilateral cli- naces. and exclusive support. that chains with mate targets for EU industries in With regard to the economic Skyline’s flagship products include their thousands of highly innova- 2030, ‘40 and ’50, and on the set- outlook, Eurofer does not expect hot rolled and cold formed sheet tive, large, medium and small aside of allowances from the third steel market conditions to improve piles, H-piles and pipe piling. enterprises can further prosper in period of the emissions trading sys- before 2013. Moderate recovery in Europe.” tem in order to artificially increase real and apparent steel consump- Forgemasters expands as European countries with a the carbon price. tion probably results in some stock technology takes over strong industrial base and manu- “We strongly doubt that a set- replenishment. A creation of Sheffield Forgemasters facturing value chains are much aside is in line with EU legislation, Eder concluded: “But overall, ‘RD26 Ltd’ underpins landmark less affected by overall economic or has a valid legal basis”. industry requires a stable, support- developments, which have enabled troubles than others, he said. Eurofer is against a set-aside ive political and economic frame- the 200-year-old company to The current EU climate change because: work if it is to flourish. We need become a world-leader in the manu- policy clearly disadvantages the – the Emissions Trading Directive answers to the challenges facing facture of high-technology compo- industry against competitors out- makes it clear that its 21% GHG the Eurozone if we are to see con- nents for a diverse range of markets. side EU. reduction objective should be fidence return to the markets and The new company, SFIL’s seventh Eurofer is currently working on achieved in a cost-effective manner; Europe’s economy brought back subsidiary, frees up the Research a ‘Steel roadmap for a low carbon – It interferes in the market system on track.” and Development division to offer its services externally, a process which has already begun with enquiries and quoted work into new China’s steel sector growth slows markets, including civil nuclear proj- ects and the design of large-scale China’s crude steel output slowed Research Commission showed. lower than last year. Facilities over- pressure vessels to the US. in the first five months 2012 as According to the National hauls in steel companies such as demand dropped amid a cooling Bureau of Statistics (NBS), the Iron and Steel Corp, VOD plant to voestalpine domestic economy. Crude steel country’s crude steel output in the Iron and Steel (Group) Corp, and Giesserei output increased by 2.2% year-on- first five months of this year Shagang Group Co in late The voestalpine Giesserei Linz year to 296.26Mt during the amounted to 295.23Mt, up nearly May led to a decline in the crude GmbH, part of the Steel Division of January- May period, down from 51% from 195.61Mt for the same steel output. the voestalpine corporation, has 8.5% growth during the same peri- period 2007. ordered a 50t vacuum oxygen od last year, data from the In May alone, crude steel output Source: China Metals (VOD) from Siemens National Development and rose 2.5% from a year earlier, 5.3% e-mail [email protected] VAI Metals Technologies. The plant will use mechanical vacuum pumps and the VOD will provide secondary metallurgical processing of cast 2011 Merchant HBI production up 30% for demanding applications in the and in the 2011 was a good year for the glob- Shadeed Iron & Steel in Oman, Non-members of IIMA pro- machine-building industry. The new al merchant hot briquetted iron owned by the Jindal Group of duced almost 1.2Mt of HBI in vacuum decarburization plant is (HBI) industry, with production India, had a strong first year pro- 2011. expected to be operational from the increasing by almost 30% while ducing and shipping approximate- International Iron Metallics end of the calendar year. sales were up 15%, according to ly 1.1Mt. Comsigua led the five Association (IIMA) was created in figures compiled by the Venezuelan HBI plants with out- January 2011 by the merger of International Iron Metallics put of almost 850kt and sales of HBI Association, Ltd (HBIA) and Association (IIMA). nearly 750kt. , in International Association Total production of HBI for India, a member of IIMA in 2011, (IPIA). IIMA is a UK-registered merchant purposes was 6.7Mt. was limited by natural gas avail- not-for-profit company which Sales approached 6.3Mt, with ability and produced 77kt. serves as the trade association for VISIT: almost 5.5Mt to export customers. Metalloinvest’s OEMK pro- merchant ore-based metallics – pig www.steeltimesint.com Lebedinsky GOK, of Russia’s duced and shipped about 135kt iron, HBI, DRI, and iron nuggets. To see a full list of news and Metalloinvest Group, led IIMA DRI and with the Venezuelan HBI IIMA has 98 members in 36 coun- features. members with more than 2.4Mt of plants accounted for sales of more tries, as of June 2012. HBI produced and sold in 2011. than 879kt of DRI/HBI fines. www.metallics.org.uk

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www.steeltimesint.com World News News in Brief

Micro for of Al-Qaryan Weak demand in steel Al-Qaryan Steel Saudi Arabia has PUBLICATION placed an order with SMS Concast China ups exports for the design, manufacturing and commissioning of a Micro Steel Mill Apparent consumption of steel in prices of similar products in China to be installed in Dammam. With China for the first five-months and abroad are driving local mills the process route to be realised in 2012 fell 1% to the lowest level to shift part of their supplies to the Phase 1 consisting of induction fur- since 2001. overseas markets for better profits. nace, ladle furnace and continuous China exported 5.23Mt of steel The data also showed that the caster, Al-Qaryan will make its first products in May, up 560kt from country imported 1.32Mt of steel step into the value adding produc- April and 9.87% from a year earli- products in May, up 3.1% y-o-y tion of commercial billet. The overall er, hitting a new record high since and the steels imports in the peri- layout considers further expansions July 2010, according to the latest od of January-May amounted to by adding a second steel shop and data released by the General 5.85Mt, down 14.4% from a year caster as well as a mill for re- Administration of Customs. earlier. This indicator echoes the bars with a final production of The country’s steels exports declining PMI data for the past 600kt/y. Latin American Steel stood at 22.04Mt in the first five few months in a row. The scope of supply by SMS Concast - A retrospective in months, rising 10.1% year on year. Source: China Metals is covering all technological equip- 101 essays Widening gaps between market e-mail [email protected] ment. Apart of above specified key components it includes water treat- ment plant, dust collection system, shop cranes, material handling Benchmarks under equipment and related supervision services. ‘Latin American Steel: A retro- spective in 101 essays’ is a collec- the ETS to be judged AISU appoint chairman for 2012 tion of reprints of pages from Steel The Arab Iron & Steel Union (AISU) Times International of articles The General Court of the Court is that a complaint on the has appointed Mr Khalid Al-Qadeeri, authored by Dr Germano Mendes European Union has declared allocation of allowances (which are MD of steel investment company, De Paula, Professor of Economics inadmissible Eurofer’s court case based on the benchmarks) has to Foulath its chairman for 2011/12 at the Federal University of for the annulment of the be judged by a national court after The Arab Iron and Steel Union is the Uberlandia (UFU), Brazil. Commission Decision on the allocation of certificates on nation- largest regional Arab conglomerate In all, 101 articles have been col- benchmarks under the EU emis- al level. Only after a judgement by of Iron & Steel producers and users, lected covering the period January sions trading system (Commission a national court may the case be comprising more than 80 compa- 2000 to December 2011 providing Decision of 27 April 2011 deter- referred to the European Court. nies from 16 Arab states. an invaluable collection to trace transitional Union-wide This is a delay but action by the the development of Latin rules for harmonized free alloca- steelmakers will now take place on Siemens acquires US furnace American steel in the past decade. tion of emission allowances pur- a national level followed by company Over 80% of the articles are suant to Article 10a of Directive European action. Siemens Industry, Inc has closed a ‘Updates’, Germano’s regular col- 2003/87/EC). In principle this means that the purchase agreement to acquire umn which each issue focuses on The decision does not mean that European steel industry will not 100% of the shares of FCE, LLC, a some aspect of the Latin American the steel benchmarks set by the have certainty before the coming furnace supplying company serving steel industry. The remaining arti- Commission are correct. The ETS into force of the directive on 1st the metals industry, headquartered cles are reports on conferences in directive makes it very clear that of January 2013 and during the in Huntingdon Valley, Pa, USA. Latin America attended by the the benchmarks must be set at a first years of the third trading FCE will operate within the Metals author, including each of the level which allows the allocation of period. The allocation of free Technologies (MT) business unit of ILAFA (renamed Alacero in 2011) sufficient emission certificates to allowances will now be imple- the Siemens Industry Sector, and will conferences – with the exception the best performing installations mented according to the bench- become the global centre of compe- of 2002 when economic turmoil hit (ca 5 out of 100 installations). This marks set by the Commission. tence for furnaces. The company the region preventing Germano’s is clearly not the case with the However, if a court case at a will continue to operate from its attendance. benchmarks set by the national level is successful, the Pennsylvania location and its Over 400 steel companies are Commission. Commission may have to change approximately 20 employees will be mentioned in the collection of The decision of the General its benchmarks retroactively. integrated into the Siemens business papers, some many times, such as structure. Gerdau, Usiminas, ArcelorMittal, Te r n i u m , Te c h i n t , S i d o r, C S N , Essar Steels opens Phase 1 of Acesita, Tenaris, CAP and In Memoriam: pellet plant Deacero, while some have only Jacques E Astier, 1923-2012 created a Knight of the Legion of has commissioned a one entry such as Comesa (now a Honour. 6Mt/y pellet making facility at the Gerdau group company), It is with regret that we have His death even at the age of 88 port of Paradip in Odisha (Orissa) NE Ferromallas, Inlasa and many oth- learned of the death of Jacques was a surprise and sudden. He India. This is the first phase of a ers. Indeed, many of these isolated Astier on 20 May. leaves the evidence of much scien- 12Mt/y pellet plant to be commis- names are absent from the steel Jacques was internationally tific achievement. His work sioned by 2013. Essar Steel is invest- directories and are revealed only known for his work on agglomera- remains a model of knowledge ing Rs 42000M ($756M) in the proj- by the author’s in depth knowl- tion of iron ores and investigations transfer and human relationships, ect as part of its ongoing invest- edge of the region. on alternative ironmaking processes. where his modesty enabled him to ments in the state of Odisha. An index to the pages referring He worked for the first part of forge close links with specialists in to each of these companies is his professional career at the many countries. Many were proud found at the end of the book. French research establishment, to know him as a friend. ISSN 2049-7660 IRSID but continued after his A full obituary is published VISIT: 160 pages, A4 Price, £25 + p&p retirement in 1988 as an interna- under the Features section of the www.steeltimesint.com To order visit: tional consultant in these tech- Steel Times International web site To see a full list of news and www.steeltimesint.com and click nologies http://www.steeltimesint.com/fea- features. on book cover image. For his work, Jacques Astier was tures

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World News www.steeltimesint.com

Tata Steel Production of silicon steel & low invests at strength rebar banned in China China will prohibit steel companies the production. China’s hot rolled duction and application of IJmuiden from producing hot rolled silicon silicon steel production capacity 500MPa rebar. High-strength steel and low strength rebar, says the was about 1.3Mt in 2010 and fell products will take an 80% share in Tata Steel has recently completed a Ministry of Industry and to 899.5kt in 2011. China’s rebar output and more significant investment in upgrad- Information Technology (MIIT) in Earlier this year, MIIT and the than 65% use in domestic building ing one of the coilers on the Hot the revised requirements on the Ministry of Housing and Urban- bar consumption by the end of Strip Mill at its IJmuiden plant in production and operation of iron Rural Development jointly issued 2015. By then, the use of high- the Netherlands. and steel industry issued on June 15. guidelines on boosting the use of strength rebar will help reduce the The investment paves the way Hot rolled silicon steel has been high-strength steel products. weight of rebar used by 10Mt/y for the development of heavier- listed among the country’s cata- According to the guidelines, China and correspondingly reduce con- gauge strip for use in the manufac- logue of steel products required to will eliminate the use of 335MPa sumption of by 16Mt. ture of articulated trucks, and of be eliminated because of serious rebar in construction by 2013 and Source: China Metals higher-strength steel grades for use damage to the environment during gradually raise the ratio for pro- e-mail [email protected] in cranes and machine boom arm applications. The result will be that the weight of customers’ finished fabrications can be reduced whilst Chinese steel profits continue decline maintaining strength and integrity. A number of new steel grades Steel stocks in China’s key steel risks of bad loans in this sector. reduce production costs. are in development and are being companies stood at 11.49Mt at the Steel sector’s profits also slipped Mills have been stepping up pro- trialled through the upgraded coil- end of May, down 8.5% from a sharply. Steel producers saw profits duction believing they can make er, including Ympress® S700 and month earlier, but rose 34.3% from down 49.5% from a year earlier to up for losses last year when prices Ympress® S960. These grades are that at the beginning of this year. RMB39.5bn (US$6.2bn) in the of raw materials were higher. becoming increasingly important The high stocks indicated the first four months 2012. Steel price However, this undermines the cost to lifting and excavating equip- weakening demand from the also fell in May, as the country’s obtainable on finished products. A ment makers. downstream sectors. average steel composite price round of price increases in April The upgrade was carried out by It is crucial for domestic steel index fell 17.28 points from last used to be regarded as a sign of metallurgical plantmakers Siemens companies to accelerate the year to 118.76. The figure was also bottoming of the steel market, but and SMS Siemag. The coiler has process of de-stocking and de- 2.76 points lower than the previ- it turned out to be a very short- been upgraded with new mandrel stocking has picked up since the ous month. lived this year with prices falling and pinch roll equipment as well as beginning of June as steel traders One good point for mills was again in May. with new motors, electrical drives, in the country become cash hungry that the price of iron ore and gears and hydraulic equipment. as commercial banks have been fell from the beginning of this year Source: China Metals The upgraded coiler can supply alerted by the Central Bank to the which helped to substantially e-mail [email protected] high-strength steels up to 20mm thick. Core applications for the new steel grades will be those requiring high strength combined with MMK expands into Tata plans reduced weight, including cranes and construction equipment. ship-building plate for 6Mt plant MMK is investing in abrasive blast pipes specified by Gazprom and On June 7th Tata Steel announced a Jindal cleaning equipment for rolling Transneft of 50mm wall thickness Rs 300bn (US$5.4bn) investment to shop No 9, which houses its and X120 ultra-high strength. The build a 6Mt/y steel plant in the 5000mm Plate Mill. This will allow mill has the technical ability to pro- Haveri district, state of Karnataka expands MMK to produce AB2-1 and AB2- duce steel for oil platforms operat- SE India. 2 steels, which have ing in Arctic conditions, as well as The announcement was made at to undergo thorough surface for bridge-building, construction the second global investors meeting capacity cleaning on both sides. of furnaces, and ship steel, includ- organised by the government is hop- In early 2012, MMK signed a ing for tankers, the Russian Navy ing to exceed the investments made Jindal Steel & Power announced contract for the blast cleaning and icebreakers. in 2010 – primarily in the iron and its Net Profit after Tax was up 5% equipment with Kolpino Research In November 2011, MMK steel sector but little of this has yet to Rs 40020.26M ($727.6M) in FY and Design Institute for signed a strategic partnership materialised due to various reasons, 2011/12. Metallurgical Engineering. MMK agreement with United including problems of land acquisi- Turnover was up 39% to expects an annual economic effect Shipbuilding Corporation (USC) tion and more recently issues of Rs182.086bn ($3.3bn). of RUB 80M ($2.47M), and a pay- to collaborate on existing and new availability of ore due to the suspen- Consolidated EBIDTA back period of less than one year types of ship-building materials sion of operations at a number of increased by 10% to Rs 71.292bn for this investment. and establish a supply chain for mines due to unauthorised mining. ($1.29bn). This investment project will MMK's products to USC. Boris The Bharatiya Janata Party gov- In FY 11/12 the company pro- expand MMK's range of steel Dubrovsky, CEO of MMK, said: ernment which is in its last year of duced 2.75688Mt of finished steel, products and is intended to boost "MMK already owns cutting-edge the current tenure is making Rs 6bn up 21%, 1.667Mt pig iron and hot the share of ship-building steel in thick plate technology with Mill ($108M) worth of investments this metal and 3.7369Mt of ore pellets. the 5000mm Plate Mill (Mill 5000) 5000, and we are determined to time around. The Company has announced production output. Mill 5000 make inroads into the market for In addition, the Aditya Birla is plans to expand its steelmaking began production in July 2009. It shipbuilding steel. We now have proposing investments of Rs capacity at Raigarh, Chattisgarh by can produce almost any type of that opportunity, and are pleased 70 000M ($1262M), including a 3.5Mt taking total capacity to steel plate up to the maximum to have reached an agreement with 4Mt/y cement plant. 6.5Mt/y. requirements for large-diameter USC.

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www.steeltimesint.com News and Statistics Events Diary

May 2012 crude steel at 130.5Mt AUGUST 2012 22-24 The 9th China () World crude steel production for -9.7% on May 2011. Italy’s crude crude steel, up 7.4% on May 2011. International Metallurgy the 62 countries reporting to the steel production was 2.6Mt, down Brazil’s crude steel production Industry Expo 2012 World Steel Association (world- -3.3% on May 2011. Spain’s crude was 2.9Mt, -11.7% lower than May Beijing, China steel) was 130.56Mt in May 2012, steel production for May 2012 was 2011. http://www.steeltimesint.com/events/ an increase of 0.7% compared to 1.3 Mt, -13.9% lower than May The world crude steel capacity view/the-9th-china-beijing-interna- May 2011. 2011. Increases in output were utilisation ratio for the 62 coun- tionalmetallurgy-industry-expo-2012/ China’s crude steel production reported in France which pro- tries reporting to worldsteel in May for May was 61.2Mt, an increase of duced 1.5Mt of crude steel, up by 2012 slid to 79.6% from 81.3% in SEPTEMBER 2012 2.5% compared to May 2011. 1.3% compared to May 2011 and April 2012. Compared to May 3-4 Steel Tech Seminar 2012 Elsewhere in Asia, Japan pro- in UK which produced 0.98Mt in 2011, it was 1.4% lower. During Kolkata India Organised by Steel Tech duced 9.2Mt up 2.0% compared to May an increase of 8.0% on May the past 18 months, the ratio was & Steel Times International May last year. South Korea’s crude 2011 largely due to the restart of at its highest in April 2011 with http://www.steeltechexpo.com/ steel output was 6.0Mt, an the Redcar furnace on Teesside. 82.8% and the lowest ratio was in increase of 2.0% on May a year Turkey’s crude steel production December 2011 with 70.7%. 5-7 10th China International earlier. India produced an estimat- for May 2012 was 3.1Mt, an Visit http://www.worldsteel.org/ Coking Technology and Coke ed 6.2Mt up 3% on May 2011. increase of 6.6% compared to May statistics/crude-steel-produc- Market Congress In the EU, German output was 2011. tion.html for country by country Beijing, China 3.7Mt of crude steel, a decrease of The US produced 7.7Mt of listing www.coke-china.com

10-12 4th International For full listing of monthly statistics by country visit Conference on Thermo-mechani- www.worldsteel.org/?action=stats&type=steel&period=latest cal Processing of Steels Sheffield, England www.iom3.org/events/tmp2012 DRI output grows 4% 12-13 Steel Scrap Conference Istanbul The world’s total DRI production Russia saw an increase of 0.4Mt. ammonia (fertilizer) production www.metalbulletin.com/EventDetails in 2011 reached 73.3Mt, up 4% on In the UAE, the growth was pri- than to the manufacture of iron /0/4890/2nd-Steel-Scrap- 2010 and setting yet another new marily due to the start-up of a new and steel. Conference.html record for the industry according to plant at Emirates Steel combined Output in Libya fell by 0.8Mt. data compiled by Midrex with the ramping up toward full Libya’s decline was a result of the 13-16 Ankiros 2012 Technologies, Inc. Growth slowed production by another plant at the national revolution which affected Istanbul Tuyap Fair Convention & in some areas of the world, but in same steel works. Venezuela’s all aspects of the country. The DRI Congress Center www.ankiros.com/ other regions increased production growth is reflective of a partial facilities at LISCO shuttered their more than counteracted this recovery from a prolonged decline plants early in the year and had not 18-20 World of Metal 2012 decline. Although last year’s pro- in production due to political and restarted by the end of the year, but Minsk, Belarus duction rose about 3Mt from governmental factors that the DR have since resumed operation. www.belexpo.by 2010’s total production of 70.4Mt industry experienced over the past Altogether 2011 was up by 4% it marks nearly a 9Mt increase from five years. In Mexico, the growth (2.87Mt) over 2010’s data. This 19-22 Korean International Steel the 2009’s 64.Mt. was primarily attributed to general was the ninth year out of the past & Non-Ferrous Metals Industries In the natural gas fuelled sector economic recovery from the finan- ten that a new world production Expo 2012 (KISNON) of the industry, in 2011 Midrex cial crisis as both Mexico and its record was established. Kintex Expo Centre, Goyang, S Korea Direct Reduction Plants once again major market, the United States, Gas based production grew by www.kisnon.com led all technologies producing continued their economic recover- 7% from 52.3Mt in 2010 to 55.9Mt 44.4Mt, followed by HyL-Danieli ies. Russia’s growth came from a in 2011 but based production 22-24 China (Chongqing) Energiron plants, which produced general increase in the capacity of (mainly in India) by the rotary kiln International Metallurgy Industry 11.1Mt. six existing plants as they outper- processes shrank by 5% from Expo 2012 Finmet, represented by a single formed their prior best by over 8%. 18.1Mt to 17.3Mt. Chongqing International Convention plant of 2Mt/y capacity at Orinoco Nations where there was signifi- Iran ranked second in global & Exhibition Center, China Iron, Venezuela, made over 500kt. cant decline included India, which production making 10.4Mt. www.dccybj.com The remaining 17.3Mt was pro- produced 22Mt, a drop of 1.45Mt Mexico was the third top producer duced using various coal based in 2011 over 2010 but the country with production of 5.9Mt, well 25-27 9th International rotary kiln technologies found in still remains the world’s largest pro- above 2010, but still well below Conference on Creep and India and in other areas of the ducer. The decline was due to their all time peak of 6.5Mt in Fatigue at Elevated world. some plants being unable to obtain 2004. Saudi Arabia and Russia Temperatures Four nations experienced signifi- as much iron ore as they needed were fourth and fifth respectively. , UK cant growth. The United Arab due to governmental restrictions These five nations produced more www.iom3.org/events/weldscreep Emirates (UAE) saw an increase of on mining. In addition, govern- than two-thirds of the world’s sup- 1.1Mt, and Venezuela made 0.7Mt mental allocations were placed on ply of DRI. 25-28 10th European Electric more than the previous year. natural gas that gave higher priority Complete data is available for Steelmaking Conference (EEC Mexico increased by 0.5Mt and to electric power generation and to download from www.midrex.com. 2012) Graz, Austria www.eec2012.at.hm seeks better ore price Anshan is diversifying its markets cial Xinhua News Agency Steel about shortening the pric- as domestic demand slows and reports, citing the China Iron ing period for iron ore amid raw-material costs remain high. and Steel Association. Angang, expectations the spot rates may VISIT: China’s major steelmakers the biggest Hong Kong-traded fall 10% to 20% due to slowing www.steeltimesint.com incurred combined losses of steelmaker, this week posted a demand, said Chen Ming, vice To see a full listing of industry 2.8bn yuan ($445M) in the first second-half loss of 1.93bn yuan. chairman of listed unit Angang events click on ‘events diary’ two months of this year, the offi- Angang is in talks with Anshan Steel Co.

