News for Xlerplate® steel customers ISSUE 12 | SPRING 2008

SPECIAL FEATURE Understanding steel plate condition – page 5

SPECIAL FEATURES Case Studies Regular Features In this issue Understanding steel plate supply condition Major Metals – Gold Coast desalination plant Sales team contacts RPG Australia – wind farm contract Quick quiz Hot Seat News for XLERPLATE ® customers

ISSUE 12 | SPRING 2008

SPECIAL on in market right now, EATF URE Understanding steel plate condition – which means there is a lot of relevant page 5 information we want to communicate to you through the newsletter. We hope that our new and improved newsletter satisfies your needs for information about XLERPLATE® steel and its applications.

IN THIS ISSUE SPECIAL FEATURE Understanding steelS plate supply condition CASE STUDIES It has certainly been a challenging year Major Metals – Gold Coast Desalinati RPG Australia wind farm cont REGULAR FEATURES on Plant ract Sales team contacts Quick quiz for our industry. The global market for Hot Seat with Barry Duthie steel has been very buoyant, based on robust consumption in the developing In addition to the revamped Steel in Touch Hello everybody and welcome to the world and generally strong economic newsletter, we have undertaken two other first national edition of XLERPLATE® activity in major steel consuming markets. new and exciting initiatives to support our ® Steel In Touch. Consistent with the global situation, XLERPLATE customers. We are about to launch ® Australia has also experienced strong the new, comprehensive XLERPLATE Product In late 2007, we surveyed our readership demand for the full range of steel products. Information book and updated training DVD. and sought suggestions from you on ® how we might improve Steel in Touch. We have seen unprecedented demand These will be on show at our XLERPLATE We had an excellent response to the for XLERPLATE® during this period and display at the Australian Steel Convention survey and one of the main opportunities we have increased our production output on September 14-16 in Perth. for improvement we discovered, was to and worked our supply chain hard in an I hope you enjoy this edition of Steel In Touch. increase the scope of the newsletter to endeavour to satisfy the needs of our include content that was not confined to customers. Our customers are our focus and what was happening in specific states. we remain committed to supplying as much XLERPLATE® steel as we possibly can to the Based on your feedback, we have Australian market. Bernie Landy re-shaped Steel In Touch to give it a General Manager Industrial Markets national focus so readers have access to I would like to take this opportunity to thank BlueScope Steel a much broader selection of stories and our customers for their continued support information. There is certainly a lot going during this challenging period. [email protected] Steel: a global perspective

Steel market fundamentals both in Australia This combination of factors resulted in steel growth in China has averaged close to 16% and internationally are driven by global prices reaching record high levels in all per annum with 5% growth in India. factors over which individual steel producers major regions. Supply shortages of key raw materials have limited control. This has ramifications More recently, however, steel prices have (e.g. coking coal and iron ) constrained not only for the steel industry, but for the corrected on the back of slowing demand crude steel production in most regions in the whole Australian economy, as steel literally in the northern hemisphere, caused by the first half of 2008. The Queensland floods from provides a backbone for growth in sectors seasonal slowdown in Europe and the Middle earlier this year contributed to this situation, such as mining, engineering, construction and East. However, this correction has not been leading to reduced coal output which impacted manufacturing. reflected in imports into Australia due to the supply to major steelmakers in Europe, Japan In the first half of 2008, the steel market softening AUD. Meanwhile, a combination and India. experienced: of poor weather conditions and the Beijing Due to supply constraints and strong demand, Olympics has slowed construction activity • A shortage of key raw materials and related raw material markets have seen record in China. raw material cost increases contract values for hard coking coal and iron A slowing global economy is also likely ore (refer to Raw Material Prices chart). • Record high ocean freight rates which to impact the level of steel demand in the increased the costs of inter-regional trade For the 2008/09 contract year, coking coal second half of 2008. The outlook for emerging prices jumped by 200% compared to the year • Strong demand in emerging markets such economies remains sound, which consume prior and are now over USD300 per tonne. as India and China, which led to a global about 60% of global steel production. In the steel shortage three months to July 2008, industrial production