8 – July/August 2012 – Steel Times International www.steeltimesint.com USA_Layout 1 7/11/12 3:27 PM Page 1

USA Update

US politicians receptive to steel industry’s complaints in an election year

With the return of a slow down of the global economy coinciding with the upcoming Presidential and Congress elections in the USA in November, US politicians are willing to listen to complaints of dumping of steel on US shores, especially from China. By Manik Mehta*

IN an election year when every potential vote government data showed. Steel prices have tumbled nearly 13% since gained brings a politician closer to victory, no Steel imports to the US, which benefitted February this year from $826 a ton for hot- politician can afford to ignore the prevalent from relatively strong automotive and manufac- rolled steel to $723 a ton. Indeed, the general public mood – whether it is the industry, the turing demand, jumped 18.8% in the first four view is that prices will further decline to less trade or the general public. months of the year, according to data firm than $700 a ton in summer. Some experts are The logical conclusion of this behaviour is Global Trade Information Services. recommending that production will have to be that the US steel industry will find it relatively This surge has sent many US steel companies drastically cut to arrest any further price easy to raise the old cry of what is euphemised into panic mode believing that China’s eco- decline. “Otherwise, the momentum gained as ‘unfair trade practices’ which may sound dif- nomic slowdown was prompting its producers through the recovery would be completely lost,” ferent from ‘steel dumping’ or ‘currency manip- to ship the excess production to the United as one Wall Street analyst warned. ulation’, but conveys the familiar complaint States. against China and some targeted countries that Facing criticism from the industry, the US External impact are guilty, in the eyes of the steel industry, of administration has applied pressure on foreign Although nobody can say if and to what extent using unfair means to promote trade. governments to curb their exports. The US Europe’s crisis would impact the US steel It is hardly surprising, therefore, that about Department of Commerce recently ‘punished’ industry, people tend to be worried over a pos- half of the so-called unfair trade practices India, as some analysts are saying, by imposing sible spillover from across the Atlantic. With brought before the US International Trade new duties on some Indian imports after estab- steel consumption expected to decline in Commission involved steel or related indus- lishing that Indian companies had been selling China, where new major construction projects tries. Big industry names such as those of spiral welded carbon-quality steel pipes in the are being kept on hold, global steel suppliers, Wheeling-Pittsburgh Steel, Wheeling Nisshin, United States at a price almost 50% lower than including Chinese, will increasingly look at dis- Weirton Steel and others were mentioned as the fair-market value. tant markets to offload their excess production. complainants against the unfair trade practices. The US also imposed punitive duties on This can only mean that the world's steel suppli- According to Charlotte Lane, who was Chinese steel exports but China rejected the ers will be eyeing North America to ship their attached to the US International Trade duties and decided to take the case to the WTO excess production. Commission for eight years, about 88% of her last month. Nucor Corp, America's second- votes were cast in favour of US companies largest steel producer, said that the weakening WTO challenge complaining about foreign competitors. The in prices in the US was due to the surging for- The steel trade war also continues to rage in a steel industry views the ITC’s decision against a eign supplies, and blamed its weak perform- different direction. The US administration, foreign competitor as the first step toward ance on rising imports. which at the behest of the nation’s steel indus- redressing the complaint against unfair trade Nevertheless, the overall mood in the steel try had filed a complaint against China’s impo- practices of foreign suppliers, including dump- industry is characterised by mixed feelings sition of anti-dumping and anti-subsidy duties, ing, by imposing protective tariffs. about the economy in view of too many global was encouraged by a recent WTO ruling that Hawks in the steel industry, who work close- uncertainties, notably the ongoing Euro crisis China did break global commerce rules by ly with politicians, have again cited Chinese and the downturn in China, and others. Indeed, imposing anti-dumping and anti-subsidy duties endeavours to dramatically increase steel many are already preparing themselves for a on US steel products worth more than $200M. exports to the United States to offset the short- downturn, underlining the need to cut costs The WTO panel of judges ruled that China fall in China’s domestic demand. and close down unprofitable plants. This is a was unable to prove that imports from the USA Lane has been calling for creating a ‘level sharp contrast to the buoyant mood last year to China of grain-oriented electrical steel strip, playing field’ for the US industry so that it com- when steel producers were able to even increase produced by such companies as AK Steel pete in the international markets. She told an prices and step up production. Holding Corp, ATT Allegheny Ludlum Corp audience recently in Charleston that American US analysts say that steelmakers worldwide and others had caused injury to Chinese com- steelworkers were capable of making products are closing down mills, a trend that also seems petitors. China was also criticised for starting its of excellent quality at good prices, if only they to be catching up in the United States. anti-subsidy proceedings without adequate evi- were not driven out of business by unfair trade Sparrows Point, Maryland-based RG Steel dence to the effect that US companies had practices. LLC, for example, has filed for Chapter 11 received illegal government assistance. The ‘dumping-theory-advocates’ got new bankruptcy protection and closed down its Responding to a question during a confer- ammunition in the form of new data showing a Sparrows Point plant and two other plants, wip- ence call with reporters, US Trade surge in imports of steel products in the United ing out over 4000 jobs. Representative Ron Kirk recently said that States which, according to John Surma, chief In May, ThyssenKrupp’s executive board China had to “……..simply play by the rules to executive of US Steel Corp, threatened the chairman Heinrich Hiesinger said that the com- which it agreed when it joined the World Trade supplies of steel pipes for the oil and gas indus- pany has to examine whether it still makes Organisation 10 years ago”. try which is doing well in the US market. The sense strategically to operate its Brazilian slab Two of China’s largest state-owned steel-pro- first four months of the year showed a sharp plant and its new greenfield strip mill in ducing companies Wuhan Iron and Steel Corp rise in steel-pipe imports compared to the year- as a single unit. The cost of slab pro- and Baosteel Group Corp had alleged that AK earlier period. “This is a case of major concern”, duction in Brazil, which supplies the mill in Steel and ATI Allegheny were getting unfair Surma said at a recent conference in New York. Alabama, has risen and the Alabama mill post- advantage from government subsidies provided ed a loss of €518M on sales of €1044M for the under US federal and state laws and engaging Surging imports half-year. in injurious dumping. A strong demand for steel pipe fuelled by a Elsewhere, ArcelorMittal closed a plant in Leo W Gerard, the president of the United boom in oil and gas drilling has also attracted Belgium last year, and has cut down production Steelworkers of America (USW), applauded foreign suppliers to ship steel pipe to the US or even stopped it at other sites including the the WTO decision, saying that China had for where imports of these posted a 17% growth to postponing the build of a new coke oven at too long attempted to “tilt the playing field for 2.7Mt in April over the year-earlier period, US Gijon in Spain. the global steel trade in their direction”. ᔢ

*STI New York correspondent

10 – July/August 2012 – Steel Times International www.steeltimesint.com LA_Layout 1 7/10/12 10:37 AM Page 1

LA Update CAP – Change to ore as its core business

Chile’s largest steelmaker, CAP, has seen its ore business grow to the point where it now contributes 94% of company profits compared with zero for steel. Steel expansion plans are on hold while investments in ore output intend to grow output 50% to 18Mt by 2015 and possibly 30Mt later. By Germano Mendes de Paula*

DUE to high input prices of raw materials and 2011. It is hard to deny that iron ore should – pig iron capacity, from 1.2 to 3.25Mt/y; energy some steel companies have been devel- now be considered the core business of CAP. – crude steel capacity, from 1.45 to 3.0Mt/y; oping a strategy of backward vertical integra- On April 28th the Bank of America and and tion. They are investing in iron ore and – to a Merrill Lynch released a report on CAP, stress- – hot strip mill capacity, from 0.6 to 1.0Mt/y. lesser extent – coal assets. In the experience of ing that the steel volumes were 12% higher in the Latin American steel industry, this trend is Q1 2012 in comparison with the previous quar- As a consequence, flat rolled production frequently observed. It has been employed by ter, due to seasonality. Nonetheless, the steel would be increased to serve the domestic mar- firms in Brazil (Companhia Siderúrgica selling prices were 2% lower in 2012. As a con- ket, while CAP would increase ore exports and Nacional/CSN, Usiminas, Gerdau and sequence, the Earnings Before Interest and would begin to sell pig iron (300kt/y) and slab ArcelorMittal), Mexico (Ternium and Taxes (EBIT) of the steel division were -9% in (1.55Mt/y) abroad. However, these plans need- ArcelorMittal), Colombia (Acerías Páz del Río) Q4 2011 followed by continuing decline to - ed to be amended to fit the new business envi- and Chile (CAP), among others. This article 10% in Q1 2012. ronment observed during and after the world pays attention to CAP, which is the largest steel- More importantly, the recommendation economic turmoil. maker in Chile. made by the above investment bank to acquire According to a presentation delivered in May shares in CAP was mainly underpinned by the 2012, CAP declared that: a) the substantial Core business iron ore business: “We maintain our Buy rating global overcapacity in steel production is a sig- There is much debate about the so-called ‘core and CLP22 000 price objective, as fundamen- nificant obstacle to an increase in Chilean steel business’ of a company. However, a simple and tals remain strong: capacity; b) after overcoming damage to plant practical definition is offered by the Financial 1) our bullish view on iron ore as a result of the February 2010 earthquake, Times Lexicon, which describes a core business (88% of CAP’s EBITDA in 2012); CAP currently has recovered its production as the one ‘that takes the most money for a com- 2) the company’s growth potential, with iron capacity and it is near its historical level of mar- pany and that is considered to be its most impor- ore production increasing from 12Mt to ket share; c) the company has been focusing on tant and central one’. Bearing this in mind, it is 18Mt in the next three years; and optimising its steel production capabilities, interesting to discuss what is now the core busi- 3) lower political risk in Chile”. through a gradual reorientation towards pro- ness of Chile’s largest steel producer, CAP. ducing more long products. Therefore, it can be CAP is a highly verticalised company, being Thus, the capital market clearly sees CAP seen that there are important changes to the involved with iron ore (12Mt/y capacity), steel now as an iron ore mining business with some earlier strategy for the steel business: optimisa- production (1.45Mt/y) and steel processing steel production and steel processing assets tion of existing output to meet market demand (0.4Mt/y). Regarding its mining activities, the rather than a steelmaker per se. rather than capacity expansion and long prod- company is more dedicated to exports (mainly ucts rather than flat products as the focus. to Asia) rather than supplying its own coke- Growth plans More importantly, iron ore capacity will jump integrated mill. Its steel business produces a In mid-2008, just prior to the eruption of the from the current 12.0Mt/y to 17.0Mt/y by 2014 large variety of flat and long steel products, global financial crisis, CAP intended to invest and eventually to 18.0Mt/y in 2015. CAP will focusing on serving the domestic market, while $4.02bn during the following five years. This invest $800M in Cerro Negro Norte, a 4.0Mt/y its steel processing plants are distributed was a considerable amount of money; essential- greenfield mining project, to start operations in between Chile, Peru, and Argentina. ly if it is taken into consideration that in 2007 the second half of 2013. CAP’s original core business was steel, as its the company’s total sales achieved only $1.6bn Meanwhile, $360M will be applied in its Los name reveals: Compañia de Acero del Pacifico, and the EBITDA, $336M (STI, Jan-Feb 2009, p Colorados mine, boosting capacity from 5.2 to which can be translated into English as ‘Pacific 12). Among the projects, there would be a num- 7.2Mt/y by H1 2013. Consequently, CAP will Steel Company’. It was established in April ber of expansions: become even more dependent on iron ore, 1946, and the following year construction of its – iron ore capacity, was to grow from 11 to highlighting that this has become its current integrated works – Huachipato Works – located 17Mt/y; core business. In May 2012, CAP’s CEO, Jaime in Concepción City, 520km south of the capital Charles declared at an investor seminar that the Santiago – commenced. The first stage of this 120 company is ‘pondering to further grow its iron coke-integrated mill was inaugurated in ore capacity to 30Mt/y’. This decision will be 100 5 6 6 November 1950, with an 180kt/y installed steel 8 13 12 8 taken in 2013 or 2014. capacity. Not only has CAP greatly increased its 80 18 Summing up, in mid-2008, CAP had ambi- steelmaking capacity, but also it became tious growth plans, aiming at expanding its involved in iron ore mining in 1959. 60 54 40 52 50 crude steel and iron ore capacity. Its net debt While being an iron ore producer since the 40 was equivalent to 25.4% of its total sales and the late-1950s, steel production continued to be amount of the planned investments was much the most important business for CAP until 20 38 47 36 42 77 97 94 higher than the profit generation. 2008. Fig 1 shows that steel production was 0 Now, the company has clearly decided to go responsible for 54% of the EBITDA generated -3 ahead with expansion of its iron ore assets, -20 by the company in 2005. The share shrank in 2005 2006 2007 2008 2009 2010 2011 aborting increasing steel production, despite the 2006, but continued at the 50% level up to Iron ore Steel Steel processing fact that its previous net debt transformed into 2008. Since then, steel’s contribution to profits a net credit (Table 1). The ambitions for steel has plummeted to 18% in 2009, -3% in 2010 Fig 1 CAP’s EBITDA generation by division, have fallen, as iron ore has become CAP’s core and finally 0% in 2011. Thus, the steel business 2005-2011 (%) business.  has lost its capacity to make profits for CAP. Also, the contribution to EBITDA from steel processing fell from 13% in 2006 to 6% in 2007 2008 2009 2010 2011 2010-11. Table 1 Selected Conversely, the contribution of iron ore to financial figures for Sales 1583 1972 1375 1994 2787 EBITDA remained at a plateau around 36%- CAP, 2007-2011 EBITDA 336 534 128 740 1184 47% from 2005 to 2008. After this, it skyrock- (US$M) Net Income 236 293 -15 303 442 eted to 77% in 2009, 97% in 2010 and 94% in Net Debt 439 501 514 20 -255 Capex 309 161 142 207 282 *Professor in Economics, Federal University of Uberlândia, Brazil. Email [email protected]

12 – July/August 2012 – Steel Times International www.steeltimesint.com China_Layout 1 7/16/12 2:49 PM Page 1

CHINA Update China’s steel market generally cornered with industrial losses this year

Despite China’s steel mills being barely in profit, the average return for the industry being just 2.24% during 2011 and up to a third of mills reported losses in Q1 2012, crude steel output increased in April following improved selling prices for steel products and a reduction in stock levels. The outlook, however, remains tight as Government funds for construction projects have dried up and banks are unwilling to lend. By Shi Lili*

THE downstream demand for steel products a low stockpile could not be sustained when just 2.24% and the rate for all private com- has remained weak this year. There are three output from steel mills continues to rise. Most panies stood at a slightly improved 2.7% due main reasons for this: steel mills have begun to release stock onto the to their more flexible mechanisms and bet- First, stricter policies on building real estate spot market in large quantities. In May, they ter cost controls. This is no doubt a danger- continue which is a heavy blow to the construc- were at a less competitive level due to their pes- ous signal following the slowdown in the US tion industries in general and the steel industry simistic view about the market. The declining economy in recent months. in particular which is one of the most badly stocks of steel came to an end this May largely Ɂ Finally, those companies that had been sup- affected industries. The low rate of steel plant due to rising production and a slow recovery of ported by strong investment from the utilization was so widespread that steel produc- stocks. Central Government to supply construction tion dropped to a record low in April. steels for infrastructure projects now report Secondly, the steel industry is also suffering High costs a loss. This is because the government’s from a slowdown in the ship-building sector. As a result of the high price of iron ore coupled planned investment of 4 trillion Yuan Orders for new ships have fallen by over 50% in with a sluggish market demand for products ($631bn) has been used up and it will hard terms of both volume and price. manufactured from steel, figures from CISA to find a further means of boosting the Thirdly, although the official PMI index grew indicated that losses generated by the steel downstream demand for steel. slowly to 53.3% in April, the HSBC PMI for industry during the first three months of 2012 China remained at 49.3% for April. Any figure were 1.034bn Yuan (US$163M) and a third of Testing times for China’s mills below 50% is considered a recession in that all companies suffered losses during this period. The key issue for China’s steel mills is to obtain industry. There is thus a discrepancy between The factory price of steel following the Chinese and retain profitable operations. It is hard to the two figures and most people tend to believe New Year celebrations increased several times put costs under control. But driven by a rise in the HSBC one which better reflects the reality for most steel mills made some profit because the selling prices of finished steel, daily produc- in the whole engineering manufacturing indus- of the improved selling price. Yet the amount of tion of crude steel rebounded rapidly in April try. Manufactures of domestic appliances, for steel sold remained low and most producers this year. But due to the rapid increase in the example, are facing a crisis as demand for their had to raise preferential subsidies for traders to capacity of steelplant during the second half of products drop. According to statistics from attract them to become more actively involved this year, the price of steel is expected to China’s Bureau of Customs, exports were high in buying and selling steel. Traders were happy decline due to rising stockpiles on the market. during the first half of 2011, but fell during the as this gave them better access to buy steel. But the overall feeling is that profits from second half. Take air conditioners for example, Since September last year, the tight cash flow China’s steel industry remain low compared exports of these in Q4 2011 went down 37.1% suffered by most traders could not be relieved. with European mills. compared with the same period of the previous Most banks, especially those in Eastern China, Few companies are optimistic about the mar- year. What is more, total outbound shipments put some steel traders on a black list because of ket in the future. Certain steel mills have even during the first five months of 2012 declined this. given up their core business of making steel and 15.8% year-on-year. have turned to auxiliary businesses such as It can be seen from these factors that weak Three features hitting Chinese steel automation. Statistics show that the general downstream demand is giving rise to a stagnant Along with a surplus of steelmaking capacity in sales profit of Wuhan Steel in 2011 was 1.67% steel market which is hard to change in a short China, the industry’s ability to generate profit while their non-steel business stood at 3.47%t. time. also drops in proportion. The whole of industry Reports from successful foreign steel mills suffered losses this year. This largely has three say they would like to associate their businesses High output and low stockpiles causes: with a major business in China. For such inward Based on statistics from the China Iron & Steel Ɂ The larger the company is, the more losses it investment, many of the large European plant- Association (CISA), output of crude steel per is likely to receive. Of the published per- builders are turning to supplying downstream day by major steel companies during the first formance of listed steel companies almost all manufacturing to make a profit rather than rely- half of April reached an historical high of suffer losses. Shougang, for example, lost ing 100% on steel production. 2.0308Mt, which was much higher than the 140M Yuan or $22M, last year. Losses at But in the long run, China’s steel mills are 1.87Mt during the same period last year. Hualing Steel reached 690M Yuan or bothered by being overly focused on produc- Although output dropped during the middle of $109M, while Angang suffered the greatest tion, construction and operation industries and April, the daily average still remained at over loss of 1.89bn Yuan or $298M. that insufficient attention is being paid to asso- 2Mt. Stockpiles were sold declining by 158kt Ɂ Private steel mills that had been growing ciating with their downstream clients, forging since April last year under a condition of low steadily have made losses in recent years and an attachment to makers of manufactured national demand, a trend well supported by the are loosing money. The average sales profit goods and staying away from the provision of present market price. But it is obvious that such for the integrated steel industry in 2011 was services. ᔢ

*STI correspondent in China

Chinese steel exports jump in first four months 2012

CHINA’S exports of finished steel for the peri- Exports of Bar & Rod products rose the most of just 2.44Mt. Stainless exports saw a decline od January to April grew 10.16% to 16.8Mt. reaching 3.062Mt, up 38.89% followed by of -10.56% exports reaching 636.99kt. This took place despite of the central govern- angles and sections at 1.071Mt, up 33.53%. ment’s progressive measures to curb the coun- Pipe, tube and fittings reached 3.432Mt, up try’s excessive exports of energy-intensive com- 8.05%. Flat products were the largest product Source: China Metals modities due to environmental concerns. exported reaching 8.470Mt a modest increase e-mail [email protected]

14 – July/August 2012 – Steel Times International www.steeltimesint.com India_Layout 1 7/10/12 10:48 AM Page 1

INDIA Update Moderate growth of Indian steel in FY’12 While India’s steel industry has grown at a more rapid rate than most manufacturing industries the rate has slowed due to high inflation, increased taxes and higher interest rates hitting the spending power of the population for manufactured goods. Additionally, a fall in the value of the Rupee against the US dollar has increased the cost of coking coal imports resulting in losses or little profit across steelmakers. By Sanjay Sengupta*

INDIA’S Central Statistical Organization in its inflation, a widening current account deficit, consumption from gross production. 68.93Mt forecast on 7th February, 2012 estimated that the sharp depreciation in the value of the Indian of finished was available for sale in country’s GDP may grow by 6.9% in FY’12 rupee against the US dollar and cooling of FY’12, up 7.28% on the previous year. A sum- (April 2011-March 2012) as against 8.4% in demand, India’s Index of Industrial Production mary of production for sale of iron and steel FY’11. But according to present trends, this may (IIP) has grown at a dismal 2.8% in FY’12 com- products in FY’12 is shown in Table 3. prove optimistic. pared with 8.2% in FY’11. The manufacturing On the back of a bundle of economic woes sector, with a weightage of 75.5% in the IIP, Steel trade afflicting the Indian economy including high recorded a meagre growth of 2.9% in FY’12 as Imports of carbon finished steel by India in FY’12 at 5.40Mt declined 7.38% over 5.83Mt Type of Production % change Domestic % change Exports % change in FY’11. Major imports were plates 0.66Mt, Vehicles in over Sales over in over HR Coils 1.80Mt, and CR Sheets/Coils FY’12 FY’11 in FY’12 FY’11 FY’12 FY’11 1.44Mt. Passenger Vehicles 3 123 528 4.72 2 618 072 4.66 507 318 14.18 Exports of Carbon Finished Steel by India in Commercial Vehicles 911 574 19.83 809 532 18.20 92 663 25.15 FY’12 at 3.66Mt rose by 13.66% over 3.22Mt in Three Wheelers 877 711 9.78 513 251 (-) 2.43 362 876 34.41 FY’11. Major exports were HR Coils 1.03Mt Two Wheelers 15 453 619 15.76 13 435 769 14.16 1 947 198 27.13 and GP/GC sheets/coils 1.31Mt. India TOTAL 20 366 432 13.83 17 376 624 12.24 2 910 055 25.44 remained a net importer of steel. Source: SIAM Unit Number of Vehicles. Consumption Table 1 Production, Domestic Sales, and Exports of Indian Automobile industry Consumption of carbon finished steel after adjusting for variations in stock and double Product Production % change against 8.9% in FY’11. The situation is reminis- counting in FY’12 reached 66.41Mt a growth of (P) over FY’11 cent of the global crisis that started in October 5.53% over 62.93Mt in the previous year. Crude Steel 73.792 4.42 2008. Of which ISPs (I) 23.605 (-)1.03 The core sector representing the eight infra- Financial performance Secondary (2) 50.187 7.19 structure industries posted a growth of 4.3% in Despite posting higher sales in FY’12, most Source : JPC (P) = Provisional FY’12 viz 6.6% in FY’11. Indian steel companies recorded either a loss or Note 1 ISP’s are SAIL, Tata Steel and Vizag Steel Plant. Despite the gloomy picture of the country’s lower profit over FY’11 due to the following 2 ‘Secondary’ includes mini blast furnaces industrial growth this year, in FY’12 the Indian reasons: steel industry recorded a moderate growth of • Higher taxes pulled down the demand of Table 2 India’s crude steel production in 7.8% in ‘production for sale’ of carbon finished automotives, capital goods, white goods, FY’12 (Mt) steel and a rise of 5.53% in steel consumption and construction sector materials. over FY’11. • High inflation averaging about 9%. Product Production % change • The value of Indian rupee against US$ for sale (P) over FY’12 Automobile production depreciated by 12.36% from Rs 44.5 in Cold Pig Iron* 5.881 1.66 Overall, India’s automobile sector in FY’12 August, 2011 to Rs 50.00 in March, 2012 of which ISP’s 0.502 (-)13.30 recorded a significant growth of 13.83% in pro- forcing Indian steelmakers to bear extra cost Secondary 5.379 3.32 duction, 12.24% in domestic sales and 25.44% in on imported coking coal and steel materials Less IPT/Own consumption 0.098 (-)2.97 exports although these figures were below the besides losses on external commercial bor Production for sale 5.783 1.74 FY’11 performance when the respective growths rowings etc. Sponge Iron (DRI) 24.834 (-)2.00 were 27.45%, 26.17% and 29.64% Table 1. • Price of imported coking coal FOB Australia of which ISP’s -- -- per tonne was US$310 in April, 2011 which Secondary 24.834 (-)2.00 Crude steel production gradually came down to US$220 in Q4 of Less IPT/Own consumption 4.462 1616.15 India’s total production of crude steel in FY’12 2012. This decline was, however, offset by Production for sale 20.372 (-)18.78 reached 73.79Mt according to provisional fig- the depreciation of Indian rupee. Carbon Finished Steel 77.946 9.33 ures released by the Joint Plant Committee, an • Coal India Ltd, the only domestic supplier of which ISP’s 17.577 (-)3.27 increase of 4.4% over FY 2011. Table 2 details of coal in India, increased the prices of non- Secondary 60.369 13.64 production by sector and the variance with coking coal by 30% in FY’12. This affected Less IPT/Own consumption 9.016 27.96 FY’11. adversely the margins of the steel plants Production for sale 68.930 7.28 using these as input and also the cost *Surplus of steel making requirements supplied to . Ferrous sales to coal-based sponge iron plants. Source : JPC (P) = Provisional Production for sale is arrived at by deducting inter-plant transfers (IPT) and producers’ own Sales and profits of some Indian companies in Table 3 India’s ferrous output for sale in FY’12 compare to FY’11 are shown in Table 4. FY’12 (Mt) *India Correspondent Tata Steel’s European operation was hit by lower demand due to the Eurozone crisis and Net sales/Income from operations Net profit higher input costs. This impacted the compa- INR x 10 million INR x 10 million ny’s consolidated net profit in FY’12, even Company FY’12 in FY’11 % change FY’12 FY’11 % change though its consolidated turnover rose by 11.9% SAIL 50348.00 a 47 041.00 a 7.03 3 542.72 4 905.00 (-) 27.77 over FY’11. Tata Steel* 132 900.00 a 118 753.00 a 11.91 5 390.00 8 983.00 (-) 40 Publicly owned SAIL’s net profit was impact- JSPL 13 270.67 9 513.14 39.50 2 110.65 2 064.12 2.25 ed adversely by a rise of Rs 40000M Bhushan Steel 9 940.96 7 000.46 42.00 1 024.35 1 005.09 1.92 (US$800M) in input costs in FY’12 mainly due Maharastra Seamless 2 291.82 1 761.27 30.12 317.40 342.81 (-) 7.41 to the higher price of imported coking coal Monnet I & E 1 900.87 1 569.50 21.11 306.23 281.18 8.91 which rose to US$288 per tonne over US$213 *Tata Steel’s figures are consolidated including their overseas operations. in FY’11. The impact of the hike was com- a=turnover pounded by volatility in the rupee – dollar value which negatively impacted SAIL’s financials in Table 4 Sales and profits of some Indian steel companies in FY’12 Vs FY’11(Rupees x 10 million) FY’12 by about Rs 9000M ($180M). 

16 – July/August – Steel Times International www.steeltimesint.com GBR copy_Layout 1 7/16/12 3:14 PM Page 1

Indian supplement

India rising: Can India’s steel industry deliver on years of promise?

A REPORT BY GLOBAL BUSINESS REPORTS FOR STEEL TIMES INTERNATIONAL

India has seen crude steel production Picture courtesy of Flickr: increase by 47Mt or 174% since the start Himanshu Sarpotdar of the 21st century an average annual increase in output of 14.5%. It now ranks as the fourth largest producer in the world. Much of this growth has come from the private sector which now accounts for three-quarters of total pro- duction. This Special Report compiled in India by Global Business Reports reveales Steel – The gateway through interviews with key industrial players how this remarkable growth has been achieved. Additional articles review to India’s industrialisation India’s passion for small and large scale DRI plants, its vast ore reserves but trou- bled development of these and how a 105 year old steel site has moved into modern times. By Joseph Hincks and Pavlina Pavlova *

Built in the days of the British Raj, the ‘Gateway to India’ is an impressive monument on the shore of the then city of Bombay – present day – and remains a symbol to welcome foreign investment into India

FROM the arrival of the Qilin in , who ly recorded) compared to India’s 72.2Mt in that were thought to herald the absolute harmony of calendar year (Table 1). Once skyrocketing, the Yongle Emperor, to Halley’s Comet fore- China steel demand is expected to decelerate telling the victory of William the Conqueror, Dr Amit Chatterjee and the steel rolling industry is expected to portents of prosperity have transcended history former Technical experience stable but comparatively lower and culture. Director Tata Steel growth from 2012 to 2016. Today, the conventional assessment of a and recently retired Despite the obvious growth potential of country's performance begins with reference to advisor to the MD Indian steel production and consumption, the its Gross Domestic Product (GDP). GDP, how- trajectory of the country's steel industry over the ever, is a rather turgid measurement. next few years is more difficult to predict. On Examining a country's steel industry provides a the one hand, India has signalled its intent more dynamic and expansive means of fore- sumption per capita in India remains remark- through investing heavily in giant steel mills, casting its economic future. Steel consumption ably low. Average Indian steel consumption in continuous modernisation and the upgrading of per capita is directly related to the condition in 2011 stood at around 55kg per person per year, old plants. Expectations are tempered, however, which a population lives: it can be broken down compared to the global average of 206kg and by concerns over access to raw materials, a com- regionally to depict discrepancies in economic more than 500kg in mature economies coun- plex land allocation process, and questions over development, it reflects patterns of urbanisa- tries such as the USA and Japan. What is espe- the ability of India’s infrastructure to keep up. tion, infrastructure spend, the state of industry cially relevant is that rural Indians, who consti- and manufacturing capacity. “Steel production tute more than 70% of the country's popula- A roadmap to success and consumption is accepted as a barometer of tion, consumed on average just 9.78kg in 2011 Economic reforms in 1991 ushered in a new era any country’s progress,” says Dr Amit according to Sushim Banerjee, director general of growth and new capacity was piled onto Chatterjee, consultant and former advisor to of Institute for Steel Development and Growth India’s steel scenario. Yet despite a succession the managing director of Tata Steel, (INSDAG). For India to truly become a global of high profile investment announcements, the Jamshedpur. leader in steel production, it must access its pace of development, especially relative to that In the case of India, an examination of the domestic market; meaning this figure has to of China, did not befit that of a waking giant. steel industry is particularly instructive. The increase drastically. Although India’s impressive economic growth country is now the world’s third largest steel In a sense, China’s Qilin has already arrived. rate made the country appear an ideal destina- consumer yet, while production has increased China reported produced of 695.5Mt of crude tion for FDI, discouraged investors repeated steadily since economic liberalization, con- steel in 2011 (this figure being only that official- similar complaints: infrastructure was absent;

*Global Business Reports

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ports and roads were needed; and things in the Financial year Quantity particular have been shunted back and forth country just happened too slowly. (April-March) (Mt) between the federal and state governments. In 2005, the Indian Government, in its new “There is no point in selling India as an invest- role as a facilitator, came up with a directive 2000-01 26.89 ment destination at Davros when the invest- that promised a solution: The National Steel 2001-02 27.94 ments which have already come are facing mul- Policy 2005. The policy envisaged steel produc- 2002-03 30.44 tiple problems and not able to move forward,” tion reaching 110Mt by Financial Year (FY) 2003-04 34.25 vice president corporate affairs Posco India, 2019-20 with an annual growth rate of 7.3%. 2004-05 38.49 Vikash Sharan, told journalists in January 2012. The 2005 Steel Plan was largely successful 2005-06 46.46 Although in many ways India’s democratic and by 2007 new investment had propelled 2006-07 50.82 approach to land allocation is to be lauded, the India towards becoming the fifth largest pro- 2007-08 53.86 government must be seen to be taking steps ducer of steel in the world and the largest pro- 2008-09 58.44 towards streamlining the process if it expects to ducer of (DRI, also referred 2009-10 65.84 garner future greenfield project investment. to as sponge iron) in the world. 2010-11 69.58 “Land acquisition is a problem and is the At the time of writing, the National Steel 2011-12 73.79(p) main reason for investors shifting their focus to Policy 2005 was being reviewed in light of the Source: Joint Plant Committee (JPC) brownfield projects. The governments of the rapid developments on both the supply and (p) Provisional five or six states that are major steel producers demand side of the domestic steel industry. The need to make brave decisions, otherwise India new steel policy, released in June 2012, will set Table 1 Crude steel production in India will not have an industry. We are hopeful of a production targets far exceeding those of the (Million metric tonnes in Financial Year) practical approach being taken,” India’s govern- 2005 plan. ment supported Joint Plant Committee told us. Based on an estimated infrastructure spend Financial year Quantity In February 2012, signs were emerging that of nearly US$1tr, the projected growth of Posco could soon see a resolution to some of India’s manufacturing industries, an increase in these land issues, and there are hopes that the the country’s urban population to 600 million 1999-00 28.03 new steel policy will expedite a more efficient by 2030, and the emergence of the rural market 2000-01 28.00 approach to land acquisition. Purshopam for steel consumption, the Ministry of Steel’s 2001-02 29.19 Agarwal, vice president, projects advisory and Working Group on Steel for the 12th Five Year 2002-03 30.63 structured finance, of SB Capital Markets at Plan April 2012-17 has projected that crude 2003-04 33.62 the State Bank of India is optimistic about steel capacity in India is likely to reach 140Mt 2004-05 37.73 future foreign investment in the country. “I by FY2016-17. Furthermore, memorandums of 2005-06 43.91 think we will see more foreign steel players in understanding (MoUs) signed by private pro- 2006-07 49.67 India in the near future,” said Agarwal. ducers with the various state governments indi- 2007-08 55.23 “Everybody is eyeing India in terms of further cate that capacity might exceed 200Mt by 2020. 2008-09 55.09 growth in business. With some more clarity in “The next five year plan includes infrastruc- 2009-10 60.00 terms of policy issues, I am hoping more and ture investment, financed by taxes on the steel 2010-11* 64.56 more players will be interested in coming here.” industry, and commitment to research and *Provisional development,” the Joint Plant Committee told Source Steel Scenario Yearbook Coking coal us. “In general, we expect demand to grow at Land access issues may have accounted for the around 8.5%, although this year the manufac- Table 2 Apparent steel consumption of delays in India’s greenfield projects, but they turing sector slowed down slightly and growth carbon steels by Financial Year (Mt) were not the sole constraint on the Indian steel will only be around 6%.” industry’s growth in 2011; a look at the produc- Table 2 shows apparent steel consumption Product Production % change tion figures of India's largest steelmakers in (ie Production + Imports – Exports) of carbon for sale over prev FY 2011 reveals that constraints were felt even by steels since 2000. Consumption has grown over long established plants (Table 3). the period by 36.5Mt or 130% an average annu- Cold Pig Iron* 5881 1.66 India has abundant thermal coal resources, yet al growth in demand of 10.8%. of which ISP’s 502 (-)13.30 deposits of coking coal are scarce. Most of the Secondary 5379 3.32 country’s coke requirement, a vital input for the Less IPT/Own consumption 98 (-)2.97 conventional method of steelmak- Raw materials for Production for sale 5783 1.74 ing, is met by imports of hard coals for coking. Sponge Iron (DRI) 24 834 (-)2.00 Modern steel producers have always been steelmaking of which ISP’s -- -- somewhat vulnerable to raw material price fluc- India’s growth prognosis should, in theory, Secondary 24 834 (-)2.00 tuations but in 2011, high coking coal prices, prove a huge spur for foreign direct investment Less IPT/Own consumption 4462 1616.15 driven by factors such as the Queensland floods (FDI) in the steel industry. Yet a simplistic Production for sale 20 372 (-)18.78 and augmented by the depreciation of the inclusion of just infrastructure plans and Carbon Finished Steel 77 946 9.33 Indian rupee, exerted particular pressure on domestic market potential is not enough; an of which ISP’s 17 577 (-)3.27 steel industry profit margins. examination of industry sentiment elicits a Secondary 60 369 13.64 “The recent depreciation of the rupee has more multifarious response. Indeed, each one Less IPT/Own consumption 9016 27.96 resulted in a spike in coking coal prices in Indian of the vital ingredients for steelmaking – iron- Production for sale 68 930 7.28 rupee terms at about INRs.23 000/t ($408.5) ore, coking coal, and, we must not forget land, Notes: *Surplus of steel making requirements supplied to foundries. compared to about INRs19 000/t (US$337.4) in – is in its own way, compromised in India. Source : Joint Plant Committee (P) = Provisional the corresponding period last year,” the Stock Market Review reported in December 2011. Land Table 3 Saleable product in FY 2011-12 (kt) “Higher raw material prices are expected to Back in 2005, Lakshmi Mittal, the head of the keep the cost of production high even in the world’s largest steel company ArcelorMittal ArcelorMittal and Posco’s monumental weak demand scenario and may make it difficult rescinded on an alleged promise he had made investments reflected the optimistic climate in for companies to pass on the higher cost to con- never to do business in his own country and which they were conceived. However, as of sumers. This is likely to put pressure on the mar- flew into the state of Jharkhand to announce a February 2012 neither project had begun sub- gins and cash flows largely in the case of non- $9bn investment to build a greenfield steel stantial construction and, at the time of writing, integrated companies.” plant with a 12Mt/y production capacity. In Lakshmi Mittal has suspended activities on all Indian steel producers have moved to insu- June of the same year, the South Korean com- proposed projects in India and Posco is still late themselves from the effects of coking coal pany, Posco, the world’s fifth largest steel awaiting the land allocated to its mill to be price volatility in two distinct ways: through maker, signed a MoU with the Orissa (now approved pending various counter claims and backward integration, acquiring coking coal renamed Odisha) government for an eventual environmental concerns. assets domestically and overseas, and through investment of $12bn for setting up a steel plant In Posco’s case, of the 4004 acres required investing in technology. As part of its moderni- in the state. At the time, this represented the for the project 3586 acres belong to the state sation programme, for example, India’s largest largest FDI in Indian history. and approvals pertaining to forested land in steel producer state-owned Steel Authority of

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Even with DRI use becoming more promi- nent in the Indian steel scenario, producers will continue to depend to a large extent on import- ed coking coal. However, with Mozambique becoming an increasingly viable source, Australia taking steps to protect its mines from flood damage, and Indian players such as NMDC, NRE Gujarat, and GVK Power having already entered the Australian mining space, there are encouraging signs that the Indian steel industry will be less vulnerable to price volatility V R Sharma CEO & going forward. “With the arrival of American deputy MD, steel and Russian mining companies, the dominance business, JSPL of Australian firms is reduced, and in the past six months prices have gone down from more than $300 to $200/t. I think Indian prices should reach $160 to $180 and if they do, coking coal Nearly a quarter of will no longer be a great concern,” JSPL’s VR India’s steel was pro- Sharma told us. However, a caveat to this duced in small scale should be that rising resource nationalism in induction furnaces in Indonesia, a key coking coal supplier to India, is 2011 Pic courtesy causing increasing concern, as is the deprecia- Inductotherm India Ltd tion of the Rupee against the US dollar.

FY 05-06 FY 06-07 FY 07-08 FY 08-09 FY 09-10 FY 10-11 Iron ore Coal Based 7.278 11.012 14.142 16.050 16.821 17.065 In part driven by strong Chinese demand for Gas Based 4.542 5.264 5.845 5.280 6.172 6.190 iron ore and the commodities resultant prof- Total 11.821 16.277 19.987 21.330 22.993 23.255 itability, illegal mining has flourished in India. Even authorised miners have faced a litany of Table 4 DRI production in India (Mt) charges in India’s ore-rich states, including unregulated encroachment on forest areas, India Ltd (SAIL) has taken steps towards reduc- over 1Mt of steel per annum, whereas DRI- underpayment of government royalties, and ing coking coal use in its existing plants. “We are based production has allowed small producers conflict with tribal groups regarding land rights. targeting higher filtration (washing the coal to to thrive in India. The Sponge Iron In 2010 the Indian government launched lower the ash content), reducing the need for Manufactures Association, for example, which investigations in the states of Karnataka, coke and thus coking coal,” said Anirban represents the Indian DRI industry, currently Orissa, and Goa in an attempt to stymie illegal Dasgupta, SAIL's deputy general manager in the has 94 members. mining. The investigations are ongoing in Goa, Chairman’s secretariat. “Secondly, we are trying For India’s larger producers, the DRI route and have led the government to impose mining to develop technologies to use more of semi-soft has provided something of a hedge against bans in Karnataka and export restrictions in and non-coking coal in the plant so our depend- coking coal price volatility. Jindal Steel and Orissa. Such restrictions have translated into ence on prime coking coal comes down.” Power (JSPL), for example, one of the four supply constraints for many of India’s steelmak- Some of the most promising technologies will Jindal group entities, operate using both the ers. Karnataka, which accounts for around 30% be discussed later, but most solutions mooted conventional blast furnace and DRI route to of India’s steel output and about 25% of the for India have the use of direct reduced iron steelmaking at its plant in Chattisgarh state. country’s iron-ore exports, has been especially (DRI) for steelmaking at their core. “Having compared costs, we believe that DRI hard hit. India has championed the DRI route to steel- is a cheaper route to manufacture steel than Around 80% of sponge iron units in making to a greater extent than any other steel- importing large quantities of coking coal, Karnataka remained closed at the end of 2011, producing nation. There are now estimated to although like most Indian companies we will and sponge iron units in other states were affect- be 1275 induction furnaces spread across India mix our methods,” said VR Sharma, CEO and ed by either a straightforward lack of availabili- which are used to melt a blend of coal based deputy managing director, steel business, at ty, or scarcity induced high pricing of iron ore. DRI and scrap. Although each operation is small JSPL. In fact, the company is India’s largest The lack of iron ore was compounded by a short scale, a total of 17Mt of coal based DRI was producer of coal based DRI by far making supply of thermal coal. “As things stand today, produced in FY 2010-11 contributing 24.4% of 13.19Mt last financial year representing 77.3% the future of the Indian sponge iron units, par- all production. Add to this 6.19Mt of gas based of India’s coal based DRI production. ticularly the stand alone units, appears to be DRI production and the full contribution of India is unusual in relying so heavily on coal very bleak,” said Dr Kashiva, executive director DRI grows further to 33.4%. DRI-based pro- to produce DRI. In calendar year 2011, a total of the Sponge Iron Manufacturers Association. duction has increased dramatically; from essen- of 73.3Mt of DRI was produced worldwide of In addition, new Standards for construction re- tially zero in 1980 to 23.2Mt in FY2010-11 which 17.3Mt was made from coal or 23.6%. bar – the major market for induction furnaces (Table 4). India is now the world’s largest pro- Of this coal based DRI, India produced around melting sponge iron – are to be implemented in ducer of DRI. A conventional blast furnace is 17Mt or 98%. More will be said regarding the September which will be difficult to meet by economically viable only for plants producing technology of this process later. these small scale producers.

A rotating SLRN kiln for coal based DRI production Pic courtesy Outotec

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In a move that some many consider reminis- cent of pre-liberalized Indian economics, the government has become increasingly involved in India's mining scenario. In February 2012, the Supreme Court-appointed Central Empowered Committee (CEC) recommended that an artificial ceiling of 30Mt/y be applied in Tata Steel, established in Jamshedpur in 1907 is the first steel company to break Karnataka’s ore production based partly on ground to build a greenfield plant somewhere in India Pic courtesy Tata Steel fears – unwarranted according to commenta- tors such as the Indian Bureau of Mines – that the state might run out of iron ore resources in manager in the Chairman’s Secretariat, Anirban giant for the installation of new 15 to 20 years time. At the time of writing, the Dasgupta. technologies, and notably with Korea’s Posco mining industry, under the aegis of the SAIL’s previous large-scale expansion around the installation of Finex technology Federation of Indian Mineral Industries, was occurred in 1995-96, when the company mod- which can use fine ore and non-coking coal as preparing to appeal to the Supreme Court to ernised its plants at Durgapur and Rourkela. the raw material feed (this technology will be permit ‘A' category mines in Karnataka, those in Buoyed by India's demand scenario, SAIL is discussed later). which no illegality or marginal legality was currently undergoing a round of expansion that Table 5 shows crude steel production by found, to resume work immediately. At present, will take its production capacity of finished SAIL and privately owned plants only the state owned NMDC is permitted to steel into the region of 23.5Mt/y, and its crude continue mining operations in Karnataka. steel capacity to around 20Mt/y. Tata steel In parallel with the mining restrictions, the Meeting projected demand and increasing Established in 1907 in Jamshedpur NE India, Indian government raised export duty from market share is not the only driver in the cur- Tata Steel was India’s first industrial steel plant 20% to 30% in early 2012. The export duties rent round of expansions. “The second precon- (Indian Iron had set up a blast furnace at Kulti are intended to advantage Indian steel produc- dition was the need to modernise our facilities,” – near Asansol, West Bengal – a little earlier but ers by ensuring that they are able to compete said Anirban Dasgupta. Over the past five years without steelmaking facilities). Today, its pro- for the country's now artificially limited SAIL has increased production by roughly 11%, duction places it in seventh place among global resources. mainly through enhancing process efficiencies. steel companies with an annual crude steel Although the iron ore production limit of However, some of SAIL’s current facilities were capacity of over 28Mt/y. In calendar year 2010 30Mt from Karnataka meets the current installed in the late 1950s and many – such as it produced 23.2Mt of crude steel across its domestic requirement for steelmaking and pig IISCO – are reliant on now obsolete produc- Indian and international operations. Following iron production, the ban on exports is costing tion processes. In addition to adding about its acquisition of the UK-Dutch Corus Group, Karnataka and Indian Railways, who move the 10Mt/y of capacity, SAIL plans to phase out it is now one of the world’s most geographical- ore, around $2.2bn per year, and the loss of 3Mt/y of its under-performing assets: 2.5Mt/y ly-diversified steel producers, with operations in export taxes alone accounts for nearly $1bn. at its and around half a million 26 countries and a commercial presence in over India is the third largest exporter of iron ore in at its Burnapur plant. 50 countries. the world, with exports primarily feeding the As part of its modernisation programme, The Tata Steel Group, had a turnover of US$ Chinese market. India produced 260Mt of iron SAIL will be employing various technologies to 22.8bn in FY’10, and has over 80 000 employ- ore in 2009, but this fell to 190Mt in 2010, and reduce coking coal consumption at its plants ees across five continents and is a Fortune 500 exports from major ports were down 35% year and therefore insulate itself against volatile company. on year in November 2011. pricing. SAIL is collaborating with Japanese Tata Steel’s larger production facilities include The bans may have served their immediate purpose of enabling Indian steel producers to Public sector Private sector compete with overseas buyers for iron ore sup- FY BSP DSP RSP Bok ISP ASP/ Total VSP Tata Others Total Grand plies, but they have also impacted investment in VISL Sail RINL Steel Private total new mines. New projects face difficultly in accessing funds if raw material supplies have not 06-07 4.789 1.869 1.990 4.067 0.472 0.309 13.505 3.497 5.174 28.640 33.814 50.816 been secured. “Raw material availability is one 07-08 5.055 1.914 2.093 4.127 0.458 0.315 13.962 3.129 5.014 31.753 36.767 53.858 of the most important aspects we consider when 08-09 5.184 1.888 2.082 3.578 0.417 0.264 13.413 2.963 5.646 36.419 42.065 58.441 carrying out due diligence for a project,” said 09-10 5.109 1.966 2.128 3.599 0.400 0.308 13.510 3.205 6.564 42.562 49.126 65.841 Purshopam Agarwal, vice president, project 10-11 5.329 1.961 2.160 3.593 0.411 0.308 13.762 3.235 6.855 45.723 52.578 69.575 advisory and structured finance, SBI Capital Notes: BSP Bhilia Steel Plant; DSP ; RSP ; Markets at the State Bank of India. “In the past, Bok Bokaro; ISP Indian Iron & Steel Co; ASP/VISL Alloy Steel Plant & Visvesvaraya Iron & Steel Ltd; VSP Visakhapatnam Steel Plant ( Ltd – spun the availability of raw materials, especially iron off from public sector to privatise ore, was taken for granted. Of late, due to the environmental and other related issues, the situ- Table 5 Crude steel ation has changed significantly. All government production by major clearances on the supply side should be in place integrated plants to ensure the viability of a project.” (Mt) Further details on iron ore reserves and the political ramifications of their control are dis- cussed in a separate article in this issue. Steel giants SAIL Public sector Ltd (SAIL) is India’s largest integrated steel pro- ducer, currently holding a market share of Sail is close to com- around 17% to 18% of the country’s steel pro- missioning a new duction. Throughout its history, SAIL has not 500kt/y wire rod mill only contributed significantly to India’s produc- and a 3.88Mt/y sin- tion portfolio, but also to a large proportion of ter plant at its IISCO its steelmaking expertise. “Many of the people Steel Plant (ISP) at who have headed other major industrial compa- Burnpur in the east- nies came from SAIL. Many engineers and ern state of West technicians groomed in SAIL have learned Bengal steelmaking and then gone on to work in other Pic Courtesy Sail steel companies,” said SAIL’s deputy general

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Indian steel supplementJindal South West is India’s largest private sector steel company in terms of installed capacity and one of the lowest cost producers in the world Pic Courtesy JSW

Prashant Jain JSW Steel’s head of corporate strategy

those in India, the UK, the Netherlands, costs are cheaper.” Steel’s former CEO and current board member Thailand, Singapore, China and Australia. JSW Steel’s management did indeed learn Malay Mukherjee told us. “Our outlets Operating companies within the Group include from its first foray. In 2002, when the govern- are close to customers, with materials available Tata Steel Ltd (India), Tata Steel Europe Ltd ment and the national reserve bank came up in small packs, giving access to anyone within a (formerly Corus), NatSteel, and Tata Steel with a corporate debt-restructuring scheme, five to 10km radius to quality products.” Thailand (formerly Millennium Steel). JSW embarked upon a round of expansion, At the time of writing, Essar Steel had seven Within India, Tata Steel started construction pioneering a green technology that did not service centres located in India’s industrial of a greenfield integrated site at Kalinganagar, require coking coal: the world's India’s first zones, and more than 375 retail centres. Larger Orissa state in January 2011. This is the first Corex plant. “We set up a blast furnace in 2003, retail outlets belong to the company, while greenfield project to be started in India for and since then have never looked back,” said smaller ones are franchised. “It is an ideal many years. Phase 1 of production due to start Jain. The works now operates two modestly model that we believe works in creating steel in 2013-14 will have a capacity of 3.5Mt/y and sized blast furnaces each capable of producing intensity and availability to customers,” said the second phase, to be commissioned in 2015, 900kt/y and two C-2000 Corex units each with Mukerjee. will increase this to 5.5Mt/y. The plant will pro- a capacity of 800kt/y. duce flat products. Jain’s analysis of market conditions has led Bhushan Steel At Tata’s Jamshedpur works Jharkhand state, JSW Steel to maintain its primary focus on the While the mixed fortunes of large scale foreign north east India, output reached 3.54Mt of Indian market. “While demand rises, supply investment into greenfield projects, such as that crude steel and 3.46Mt of saleable steel in FY faces constraints: setting up new steel plants in of ArcelorMittal and Posco, may have garnered 2010-11, up 8.1% year-on-year. The company is India is not easy – there are serious land, social much media attention, investment in the form investing in new plant at Jamshedpur including and infrastructure issues – which means that of technical tie-ups between Indian steel-pro- a second roller hearth furnace for its thin slab the country will continue to be a net steel ducers and foreign, particularly Japanese, com- caster and rolling line. importer,” said Jain. panies, have enjoyed much greater success. Tata Steel has signed an agreement with As part of its capacity increase programme, Bhushan, located in the state of Orissa, is Corp to form a joint venture to JSW is commissioning an extra 2Mt/y of capac- unusual as a large scale producer in that it pro- build a continuous and processing ity at its Vijayanagar plant in 2012-13, and the duces DRI using coal which is then melted in an line (CAPL). The CAPL will have a production company aims to produce 34Mt/y by 2020, with (EAF) which, unlike the capacity of 600kt/y and should start operating greenfield integrated steel plants coming up in induction furnace, permits refining to take in 2013. The two companies plan to discuss fur- West Bengal and Jharkhand. place. Bhushan has eight DRI kilns each of ther collaboration in fields such as galvanizing JSW steel has been one of the earliest movers 500t/day capacity. lines for auto sheet or upstream operations. in promoting steel use in India’s rural areas. The formation of the partnership between “When the industry opened up after economic relative industry newcomer Bhushan Steel and JSW Steel liberalisation, steel only reached urban areas, Japanese giant Sumitomo in 1996 preceded the The Jindal Organization, set up in 1970 by the and there was a further problem of poor knowl- subsequent collaborations of Nippon Steel and steel visionary O P Jindal and today incorporat- edge of steel use in the countryside,” said Jain. Tata Steel, JSW Steel and JFE Steel, and SAIL ing Jindal Stainless Ltd, Jindal SAW Ltd, Jindal “The first thing JSW did was to improve steel and Kobe Steel. “Bhushan Steel was the first to Steel and Power Ltd (JSPL) and Jindal South availability: we placed stockyards in remote realise the potential of this kind of arrange- West (JSW) Steel Ltd, is regarded as one of areas, with all of our products made available. ment,” said Bhushan Steel's CFO Nithin India's most important steel powerhouses. The Simultaneously, JSW has been promoting the Johari. “Our partnership with Sumitomo group has grown from an indigenous single-unit use of steel, and our goal is to double our num- allowed us to enter into auto-grade steel in the steel plant in Hisar, Haryana into a multi-billion ber of stockyards within 24 months.” first place.” dollar, multi-locational and multi-product steel The automotive market is considered to be conglomerate. Essar Steel one of the key growth destinations for Indian Today, JSW Steel, headed by Sajjin Jindal, is Essar Steel was one of the first companies in steel production, with the largest players now India’s largest private sector steel company in the private sector to move into steel production present in the country. Through its collabora- terms of installed capacity and one of the low- after the government liberalized India’s econo- tion with Sumitomo, Bhushan Steel has pene- est cost steel producers in the world. However, my in the 1990s. Although 80% of Essar Steel’s trated more than most into the automotive sec- the journey has not been easy for the group. business is local, Essar is present in over 30 tor's niche markets. “Steel is usually regarded as Building on the Jindals’ expertise in the steel countries, an attribute that Essar claims enables a commodity but we are not a commodity play- sector, JSW’s former incarnation Jindal it to understand global business and how prod- er,” said Johari. Vijayanagar Steel Ltd set up its first plant in the uct portfolios change. Expanding on the company’s current range Bellary-Hospetarea in the south-west state of In India, Essar Steel is expanding its capacity of flat products for the , Karnataka in 1995. Following the Asian finan- from 4Mt/y to 10Mt/y, and is now in the stage Bhushan Steel has signalled its intention to set cial crash of 1998, however, and the bursting of of commissioning new plants and ramping up up an advanced pickling line coupled with tan- the dot-com bubble around 2000, the hot- to production. dem cold mill and continuous annealing line rolled steel price dropped to $145 and the new Like JSW, it is not forgetting the rural market. (PLTCM & CAL) facility at Orissa, with a player was in trouble. Through its pioneering distribution model, capacity of 2Mt/y. This line will cater to the “JSW made the mistake of investing during Essar Steel has taken the lead in addressing the requirements of the automobile industry: by the peak of the economic cycle the first time discrepancy between rural and urban steel con- increasing the strength of steel, thinner sections round,” said JSW Steel’s head of corporate sumption. “We were the first to determine that can be used thus reducing the weight enabling strategy Prashant Jain. “The management has the steel intensity of India was low compared to reduced consumption. “We have already (now) learnt to foresee market changes and the rest of the world. This was not because finalised the technology side, and are now adjusted our corporate strategy towards making there was no demand for steel, but because it working on the engineering, and we will start investments during recession years when capital was difficult for people to get hold of it,” Essar physical construction sometime in January