2 XLERPLATE® steel used in the manufacture of rail wagons for EDI Rail.

In February, multi-national mining company Steel Sheet Consumption There is no doubt that China continues to Vale (the world’s largest producer of iron ore) – Million Metric Tonnes be the most influential player in the world Source: CRU International announced a 65% price rise in iron ore fines, steel scene. The balance of global supply and an increase which has now been surpassed demand going forward will be dependent on by Rio Tinto and BHP Billiton. Both companies the extent to which China adds additional secured a 79.8% rise for iron ore fines and a capacity. India is also becoming a significant 96.5% rise for lump ore. force, and the expectations are that India will substantially increase its capacity, albeit from Raw Materials Prices a low base. Source: Steel Business Briefing BlueScope Steel, Australia’s largest manufacturer of steel products, including XLERPLATE® steel, has been steadily increasing the volumes it produces for a The supply/demand balance was particularly number of years (refer to Pattern Plate tight in China. This was exacerbated by the Production chart). Consistent with the global Sichuan earthquake which occurred in May situation, Australia has also been experiencing and resulted in a short term spike in demand stronger than expected demand and for galvanised sheet products used in the consequently supply/demand imbalances. construction of emergency shelters, further BlueScope Steel is maximising its production pushing prices upward. output and getting the most out of its supply In addition, Chinese steel production has been With regard to the global plate situation, robust chain in an endeavour to meet customer impacted this year due to difficulty with port activity in key end-use sectors has resulted in demand. Domestic customers are our focus and rail logistics, restricting access to coking further acceleration in demand in the past few and we remain committed to supplying as coal and iron ore. years, driving strong price growth: much XLERPLATE® steel as we possibly can Despite these constraints, global crude steel to the Australian market. • Shipbuilding demand has soared due production reached 815m tonnes in the first to the increase in global trade of many Plate Production: seven months of 2008, up by 6.1% compared commodities. Cumul. % Change to the same period in 2007. The global supply/ demand balance for steel remains tight, with • Investment in infrastructure and capital steel demand remaining robust, especially in equipment has been boosted by sustained emerging markets. economic growth, particularly in the developing world. According to CRU International, steel sheet demand was 6% higher in the second quarter Constraints in steel production have limited of 2008, compared to the same period last China’s ability to export, adding to the effects year (refer to Steel Sheet Consumption chart). of export taxes and high freight rates. During This resulted in steel buyers competing the first half of 2008, Chinese net exports of for supply and placing upward pressure on finished steel were 26% lower compared to By Bernie Landy steel prices. the first half of 2007. General Manager Industrial Markets

3 is forecast to require $25 billion in infrastructure spending in the next decade to support plate-intensive mining and deep-sea port expansions, such as that forecast for BHP Billiton’s (pictured). SA mining infrastructure set to boom

South Australia will require $25 billion to Connell Wagner Principal and Consortium Mr McKay said the infrastructure be spent on infrastructure over the next member Ron Ely said the development of expansion could result in South Australia decade on deepwater ports, regional shared, base engineering infrastructure retaining entire manufacturing processes. roads, rail connections, power plant, water, was vital for the economically successful “It’s a brilliant opportunity for South communications facilities, and more, transition of many of the state’s early Australian business. The challenge for the according to a South Australian Chamber exploration finds into operating mines. local industry is to be able to manufacture of Mines and Energy report authored by the ”In order to more effectively progress future quality products and provide specialised Connell Wagner Infrastructure Consortium*. government and private sector development, structures and integrated fabrication Professor Richard Blandy from the the Consortium is still creating the services. Mining companies will be Consortium said South Australian mining necessary data capture, strategic planning looking at integrated solutions, not just infrastructure spending over the next and coordination mechanisms,” Mr Ely said. buying steel,” Mr McKay said. 20 years could amount to $10 billion and Significant amounts The South Australian government has open the way to a Western Australian-like of steel formed the Resources and Energy Sectors mining boom. SCM Advisory Principal and Consortium Infrastructure Council (RESIC) in response “The impending demand in South Australia member Scott McKay said the projected to the study’s preliminary findings is staggering,” he said. “The dominating infrastructure expansion would naturally and recommendations. force will be the BHP Billiton Olympic Dam involve significant amounts of steel OneSteel Whyalla Steelworks Business mine, which is set to become one of the construction. Sustainability General Manager and world’s biggest open-cut mines. “Logically, a substantial amount of steel RESIC Member, Jim White, said RESIC This will be pivotal in influencing infrastructure will be involved in the has recommended the state government infrastructure decisions impacting overall expansion. take action to support mining industry South Australia’s mining fraternity and infrastructure by initially focusing on road “The steel industry will contribute a a whole range of other projects coming access and ports development. diverse range of materials including steel on stream. In turn this will require plate for fabricating mining assembly * The Consortium is led by University of South infrastructure rivaling the needs of the Australia economist Professor Richard Blandy; operation and storage containers, Olympic Dam expansion.” Scott McKay, Advisory Principal of supply chain desalination plants, deep sea ports, and and infrastructure specialist SCM Advisory; and Ron Ely, Resource Sector Development Manager potentially a power station.” for Connell Wagner in SA.