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ern part of the country based on natural gas. Therefore, for the first time in the world, JSPL has entered into a technological change for pro- ducing DRI by coal gas (syngas),” said Sharma. Should JSPL’s syngas project prove a success when it comes on stream in August 2012, it will represent another step change in reducing the industry’s dependence on coking coal. JSPL also plans to install India’s first HIsmelt plant by 2014. The product of a joint venture with Rio Tinto. HIsmelt could provide a more effi- cient means of consuming iron ore fines using local coals to produce hot metal. “I am sure this will prove to be the technology for tomorrow,” said Sharma. The Corex process also offers an alternative means of supplying gas to a DRI shaft furnace and such a coupling has been operating at Saldanha in for many years. FINEX Posco’s beleaguered Orissa project is not only notable for the size of investment it entails. The Orissa facility is set to be the world’s first steel Bushan Steel is plant to employ solely Finex technology. Ore fine Non-coking coal operating eight coal Finex, developed by Posco in partnership Heat exchanger based DRI kilns with Siemens VAI, provides another means to melting the product bypass the need for coking coal and allows the in an EAFPic courtesy direct use of iron ore fines and non-coking coal Bushan Steel as feedstock. The process uses fine iron ore Hot DRI Coal R4 compaction briquettes charged in a series of fluidised-bed reactors. The ore cascades down through each in turn R3 R2 meeting the hot reducing gases from a coal gasi- fier and melter below. The ore is reduced to R1 CO2 Power plant removal DRI which is then hot-compacted and trans- ferred to a charging bin positioned above the Fluidized bed reactor PCI melter gasifier, from where it is charged by grav- ity into the melter gasifier where reduction is Melter gasifier Oxygen completed and it is melted. The tapped prod- Oxygen plant Process flow of uct, liquid hot metal, is equivalent in quality to Finex the hot metal produced in a blast furnace or Corex plant. Posco’s technology promises a dramatic 2013,” said Johari. cost, negating the original benefit of avoiding reduction of SOx and NOx emissions, and Bhushan Steel expects to be in the position the coking coal intensive blast furnace route, dust, as compared to the blast furnace route. to complete its project in Orissa in two and a and has meant that just seven natural gas-fired This reflects the emphasis India is placing on half years from start of physical construction. shaft furnace plants, including six Midrex environmentally friendlier production methods Direct Reduction Modules, have been installed going forward. “In the past the focus was all on in the country up to now. These are at Essar production rather than (preventing) pollution, Engineering the Steel, Gujarat, the former Ispat Industries (now but now new plants have to receive permission JSW Ispat Steel following the taking of a from environmental organisations,” said future 41.29% stake by JSW in December 2010), Navinender Gupta, chief general manager at state, west India and Welspun Korus Engineering Solutions. “Environmental Syngas Maxsteel also in Maharashtra. considerations are an integral part of invest- Of more than 350 DRI-based plants in India, In December 2009, Jindal Steel & Power Ltd ment, without which you cannot get your plant all but seven make use of coal-fired rotary kilns. (JSPL) announced its intention to construct a to run.” Rotary kilns are comparatively cheap and have 1.8Mt/y Midrex DR plant with a Lurgi coal While Finex has the potential to change the allowed numerous SME's to enter into steel- gasification plant to supply the reductant gas in face of the Indian steel industry, it is still com- making, however such kilns rarely exceed Angul, Orissa. The Midrex module will pair mercially being optimised. A 1.5Mt/y commer- 200kt/y production capacity. Eventual steel commercially available gasification technology cial plant started operations at Posco’s Pohang quality is often compromised due to the use of from Lurgi of Germany, with a 7.15m diameter Works in South Korea in April 2007 and the ashy, sulphurous coal and low-grade iron ore Midrex shaft furnace to produce DRI as a feed construction of a second 2Mt/y plant is under lumps. to an electric arc furnace. way at the same location. The industry’s fore- The DRI produced using coal has a lower car- “In the long run, the Angul plant will have most engineers will be watching its application bon content of 0.2-0.3% than that produced by another gas based DRI. It will be based on the keenly. “From an environmental point of view it gas-based processes which makes it suitable for HYL/Tenova technology at a capacity of 2.50 does make sense,” said Dr Jens Kempken, SMS the production of rebar for the construction Mt/y and one more Blast Furnace which will Siemag’s executive vice president for strategic industry. However, the induction furnaces used elevate the plant to 12Mt/y. We are expecting project development and an expert on method- to melt the DRI cannot refine the product in par- this quantity in Angul by 2017,” said VR ological engineering. “Finex is a unique solution ticular leaving it high in the detrimental elements Sharma, JSPL’s CEO and deputy managing to the problem of what to do with this low qual- sulphur and phosphorus by modern standards. director, steel business. ity, high ash coal... [but] the capital expenditure Gas-based DRI plants enable a much greater JSPL’s project will be the first time a Lurgi is enormous, especially for the coal specifica- production capacity from a single site and on gasifier is paired with a Midrex shaft furnace tion. We shall see whether this pays off or not.” the surface appear to be an ideal solution. and will effectively enable the production of However, while India has abundant thermal synthetic gas – or ‘syngas’ – from India’s Pelletising ore fines coal, the country suffers from a shortage of nat- domestic thermal coal to be used in the steel- Of the few really large miners in India, many ural gas required for the gas-fired process. This making process. “India is short of natural gas are steel producers with captive mines. has forced steel makers to import LNG at high and it is impossible to produce DRI in the east- However, more than 90% of India’s mines are

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www.harimachines.com owned by small merchant miners with mining capacities of around 1.5Mt/y. Kolkata based engineering company Hari Machines, in part- nership with Siemens, has come up with a new pelletisation technology specifically targeted at small merchant miners with a pelletising need of 1Mt/y to 2.5Mt/y capacity. “Since we had already acquired technology in the field of ben- eficiation, grinding and pelletising, Siemens approached our group for a tie-up on smaller pelletising plants. This is the best venture we are involved in, particularly in light of the gov- ernment’s restrictions on ore exports,” Hari Machines’ managing director Sabyasachi SHOWING Mishra told us. Initially focused on contract manufacturing, Hari Machines backwardly integrated into engi- neering when it became obvious the domestic steel industry would require more technical THE WAY solutions to advance. “Hari Machines was based in Orissa from 1971, so the natural incli- nation was to get into mineral processing based industries,” said Sabyasachi Mishra. “The idea was not to manufacture based solely on cus- tomers' designs but to provide complete solu- tions. In order to do this we needed engineers and industry leading technologies, so Hari Machines approached the global experts and formed joint ventures with them.” Hari Machines is an example of an Indian company that, through a combination of techni- cal tie-ups and internal research and develop- ment initiatives, has moved up the value chain and helped equip the industry to face the demands imposed upon it. Hari Machines will set up the largest beneficiation plant in India for JSPL and has also supplied to Essar for their proposed beneficiation plant in Orissa. Foreign engineering Foreign engineering specialists have played an integral role in the Indian steel industry’s devel- opment. Germany’s SMS Siemag, for example, has been in India for the last 30 years, and has around 80% market share in steelmaking tech- nologies and maintains a large workforce in the country. As the market leader in plant engineering, SMS Siemag has come up with a variety of methods for optimising India’s resources mix “The raw materials situation here in India is such that there is low quality iron ore that leads You want to seize your opportunities in the global marketplace – you to a poor quality of hot metal,” said Dr Kempken. “Therefore for the steelmaking need a partner who paves the way for you. We collaborate with leading plants that SMS has established in India we use global experts through various joint ventures to offer customized so- Conarc technology.” Developed 20 years ago, Conarc is particular- lutions for the Cement, Mining, Mineral Processing, Power & Steel In- ly suitable for the Indian steel scenario: of four plants in the world using the technology, three dustries, all in one place – with tried and tested know - how, superior are in India and SMS recently provided a technology and future oriented methods. 2.5Mt/y Conarc furnace for Essar’s Hazira steel complex. The Conarc technology effectively combines Giving you a straight shot to your goals. the merits of an EAF with an oxygen converter (BOF). Indeed, the name is derived from ‘CONverter ARCing’. It is a very flexible process in terms of both charge mix and energy use. Varying proportions of scrap, pig iron or DRI can be charged depending on the steel grade to be produced as well as according to the availability and prices of materials. An electric arc is used to melt the charge and an oxygen lance to decarburise the melt. And there is fur- ther flexibility when it comes to the type of energy used which can be electricity, coal or gas. Another technology particularly appropriate to newly industrialised nations is SMS Siemag’s Compact Strip Production (CSP) technology

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which combines thin slab casting with an in-line cessful collaborations with technology partners. base for after sales service support for our rolling mill to produce hot rolled coil (HRC). A commitment to research and development gauges.,” O P Garg, executive director at Jasch This has also been employed in India as plants has been central to Majumder’s business Industries told us. look to optimise capacity. “The key advantage is model. “We cannot follow Chinese companies In addition to the company’s recent presence less capital expenditure: you do not need a big who made European contacts, copied their in the US, Jasch Industries has an almost 100% furnace, so there is less energy consumption for technology and implement it in their own coun- market share in India, Pakistan, Bangladesh heating the slab and for rolling, and production try,” said Majumder. “In India we prefer to and the Philippines for coating gauges for gal- yields are higher,” Kempken explained. work together with international companies.” vanizing lines, and an almost 90% market share As India ramps up its production and contin- Eastern Metec has mainly collaborated with in China, alongside a significant presence in ues to modernise its processes, foreign engi- overseas companies on a project-by-project Europe. The company is looking to ramp up its neering companies such as SMS Siemag, basis, but is now seeking longer-term partner- presence in the European market with another Siemens VAI, Danieli, and Outotec will contin- ships as it expand its product offering into slab acquisition in the near future. ue to play a key role. In addition, in recent casting and rolling mill lines. Jasch Industries’ facilities include a research years, local engineering players have increasing- Indian specialist equipment suppliers are also and development centre at its Sonepat factory ly contributed to step-change . “Up gaining brand traction overseas. In January with a staff of 78, incorporating 25 research and until now, steel grades have been imported and 2012, Indian company Jasch Industries, which development specialists. “Jasch Industries processed in India, however it is only a matter specialises in gauging systems for flat products, products are not a onetime sale and so we need of time before India will do that on their own,” augmented its growing global presence by regular modernisation,” explained Singh Kempken told us. acquiring one of its former competitors, Chadha, “Everything, including the design of -based Indev Gauging Systems. PCB’s and even software, is done in-house.” Brand India “Entering the market in the USA is challenging, In the past Indian specialist equipment was Partha Majumder, the founder of Eastern so we acquired Indev to market our products in considered cost competitive but not necessarily Metec, is one entrepreneur that has benefited the States; thereby providing us with a local of internationally competitive quality. This per- from the rising profile of Indian engineers over- ception made it difficult even for Indian com- seas. From an initial investment of around panies with quality products to gain brand trac- $5000 in 2006, Kolkata based Eastern Metec tion. However, in part due to sustained invest- has reached an annual turnover of between ment in research and development and the suc- $20M and $25M in just five years and has an cess of products such as Jasch’s gauges, ‘Brand extensive portfolio of overseas projects. India’ is gaining a much stronger reputation in Eastern Metec focuses on the engineering of global markets. furnaces, and supplying coating, and casting equipment to the steel industry, as well as pro- Ramesh Iyer, Vice Steel futures viding consultancy services. The company has President business While volatile metal prices have had repercus- prospered in both the domestic and interna- at NCDEX sions across the strata of the Indian steel indus- tional markets in part thanks to a series of suc- try, the country’s steel traders are particularly vulnerable. The introduction of steel futures trading by financial institution NCDEX has offered traders a valuable hedge in the today's uncertain climate. NCDEX, which is promoted by four leading Indian financial institutions: the Life Corporation of India; ICICI bank; the National Bank for and Rural Development; and Credit Rating and Information Services, has pioneered a price discovery and registration platform for steel. Unlike base metals, there is little precedent for forward trading in ferrous metals: standard- isation is difficult because steel is an alloy, and having a standard is a pre-requisite for any form of futures trading. Furthermore, steel has var- ied applications across many sectors, and it is challenging to bring so many disparate partici- Futures Trading pants together. Steel producers worldwide have been, and continue to be, adverse to the idea of in Steel steel futures. “They are unwilling to surrender their prices to somebody else,” Ramesh Iyer, your vice president of business at NCDEX told us. Transform Risks However, the Indian steel market is differ- into ent. “Secondary steel companies comprise Opportunities around 60% of the market. They are sand- wiched between very volatile raw material prices and equally volatile finished product prices”. Such small companies are vulnerable to changes in input costs but are generally too small to do anything about them. It is this seg- ment that NCDEX took it upon itself to address. “While the primary industry followed the international example, the secondary pro- ducers embraced our contracts. These are small businessmen that know their limitations but wanted to be part of the steel industry so took Connecting People and Markets to hedging in it,” says Iyer. NCDEX’s futures contracts are compulsorily Akruti Corporate Park, 1st Floor, Near G.E. Garden, L.B.S Marg, Kanjurmarg (West), delivered, unlike some of the other exchanges, Mumbai - 400 078. Tel: +91-22-66406789; Fax: +91-22-66406899 and see around 50 000t of goods exchanged per month. Steel futures give producers, intermedi- Email: [email protected] Website : www.ncdex.com aries and end consumers a real-time indication

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of price trends. One of the issues that make steel futures trading so challenging is the wide grades and possible applications. However, NCDEX has been able to overcome this by focussing on low carbon steel, which accounts for 70%-80% of steel consumption in India's largely construction-orientated market. Black steel during chaos Popular rhetoric has it thus: Old World Europe is locked in a debt crisis, and the former New World is absorbed in its own slow recovery. Economic power and influence have shifted east, and rests in the hands of the new New World: Asia, and in particular two formidable BRIC’s: India and China. However, this east/west dichotomy has its limitations. While European traders may have once rounded the Horn of Africa to acquire the bounties of India and China, their contempo- rary Chinese and Indian counterparts are unlikely to be guilty of such an oversight: Africa is not a continent to be circumnavigated. African mines are an increasingly viable alter- native to Australia for India’s raw material con- strained steelmakers. While Australia will con- tinue to play a vital roll in supplying raw mate- rials, and particularly coking coal, to India, never-the-less Indian steel producers have been aggressive in acquiring iron ore and coking coal assets in Africa. These include JSPL, JSW and Tata Steel in Mozambique, while Essar Steel has invested in Zimbabwe, and SAIL in South Africa. ‘But the advance of Indian steelmakers' into Africa goes beyond basic acquisitions. Steelmaking sub-Sahara is practically limited to South Africa. There is a vast landscape in between, with a population of a billion people with very limited access to steel products. “We make a mistake by looking at Africa as just a resource base,” Malay Mukherjee, former CEO of Essar Steel told us. “Zimbabwe fits far more into our vision for Africa than it would be if we were just looking at a mine. In addition to getting a steel mill up and running, we will look at meeting demand by adopting our Indian model of service and retail centres,” said Mukherhjee. If India’s producers and service companies are successful in navigating their own domestic challenges: complex land rights issues, infra- structure constraints, and extremely low steel consumption in rural markets, they will not only propel their economy forward and raise the material standard of living for millions, but also prove themselves uniquely equipped to service the highly prospective African market. It is pre- cisely this struggle against challenging political, economic, and environmental conditions that has galvanized Indian steel players to take on the world. ᔢ

Article contributed by Global Business Reports Yildiz Mahallesi Citlembik Sokak, Unal Apt No: 4/4 Besiktas, Istanbul 34523 Turkey Tel +90 212 227 84 62 & +90 212 327 06 98 Fax +90 212 236 81 53 e-mail [email protected]

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6Mt/y pelletizing plant at Paradip to utilise ore fine discards Pic Courtesy Essar Steel Tough ride ahead for Indian iron ore miners Global demand for iron ore has jumped in recent years as also has the price to those steel mills without captive mines. As well as due to demand, price increases have also resulted from the precarious economy in the Euro Zone which affects demand for most commodities including steel. By Dilip Kumar Jha*

ORE miners and traders are worried when they natural resources such as iron ore are being to 208Mt in 2010-11, the overall production of see the muted demand from the major buyer, depleted and hence, should be preserved for ore is estimated to have declined drastically to China, and also amid restrictions by the Federal long term use. This decision, however, was chal- below 200Mt in 2011-12. With growing mine Indian government such as increasing the lenged by the industry body the Federation of head stocks, total availability of iron ore was export tax and the loss of concessions which Indian Mineral Industries (FIMI) in the 278.86Mt, 296.15Mt and 283Mt in 2008-09, will continue to hurt the export and domestic Karnataka high court but the court upheld the 2009-10 and 2010-11 respectively. Iron ore markets this Financial Year. state government’s move. Again, the high court availability, however, is forecast to plunge to The iron ore industry in India is currently decision was taken up in the Supreme Court 250Mt during the financial year 2011-12. experiencing hard times because of several (SC) of India which set up a Commission under As a result of the decline in ore availability harsh measures adopted by the government to the chairmanship of a retired judge, M B Shah, production by domestic steel producers has discourage illegal activities in this sector and to investigate the validity of the blanket ban. been severely hampered and proposed new also to safeguard a valuable resource for The Commission was also assigned to investi- capacity curtailed. The total requirement for domestic use. gate the legal basis of mining across other states iron ore by steel mills across India has grown The majority of mines spread across the three including Odisha (Orissa) and Goa and submit from 85.33Mt in 2008-09 through 97.74Mt in major producing states – Karnataka and Goa in its report. Justifying the ban to protect India’s 2009-10 to 103.25Mt in 2010-11. During the the south west and Odisha (Orissa) in the mineral wealth, the Shah Commission recom- financial year 2011-12, however, the demand of north-east are facing the threat of permanent mended that only legal mines should be allowed iron ore by domestic steel mills fell to around closure due to the government’s attempted to reopen, not only in Karnataka but also in 97Mt for a crude steel output at 66Mt that year. move to curb illegal mining. While steel compa- Goa and Odisha. The majority of steel mills dependant on buying ny captive mines can continue to excavate ore In yet another important recommendation, iron ore from independent miners have had to to feed the blast furnaces, independent mines the Commission suggested revoking mining cut production during the past financial year. are facing many questions related to environ- licenses from mine owners engaged in illegal Karnataka-based companies such as the largest mental and land issues which have lead to the activities. Acting heavily on this recommenda- steelmaker in the state, JSW Steel, was forced revoking of some mining licenses. Therefore, tion, the government mandated the need to to cut output by up to 65% for several weeks uncertainty continues for steel mills without obtain approval for any further activities on due to the shortage of iron ore. Later, the com- captive mines who have to buy ore from mining mine sites across India. pany restored a part of its operating capacity companies. Secondly, the government raised the export after procuring ore through auctions held in duty on iron ore; first to 20% ad velorem uni- Karnataka selling ore stockpiled at the mine Harsh measures formly, the order being published in the Union heads. The auctions were conducted under the The trouble started with the Karnataka govern- Budget 2011-12. Prior to this the duty was 15% supervision of the Supreme Court (SC) of ment’s decision to ban transport of ore outside for lump and 5% on fines. The export duty was India. the state boundary in 2010. This was followed again raised, this time to 30% ad velorem from The Joint Plant Committee (JPC) under the by the cancellation of licenses to over 500 min- December 30, 2011. This near exponential Ministry of Steel, has estimated total crude ing companies across the state because of a lack increase in export duty came about under pres- steel production in 2011-12 at 66.80Mt, a of satisfactory trade related information provid- sure from the steel lobby and has kept the iron decline of around 5% from 69.58Mt in the pre- ed by these mines. Apparently, the swelling of ore industry on tenterhooks. vious FY year. A recent report by the credit rat- stockpiles at the mines due to sluggish demand ing agency Icra said that crude steel output in from domestic as well as overseas markets has The industry the country had increased at a CAGR of about impacted independent steel mills compounding Statistics compiled by the Indian Bureau of 9.8% over recent years, supported by demand difficulties relating to sustainability and capaci- Mines (IBM) show that total iron ore output from the key consumer segments of construc- ty utilisation. was 212.96Mt in 2008-09 a figure that grew to tion, capital goods and automobiles. But, for a The Karnataka state government argues that 218.55Mt in 2009-10. After a marginal decline while, Indian steel consumption is expected to

* STI correspondent in India

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Iron ore exports Financial Year Quantity (April-March) (Mt)

2000-01 37.27 2001-02 41.64 2002-03 48.02 2003-04 62.57 2004-05 78.14 Essar Steel’s 10Mt/y steelplant at Hazira on India’s west coast 2005-06 89.28 receives pellet by sea from its plant at Paradip on the east coast 2006-07 93.79 2007-08 104.27 2008-09 105.87 Grade As on Right: Table 1 2009-10 117.37 +55% Fe Exports of iron ore 2010-11 97.66 April 1, April 1, April 1, April 1, April 1, by India (Mt) 2011-12* 11month 55.77 1980 1990 2000 2005 2010 Est 2011-12 year 60.84 Haematite 11 469 12197 11 426 14 630 17 882 Source : FIMI, *Between April ‘11 – February ‘12 (+728) (-771) (+3204) (+3252) Left: Table 2 India’s Magnetite 6095 10590 10682 10619 10644 reserves of iron ore ment’s attempt to conserve mineral resources (+4495) (+92) (-63) (+25) between 1980 and and restrict supply, especially to China which Total 17 564 22 787 22 108 25 249 28 526 2010 (Mt) consumes over 90% of India’s ore export, has From 1980 to 2010 (+5223) (-679) (+3141) (+3277) brought such illegal mining into the spotlight. Notes: (i)The resources are with a cut-off grade of +55% Fe and roughly estimated up to 50m depth by drilling. (ii) These Below: Essar’s 8Mt/y The honourable Supreme Court, on May 11, resources do not include around 1000Mt of haematite iron ore recently discovered by DMG, Chattisgarh in Kabirdham ore pelletizing plant district. Source: Indian Bureau of Mines ordered the Central Bureau of Investigation at Vizag (CBI) to probe the role of JSW Steel in procur- ing iron-ore in Karnataka. The move comes after a Central Empowered Committee (CEC) recently recommended the Supreme Court to order a CBI enquiry into the alleged role of JSW Steel and Adani Enterprises in mining without permits. In addition, the apex court has also asked an investigating agency to probe the role of Karnataka's former chief minister, BS Yeddyurappa, in allowing illegal mining. The federal agency is expected to look into links between the payment of INR100M ($1.8M) to a JSW Group Associate, and subsequent receipt of illegal iron-ore by JSW Steel and also the alleged favour shown to it in respect of Open pit mining of haematite ore Mysore Minerals. Also, the Court granted the Source Indian Bureau of Mines request to directed a CBI inquiry against Mr Yeddyurappa for his alleged role in all these activities. JSW, however, denied the allegation for its involvement in illegal buying of iron ore. Yeddyurappa also surprised everyone by saying “Justice will prevail now.”

Massive deposit FIMI’s defence of iron ore The Federation of Indian Mineral Industries (FIMI) has termed the allegation that the domestic steel industry is facing a shortage of witness only moderate growth, the reason being leaders’ but often with the support of local iron ore due to exports as a myth. The quanti- the continuing slowdown in demand from key politicians. These leaders generally engage local ties of ore exported since 2000 peaked in 2009- consuming sectors. Already, there has been a labourers to excavate ore and contract for the 10 at 117Mt and have since nearly halved to an slowdown in off take in India in the major steel sale of the ore to local steel mills. Since such expected 61Mt in 2011-12 (Table 1). After consuming sectors ie construction (~65%), mines have no government licence to mine meeting domestic demand and export, the capital goods (~15%), and automobiles (~8%) from the Ministry of Mines and do not pay any country has 82Mt/y of excess ore. Also, ore for a variety of reasons, including problems royalties to the government, whatever quantity fines are co-produced when lump ore is cali- over land acquisition, resettlement and rehabil- they excavate is directly sold to local steel mills brated the ratio of fines to lump being 70:30. itation, uncertainty in the global economic out- at a huge discount to the prevailing market However, allowing sufficient quantities of ore look, and a sharp increase in interest rates in price. Since, the ore requires no payment of to be exported as suggested in some quarters India. All the major domestic steel producers taxes to the government, the mine receives the may lead to closure of mines and reduced pro- have embarked on capacity addition, a signifi- full sale sum as profit. duction. Thus, the need of the day is for better cant portion of which is expected to be commis- For steel mills, too, the difference in the price utilization of fines in the domestic market sioned over the short to medium term. Thus, paid for such illegal ore and the prevailing mar- through pelletising and ensuring that future almost 25Mt of new capacity, which is about ket price is profit and as the do not record the steel plants are fines – oriented. Meanwhile, 30% the country’s current production capacity, quantity of such ore bought on their account FIMI said the discovery of iron ore resources is is scheduled to be commissioned in the next books, they pay no tax on it as this account a function of exploration and subsequent min- 18-24 months. But, the ongoing shortage of raw record is used to assess taxes owed. Both, min- ing. Even after mining 997Mt of iron ore material may hinder the start of these plans ing of ore without a government mandate and between April 1, 2005 and March 31, 2010, which may only resume with the restoration of its purchase by the steel mills is illegal. haematite ore reserve estimates so far discov- full mining activities in the country. JSW Steel’s 10Mt/y capacity steel plant in ered have increased by 3252Mt (Table 2). This Bellary, Karnataka, is alleged to have bought proves higher prices lead to more exploration CBI probe of illegal mining ore on this illegal market in the state to evade and discovery of more resources. A suspension A large number of iron ore mines are controlled taxes. While such activities have been prevalent on iron ore mining in India would impact badly directly and indirectly by so called illegal ‘street across the country for some while, the govern- on the country’s economy, they say. ᔢ

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Coal based DRI is the main feed for India’s induction furnaces Pic courtesy Outotec

UniqueUnique toto IndiaIndia –– Electric induction furnace steelmaking

India has developed small scale steelmaking using induction furnaces to melt a blend of scrap and DRI which has enabled the needs of local markets, particularly in rural areas, to be met cost effectively. However, quality can be an issue and one that will be highlighted in September when standards for construction steels are made mandatory. By Sanjay Sengupta*

CONVENTIONALLY two routes of modern Raw materials fines in small capacity induction furnaces to steelmaking prevail, one is the conventional Initially, production of mild steel ingots through make steel. This has helped distribute the steel blast furnace plus basic oxygen converter the IF route used steel scrap as the main input industry to various parts of the country. (BF/BOF) integrated route which uses ore and material. However, in later years a shortage of Dr Amit Chatterjee, former Technical typically up to 20% scrap to produce a ‘virgin’ scrap developed in India causing its prices to Advisor to Tata Steel, has observed “While in iron, the other is the electric arc furnace (EAF) rise substantially. To make up for this shortfall the rest of the world, DRI is used exclusively in route which conventionally remelts scrap, but of scrap, direct reduced iron (DRI), commonly EAFs, in India, DRI, particularly DRI fines increasingly may also melt virgin iron in the known in India as ‘sponge iron’ because of its below 3mm without any agglomeration, are form of blast furnace pig iron or direct reduced porous structure was increasingly used as feed charged into induction furnaces. India is in fact, iron (DRI) to improve quality. But in India, to the IF furnaces. the only country in the world that utilizes IFs to there exists a third route, the Electric Induction Since the mid 1990s, India's IF industry has produce steel on such a large scale. Indeed, in Furnace (IF). grown a symbiotic relationship with the sponge the late 1980s, many mini-mills in India shut In India, the contribution of the IF is remark- iron industry. Often, both plants are integrated their EAFs and substituted them by IFs of 5 to able and in Financial Year 2010-11, it held a in the same location. As the commercial success 10t capacity, on account of lower cost of pro- 33% share of India’s total crude steel produc- of the IF industry surged, it carried along the duction in the latter case”. tion. Such a significant role for the IF is unique- sponge iron industry on a parallel growth path. ness to the Indian steel industry. India produced 26.3Mt of DRI in calendar Quality aspects In the late 1970s, small Induction Furnaces year 2010, making it the largest producer of The chemical composition of the liquid steel in were imported to melt stainless steel scrap to DRI in the world. Of the DRI produced, India IFs cannot be controlled easily and refining of produce utensil grade material. Gradually, occupies another special case in world DRI pro- the crude steel also cannot be done. As chemi- entrepreneurs using this process found a mar- duction in that nearly three-quarters of the DRI cal refining in IFs is not possible, controlling ket to produce mild steel pencil ingots follow- is produced using coal in rotating kilns rather phosphorus and sulphur is not easy. The pres- ing the same principles and furnaces of 2t than the more conventional natural gas shaft ence of these elements beyond a specific limit capacity were successfully installed melting furnaces. Most of the growth of the Indian DRI affects the quality of steel in terms of toughness scrap carbon steel. industry happened in the coal-based category and strength. The iron ore used for the produc- Following the spread of the Induction due to the easy availability of low-grade coal tion of the DRI should therefore have a low Furnace producing pencil ingots the re-rolling and lump ore suitable for DRI production. phosphorous and sulphur content (Table 1), industry started to evolve in the mid-1980s and Production of DRI started with low capacity and likewise the coal used. gradually the capacity of IFs started to grow. kilns of just 30t per day output in the mid- The output quality of IFs is largely managed Today, 12 to 15t charge furnace are quite 1990s but today there are many DRI plants of by controlling the raw materials input, keeping common and recently 40t capacity units have 100 to 500t per day capacity in operation. the correct proportions and by adding fluxes been built indigenously which has increased Consumption of DRI by the IF industry ranges such as dolomite as well as ensuring a good productivity and reduced energy consumption. from 60 to 80% of the charge, the balance being quality refractory in the furnace to avoid con- Also, with the availability of simple locally built scrap, thus easing the demand for steel scrap. tamination of the steel from the lining. continuous casting machines at affordable price According to experts, an innovation in the field Metallisation of the DRI produced is typical- for IF units, the quality of the steel produced of direct reduction in India is the use of DRI ly 88-90% and the carbon content 0.2-0.3% – has improved and is a ready supply of steel for rolling into bar which has many applications for Source Chemistry wt % local fabricators such as security grills, furniture (Size range mm) Fe Al2O3 SiO2 P S CaO MgO Moisture and rebar for concrete reinforcement. Essel Mining (10x30) 65.0 2.00 2.40 0.034 0.003 0.25 0.10 1.2 Industry Structure OMC(Gandhmardan) (5x18) 62.6 1.90 3.40 0.049 0.006 0.31 0.12 1.5 Across the country there are now around 1100 OMC(Gandhmardan) (10x40) 60.3 2.50 4.90 0.052 0.006 0.35 0.14 1.8 business units running multiple units of IFs of NMDC(10x50) 64.5 2.10 2.00 0.059 0.005 0.23 0.10 1.0 varying sizes. Rungta(10x40) 64.0 2.00 2.90 0.044 0.004 0.26 0.10 1.0 The total capacity of the IF steelmaking indus- Source: Bhushan Steel Ltd try in India is estimated at about 30Mt/y. Capacity utilization is about 75%. Table 1 Typical chemistry of iron ore and size fraction from various mines in Orissa

* STI correspondent in India

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much lower than that from gas based processes Metallisation FeO Fe(t) Fe(M) Gangue where the carbon content is generally in excess of 1% making it unsuitable for charging to IFs 86.2 16.2 90.6 78.1 5.7 producing low C steel. Instead, such DRI is Source: Bhushan Steel Ltd charged to electric arc furnaces (EAFs) where the carbon can be oxidised with the added ben- Table 2 Typical quality of DRI produced at Bhushan Steel (%) efit of the resulting temperature rise adding to the heat input and so lowering electric power consumption. About 10%-16% of FeO remains in the product along with 5-8% gangue (Table 2). Power supply IF power operation is dependent on the avail- ability of an uninterrupted power supply at a low cost, as about 60% of the cost of production is on account of electricity. Some major IF units have built captive power plants to generate elec- tricity along with the DRI units which has made it easier for them to control cost. Research & development To improve the energy efficiency of IF steelmak- ing as well as to further improvement the quality of the product it is necessary to continuously conduct R&D initiatives to ensure constant upgrading of the technology. But as the IF sector consists mainly of small and medium sized enter- prises there are few resources for individual com- panies to conduct major R&D programmes. Induction furnaces typically have capacities of 2-20 tonnes although larger 40t units are The industry expects that for the sustained now appearing Pic courtesy Inductotherm India growth of this sector the will extend cooperation and support the devel- opment of the IF industry by seriously taking the grade steel capacity, according to a survey of six Cold-Rolled Steel Manufacturers Association much needed R&D initiative. companies, government officials and analysts. of India. About 23% of India’s 88Mt/y steel capacity “Considering the challenges, implementing Overseas footprints comes from low-cost induction furnaces that the order is neither possible nor necessary,” The remarkable performance of the Indian IF use DRI made from coal and such furnaces are Mathur added. industry has found customers for the technology unable to remove phosphorus and other impu- “The new guidelines will give us an opportu- in countries such as the Gulf region, Saudi rities in the steel. While using DRI produced nity to enter new markets,” said Seshagiri Rao, Arabia, Iraq, Iran, Turkey and Africa. The small from gas would improve the quality, the pro- joint managing director at JSW Steel, India’s and mini steel plants in these countries source ducers would need funds, time and technology third-largest producer. equipment such as IFs, continuous billet casters, to switch to the new process, said R S “Our products match the best in the industry electric overhead cranes, material handling Borwankar, assistant vice-president at Welspun and we’ll produce more this year following our equipment etc from India. Maxsteel Ltd, which uses gas shaft furnaces to capacity increase.” produce DRI. Tata Steel, SAIL and JSW will together have Current problems “Low-priced and poor-quality products will be increased capacity by 45% to about 40Mt in the World Steel Dynamics (February 29, 2012) has out of the market,” Borwankar said in an inter- two years ending March 31 on forecasts that observed that in India production from coal- view. “That’ll help in building stronger structures consumption will surge on government spend- based DRI facilities and IFs of capacity 30t or that can withstand natural calamities.” ing. Prime Minister Manmohan Singh plans to less is declining because of increasing raw mate- Certification from the Bureau of Indian attract $1tr in investments by 2017 to build rial costs and the need to combat air pollution. Standards for steel products is presently option- power plants, ports and highways, to support Some of these mills are no longer able to pur- al but will become mandatory in September, economic growth. ᔢ chase iron ore at bargain prices which was often Basak said. While the large steel mills such as obtained from illegally operated iron ore mines. Tata, JSW and State owned Steel Authority of Further reading Despite this, India’s IFs have made a remark- India Ltd that make certified products will ben- ‘Coal based DRI quality and raw materials: able contribution to the country’s growing steel efit, steel produced in induction furnaces will Experiences at Bhushan Steel’ U S Yada et al, demand and will continue to play an important need to invest in further refining, he said. Steel Times International Vol 35 No4 May/June role in the future growth of India’s steel industry, Enforcing the new rules may not be straight- 2011 pp22-26 particularly in rural areas. Per capita steel con- forward. Small steelmakers apprehending clo- ‘Production of pellet for coal based DRI’ V sumption in rural India is very low at about 10kg. sure may approach local courts to restrain the Subba Rao, Raghuvamsi Technologies, Steel Government authorities would do well to utilize ministry from imposing the new quality stan- Times International Vol 35 No4 May/June 2011 this low cost small scale means of producing steel dards, said S C Mathur, executive director at pp28 & 34 as a way of increasing rural steel consumption in such products as rebar. IFs can play a larger role if the challenges faced by it are addressed in a The induction furnace charge typically contains 60% DRI fines from coal proactive manner by the authorities with the sup- based kikns port of government agencies. A question of standards The Bureau of Indian Standards will introduce norms this September to improve the quality of steel used in buildings, bridges and roads, G K Basak, executive secretary at the steel ministry’s joint plant committee, said in an interview. The government plans to improve the quality of infrastructure steel in the wake of last year’s earthquake and tsunami in Japan, he said. The rules will impact about 11Mt of low-

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The finishing stands at Tata Jamshedpur have been revamped with new gearboxes Tata Steel’s accelerated hot strip mill shutdown

Computer project management software successfully ensured completion of a major revamp of Tata Steel’s hot strip mill in Jamshedpur enabling the work to be completed in 8.8 days instead of the allocated 11, saving Tata some $4M in earned revenue. By Sudipto Sarkar* & Kapil Gupta**

IN 2009, Tata Steel, now the 7th largest pro- boxes were to be completely removed and Critical chain management ducer of steel in the world, planned to upgrade replaced with new, while others would keep the Critical chain is a project management method- its Hot Strip Mill in Jamshedpur, NE India. original casings but all the internal components ology that synchronizes work by setting clear This was a $90M project designed to increase would be replaced with new parts. In addition, priorities and eliminating multitasking, even in output of the mill by 23% from 3.25Mt/y to the spindles needed to be changed, the roughing the face of the unexpected. Typically, organiza- 4Mt/y. Such an upgrade would increase revenue mill motor needed to be aligned and one of the tions that adopt Critical Chain see their by approximately $200M annually. finishing mill motors needed to be upgraded. throughput improve by 30% or more. The plan for the mill project would require All of these tasks represented a great deal of To synchronize execution, Critical Chain out- one year of preparation followed by an 11-day work to be completed in just 11 days, but the lines three basic rules: execution phase in the field, during which time plant’s logistics made the project even more there would be no production at the mill. Since complex. The shutdown and turnaround Ɂ Rule 1: Pipelining – limit the number of this is Tata’s only hot strip mill (HSM) at encompassed six organisations, including; the work-streams in execution. Jamshedpur, for each day that the mill was not HSM and Tata’s Shared Services and Ɂ Rule 2: Buffering – discard local schedules in operation, the company stood to forfeit Engineering group, 30 task managers, 300 and measurements and use a global project about $2M in lost revenue. The goal, therefore, workers, 15 experts, equipment vendors, spe- buffer to protect against uncertainties. was to minimise the downtime required to shut cialised service providers and five external Ɂ Rule 3: Buffer management – use buffer down and upgrade the HSM. agencies – all spread across four different coun- consumption rates to measure execution, The scope of work included upgrading gear- tries. It required coordinated efforts among giving highest priority to tasks that are con- boxes in all finishing stands. Some of the gear multiple disciplines, including mechanical, elec- trical, electronics, civil engineering and automa- tion. To top it all, the project faced a massive constraint: there was just a single crane in the motor room capable of lifting the necessary loads of 50 to 60t, and there was insufficient space to bring in a mobile crane. Application of critical chain Tata Steel first started applying Critical Chain project management concepts to maintenance and sustenance projects in December 2005 with the help of the consulting and software company ‘Realization’ which specialises in re- engineering project execution to increase throughput and speed to completion. Since then, Tata Steel has applied Critical Chain to more than 100 major shutdown and turnaround projects. These include 10 mining, nine blast furnace, 29 steel melting and casting, 29 rolling mills (including strip mills, wire rod mills, and hot and cold rolling mills), 11 sinter plant and 12 power plant projects, all with dramatic The roughing mill motor was re-aligned improvements over the time it typically takes to The F3 stand motor was replaced and during the revamp complete them. aligned within 65 hours

*Sudipto Sarkar is Head of Technical Services, Hot Strip Mill, at Tata Steel. **Kapil Gupta is Vice President, Strategic Services at Realization.

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suming buffer at the fastest crane constraints. rate. Ɂ The F3 motor work could start only after the roughing mill While these precepts themselves motor was installed. are relatively simple, implementing and sustaining them requires effort Execution and buy-in from management. The first unexpected interruption The first order of business for came on the very first day. The Tata Steel was to evaluate the fea- twenty foundation bolts that were sibility of completing the project in to be removed would not budge 11 days. There were certain techni- even a millimeter. After three to cal dependencies which appeared four hours attempting to remove to make it difficult to complete the just one bolt, the team gave up, shutdown in 11 days. asking themselves if they had Commissioning would take 54 made a wise decision in trying to hours. Because of the nature of upgrade the mill. commissioning – with all of its tri- To solve the problem, the team als and minor adjustments – it was consulted with engineers in impossible to anticipate the nature Germany and determined through of interruptions that would occur. testing that the old bolts were still Logistically, the F3 Motor could usable, which ultimately saved the only be dismantled once F3 Gear company time. They placed the box had been installed. new gear boxes on the old bolts, Considering the time necessary to instead of the alternative, which complete these two tasks, the proj- was to replace the entire founda- ect could only be completed in 11 tion in order to replace the old days if the F3 motor was disman- bolts. tled and the new motor was Dismantling work on the mill installed within 65 hours. Initially, took less time than anticipated, this appeared to be impossible. although both work on alignment A trial was undertaken with the and the roughing stand motor took F2 motor during a minor shut- much longer than estimated. down prior to the main shutdown. They learned that dismantling the End results motor took much less time than Through the use of Critical Chain, expected, but assembly time (ie all project problems were solved alignment) took much longer than on the day in which they were expected. Tata discovered that the experienced. Tata took a great deal coupling and bearing set up could of satisfaction in the harmony that be carried out in parallel and that existed between operations staff, the actual time the crane was in maintenance staff and engineering use was only a fraction of the allot- staff throughout the entire project. ted time. The information learned Project completion was everyone’s through this trial run provided Tata most important objective. Steel with countermeasures that Individual team goals were sec- would allow it to complete the F3 ondary to the ultimate goal. motor replacement within 65 Another noteworthy achieve- hours. ment was that the project was completed without any accidents. Constraints All shutdowns in Tata Steel have The most constrained resource been accident free for several was clearly the crane. In order to years. complete the project on time, Tata In the end, Tata Steel’s planned implemented two rules to stagger 11-day upgrade was completed in its use: just 8.8 days, saving the company Ɂ Rule 1: A single person would about $4M. In fiscal year 2010 be responsible for deciding (ending March 31, 2010), the mill where the crane would go. finished 3.65Mt of steel, a 400kt Ɂ Rule 2: The crane must be (12.3%) improvement on the released when it is not being 3.25Mt processed in fiscal 2009. used. In terms of net operating hours (availability), the plant went from Another important part of the 6222 hours in fiscal 2009 to 6991 planning phase was to evaluate the hours in fiscal 2010, setting a steps in the process and control benchmark that is slightly better the release of work. The following than the average for the rest of the elements and their order of com- world. The mill is now expected to pletion were established during the cross 4Mt in fiscal year 2012. ᔢ evaluation phase. Contact Ɂ The F3 motor assembly could Realization HQ, 125 South Market Street, only start once replacement of Suite 600, San Jose, CA 95113, USA F3 gear box was completed. Tel +1 408 271 1720 Ɂ The F4 and F2 gear boxes e-mail [email protected] needed to be sent to the repair web www.realization.com/ shop. Indian offices in Mumbai Tel +91.22615.61500 Ɂ The team could only work on e-mail [email protected] and Pune two gearboxes at a time due to Tel +91.90499.88918

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Long products

The experience of hot charging an Ecoplant minimill at Tung Ho Taiwan

A new concept of 100% hot charging which has been applied by SMS to a minimill in Taiwan employs an induction furnace to homogenise the temperature of the billet as it enters the rolling mill still hot from the caster. Savings in energy for a 868kt/y mill are in excess of 90% compared with a conventional cold charged oil fired reheat furnace, CO2 emissions are reduced by 72kt/y, SO2 emissions by 410t/y and NOx emissions by 225t/y. Operating costs savings are in the order of €9M/y and capital costs are much reduced. By F Verlezza*, P Cancian** & M Fabro***

Products are awarded of ‘Ecoplant’ status in the SMS Meer organisation, on the basis of their compliance with the following economic and ecological criteria: – Significant reduction in the use of raw materials; – Significant reduction in the use of energy and operating media; – Significant reduction in emissions; – Significant improvement in the recycling quota

This article presents an overview of the Tung Ho minimill in Taiwan and examines the core technologies to achieve a direct link between the caster and rolling mill. It looks at the con- siderable advantages in terms of reduction in energy requirement and emissions thereby achieved and so cost savings. A breakthrough step in minimill design took Fig 1 Comparison of standard (left) and INVEX(®) (right) moulds the latter showing a more place in 2008, the outcome of the combined uniform temperature in the corners (when superimposed with a square section) efforts of SMS Meer Concast, SMS Elotherm and SMS Meer, all members of the SMS Group. Tung Ho Steel Enterprise Corp is a Steelmaking and Casting matic alloy addition storage and delivery systems Taiwanese company where a totally uninterrupt- The meltshop is fit for the production of carbon to both the EAF at tapping and tapping the LF. ed route has been established between the steels, however its design already considers Additional environmental protection is assured operations of the electric arc furnace, the con- future production of special steels by installing by a dry fumes suction and filtering system. tinuous caster and the rolling mill. This concept a vacuum degasser and equipment for sub- The billet caster design is based on the use of is easily applicable to other countries where fast merged casting. Production equipment has INVEX® mould technology for high-speed growth is forecast, such as India. been entirely designed and delivered by SMS casting. This technology has been selected for Limiting energy losses, fuel-oil consumption, Meer Concast. two important reasons: and emissions of pollutants into the atmosphere The electric arc furnace is conceived around – It makes the necessary high casting speed demonstrate SMS’s concern for economic and the concept of the Ultra High Chemical Power possible and reliable. ecological issues. EAF developed by SMS Meer Concast. The – It allows the casting of billets with poor UHCP operation is based on the use of power- temperature distribution (Fig 1). Plant overview ful CONSO oxygen injectors (total O2 flow is These high casting speeds are necessary to The new minimill at Tung Ho is located in the 15000Nm3/h). remove the need for a traditional reheating fur- industrial area of Taoyouan, Taiwan. The instal- After tapping, the ladles are transferred to nace which is the key to minimising the emis- lation brings to the Group an additional capac- the Ladle Furnace for secondary metallurgy sion ‘foot-print’ of the minimill. ity of 1.2Mt/y of cast billet and an additional processing. Following this, the treated liquid The temperature of the billets delivered to rolling capacity of 800kt/y of rebar of diameters steel is transferred in the ladle to the continu- the induction heater is higher and more homo- of 10 to 43mm as well as 68kt/y of rebar 10 to ous casting machine. geneous than for billets stored after casting thus 25mm diameter in coils. Completing plant installation are scrap han- requiring only a minimal amount of energy to The two production areas, caster and mill, are dling and delivery equipment to the EAF, auto- reach the required rolling temperature. linked by an induction heating furnace to ensure temperature equalisation of the cast bil- Fuel name CO2 emissions CO2 emissions let, and thus there is no traditional billet reheat- (lbs/106 Btu) (g/106 J) ing furnace. The plant consists of: – Scrap yard Natural gas 117 50.30 – Electric Arc Furnace Liquefied petroleum gas 139 59.76 – Ladle Furnace Propane 139 59.76 – Fume Dedusting Plant Automobile gasoline 156 67.07 – 5 strands Continuous Caster Fuel oil 161 69.22 – Induction Equalising Furnace Wood and wood waste 195 83.83 – Continuous Rolling Mill (14 stands) Coal (bituminous) 205 88.13 – High-Speed Finishing Block (6 pass) Coal (subbituminous) 213 91.57 1 – Straight Bar Cooling Bed with HSD Coal (lignite) 215 92.43 Table 1 CO2 emis- – Finishing Facilities for Straight Bar Petroleum coke 225 96.73 sions from some –VCC2 Coiled Bar Production Line. Coal (anthracite) 227 97.59 common

(1) HSD® = High Speed Delivery *Sales Area Manager, Tarcento, Italy; **Sales Director, SMS Minimill Team, Tarcento, Italy; (2) VCC® Vertical Compact Stands ***Sales Manager, Long Products, SMS Meer Service, Inc., Cranberry TWP, PA

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Fig 2 Induction heating system for temperature homogenisation of Fig 3 Finishing mill with six pass ‘V’ blocks for high tolerance, high hot cast billet straight from the caster speed rolling of bar

Rolling mill and the surface is colder than required. To tributors to acid rain which can have harmful The rolling mill is designed for continuous hot properly roll the billet, the billet temperature effects on the environment. charging of the cast billets. Billets are delivered needs to be uniform across its cross-section to the mill hot from the caster but still require which is achieved by the induction heater which Application of concept in India equalisation of the temperature since the sur- re-heats the surface ‘layers’ more than the core The Tung Ho experience makes much more face is colder than required for rolling, while and allows sufficient time for the hot billet core sense in a developing country such as India the core is hotter. temperature to diffuse towards the surface of where the GNP is growing fast increasing The equalisation process in this new minimill the billet. When the equalisation process is demand for energy. The forecast for the is achieved thanks to an SMS Elotherm induc- complete, the temperature difference within increase in energy demand in India is presently tion re-heating system which perfectly equalises the billet is only +/-25°C. around 2.5% a year from 2007 to 2035. the temperature throughout the billet, both in This task is performed using induction tech- Following this trend India will become the cross section and lengthwise, thus delivering nology, the main advantages of which are: third largest emitter (after USA and China) in the billet to the mill at a suitable temperature – Extreme flexibility: the system can rapidly terms of greenhouse gas emissions by 2030 . for rolling (Fig 2). adjust at variations in input conditions such Today, 50% of India’s energy demand is met The continuous rolling mill is equipped with are billet temperature and speed; by solid carbon based fuels, 30% by crude oil, fourteen stands followed by a six-pass high speed – On-demand system use: circuits are 10% by natural gas and the remaining 10% is block arranged in ‘V’ configuration (Fig 3). energized only when needed provided no based on other sources (Nuclear, Solar, The roughing and intermediate mill stands preheating is required; Hydroelectric). are of the SMS Meer HL housingless design. – Ease of installation and operation, limited The carbon and crude oil portion is destined The SMS Meer ‘V’ block is specifically footprint; to be partially substituted by gas, solar and designed for highly efficient and productive fin- – Maximum energy efficiency since power nuclear power. Particularly interesting are the ishing of rebar at speeds up to 40m/sec. The input is only required when rolling. The government’s programmes related to solar and capability of maintaining very close tolerances induction heater is idled during inter-billet nuclear power. Indian, together with China, in this single strand rolling results in a consider- feed time as well as during maintenance and each run a civil nuclear power programme, the able yield increase compared to the traditional emergency shut-downs; largest worldwide. lower speed slit rolling for the same plant pro- – Absence of direct emissions. Six Indian nuclear plants are commissioned ductivity. with future projects for 12 more. The final tar- The plant can produce rebars as straight bar Burning fossil fuels get is to increase power generation from or in coils. The straight bar process line is Traditional reheating furnaces burn natural gas nuclear to 21GW in 2020, 63GW by 2032 and equipped with the SMS Meer HSD® High or fuel oil. It is well known that the environ- finally supply 25% of total demand by 2050. Speed Delivery system for safe and reliable mental impact of producing, storing transport- The ‘Indian National Solar Mission’ has an delivery of bars to the cooling bed at 40m/sec. ing and consuming these fuels is large. ambitious government project with the target to The SMS Meer VCC Vertical Compact stands Burning fossil fuels generates greenhouse generate at least 20GW of power from nuclear are designed to roll 9.5 to 19mm diameter rebar gases such as CO2, NOx and SOx. Greenhouse sources by 2022 (presently nuclear power gen- at a speed of up to 35m/s to produce coils gases are emissions in the atmosphere that eration is only 0.12GW. weighing up to 3t. absorb and emit radiation within the thermal infrared range. This process is considered the Return on environment Caster to mill direct link basis of the causes of the greenhouse effect. The initial design for the Tung Ho project envis- In conventional minimills it is established prac- Greenhouse gases, besides the fact of being aged the use of a gas fired reheating furnace to tice to cool and store cast billets for independ- toxic to living beings, are now recognised as heat cold billets. However, in line with the ent subsequent rolling operations. When a bil- the fundamental cause of worldwide ‘global Taiwanese Government’s policies soliciting the let is to be rolled, it is charged into a hot reheat warming’. use of a cleaner means for heating, Tung Ho furnace to be heated to the required rolling Even although natural gas is often described was keen to employ a concept in which its emis- temperature. In most cases, heating is from as the cleanest fossil fuel, producing less green- sions were substantially cut to zero. Tung-Ho ambient temperature. house gas per energy unit delivered than oil as then decided to adopt the ‘electric fuelled’ At Tung Ho Steel this step is completely elim- well as containing far fewer pollutants, it sub- induction furnace concept and to recover most inated since the direct link between the contin- stantially contributes to global emissions by of the residual heat of the continuous cast bil- uous casting machine (CCM) and the rolling emitting some CO2 and is itself a potent GHG lets. This is in accordance with the fact that in mill enables the residual heat of the casting with 20 times the impact of CO2 so any fugitive Taiwan 20.7% of power was generated from process to contribute towards the required emissions due to leaks or during extraction are nuclear power, which is virtually free of green- rolling temperature. very damaging. houses gas emissions. Billets at the CCM discharging have an aver- Fuel oil ranks as a greater emitter than gas Only billets which leave the caster close to age temperature very near or already in the but not as great as coal. Table 1 lists CO2 emis- 870°C, (measured at the CCM, discharge) fol- range required for rolling, but with a noticeable sions from some common fuels. low the route to the induction furnace where cross sectional difference, the core being hotter NOx and SOx as well as CO2 are also con- they are heated to enter the first rolling mill

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Traditional Mill Tung-Ho Hot Charge with induction costs. The calculation is on the basis of 140t/h with fuel-oil furnace heating system production rate and 868kt/y and 6200 net pro- Cold Charging Consumption 26 kg/t Induction Heating Consumption 28.5kWh/t duction hours per year based on 2200 stand-by Stand-by Consumption 694kg/h Stand-by Consumption 0kWh/t hours/year and 15 days/year of shutdown for Heavy Oil Cost (2008) 0.43€/kg Electrical Energy Cost (2008) 0.039€/kWh maintenance. Total Yearly consumption Further savings in operation are achieved as a (heavy oil) 24 096t Total Yearly consumption (electric energy) 26 040MW result of: Total Yearly Cost 10.361142M€ Total Yearly Cost 1.015160M€ – Increased metallic yield, as primary oxidation

+ 72000t/y CO2 emissions - >90% energy savings in the induction furnaces is much lower (30% + 225t/y of NOx emissions - 10.77 €/t savings ess) compared to a conventional reheat fur- nace; Table 2 Energy cost comparison of traditional reheating furnace vs induction heating – Reduced maintenance and spare parts as induction furnaces are less exposed to wear stand at a temperature of not less than 950°C. – A traditional reheating furnace is lined with a and components failure; and Eliminating the reheating furnace results in substantial quantity of refractory materials – Lower manpower requirement as there is no the following environmental emissions reduc- which an induction furnace does not require; billet storage and intermediate handling. tions: – A traditional reheating furnace calls for sub- – saving of 72kt/y of CO2 emissions stantial foundation works, while the induc- Conclusion – saving of 410t/y of SO2 emissions tion furnace foundations are small; The Tung Ho Minimill started commercial – saving of 225t/y of NOx emissions. – Induction furnace installation and commis- operation in summer of 2010. Operation of the sioning time and cost are much lower than Tung Ho concept minimises energy consump- Equating the CO2 emission savings from the for a traditional furnace, tion and waste since the heating parameters are mill to those from automobiles, the reduction in – The learning curve to operate an induction tightly related to the incoming temperature of CO2 emissions for the 868kt/y mill is equivalent furnace is faster and easier than for a reheat the billet from the caster and only the required to that from 47 400 cars based on each travel- furnace. energy is added to the product. ling 10 000km/year and meeting of EURO 4 This modern facility demonstrates that an highly efficient fuel consumption. NOx savings Operational costs & energy savings environmentally conscious and energy efficient are even higher being equivalent to that emitted Table 2 summarises the economic assessment approach can also result in a considerable by 280 000 cars. of the different solutions. The comparison con- reduction of investment and operating costs fit- cerns the cost of energy to heat billets with a ting to Indian demands. ᔢ Savings by induction heating traditional reheat furnace based on cold charg- Savings in capital investment are achieved due ing against that of the Tung Ho hot charged mill Contact to the following: with temperature homogenisation by induction. SMS Meer SPA, Via Udine 103 I-33017, Tarcento (UD) Italy – Cost of an induction furnace is substantially Considering the same hourly production rate Tel +39 0432 7991 11, Fax +39 0432 7920 58, lower than that of a traditional reheating fur- and annual output, the latter show savings e-mail [email protected] nace; amounting to over €9M a year in production web www.sms-meer.com

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Long products

Hot billet charging saves energy and improves mill productivity German minimill BSW of the Badische Group is charging billet to reheat furnace No 2 at an average temperature of 750ºC and achieving 85% of all billet hot charged. This has resulted in a 50% reduction in natural gas consumption and improved productivity in the mill by between 11% for sections over 7.5mm diameter and up to 55% for 14mm sections. New tools such as simulations are employed to continuously improve the process. By Volker Preiß*, Sebastian Ritter** & Klaus Zehnle***

ENERGY prices for gas and oil are on a rising trend while prices and sales volumes for rolled products remain stagnant. This now influences Hot charging the focus of the logistics consulting services of requires rapid trans- BSE – the engineering and consulting company fer of billet from the of the Badische Group – with regard to materi- caster to the reheat al flow optimisation in the steel plant and furnace or to insu- rolling mill. lated buffer boxes In the past the primary task to achieve an increase in production was to eliminate internal average proportion of 85% of billet hot charged Optimum hot charging transport bottlenecks or to prevent them when at an average temperature of 750ºC. This corre- Fig 2 highlights the basic prerequisites to planning new plants. Today, the focus is increas- sponds to a natural gas consumption of less achieve high hot charging rates. Addressing ingly put on cost reduction. than 200kWh/t on average for both rolling mills each in turn: The billet yard, which is the link between the at a mean hot charging rate of 76%. steel plant and the rolling mill, has often been a Suitable layout and equipment neglected interface in the entire material flow, Hot charging These of course are decisive factors for warm or but it offers a valuable approach to reduce ener- Hot charging refers to the practice of handling the hot charging practice. New steel plants are now gy consumption and so the cost of running the billet directly from the end of the continuous cast- designed with a direct roller table connecting reheat furnace. This can be achieved with a min- er run out table to the rolling mill furnace without the caster discharging roller table or the cooling imum of investment so providing an extremely intermediate storage. This can be achieved by bed to the charging grid of the reheating fur- short payback time to optimise material flow to crane, as it is the case at BSW, or by means of a nace. In existing installations, such as BSW’s, the furnace. These savings counter the trend of roller table linking the two items of plant. Modern that have to use alternative means of conveying continuously increasing energy costs. billet transport units can be equipped with a heat- the hot product, the merits of a direct table link BSW can call on 30 years of experience in the ing box to reduce cooling of any billet which can- are frequently discussed. field of hot charging and is therefore an excel- not be charged to the furnace immediately. However, the merits of a crane unit should lent show-case to illustrate optimisation of this In the case of short-term intermediate storage not be underestimated as it permits the plant to technique. In the past 10 years, gas consump- in the billet yard or if further handling to the react to any fluctuation in billet availability on tion on the pusher furnace at the bar mill RM1 rolling mill via transport carriages is required, the caster side or demand from the rolling mill, at BSW has been reduced by 90 to 100kWh/t to then instead charge ‘warm’ at a lower tempera- in a rapid and flexible way. a value of 240kWh/t (Fig 1). This is a 28% ture range between 400°C and 600°C can be Especially if no heating boxes are available as reduction since 1996. charged. As it is never possible to achieve hot a buffer, fluctuations in caster output or mill Also, in wire rod mill RM2, which mainly charging permanently over an extended period, demand negatively influence the hot charging focuses on hot charging, the average hot charg- this process practiced at BSW is called warm practice. In addition, even if a linked transfer ing rate has, for five out of 16 years achieved an charging. table exists, a crane must be available and tem-

% kWh/t 100 400 360 Suitable Suitable Level 2 reporting 80 layout equipment 320 system 280 60 240 200 40 160 120 20 80 40 Production Automation 0 0 96 98 00 02 04 06 08 10 planning/ reheating High quality control furnace accuracy RM1 RM2 RM1 RM2 production level 2 % % kWh/t kWh/t

Fig 1 Percentage of hot charging and furnace energy use at BSW Fig 2 Conditions required to enable hot charging bar mills 1 & 2 since 1996

*Billet Yard Operation Manager BSW; **Project Engineer Rolling Mill BSW; ***Senior Consultant Logistic BSE

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Long products

Raw materials department Sales

Fig 3 Interfaces Steel Quality between plant department departments required to Billet achieve high Production yard hot charging planning rates Target Cost efficient Rolling production mill

Technical Dispatching reporting system

porarily manned for storage or removal Currently, the old Level 1 automation of activities. pusher furnace No 1 is being replaced by a modern level 2 automation system. Level 2 reporting system automation High quality accuracy To be able to evaluate the hot charging At the beginning of 2001 the software practice objectively and to continuously ‘Chardis’ was implemented to support the optimise the process, the respective techni- dispatchers at the billet yard. Fig 5 shows a cal data must be recorded and entered into typical display. Based on the analytical the production data acquisition system. results of the final ladle sample Chardis Shift-specific data about the specific makes it possible to decide on the metallur- kWh consumption at the furnace are essen- gical possibility of direct charging of a heat. tial for the daily report, at best including the All quality regulations and boundary con- average charging temperature and the per- ditions for charging to the rolling mills are centage of hot charged billet. This data can stored in Chardis. In case of deviations in then be included in the monthly and annu- the analyses, Chardis gives answers about al reports as average values. For this, level 2 further application and measures to be automation of the reheating furnace is taken in a matter of seconds, thus avoiding indispensable, which however is not investi- an interruption of the hot charging process. gated in detail in this paper. In addition, Chardis is a self-learning sys- tem. The results of all trial rolling cam- Production planning & control paigns are integrated into the Chardis data- Production planning and production control base and can support the decision-making are based on a comprehensive and detailed process in case of deviations in the analyses. production planning and control model as This is especially useful on the night shift high hot charging rates and charging temper- and during weekends when the quality atures can only be achieved with the close department is not manned. Previously, cooperation between the caster in the steel heats had to be deposited and allowed to plant and the rolling mill. Hot charging there- cool in the yard in the event of even a slight fore starts in principle with production plan- deviations of the billet condition from the ning, and the dispatcher at the billet yard standard settings. With Chardis, BSW now plays a key role in acting as an interface has software at its disposal which gives a between the two plants (Fig 3). detailed view on the heat analysis and con- Discipline in the assignment of billet by siders the exact rolling conditions and the billet-yard personnel, including crane driv- experience gained from previous trials for ers, to supply the rolling mill proved to be decision-making. very advantageous in this context at BSW. In 2010, of 46kt of billet considered for direct charging, deviations in the directive Automation reheating furnace analyses were detected, but through Level 2 Chardis, 22kt were passed for hot charging A Level 2 automation system is an absolute directly. must on the furnace as it is impossible to achieve optimum furnace operation with Restrictions to hot charging respect to cost and fuel consumption with Independent of the respective specific plant only a Level 1 system or without an auto- layout there are further restrictions limiting mated burner control system. the possible hot charging rate, leading to The charging temperature of each billet is warm charging or in the worst case even rul- measured directly before charging by means ing out any degree of charging other than of a pyrometer. The burners are then regu- cold (Fig 6). The most important factors lated in the different heating zones depend- are: ing on the current rolling performance. A – General restrictions with regard to the manual intervention is only required during steel grade; planned shutdowns or major delays. – Problems with billet tracking, eg only The Level 2 system also includes the cor- possibility of heat-wise charging; responding furnace visualisation screens – Charging delays caused by waiting for (Fig 4). analytical results; The first automation system at the BSW – Discrepancies between steel plant and pusher furnace No 2 was realised in 1980. rolling mill performance;

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Long products

100% Fig 4 (above) Level 2 Fig 5 The software system ‘Chardis’ supports the dispatchers at the Total: operator screen for billet yard 24% 16.0% reheat furnace con- trol °C Average cooling rate from 130mm up to 160mm billet dimension °F 1.3% 1000 80% 6.5% 1832 900 1652 840°C 800 1472 754°C 60% Fig 6 (left) Causes of 700 1292 limitations to hot ø 642°C 600 charging 932 500 752 40% 76.2% 400 572 300 392 Fig 7 (right) Billet 200 cooling curves for 100 212 20% two different cross 0 32 sections recorded ø 35min 0 50 100 150 200 250 300 350 400 450 min from the end of the Remark: billet cooling curves based on BSW surface caster measurement with open air cooling (average billet 1302 mm2 1602 mm2 0% temp. of the middle bilelt of a billter package) Different programme and planned production KWh/t MJ/t interruption in MS or RM incl. interference 212 302 392 482 572 662 752 842 932 1022 1112 1202 1292 1382 °F Heat defects 450 1620

Different performance meltshop to rolling 400 1440 mills Total hot billet charging 2010 350 1260

– System failures in the steel plant or the 300 1080 rolling mill; 250 900 – Fluctuations with regard to tap-to-tap time or casting time; 200 720 – Short sequence lengths; – Differences between current steel quality of 150 540 the casting unit and the required quality in the rolling mill; 100 360 – Quality changes within a casting sequence; 100 400 600 – Staggered repair times in the steel plant 150 200 250 300 350 450 500 550 650 700 750 800 °C and/or rolling mill. Remark: average furnace energy consumption based on 130mm2 billet surface temperature during entering pusher furnace BSE RM2 Trend BSW Many of these restrictions can be consider- ably reduced or even completely eliminated by Fig 8 Energy consumption vs charge billet temperature at pusher furnace RM2 at BSW continuous optimisation of the processes. One basic obstacle which has to be eliminat- exponential function, which means that espe- comparison of section sizes in Fig 7 where the ed is the ‘island view’ which can often be seen cially at the hottest time immediately after cast- red curve is for a square billet of edge length in a steel plant and the rolling mill. Steel plant ing every minute of handling time saved 130mm. At BSW, charging temperatures of and rolling mill operators have to grow close between the continuous caster and the reheat- about 840°C are achieved during hot charging together. The steel plant operator must learn to ing furnace is important in minimising energy (Fig 7). The average hot charge temperature accept the role of internal supplier to the rolling losses. achieved over an 8-hour-shift (with 100% hot mill which has to be supplied at the right time As the cooling curve for billets which are not charging) is approximately 750°C. with the amount required and of the correct directly charged becomes flatter, warm charging An evaluation of gas consumption at the push- quality. at a range from 400°C to 600°C is still possible er furnace No 2 at BSW (which has a cold after several hours. In addition, the cooling rate charge throughput of 180t/h) shows a near linear Energy savings by hot charging is further reduced when storing the billets in relationship of falling furnace energy consump- The higher the billet temperature when charged insulated boxes or even under cover hoods. tion as the temperature of the charged billet rises to the reheating furnace, the greater are the The billet section size is much less relevant, (Fig 8). This result is similar to earlier investiga- energy savings. Cooling of the billet follows an especially for hot charging, as shown in the tions on the previous105t/h reheat furnace.

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Long products

300 280 LASER.com

- 260 240 220 200 www.LAP 180 160 140

Good coils performance [t/h] 120 100 plain plain plain plain plain plain plain plain plain plain plain plain plain plain ribbed ribbed ribbed ribbed ribbed ribbed ribbed 5.5 6 6 6.3 7 7 7.5 888.5 9 9.2 9.8 10 10.7 11 12 12.9 12 13.3 14 Dimension [mm] Cold charging Warm charging Hot charging

Fig 9 ‘Good’ coils produced at BSW wire rod mill RM 2 depending on final dimension of product

Initial study to define the potentials Investment cost & benefit valuation Showing of main requirements

Layout and billet handling study Production planning study Equipment recommendation Planning optimisation if required with billet adjustment betwen melt shop and handling simulation rolling mill reporting system requirements

Reheating furnace study Production planning study MEASURING Adaptation furnace design Developing hot charging decision (level 2) tool “chardis” Energy optimised Further developing possible hot Productivity driven charging stock management tool SYSTEMS FOR “orchestrate” Fig 10 Approach and activities of BSE’s hot charging study

LONG PRODUCTS During 2008, BSW Furnace No Depending on final product diam- 2 achieved an annual average eter, capacity increases of up to charging temperature of 642°C for 50% are possible by hot charging. charging billets which were inter- But even with warm charging pro- mediately stored in boxes, some to ductivity increases of about 20% the point where they had almost are feasible. completely cooled. The resulting The implementation of hot average energy consumption of the charging is thus a complex issue furnace was 174kWh/t. Energy with various key aspects needed to consumption varies between the implement this and the problems optimum value of 125kWh/t for to overcome. The first step is billets charged at 750ºC to a maxi- therefore to conduct a detailed mum of 360kWh/t for ‘cold’ investigation to determine the [THICKNESS][DIAMETER] charged billets. It should be noted potential to charge hot as well as that the ‘cold’ charged billets from the resulting cost-benefits. Based a storage box still have a tempera- on this investigation, further steps ture of more than 200°C even after can be defined and specific solu- some days. tions developed. BSW achieved savings of close In the course of the past 10 to 50% on natural gas use by years, BSE has worked in close achieving an average energy con- cooperation with BSW with regard sumption of 174kWh/t. With the to hot charging with an emphasis current energy prices this means on improving productivity and savings of more than Euro10/t of reducing energy consumption. Fig good billet. 10 summarises the procedure and [STRAIGHTNESS] [PROFILES] possible key aspects of a hot charg- Productivity increase by ing study. hot charging Pusher furnace 2 presents a bottle- neck at BSW for all dimensions Contact over 7mm section diameter. BSE Badische Stahl-Engineering GMBh, Robert- Maximum capacity here can only be Koch-Str 13 achieved by hot charging. (Fig 9) D-77694 Kehl-Auenheim Germany Besides the significant energy Tel +49 7851 8770 savings, an increase in reheating Fax +49 7851 877133 furnace productivity is the main e-mail [email protected] incentive for hot charging at BSW. web www.bse-kehl.de

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Steel processing

Toll processing in USA sees an upturn

Steel processors in USA are seeing strong activity this year and expect their business to continue to trend upwards for the foresee- able future driven largely by demand from the automotive market. By Myra Pinkham*

“STEEL toll processing demand tends to rise with steel being delivered to service centres and fall with the automotive market,” says Lee and/or processors in the name of the mill, elim- Davis, a partner with Prometal Management inating the control that processors had in the LLC, Rockford, Mich, and currently the auto- past regarding their payments. motive market is doing quite well. This is large- Wolf says that for the most part his company, ly based on the increases in automotive produc- as well as other toll processors, tend to be an tion both at the traditional ‘Big Three’ extension of its mill customers, although it also automakers and the ‘New Domestic’ compa- does some work directly for OEMs and for nies (sometimes known as the transplant auto- other service centres. “By performing high vol- motive companies). Peter Adamski, general ume toll processing, we help the mills to pro- sales manager of Taylor Coil Processing, vide a single source for the OEMs,” he says. Lordstown, Ohio, predicts that, at least for his company, sales will be up a fairly brisk 5 to 8% Shift in customers in 2012 and will probably increase at least at Recently, however, many processors have seen a that rate again next year based on anticipated shift in their customer base to more OEM and North American auto build rates. service centre business with many mills just The automotive industry is by far the largest The automotive industry accounts for well wanting to sell master coil, Edward Panek, sen- customer, accounting for well over 50% of toll over 50% of the toll processing demand ior vice president of All Metals Service & processing business with the other major Pic Courtesy Middletown Lines Warehousing Inc, Spartanburg, SC, observes, OEMs using toll services being those in the although he says it is possible that the mill share appliance, yellow goods, office furniture and resurgence are pent up demand during the eco- could pick up slightly again as the economy construction sectors, according to Christopher nomic downturn, a desire on the part of some improves. Plummer, managing director of Metal consumers to exchange their gas guzzling cars Plummer says the trend toward customer Strategies Inc, West Chester, Pa. for the new, more fuel efficient models and an diversification began several years ago with the The construction market, while having bot- increased number of drivers. Brian Habermel, consolidation of their steel mill base. “That put tomed out, continues to be relatively weak see- sales manager for Steel Technologies, toll processors at a little bit of a bargaining dis- ing on the whole only low single digit growth Louisville, Ky, observes that with consumers advantage,” he says. “For that reason they have rates. Plummer says the housing market – the holding off purchases during the downturn, the been looking to diversify their customer base by smallest user in the steel consuming construc- average age of vehicles on the road is about also going directly to the OEMs and to service tion sector, but the one that tends to lead the eight to 10 years old, which is close to the age centres, (or to other service centres in the case others – was up 9.2% in the year to April on the when they tend to fall out of the marketplace. of those distributors who also do some toll pro- heels of a 26% increase in 2011 but still remains According to Dave Detzel, director of out- cessing, which is many of them and the reason 75% below its 2005 peak. Non-residential con- side sales for Voss Taylor, Taylor, Mich, automo- why processors are sometimes considered to be struction, the largest steel consuming sector, is tive output did ease off slightly in May and June a subset of service centres). Plummer says this just starting to see a slight pickup, rising 6.8% and July are usually slow months as automakers trend started in earnest about 10 years ago. year to date after declining 3.2% in 2011, while shut down for retooling. “However most In general, as the economy improves, more public works, or infrastructure, construction is automakers – both New Domestic and Big work is outsourced to toll processors, Adamski still falling, declining 1.3% year to date after Three companies – have said they plan to min- maintains. “Some companies who had been falling 7.2% in 2011. imize the time they shut down this year,” he doing the own internal slitting and pickling are The automotive market, however, not only says. In fact, some auto parts suppliers have seeing a greater benefit to contracting those has a much more positive story to tell, but has a said they might eliminate their downtime services out.” greater impact upon the toll processing busi- entirely. In some cases this takes the form of “as direct- ness. Davis says that about 25 to 30% of all steel Detzel says, one of the biggest changes in the ed as” business with the large OEMs controlling goes to the automotive market with a lion’s way processors conduct auto-related business their supply chain by dictating which mill that share of that being toll processed in coopera- has been the continuation of the transition to they want to do business with and directing them tion with the processors’ mill, OEM or service resale programmes, which has a tendency to to create a partnership with processors to pro- centre customers. take away from the usual bidding process vide the products that the OEM desires, Angela While they have not yet returned to peak lev- resulting in a squeezing of the profits of the Gagel, Steel Technologies’ general manager of els, there has been a big uptick in North independent processors. He continues to say purchasing says. American automotive output. Joe Wolf, presi- that increasingly the automotive OEMs are now Wolf comments; “Our key strength is doing dent of Precision Strip Inc, Minster, Ohio, brings more steel under their resale umbrella work (either directly or indirectly) for the larger observes that in the year to date the North OEMs, such as those in the automotive, appli- American automotive build rate is up about ance and heavy equipment industries…… It is 20%. these companies that are serviced by the larger At the current rate, Plummer says, North 2013(F) 15.4 mills and they need someone in the middle to American automotive production could almost 2012 14.9 focus on customer service and just in time return to its peak level next year. After peaking 2011 13.1 deliveries.” at about 15.8 million passenger cars and light 2010 11.9 There actually are not a whole lot of true trucks in 2005, output plummeted to only 8.6 2009 8.6 partnerships being formed, Detzel says, but million vehicles at the depth of the recession in 2008 12.6 rather cooperative relationships amongst the 2009 but have been recovering quite nicely ever 2007 15.0 OEMs, mills, service centres and/or processors, since. This year he predicts that about 14.9 mil- 2006 15.3 usually to supply what the OEM desires. It lion vehicles will be produced, up nearly 15% 2005 15.8 could involve dealing with any number of serv- from 13.1 million in 2011 and that they will Source: Metal Strategies Inc (F) Forecast ice centres, including competitors in other increase another 3.3% to about 15.4 million regions, he comments. But the reason is not to vehicles in 2013. Table 1 NAFTA Light Vehicle Production establish a partnership, but rather because the Some of the reasons for automotive’s strong (million units) processor has been directed by the OEMs to do

*US correspondent – New York

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Steel processing

By performing high volume processing, toll processors help the Batch annealing furnaces at Steel Technologies, Louisville, Ky mills to provide a single source for OEMs Slitting line Pic courtesy Steel Technologies Pic courtesy Steel Technologies

Processors have seen a shift in their customer base to more OEM In the 1990s Steel Technologies started to do some toll processing and service centre business with many mills just wanting to sell for the New Domestic automakers and that part of its business has master coil Pic courtesy Steel Technologies grown Pic courtesy Steel Technologies

so as a means to minimize freight costs. That turn, there continues to be some consolidation especially for auto production, a lot of toll only makes sense, Wolf says, given that freight – usually either toll processors buying other toll processors have opened operations right of new can eat up a lot of profits – not just for the processors or service centres acquiring a mill campuses, including at North OEM but for everyone in the supply chain. processor. Rarely will a mill look to buy a America’s Columbus, Miss, facility and at processor. “There have been some discussions ThyssenKrupp’s new mills in Calvert, Ala. Wolf Uneasy alliances of them doing so, not so much to get into toll says it is even more usual for processors to posi- In recent years, however, there have been some processing, but to acquire advantageous ship- tion themselves near OEMs. Whichever way it ‘uneasy alliances’ built and changes to business ping locations,” Taylor’s Adamski says. Possibly goes, he declares that geography is important to models. “Hard economic times tend to create Nucor Corp’s planned acquisition of Skyline processors, especially in this time of razor thin strange bedfellows,” Davis says. “Companies Steel LLC could be said to fit into that mould, margins. are willing to do things that they weren’t willing but it is questionable whether Skyline is truly a All in all, US toll processors are optimistic to do before to keep their capacity utilization processor or more of a service centre. that their business is on a sustainable upward up and to get everyone into the same lifeboat.” What several processors have been doing to trend. “2011 was better than 2010 and 2012 so This, says Plummer, includes moves by serv- control their freight cost is to locate close to far looks like it will be better than 2011,” Panek ice centres to expand the services that they offer, either their mill suppliers, OEM customer or says. “I think we will see an increase in our out- sometimes by partnering with toll processors or both. Plummer says with the shift of the locus put this year, next year and for the next few with other service centres. Such partnerships do of demand from the Midwest to the Southeast, years.” ᔢ not really represent much of a strategic change if any at all, Wolf says, given that many service cen- tres traditionally do at least some toll processing to keep their processing equipment busy. APEAL’s one-stop site for He observes that Precision Strip is somewhat unique in that while it is owned (and has been owned for about nine years) by service centre steel for packaging giant Reliance Steel & Aluminum Co, it contin- ues to operate independently as a 100% toll APEAL – the Association of European Efficiency; Versatility and Safety. Credible and processor. By comparison, Habermel says, Steel Producers of Steel for Packaging, has launched well-established information about steel for Technologies started as a service centre and a ‘one-stop’ site steelforpackaging.org which packaging is made accessible to the user in remains one. However, starting in the early provides all the facts and features that make these easy-to-understand categories, backed up 1990s it started to do some toll processing for steel an efficient, reliable and sustainable pack- by relevant supporting facts. the New Domestic automakers and ever since aging solution. Enhanced new functions include: then, that part of its business has grown. To enhance its support and meet the chang- Ɂ All the facts and figures on steel for Meanwhile, on the other end of the spec- ing expectations of key stakeholders, APEAL packaging, in one place; trum, All Metals Service is purely a toll proces- has built on over 25 years’ experience in the Ɂ A website that is simple, clear and easy sor, according to Panek. “Our customers are industry to deliver the innovative platform for to use; more comfortable with us this way. They know messages, facts and figures, that is completely Ɂ Multi-platform accessibility (laptop, tablet that we won’t try to steal any of their business,” in line with evolving technologies. and smart phone compatibility); he says. “The water tends to get muddied if you The site demonstrates a clear, simple design Ɂ Easy to export information into other do both.” and is structured to highlight the seven key sup- applications (pps, pdf, web). ᔢ While merger and acquisition activity has ply chain benefits of Steel for Packaging: slowed considerably since the economic down- Recycling; Performance; Use; Manufacturing; www.steelforpackaging.org

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Steel processing

Improving the performance of strip guiding on the DCR mill at Bokaro Steel India The deteriorating functioning of the common hydraulic supply to the cold To other customers To processing rolling mill at Bokaro Steel led to poor Deflector roll coil profile with telescoping of laps by +/-5mm. A dedicated hydraulic circuit Sensor positioner was thus implemented to directly supply the coil guide system to reduce response time of the coiler lateral shift actuators Controller Sensor Strip/coil resulting in lap misalignment being Hydraulic system reduced to not more than +/-0.5mm as well as reducing maintenance, mill down Hyd cylinder time and poor coil profile by 70%. Hyd cylinder By S T Selvam, S Chaudhuri, I Sanyal Fig 1 Strip guide Un-coiler & A K P Singh system at the un-coiler Servo valve

THE strip guide system of the un-coiler of the strip on the correct track through the mill and Original hydraulic control Double Cold Reduction (DCR) mill at the Cold maintain it on the same track throughout pro- The original centralized hydraulic system of the Rolling Mill (CRM) of Bokaro Steel Ltd (BSL) cessing by continuously re-adjusting the position DCR mill was of 15 000 litre capacity and is provided to ensure that the coils are fed and of the mandrel against any lateral movement. catered for almost all the hydraulic equipment processed consistently through the mill to pre- Any lateral movement of the strip while process- on the mill, such as the walking beam, entry vent a bad coil-profile (telescoping) of the laps ing not only affects the quality of the profile of guide car, exit guide car, un-coiler mandrel[1] of the recoiled strip. A centralised hydraulic sys- the output coil but also the performance of the etc, as well as the servo hydraulically operated tem at the DCR mill supplies the hydraulic upstream mill during further processing. strip guide system. This was achieved through power requirement of all equipment on the mill The strip guide system is servo-hydraulically various control valves fed by a large accumula- including the servo-hydraulic operated strip operated and needs precious control and mon- tor. There were nine vane type hydraulic pumps guide system, which is supplied from a common itoring of the input hydraulic parameters for to supply all the requirements of the mill. Of reservoir through a dedicated pipeline contain- best performance. these pumps, six acted as the main pressure ing individual control valves, as the needs of the To improve the performance of the deterio- supply and three were on stand-by. A common various activators in the guide system differ at rating strip guide system at the Bokaro mill and hydro-pneumatic accumulator acted as a single different times. also improve its energy efficient it was decided storage receiver for the whole system from The performance of the centralized hydraulic to change from the common hydraulic supply which different tapping were taken to supply system had deteriorated in recent years causing circuit to a dedicated one for the strip guide. individual hydraulic equipment. difficulty in maintaining accurate hydraulic The implementation of this dedicated hydraulic A control valve station provided for the strip power to both conventional and servo-hydraulic circuit has improved the performance of the guide system regulated the hydraulic flow con- equipment because of its age and complicated guide system significantly. trol at 460 litres/min and 70 bar pressure to pipeline networks.This poor performance of operate the hydraulic cylinders located on both the centralized hydraulic system has resulted in Strip Guide System (SGS) sides of the mandrel at the un-coiler to contin- deterioration of the performance of the servo- The strip guide uses is a closed loop proportion- ually adjusts its position against the lateral hydraulic operated strip guide in particular as al hydraulic control system and uses a sensor movement of the strip as it entered the mill. the input needs for this are far more stringent located as near to the un-coiler/coiler as possi- The hydraulic cylinders are designed to operate than for other equipment as it must provide ble to detect lateral motion of the strip. One at a speed of 150mm/sec to match the maxi- precise and rapid control of the coiler guide. sensor is located just after the un-coiler and mum speed of lateral movement of the strip To improve the performance of the strip before the strip’s entry point to the mill and this with the mill speed. The performance of the guide, an independent hydraulic circuit was continuously senses the edge of the incoming strip guide system is wholly dependant on this designed and implemented isolated from the strip. speed of correction. Achieving the accurate cor- centralized hydraulic system. This has improved This sensor provides an output proportional to rection speed is again dependant upon the the performance of the DCR mill, in terms of the lateral position of the strip. The sensor sig- input hydraulic parameters, ie, hydraulic system mill availability and coil profile. nal is processed by an electronic controller pressure, flow rate and cleanliness of the It is necessity for any rolling mill to have a which compares the detector signal to the set hydraulic oil. However due to numerous opera- Strip Guide System (SGS) at both ends, one (guide) point ie a neutral point. tional and maintenance difficulties in the large for the un-coiler at the mill entry end and one Any difference from this results in an output and centralized hydraulic system such as, old for the re-coiler at the exit end of the mill. to the hydraulic servo system which moves the hydraulic equipment, complicated pipeline net- These guides are necessary to ensure proper mandrel of the uncoiler so the coil, reposition- works, undetected leaks in the large system, entry of the strip to the mill and good profile ing the strip until the strip edge is cantered in and its common control system for servo- formation of the output coils with all laps in the the detector’s field of view. hydraulic equipment and conventional coil aligned with the others. Coils with bad pro- This results in the un-coiler continuously hydraulic equipment, maintaining and control files eg showing telescoping easily sustain dam- repositioning any lateral deviations of the strip the hydraulic parameters was increasingly diffi- aged to the strip edges during handling and edge to a referenced edge by means of cult. These deficiencies in the centralized hence are downgraded to a lower quality and hydraulic actuators so that the strip is fed into hydraulic system led to poor performance, such sometimes even scraped. the mill on a constant track. The principle oper- as frequent failures and slow reaction speed of The main purpose of providing a strip guide ation of the uncoiler strip guide system is shown the strip guide system. This ultimately led to at the un-coiler end is to ensure the feed of the as a schematic in Fig 1. significant production losses and bad profile

*The authors are with the Research and Development Centre for Iron and Steel (RDCIS) and (BSL) Steel Authority of India Ltd (SAIL) Post: Doranda, Ranchi- 834002, Jharkhand State. Tel 0651 2411108 e-mail: [email protected] / [email protected]

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Steel processing

formation of the output coils. As the DCR mill is the finishing mill, coils are directly dispatched for packing and forwarding to customers and so the mill totally depends upon the correct func- tioning of the strip guide system to produce the profile of the shipped coils. Hydraulic control redesign The following mill data were used for the design and engineering of a revised hydraulic system for the strip guide.

– Width of strip/ coil processed 820 – 1250mm Fig 2 View of the dedicated hydraulic – Weight of the coil system to supply the uncoiler strip guide processed 15 - 18t system – Thickness of the strip 0.15 to 0.80mm – Maximum mill speed 30m/s – System Pressure 70kg/cm2 their maximum speed of 150mm/sec. The actu- centralized control system of the DCR mill – Nos of cylinders 2 ation velocity of the hydraulic cylinders is a crit- through suitable hardware and software links to – Size of each cylinder: ical parameter to ensure rapid and accurate enable centralized monitoring and control from Bore 10” response to correct the position of the un-coil- the mill’s main control room. Stroke 1050mm er’ mandrel. The velocity of the cylinders was Velocity 150mm/sec calculated taking into account the mill’s speed Techno-economics benefits – Flow rate of oil in of operation. The new system was designed to The re-designed hydraulic system for the SGS pressure line 460 lpm supply hydraulic oil at the maximum flow rate was designed, developed and installed at a cap- up to 600 l/min at 100 bar pressure. The oil ital cost of INR3500k (US$63.6k) in 2008 and Modified hydraulic system flow velocity is maintained at 4.4m/s in the has been in continuous operation since then. The modified independent hydraulic circuit for pipelines. The monetary benefits accrued amount to the SGS is capable of controlling and monitor- The dedicated hydraulic power system con- around INR25000k ($45.4k) over the past ing the performance of the SGS independent of sists of one 2000 litres capacity storage tank three years on account of the improved mill the main hydraulic supply. This enables the with all its necessary safety and operational availability which has increased by 200 hours a SGS to operate smoothly and continuously at accessories, three pressure compensated vari- year and a 70% reduction in the number of coils its maximum capacity through precious control able displacement axial piston pumps with their with bad profiled as well as a significant reduc- of the various hydraulic parameters. The independent drive motors, couplings, strainers, tion in maintenance and operational cost of the hydraulic valves station of the SGS was isolated pre-filters, pressure relieve valves, pressure mill. Telescoping of the coil profile has been from the main hydraulic line of the centralized reducing valves, check valves, isolation valves, reduced to +/- 0.5mm from the earlier level of hydraulic system by introducing control valves duplex type pressure line filters; two diaphragm +/- 5mm. ᔢ and isolation valves including control and isola- type accumulators with accessories, return line tion valves in all the former pressure, return, filters with check valve, indicators/gauges; off- Acknowledgement drain lines etc. This enabled the modified SGS line plate type heat exchanger; piping, flexible The authors express their gratitude to the manage- to also still be operated from the centralized hoses etc. The dedicated hydraulic power unit ment of Research and Development Centre for Iron system in case of any emergency or failure of installed at site is shown in Fig 2. & Steel (RDCIS) and Bokaro Steel Plant for imple- the new dedicated hydraulic system. The new dedicated unit is installed near the menting it in DCR mill, CRM. Co-operation and sup- Isolation of the SGS from the mill’s main un-coiler at the same level as the un-coiler to port provided by the mechanical, operation, electri- hydraulic system was achieved by taking due ensure fast and accurate operation of the cylin- cal, and Instrumentation (ETL) of CRM, BSL care of the power requirements for all down- ders. A dedicated control panel with various throughout the execution of the project is thankfully stream and upstream equipment supplied by control features to operate the modified system acknowledged, without whose support the execution the centralized hydraulic system. The former is installed inside the existing control room of of this project would have been impossible. The hydraulic valves station of the SGS and the the DCR mill. Three hydraulic pumps supply authors are gratefully acknowledge the support pro- hydraulic cylinders at the un-coiler mandrel the pressure and these are grouped in three vided by the supporting staff of Design and were re-used in the new dedicated hydraulic combinations to provide one as standby to cater Engineering Division of RDCIS and maintenance power system through appropriate design mod- for failure or maintenance of any one pump. A departments of DCR mill, CRM, BSL. ifications. The valves station for the SGS is second control desk with various indication directly connected to a new hydraulic power lamps is also provided near the hydraulic power unit. The dedicated system for the SGS was unit for visual indication of the health of the References designed to cater for the requirements of the system and for emergency operation. The con- 1 Operation and maintenance manual of Strip guide existing hydraulic cylinders to operate them at trol panel is also inter-connected to the existing system installed at DCR mill, CRM, BSL. Molybdenum use and production reached all-time high GLOBAL use of molybdenum reached a new ing for 76.7M lbs (34.79kt) and 60.8M lbs Molybdenum is added to steels and cast record high of 537.1M lbs (243.62kt) in 2011, (27.57kt) respectively. to improve strength, toughness, hardenability up 5.4% on 2010. Full-year figures from the North America remained the biggest and weldability and in stainless steels to International Molybdenum Association molybdenum producing area in 2011, with improve corrosion resistance. (IMOA) also show global production at a new production increasing to 183.1M lbs There are also numerous applications in the record of 534.6M lbs (242.49kt) for the year, (83.05kt). Production in China rose to automotive, shipbuilding, construction, mining, an increase of 4.3% on 2010. 177.0M lbs (80.28kt). South America was chemical, oil & gas and energy generation The greatest use of molybdenum in 2011 the third largest region, accounting for industries. was recorded in China, where use increased 129.7M lbs (58.83kt) in 2011, with other In a separate report from CRU – ‘CRU 13% from 148.5M lbs (67.35kt) in 2010 to molybdenum producing regions contributing Monitor – Nickel chrome molybdenum’ 168.0M lbs (76.2kt) in 2011. Europe record- 44.8M lbs (20.32kt). (www.crugroup.com) global production of ed the second biggest share with 133M lbs, China used 44.5M lbs (20.18kt) in Q4 com- stainless steel in 2011 is given as 33.365Mt and (60.32kt) up 16.7% from 113.9M lbs pared with 31.7M lbs (14.37kt) in Europe. consumption of these three vital alloying ele- (51.66kt) in 2010. The USA and Japan were The USA and Japan used 18.3 (8.30kt) and ments are presented. ᔢ the third and fourth largest users of account- 15.0M lbs (6.80Mkt) respectively.

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Conference report

In June, the Luleå sun dips to the horizon but never sets Scanmet IV – How the emphasis has changed from Scanmet I

In just 12 years there has been a remarkable shift in emphasis in the topics discussed at Scanmet with close to a third of all the papers presented in 2012 addressing to an exclusive or significant degree the CO2 issue. In 1999, just two papers barely mentioned the issue. A Report by Tim Smith – Editor Steel Times International

EVERY fourth year since 1977, the Scandinavian research organisation – formerly 360 delegates attended Scanmet IV held every four years at the Nordkalotten hotel, MEFOS and now Swerea MEFOS has organ- Luleå ised a conference in its home town of Luleå in the far north of Sweden. This is a very popular conference, not only for the scope of presenta- tions, but also for the Swedish hospitality and, this year at least, 24 hour long days of sunshine due to Luleå’s location just south of the Arctic Circle. Conferences prior to 1999 concentrated only on secondary metallurgy looking at injecting refining and alloying elements into the ladle. Indeed, they went under the name ‘Scaninject’. Starting in 1999, the scope was broadened to include all aspects of primary production from the blast furnace to ladle treatments. It is instructive to compare the topics cov- ered in the first Scanmet conference with today’s as the differences are marked and show the change in thinking within the steel industry in a remarkably short period of just 13 years. In 1999, 44 papers were presented and just two foresaw the importance of the CO2 issue to length the CO2 issue. Whole sessions of the con- Scandinavia is well known for its timber indus- the steel industry, but only mentioned it in pass- ference were dedicated to the issue in various try but papers at this conference (and others) ing – Prof Dieter Ameling of VDEh in his pres- forms: ‘Towards low CO2 Steelmaking’ (4 that advocate the use of forest litter as a source entation on steel research in Europe saw the papers); ‘Recycling and Resource Efficiency’ (19 of for injection into the blast furnace issue looming on the horizon, while Toshihiko papers); ‘Reduction and separation of CO2’ (4 have forgotten what the Swedish Ironmaster Emi of the Royal Institute of Technology, papers); ‘Carbon capture and storage’ (3 knew 200 years ago; that bark and small twigs Stockholm devoted a page and a half on the papers); ‘Renewable energy’ (4 papers); ‘Process concentrate phosphorus which then reports to issue in his presentation on minimising emis- integration’ (11 papers) ‘Alternative ironmaking’ the iron. Yes, it can be removed, but only with an sions and waste in future steelmaking. (2 papers presented but 4 scheduled). additional process step which itself expends In 2012, 44 out of the 135 papers presented Some of these papers were excellent, others energy negating the small saving in CO2 either directly focussed on or addressed in some may be considered misguided. For example, achieved by using a neutral carbon source. By all

400 Fig 2 Strip casting has been commer- 361.4 350 cialised by Nucor as the Castrip process Ladle Richard Wechsler Nucor Corp 300

250 Tundish Transition piece 200 Core nozzle 160.7 150 122.3 125.4 Casting 91.4 100 77.1 rolls Overall P Input (g/tHM) Pinch rolls Pinch rolls Deflector 50 rolls Hot box Hot rolling stand Water cooling Shear Collers 0 100% Coal 50% Rice 100% 20% Sugarcane 85% Charcoal + 100% husks+50% Torrefield Bagasse + 15% Torrefield Charcoal Fig 1 (left) Phosphorus input to the metal from various bio-sources Coal willow 80% Charcoal willow Ka Wing Ng CanmetENERGY

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Conference report

120 1035 & 1050 104.6 103.6 680 Nb grades 97.5 99.4 95.6 102.4 Expands thickness window 100 Highest strengths only in galv 87.5 82.8 83.6 80 550 67.2 69.3 1020 59.6 Expands thickness window 60 % 410 High copper (~0.35%) 40 Stronger for a given processing route To achieve grade 40 requires high

Yield strength (MPa) 20 275 CT DS Grade Standard C.Mn grades Lowest strength and 0 Limited thickness window highest %EI Rail steel Cold sheet Hot strip Cold stripGalvanized Electric sheet steel 10 20 30 40 Total elongation (%) 2005 2010

Fig 3 Mechanical properties of Castrip Fig 4 (top right) Sinter, pellets BF gas Richard Wechsler Nucor Corp & coke products Increasing self suffi- Gas max. 2900m3/h ciency for steel cleaning means make use of such forest litter, but not in products within system the steel industry, far better increase its use as a China fuel in power stations, cement kilns, domestic Tian Zhiling CISRI VPSA etc where the phosphorus is not a prob- Tail gas lem and may even be a benefit producing an ash rich in P and K suitable as a fertiliser (Fig 1). Product gas Frankly, to date, no biomass material whether Pebble heater Product gas it be timber, rice husks, olive stones, straw or whatever, offer a realistic fuel for ironmaking 1000°C and have better markets elsewhere for their use. While Brazil is often held up as an example of Fig 5 The ULCOS 1250°C successful use of charcoal, making some 4Mt of TGR blast furnace Coal 170kg/t HM pig iron a year by this method, the reality is that concept trialed at max. 500m3/h the Eucalyptus plantations grown (in theory) to Mefos ULCOS Hot metal & slag provide the charcoal produce barren land after a few cropings and the root mass remaining waste products were proposed some 20 years Kobe Steel has developed the ITMk3 process under the soil anaerobicly decays over many ago but have never been applied. which operates a rotary hearth at a sufficiently years releasing methane as it does so which is high temperature to just melt the iron formed, 20 times more potent as a GHG than is CO2. Alternative ironmaking which is then cooled to ‘freeze’ it into a nugget Far more practical are the approaches to min- Twelve years on, the blast furnace remains of iron was included on the schedule but not imise energy use at every stage of production. ‘king’, its death being much exaggerated. In presented. However, a report on the commis- Here the sessions on recycling and resource 1999 papers were presented on the Romelt sioning of the only ITMk3 plant so far built, efficiency have much greater potential. Also process developed in Russia, the AusIron Steel Dynamic’s Mesabi Nugget project in another meaning to the term ‘integrated’ steel- process in Australia, Corex and Finex. The first USA, can be read in the May/June issue of Steel making was presented, this time meaning inte- of these technologies remains a curiosity with a Times International in the report on the recent grating steelmaking with adjacent industries single demonstration plant in Russia, the sec- AISTech conference (Vol 36 No 4 p39). and communities to supply these with ‘waste’ ond has disappeared completely, Corex is the In a comparison of DRI projects, the coal heat and gases to reduce the carbon footprint most successful but only some five sites world- based Fastmet rotary hearth process was com- of their activities. wide use the process: ArcelorMittal Saldanha pared to a Midrex gas based shaft furnace but Some interesting papers were presented on Steel Works in South Africa (0.8 Mt/y), Jindal came out with the remarkable conclusion that slag recycling. In Scandinavia, where LKAB’s South West Steel in India (2 x 0.8Mt/y), Essar the almost untried Fastmet technology was pellets are almost exclusively used, the BOS Steel also in India (2 x 0.85Mt/y) and Baosteel superior to the Midrex process, despite Midrex slag has a significant vanadium content. While in China (1.2Mt/y). Posco of South Korea mod- accounting for 60.5% of all DRI produced glob- this can be a valuable by-product if extracted, it ified its Corex (0.8Mt/y), to the Finex process ally in 2011. has prevented the use of granulated slag which in order to use ore fines. At present, Posco’s The speaker eventually qualified her state- contains phosphorus as a fertilizer in Sweden Pohang works is the only site using Finex (two ment saying Fastmet was more suitable in following the death of some cows grazing on units) which uses a coal gassifier/melter as in Europe where the price of natural gas is high, land that had been treated with slag. Although the Corex process but produces the DRI in a but in reality, the Fastmet process is small scale, it was not proven to be due to vanadium poi- cascade of fluidised beds, similar to that used in the few units operating producing only a few soning, and more likely was a result of the high the short lived Finmet process trialed in hundred thousand tonnes of DRI a year com- lime content of the slag which needs to be left Australia and Venezuela. pared with Midrex’s modules, the largest of to weather for a period of time, the ban has In 2012, only four papers addressed alterna- which can produce 1.2Mt/y. To date, Fastmet resulted in large stockpiles of BOS slag building tive ironmaking and two of these were ‘no has only been used to treat steelmaking dusts up in the past decade. shows’ one of these being Hyl’s gas based shaft and reverts rather than ore. K Takahashi of JFE Steel reported trials mix- furnace to produce DRI which, along with ing BOF slag with ‘soil’ dredged from the sea Midrex, is the most common approach Other new technologies bed and returning this to the sea bed to enrich employed. In 2011, 73.3Mt of DRI were pro- Strip casting in the form of a belt caster was the sea with Fe ions to ‘fertilize’ the surround- duced globally, but compared to 1100.8Mt of presented in a single paper in 1999 with a ing water to encourage the growth of edible blast furnace iron this only represents 6.2% of description of the work undertaken by Mefos seaweed. Trials have resulted in harvesting world production. and Clausthal University in Germany. Some 12 twice the weight of seaweed compared with an Only two papers addressed the Corex years later, the first commercial plant is being untreated control area. The Fe ions also react process and none Finex. Problems of sticking in built at the Salzgitter steelworks in Germany, with sulphur released during channel the Corex shaft were described by Baosteel the driving force being the need to produce preventing the unpleasant smell and toxicity of which has to stop production to clear the screw ultra high strength dual phase steels for the H2S arising. However, similar ideas from Japan feeder to the gassifier/melter chamber at regu- automobile industry which cannot be easily cast of enriching sea water with Fe ions from steel lar intervals. on a conventional curved caster.

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However, strip casting in the form of the much slab casting the saving is 0.23tCO2eq or 79%. which initially will be used to test roasting of tried twin drum caster has been commercialised sulphide ores for non-ferrous production. It is by Nucor in USA under the name ‘Castrip’ using Scope of topics capable of operating at a temperature of up to the technology developed by the then BHP Steel In addition to the CO2 and alternative iron top- 1000°C. (now Blue Scope) and IHI of Japan. Many com- ics already discussed a plenary session A continuous caster mould simulator uses a panies tried to develop such a process (already addressed uses, challenges, environmental low melting point Sn-Bi alloy which has a den- common in the aluminium industry), but either issues and raw materials as well as a paper on sity similar to that of molten steel to study flow failed technically or, where they succeeded, the , by far the world’s characteristics in the mould for various entry could not make it succeed commercially. Nucor, largest producer making 683.9Mt of crude steel nozzle configurations. The surface of the mould however, just as they pioneered thin slab casting in 2011 or 45% of global production (Fig 4). is monitored using a camera and flow velocities in the early 1980s, have built two Castrip plants, Following the plenary sessions, technical top- inside the mould are measured using ultrasonic one in Crawfordsville which started in 2002 and ics were divided into four streams running con- probes. the second in Blytheville, Arkansas commis- currently. Topics so far not discussed were coke- More conventional equipment includes a sioned in November of 2009 (Fig 2 ). making, ironmaking, hot metal treatment, universal convertor of 6t capacity which can be The second line is wider and incorporates agglomeration, oxygen steelmaking, electric arc operated in a variety of rotation and tilt modes, process improvements to enhance the productiv- steelmaking, secondary metallurgy, inclusions in a 10t AC EAF, a 5t DC EAF with hollow elec- ity of the process. It can also make use of steel steel, stainless steelmaking, casting and solidifi- trode for injecting fines, a universal single stand made from lower grade scrap which is a major cation and visualisation & modelling. rolling mill, an open die forge of 500t capacity, advantage of the process since the strip solidifies and a grinding machine able to grind cold, so rapidly that tramp elements cannot segregate Site visit warm or hot slab. All this equipment is highly to grain boundaries which is detrimental to A visit was made to the Swerea Mefos research instrumented and is supported by the necessary mechanical properties. At Crawfordsville, since centre in Luleå to look at the facilities they have auxiliary equipment such as gas cleaning. this plant also produces thin slab, good quality available. Probably the most impressive is a Mefos has come under the umbrella of the scrap and virgin iron as DRI or pig iron must be scaled down blast furnace which is owned by Swedish Research organisation, Swerea since used, and this same quality steel feeds their ore producer LKAB but run by Mefos. It is the last Scanmet in 2008. Swerea is a group of Castrip. Strip thicknesses cast are 0.8mm and used to conduct a variety of trials on different Swedish research institutes in the material sci- 1.5mm in steel grades ranging from 220Mpa to charges and can be quenched mid smelt to ences field covering textiles, polymers, ceram- 580Mpa (Fig 3). examine the process of reduction as it descends ics, materials use, corrosion, composite materi- CO2 issues are also impacted by this process the shaft. It has also been used to run two cam- als, metals and environmental technol- with significant benefits accrued by Castrip due paigns on top gas recycling (TGR) as part of the ogy. Mefos’ remit is in ferrous and non-ferrous to its lower energy consumption since no hot European funded ULCOS project aimed at metallurgy, heating, metalworking, environmen- ᔢ and cold rolling is necessary as in the conver- reducing CO2 emissions by 50% in the steel tal energy and energy efficiency. sion of conventional or thin slab to final coil. process route. Here, the top gas from the fur- Typical CO2 equivalent emissions using the nace is stripped of CO2 before being returned conventional slab caster hot and cold rolling to the furnace via an additional ring of tuyeres Contact route are 0.39tCO2eq per tonne of product located above the conventional tuyeres (Fig 5). Swerea Mefos, Box 812, SE-971, Luleå, Sweden compared with just 0.06tCO2eq for Castrip, a A new test plant expected to be commis- Tel +46 920 20 1900 0.33t saving or 84%. Even compared with thin sioned next year is a fluidised bed pilot plant e-mail [email protected] www.swereamefos.se

Technological for iron, steel, ferro alloy and non-ferrous metal manufacturers

High quality water cooled copper products Forged and machined Cast and machined

Saar-Metallwerke GmbH Hundt & Weber GmbH Am Römerkastell 6 · 66121 Saarbrücken · Germany Birlenbacher Straße 1 · 57078 Siegen · Germany [email protected] [email protected]

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Conference report 320 companies exhibited from 25 nations at Metallurgy- Litmash in Moscow

Metallurgy-LitmashMetallurgy-Litmash reflectsreflects massivemassive investmentsinvestments inin RussianRussian steelsteel

The annual springtime ferrous event in Moscow, Metallurgy Litmash, along with its associated tube and non-ferrous shows again attracted a good attendance from Russia’s metallurgical industries. In this report on the event, Steel Times International’s repre- sentative in Moscow, Alex Gurov, first reviews the current investment climate in Russia and then the show.

EXPOCENTRE Fairgrounds in Moscow was third module for HBI production in goods between these countries. In addition, the venue for three international exhibitions on Lebedinsky GOK by Metalloinvest; the next Russia gained full accession to WTO in August 28-31 May: Metallurgy-Litmash, Tube Russia stage of development of Russia’s largest Elga 2012. Russia’s membership of WTO may have and Aluminium/Non-Ferrous’2012. Attracting coal deposit for Mechel in Yakutia; the building both positive and negative consequences for Russian, other CIS and international exhibitors of a blast furnace and second oxygen converter the nation’s steel and non-ferrous industries and delegates the event was held simultaneously shop at NTMK for Evraz; the construction of and metals markets due to a drop in import with ‘Metalloobrabotka’2012’ an international several new minimills for long products; one for duties. However, positive influences are expect- machine-tool exhibition held in an adjacent hall. NMLK in the Kaluga region, one for Severstal ed to outweigh this due to very favourable con- in Balakovo and one for UGMK in the Tyumen ditions for Russia in joining WTO. Investments in Russian steel region, to name a few. Russian steel and pipe producers have invest- Metallurgy-Litmash attracts world leading plant The investment in the Russia steel sector in ed heavily in production facilities in the past and equipment providers for the ferrous and 2011 was about 160bn Roubles (US$4.9bn) few years to be prepared for competition in the non-ferrous industries. It is a key metallurgical and in the non-ferrous sector about 90bn international and domestic markets. Russia’s forum in Russia to develop close cooperation Roubles ($2.77bn). Russian steelmakers expect accession to WTO will stimulate investments between Russian steel, pipe and to continue investment in the industry up to and imports of machinery and technologies, aluminium/non-ferrous producers with interna- 2015 at a rate of about 200bn Roubles launching large-scale projects in the mining and tional plant builders to jumpstart further devel- ($6.15bn) a year. metallurgical sectors. The Russian metallurgical opment of the metals industry in Russia. Environmental programmes are becoming a industry plans to spend more than 50bn Euros According to the World Steel Association, priority alongside growth in production. over the next ten years in increased investment Russia ranked 5th in the world in term of crude According to the updated long-term state fore- activities. steel production in 2011, and third in term of cast for the development of the Russia metal- Among the major risks of entry into the tube and pipe. Metals, along with the oil and lurgical complex, until 2030 the industry will WTO for the domestic steel industry is the pos- gas industry are the two driving sectors of the invest up to US$100bn in the mining and met- sibility of the application of protective measures Russian economy. The share of ferrous metal- allurgical sectors, investment being equally against Russian steel exporters and a growth in lurgy in the total national industrial production divided between the two sectors. By 2030 pro- the import of steel products (primarily pipe) is about 10%. Steel producers use 32% of the duction at metallurgical complexes in Russia due to the reduction of import duties. By 1 July country’s electricity, 25% of its natural gas, 10% may be doubled mainly due to the demands of 2013 rates for rail transport should be charged of its oil and petroleum products and up to 20% the domestic market. in accordance with WTO rules. By the end of of the rail network capacity of the country. Thus, NLMK in is implementing an 2014 there should be a transition to market According to the Russian Ministry for ambitions programme of modernisation to principles for the price of natural gas on the Industry and Trade the current rate of replace- increase steel production from 9Mt/y to basis of equal profitability of gas supplies to ment of fixed assets in the steel and non-ferrous 12.4Mt/y by installing a modern blast furnace domestic and foreign markets. The transition to industry is about 40%. Russian steelmakers and supplied by Paul Wurth and a new converter a market-based pricing based on global energy pipe producers continue on an ambitious path shop. Severstal in Cherepovets is currently prices and freight services will lead to higher of development in spite of the current poor starting an investment programme to increase production costs for Russian companies and world economic conditions. the capacity of its converter shop to 9.8Mt/y. A increase the cost of manufactured steel in As examples, the Russian tubes producers; new project by the United Metallurgical Russia. In this connection, Russia’s metallurgi- OMK, TMK and Chelpipe, have each invested Company (OMK) is the construction of an inte- cal industry needs to continue close co-opera- in building the most up-to-date facilities for grated crude steel and pipe complex in tion with world leader suppliers of innovative large diameter pipe (LDP) production in recent Chusovoy for the production of steel strip and technologies and equipment. years to give a total production capacity of high-quality seamless pipes for the oil and gas 5Mt/y. MMK at Magnitogorsk and OMK at industry. The trio of trade fairs Vyksa have each commissioned plate mills capa- The exhibition was organized by Messe ble of rolling to a width of 5000mm to supply Trade Düsseldorf GmbH (Germany) with its Russian large diameter pipe mills with API quality Another important issue for Russian metallurgy partners Messe Düsseldorf Moscow and Metal- grades of steel for line pipe manufacture. is the operation of a Customs Union between Expo in co-operation with the International Major projects currently under way in a Russia, Belorussia and Kazakhstan since Tube Association (ITA). The exhibitions are Russian steel sector include: construction of the January 2012 which allows free movement of held with the support of leading international

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Conference report

and national industry organizations. The con- in metallurgy, energy and automobiles between Regretfully, the major Russian steelmakers cept of simultaneously holding three leading the two countries creates opportunities to were largely absent as exhibitors in marked con- industry shows together has proved its value. embark on common projects for industry and in trast to the presence of a wide range of world Metallurgy-Litmash, Tube-Russia and research and development. Within the scope of leaders in equipment and machinery supply. Aluminium/Non-Ferrous’2012 exhibitions the official German participation, a total of 37 Also, no conferences or others business events became one of the most significant events of German companies have showcased state-of- were held concurrent with the event. the year for technologists and management of the-art technology and know-how in the fields Steel Times international and Aluminium the metallurgical industries in Russia, particu- of metallurgical plants, rolling mills, casting, International Today published by Quartz larly for those Russian companies presently up- heat treatment etc. The joint participations Business Media from UK exhibited with their dating and modernising. from Germany (see more info on www.metal- bi-annual Russian language issues. The latest developments in the fields of met- lurgy-tube-russia.german-pavilion.com), is sup- Metalloobrabotka’2012, which was held allurgy and tube were displayed in an area of port by the Federal Ministry of Economics and simultaneously, enhances synergies, providing 4000m2. 320 companies exhibited from 25 Technology (BMWi), the German Engineering professionals the whole range of information nations, and 169 of these were global compa- Federation (VDMA) and the Association of concerning the latest technologies and spheres nies. The exhibitions brings together manufac- German Trade Fair Industry (AUMA). of the application of industrial products. turers of the whole range of technologies and These Trade Fairs are supported by the lead- Metalloobrabotka’2012 presented 887 com- equipment for the production and processing ing international industry associations EUnited panies exhibiting from 35 countries. The event of steel, aluminium, other non-ferrous metals, Metallurgy – The European Metallurgical included 550 Russian exhibitors. More infor- engineering, foundry, machine-building, heat Equipment Association, AMAFOND – Italian mation about this exhibition is available at treatment extrusion, and more. Association for Foundry Machines and www.metobr-expo.ru. Among the participants of the exhibitions Products, CEMAFON – The European The next Metallurgy-Litmash 2013, Tube were such well-known companies as SMS Foundry Equipment Suppliers Association and Russia 2013, Aluminium/Non-Ferrous 2013, Siemag, Siemens VAI, Seco/Warwick, Paul CECOF – The European Committee of will be held in conjunction with others Trade Wurth, ALD Vacuum Technologies, Can-Eng Industrial Furnace and Heating Equipment Fairs in May 2013. For further information on Furnaces, CVS, Ebner, Eirich, Inductotherm, Associations. The important partner from the events go to: www.metallurgy-tube- Dango and Dienenthal, Inteco, Ipsen, China is MC-CCPIT – the Metallurgical russia.com or contact Messe Düsseldorf, Mr Heinrich-Wagner-Sinto, Laempe Mossner, Council of China Council for the Promotion of Daniel Ryfisch at: Linde Gas, Foseco, TMK, Ruspolymet, and International Trade. [email protected]. ᔢ many others. This international trio of metallurgical exhibi- Germany, Italy, Austria and China had pavil- tions attracted key specialists from Russia and Contact ions to promote their smaller enterprises. the rest of the world, Basically, chief engineers, Messe Düsseldorf GmbH Germany is recognised as a reliable and long- technical directors, senior staff responsible for Messeplatz, Stockumer Kirchstraße 61, term partner for the Steel and Non-Ferrous making decisions on the implementation of D-40474 Düsseldorf, Germany Metals industry in Russia helping with their know-how and innovations which may offer a Tel +49 (0) 211/4560-01 Fax +49 (0) 211/4560-668 development and modernisation. This friendly good opportunity to discuss all future aspects of e-mail [email protected] relationship and good economic co-operation a company’s development plans. web www.metallurgy-tube-aluminium.ru 6th North American Steel Conference 29-30 October 2012, Westin River North, Chicago, USA s Gain the latest intelligence on the vital issues driving the North American steel industry s Network with senior-level steel industry decision-makers from around the world sååMeet the experts – CRU’s assessments of steel prices have emerged as the most widely used assessments in the global steel industry, in particular in North America 10%0% discountdisco for ount for Register now at STI re readersreaders. d

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Know your steel

The Basics of iron and steelmaking Part 3 – Secondary steelmaking and continuous casting This third article in this series discusses secondary steelmaking (also known as ladle metallurgy) to improve quality and the technique of continuous casting which has replaced 95% of ingot casting offering much improved yields, and lower energy and manpower require- ments. By Keith Walker*

THE previous article in this series ended with the production of liquid steel in the oxygen converter (BOF) or electric arc furnace (EAF), and at this stage the liquid is effectively pure iron. As the steel is tapped into a ladle (a large refractory-lined pot capable of holding typically 50 to 200t of steel), alloys are added to make the chemical composition stipulated by the metallurgist. These alloys, sometimes called ‘finishings’, are elements other than iron, the most common examples being silicon and man- ganese. They are most often added as a solid combined with iron and rich in the element and are called ferro-alloys. Carbon and some other alloys are also added usually, during tapping from the furnace, and also aluminium or silicon to de-oxidised the steel. Deoxidation is neces- sary because liquid steel can absorb oxygen dur- ing the refining process, but it cannot retain it when it solidifies, so that unless it is removed, problems occur during casting. The main way in which de-oxidation is carried out is by adding aluminium which reacts with the oxygen in the steel to form aluminium oxide, which floats to the surface forming a slag. However, some grades of steels cannot contain any aluminium and the alternative of using ferro-silicon is used A ladle arc furnace uses an electric arc to raise or maintain the temperature of the liquid in this case. steel in the ladle Pic courtesy Siemens VAI Today, 95% of all steel made globally is cast by continuous casting to be described later in floated to the surface. Alternatively, and some- too cold (excess temperature is also harmful this article. The remaining 5% is cast as ingots, times as well, some plants use electro-magnetic during casting). Using an LAF to maintain tem- often in very large sizes for large forgings. These stirring (EMS) and in this case large electro- perature can be very helpful for operational, ingot steels are not de-oxidised because evolu- magnets are located close to a ‘window’ of non- rather than metallurgical, reasons. The final tion of gas is desirable to compensate for the magnetic stainless steel in the steel shell of the part of the alloys required can be added at the shrinkage during solidification. Some readers ladle to induce a stirring action in the steel. LAF, or special slags can be used to removed may be familiar with the terms ‘balanced’ and Keeping the steel homogenous is critical so that impurities and some plants have lance injection ‘rimming’ steel production in ingots for this rea- the frequent chemical analysis and temperature facilities at the LAF. Such systems are used to son, but it is not necessary to make these types checks that are made are representative of all blow materials deep into the steel using a pro- with continuous casting. the steel in the ladle. pellant gas such as argon, the most common The ladle of liquid steel now has a composi- being calcium (in one of many forms) which is tion just short of what is eventually required – a Secondary steelmaking used to reduce sulphur to very low levels, a little less alloy is added during tapping than There is a large range of possible equipment requirement in some grades of steel. Note that necessary because it is much easier to add more which may now be required in what is common- this process is easily confused with the use of later than try and remove an alloy if too much ly called ‘secondary steelmaking’. This is any magnesium to remove sulphur from hot metal, were added at first. The composition is checked process which happens once the steel is tapped mentioned in the previous article, but magne- by chemical analysis using a sample taken from into the ladle and so it is also called ‘ladle met- sium cannot achieve the super-low sulphur lev- the steel once it has been stirred to homogenise allurgy’. Although some simple grades of steel els that calcium treatment does. it by bubbling gas through the liquid metal. In can be made without any secondary steelmak- One common alternative to the LAF as a some plants, the ladles have perforated plugs in ing from a metallurgical point of view, some heating station is the CAS-OB. In this equip- the bottom which permits bubbling of (usually) plants may install equipment which makes ment, a snorkel is lowered into the ladle to argon gas through the steel, but in others argon logistics easier. These are the heating stations, cover part of the slag on the surface of the is introduced using a hollow refractory lance the most common of which is the ladle-arc fur- metal, argon is then blown deep into the metal lowered deep into the liquid steel. As the argon nace (LAF) – since the steel starts to lose heat to create an ‘eye’ of metal clear of slag beneath bubbles float quickly to the surface and escape, once it is tapped into the ladle, there is there- the snorkel and heating is achieved by injecting the steel is stirred by them, and inclusions are fore pressure on the time to cast it before it is powdered aluminium and oxygen into the

*Dr Walker was formerly with Corus Group and is now MD of the steel consultancy SteelFolk e-mail [email protected]

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Know your steel

degasser. In this unit, the ladle is placed com- may be 1-2m and the thickness from just 50mm pletely in the vacuum chamber and a lid fitted. to 250mm. The capital cost of buying such plant is lower The principle of casting is the same in each than for the RH type, but it is a slower process case. Most concast machines have more than in terms of hydrogen removal. However, tank one strand – ie the metal being cast – for what- degassers are exceptionally useful for making ever cross section of cast product is wanted. It certain grades of heavy plate – such grades is clearly quicker to cast simultaneously with require low carbon, low nitrogen, low sulphur multiple strands and there can be as many as and low hydrogen. All of these can be achieved eight strands if billet is being cast. Each strand in the tank degasser in one process. The gasses is cast through an open-ended copper mould are removed in the same way as in the RH, but which is cooled by circulating water through the sulphur is also removed by reaction with a passages in its walls. Above this is a tundish act- special slag added to the ladle, something not ing as a common feed to all the strands, and possible in the RH degasser. This avoids the above the tundish is the ladle. The steel flows additional process of calcium treatment for into the tundish from the ladle through a stop- The RH vacuum degasser draws steel from such grades – a process during which nitrogen per or gate valve in the bottom of the ladle the ladle into a vacuum chamber via one levels rise rapidly which is undesirable. (they are usually sliding gates). The steel fills leg of a snorkel and returns it degassed via Some plants have installed tank degassers the tundish which serves the purpose of distrib- a second leg Pic courtesy Siemens VAI which are also ladle arc furnaces, with advan- uting the liquid steel to each of the moulds, tage of providing temperature control, but the again through valves in the tundish bottom, one snorkel, oxidation of the aluminium being a engineering demands of such units are high as for each mould. The steel fills each mould strongly exothermic reaction. Heat is trans- is their capital cost. These are called vacuum arc (which is generally around 600mm in length but ferred throughout the melt by the stirring degassers (VAD). it varies) and the strand emerges from the bot- action of the argon. The CAS-OB tends to be tom of the mould continuously, supported by used in plants where all the steel grades can Continuous casting rolls further down the machine. Liquid steel contain aluminium, so they are more common The liquid steel in the ladle is now ready for continues to flow into the top of the mould to in plants producing strip than they are in ones casting. The temperatures involved during continue to process. making plate, wire rod and long sections. steelmaking are quite variable because the steel On emerging from the water cooled mould, The other most common requirement is to composition (especially the carbon content) the strand has a solid skin of steel but the inside remove gases other than oxygen which are dis- and whether it will be re-heated at the LAF or contains liquid steel for many meters, solidify- solved in liquid steel. These are hydrogen and CAS-OB affect them, but to give the reader an ing as it is withdraw down the casting machine. nitrogen – although these may cause problems idea, tapping from a typical BOS will be at Concast machines bristle with instruments, similar to dissolved oxygen during casting, they around 1650ºC and the amount of super-heat measuring steel levels, the speed of casting, are usually at levels too low to cause this, and (that is, the amount the temperature is above strand temperature and many other things too the main reason for removing them is their the solidification temperature of the steel) at numerous to list. However, one worth mention- harmful effect on properties in some grades of the start of casting will be around 30ºC, so ing is a critical system which avoids break-outs. steel. There are various designs of equipment around 1560ºC for an 0.2% carbon steel grade. A break-out is when the liquid steel emerges which will remove them to acceptable levels Super-heat is kept as low as possible during from the strand below the mould and it clearly and they are all called degassers. casting because this reduces an undesirable takes a lot of cleaning up. By monitoring ther- Which type of degasser is chosen depends effect called segregation, but clearly some mocouples in the moulds, technicians have dis- largely on the grades of steel being made, but super-heat is required to allow time for the steel covered a way of sound an alarm that a break- also capital and operating costs count too. For to be cast so there is compromise. out is likely. Corrective procedures are then car- plants making rails and heavy plates, the RH type Continuous casting (or concast) has many ried out, such as slowing the speed of casting, in of degasser is the most common. This unit is a advantages over casting into ingot moulds and the hope of avoiding a break-out. tall chamber attached to a vacuum system which has been rapidly installed by steelmakers since Because the tundish acts as a reservoir of will permit the pressure to be lowered to around the late 1960s. There are considerable yield molten steel, it is possible and very common to 1mbar. The ladle is not placed in the chamber, benefits, because each strand is effectively one cast several ladles of steel one after another rather two snorkels on the bottom of the vacuum ingot, and so there is therefore only one con- without stopping casting. This is called chamber are lowered into the liquid steel in the traction cavity at the end of the cast to remove sequence casting, and usually all the ladles of ladle. This provides a sealed chamber. Argon gas as waste. Also, many types of surface defect steel are of the same composition. However, it is bubbled into one of the snorkels and this common with ingot are avoided, and the sec- is possible to cast steels of different composi- makes the steel flow rapidly up into the vacuum tion shape cast is closer to that of the final prod- tions using a 'link plate' inserted into the mould chamber, circulating at a rate which creates uct and so the first stage of rolling – the break- connected to the steel, onto which the new steel splashing and small droplets. Hydrogen is effec- down or blooming mill – can be removed. is poured. Its position is obvious and this part tively sucked from the steel and removed. There are many designs of concast machine of the strand is discarded later. Nitrogen can also be removed at the same time, to choose from depending on the size range Some concast machines cast the steel strands but only if the sulphur level in the steel is very (cross-section) and the grades of steel being vertically into a deep pit, a technique necessary low – this is due to a surface tension effect. The made. The section shape may be relatively small for some high alloyed grades of steel, but more degasser can also be used to remove carbon to squares known as billets, say 150mm on each commonly the mould is shaped such that the very low levels, most commonly in plants pro- side or they may be rounds or larger squares or strand is curved during casting and the initial ducing strip, in which case an oxygen lance is rectangles (blooms) or slabs in which the width vertical decent is converted to the horizontal by contained within the chamber. The oxygen reacts with the carbon to produce CO and CO2, and Multiple strands of steel are cast simultaneously to improve productivity the process works well under vacuum because Pic courtesy Siemens VAI these oxides are gaseous. Despite being a sealed vacuum chamber, alloys can be added into the RH using what are best described as air-locks. Indeed, due to the vacuum, less alloy is required because undesir- able oxidation of the alloying elements is reduced so sometimes steel which does not require low hydrogen, carbon or nitrogen levels is processed through the degasser because it is cost-effective to do so. Another type of degasser is the DH which works in a similar way, but has only one snorkel and is far less common and so will not be detailed here. Another alternative is the tank

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Know your steel

a series of heavy water cooled rollers mounted of casting. The mould is filled by the first steel in a curve below the mould. This is known as and then the dummy bar is withdraw, the solid- the ‘radius’ of the caster. The ‘straightened’ skinned strand following it. strand is then cut to an appropriate length by an The moulds are oscillated up and down during automatic flame torch moving at the same casting to avoid the steel sticking to the mould, speed as the strand (on the fly). Such curved leaving characteristic 'oscillation marks' on the Cutting a slab machines have the advantage that a much shal- surfaces of the strand. Also, the interface of continuously lower pit in the ground is needed to contain the between the solidifying steel shell and the mould cast steel with machine, so capital costs are lower, but since is lubricated, either using oil or a low melting an oxygen the straightening operation can cause surface point slag material called ‘casting powder’. torch cracking, some producers of steel grades which To avoid oxidation of the steel during pour- Pic courtesy are susceptible to cracking have opted for the ing from ladle to tundish and also from tundish Siemens VAI vertical caster. into moulds, pouring is usually done through It will have occurred to the reader that the ‘shrouds’. These are air-tight refractory tubes arranged into ‘segments’ for ease and speed of start of casting is a special case – if steel were attached below the valves with their lower end replacement since they are items that require poured into open-ended moulds it would sim- submerged in the liquid steel. Oxidation of the regular replacement for refurbishing. There is a ple go straight through. This is indeed so and pouring streams causes a problem with inclu- high metal pressure tending to push out and therefore a device called a ‘dummy bar’ is fitted sions in the product and needs to be avoided, bulge the solidified skin of the strand while it into the mould closing off its bottom at the start although some less stringent grades of steel are still contains liquid steel. Making sure that the cast ‘open’ without these nozzles as they have top and bottom surfaces of the strand cannot to be frequently replaced as deposits build up bulge is critical. inside them. Some concast machines also feature specially Many concast machines have devices fitted controlled ‘squeezing’ of the strand between which help to avoid problems with segregation. the rollers. This is called ‘soft reduction’ or liq- This is where alloys in the steel are inclined to uid core reduction and the concept is based on move to the centre-line of the strand cross-sec- metallurgical considerations and the effect is a Beam blanks can tion, the most well-known example being sul- much better control of segregation. be cast as a ‘dog phur although all the alloy elements do it to Some machines also stir the steel in the mould bone’ section to some degree. This means that the properties of using electromagnetic induction, and some also reduce the the final rolled product are different in the cen- below the mould while the core is still liquid. amount of rolling tre than towards the surface. This can be a This too helps control of segregation. This is to a H-beam severe effect. The most important aspect of most common on billet and small bloom casters. Pic courtesy Siemens avoiding it, especially in machines casting wide The cast strands are cut to the length VAI bloom or slab, is careful alignment of the rolls required by the rolling mill. Rolling will be dis- supporting the stand above and below, often cussed in the next article. ᔢ

Latin American Steel A retrospective in 101 essays

'Latin American Steel: A retrospective in 101 essays' is a collection of reprints Germano Mendes de Paula of pages from Steel Times International of articles authored by Dr Germano Mendes De Paula, Professor of Economics at the Federal LATIN AMERICAN STEEL University of Uberlandia (UFU), Brazil. In all, 101 articles have been collected covering the period January A retrospective in 101 essays 2000 to December 2011 providing an invaluable collection to trace the development of Latin American steel in the past decade. Over 400 steel companies are mentioned in the collection of papers, some many times, such as Gerdau, Usiminas, ArcelorMittal, Ternium, Techint, Sidor, CSN, Acesita, Tenaris, CAP and Deacero, while some have only one entry such as Comesa (now a Gerdau group company), Ferromallas, Inlasa and many others. Indeed, many of these isolated names are absent from the steel directories and are revealed only by the author’s in depth knowledge of the region. An index to the pages referring to each of these companies is found at the end of the book. This collection is recommended reading for all scholars of Latin America’s industrial development, historians, economists and everyone interested in the steel industry whether in a regional or global context. REPRINTS FROM LATIN AMERICA UPDATES & CONFERENCES

Latin American Steel: A retrospective in 101 essays ISSN 2049-7660 160 pages A4 Price £25 + post & package Available from Quartz Business Media, 20 Clarendon Road, Redhill, Surrey, RH1 1QX, UK Tel +44 (0)1737 855136 e-mail [email protected] web www.steeltimesint.com

70 – July/August 2012 – Steel Times International www.steeltimesint.com HISTORY_Layout 1 7/16/12 3:02 PM Page 1

History

Zinc from India – The protector of iron

By Fathi Habashi*

ZINC has been used for protecting iron against corrosion by immersing iron in molten zinc to form a protective layer. The process is known as galvanizing named after Luigi Galvani (1737- 1798) the Italian scientist who noticed the phe- Fig 1 Schematic Fig 2 nomenon of electric current but misinterpreted representation of its cause. The idea of cathodic protection the Indian method Fig 1 against corrosion was first proposed by for producing zinc Humphry Davy (1778-1829) in London. He initiated the use of zinc for the control of the Fig 2 Chinese corrosion of ships’ hulls. Centuries before zinc method for pro- was prepared in the metallic form, its ores were ducing zinc used for making brass and zinc compounds were used for healing wounds and sore eyes. Fig3 Andreas The production of metallic zinc, however, is Sigismund described in the Hindu book ‘Rasarnava’ which Marggraf (1709- was written around 1200 AD. The fourteenth 1782) described in century Hindu Rasaratnassamuchchay detail the produc- described how the new ‘-like’ metal was tion of zinc from made by indirectly heating calamine with char- calamine Fig 3 coal in a covered crucible fitted with a condens- er. Zinc vapour was evolved and air cooled in the condenser located below the refractory cru- cible (Fig 1). By 1374, the Hindus had recognised that zinc was a new metal, the eighth known to man at that time, and a limited amount of commer- cial zinc production was underway. At Zawar, in Rajasthan, great heaps of small retorts and over (Fig 2), and, after being brought to redness, are gave the name ‘contrefey’ because it was used 130kt of residue bear testimony to extensive cooled and broken. The metal is found in the to imitate gold. This often consisted of metallic zinc production from the twelfth to sixteenth centre in the form of a round lump. Zinc pro- zinc, although he did not recognize it as such. centuries. This represents the extraction of the duction expanded and the metal began to be Thus, by about 1600, European scientists were equivalent of one million tonnes of metallic zinc exported. aware of the existence of zinc. and zinc oxide. In an extensive research ‘On the method of European production extracting zinc from its true mineral, calamine’, Technology transfer From China, zinc became known in Europe in 1746 Andreas Marggraf (Fig 3) reduced From India, zinc manufacture moved to China through Portuguese and Arab traders. It was calamine from sources in Silesia (Germany) and where it developed as an industry to supply the Albertus Magnus (ca 1248) in the Holy Roman in England and Hungary with carbon in closed needs of brass manufacture. The Chinese Empire of the German Nation who was the first retorts, and obtained metallic zinc from all of apparently learned about zinc production to describe how calamine might be used to them. He described his method in details there- sometime around 1600AD. An encyclopaedia colour copper ‘gold’. Biringuccio (ca 1540) in by establishing the basic theory of zinc produc- issued in the latter half of the sixteenth century Italy described how calamine could be mixed tion. ᔢ makes no mention of zinc, however, the book with pieces of copper, and sprinkled with a layer ‘Tien-kong-kai-ou’ published early in the seven- of powdered glass, then heated in a closed cru- Suggested readings teenth century related a procedure for zinc cible for 24 hours. Agricola in Saxony in 1546 F Habashi, Readings in Historical Metallurgy, Vol 1 manufacture. Calamine ore, mixed with pow- reported that a white metal was condensed and ‘Changing Technology in Extractive Metallurgy’, dered charcoal, was placed in clay jars and heat- scraped off the walls of the furnace when Métallurgie Extractive Québec, Québec City, Canada ed to evolve zinc vapour. The crucibles are piled Rammelsberg ore was smelted in the Harz 2006, 800 pages. Distributed by Laval University up in a pyramid with lump coal between them Mountains to obtain lead and silver to which he Bookstore ‘Zone’. www.zone.ul.ca

* Laval University, Quebec City, Canada [email protected] BOOK REVIEW Historic steam explosions The 19 century saw the acceleration of the works, , traction engines, railway Industrial Revolution in Britain as steam power locomotives and one example of a marine boil- took over from water power as the main driving er explosion are all addressed in great detail force. including many illustrations, many from the This excellent book by Alan McEwan, who author’s own collection. himself only recently retired as an active partici- Steel Times International will be drawing on pant in the repair of industrial boilers working up some of the examples of explosions in iron- to the position of MD of one of the few special- works in its future History pages. ᔢ ists companies undertaking this activity, records in intimate detail 33 incidents of boiler explo- sions. Both the technical causes and social impact ‘Historic Steam Boiler Explosions’ by Alan McEwen Sledgehammer – as most accidents resulted in deaths leading to Engineering Press Ltd ISBN 978-0-9532725-2-5 Atlas Forge Bolten suffered a boiler the first official moves to inspect boilers on a reg- A4 Hardback 185 pages Price £24.95 explosion in 1874 ular basis – are addressed within its pages. e-mail [email protected] Picture Sledgehammer Engineering Press Boiler explosions in textile mills, bleach- web www.sledgehammerengineeringpress.co.uk

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