4 Understanding XLERPLATE® steel’s supply condition – part one

Understanding the conditions in which CONVENTIONAL ROLLING & THERMO-MECHANICAL XLERPLATE® steel is supplied is critically NORMALISING ROLLING important for all those involved in its use, fabrication, ordering and distribution. Using Ti (N,C) steel plate with appropriate mechanical 1200°C properties – such as strength, toughness and Temperature hardness – for specific jobs, each of which Non-ReX'n Temp. will have its own unique challenges and 900°C needs, means lower costs and more effective outcomes. Ar3 ~750°C Air Accel. Cooled Various plate standards, domestic and Cooled international, specify or provide a range of alternatives for the supply condition of steel plate. This article provides an overview of factors impacting the various supply conditions of hot rolled steel, as well as implications for Time the customer when choosing XLERPLATE® steel. The structure at this stage is one of coarse This process is known as Thermo-mechanical XLERPLATE® STEEL SUPPLY austenite. When this plate cools to room Controlled Rolling (TMCR). CONDITIONS temperature it results in a microstructure of Some steel manufacturers employ water spray fairly coarse grained ferrite and pearlite which cooling after rolling in a process known as Four typical supply conditions are: gives average strength and toughness. This accelerated cooling, alternatively known as process is generally known as hot rolling. • As Rolled Thermo-mechanical Controlled Processing • Normalised THERMO-MECHANICAL (TMCP) – TMCR and TMCP are terms used • Normalised Rolled CONTROLLED ROLLED interchangeably. This usually results in very • Thermo-mechanical Controlled Rolled fine ferrite/pearlite microstructure giving If the steel has micro-alloying elements such ® excellent strength and toughness. When discussing XLERPLATE steel as niobium, titanium, vanadium or aluminium supply conditions, it helps to have a basic added, there is a point during rolling where the Part two of this article will be published in the understanding of steel metallurgy as it relates austenite no longer recrystallises but remains summer edition of XLERPLATE® Steel In Touch to the plate rolling process. How steel is rolled in a deformed condition. This is known as the and will discuss the remaining plate supply affects the mechanical properties of the final non-recrystallisation temperature. The micro- conditions; Normalised and Normalised-Rolled. plate. This is shown schematically above. alloying elements help retard recrystallisation By John Dryden AS ROLLED CONDITION and grain growth. This leads to a finer ferritic National Technical Manager Uncoated grain size and helps improve strength BlueScope Steel When a steel slab is reheated in a reheat and toughness. furnace (~1200-1250°C), the steel forms a structure referred to as austenite. The effect If rolling is carried out below the non- of rolling on austenite and the change from recrystallisation temperature, but usually austenite to other structures (such as ferrite above the A3 (the temperature where the and pearlite), during the rolling process, austenite starts to transform into ferrite), DID YOU KNOW? significantly affects the properties of the steel. the structure at the end of rolling consists ■■ John Dryden is the National of fine ‘pancake’ shaped grains of deformed Technical Manager Uncoated, The slab begins to cool when it exits the austenite. Some rolling may also take place of BlueScope Steel. His furnace and is rolled. In the early stages of just below the A3 temperature to give optimal technical expertise is applied rolling the temperature remains high and the strength and toughness. to XLERPLATE® hot rolled plate deformation of the slab leads to new grains steel, manufactured to tolerances of austenite forming and growing within the On cooling to room temperature, the large that conform to Australian existing austenite structure. This occurs by a surface area of the pancaked grains allow Standards and ISO 9001 process known as recrystallisation and grain for a lot of ferrite nucleation sites and as International Quality Standards. growth. The deformation occurs as a result such gives a fine grained ferrite/pearlite of the rolling. microstructure which is both strong and tough.

5 Major Metals Queensland has constructed two gigantic steel caissons (below) from Grade 350 XLERPLATE® steel for the Tugun desalination plant.

Desalination plant: XLERPLATE® steel – just the ticket to win something to drink to XLERPLATE® steel customer Raymond Bertazzo never seriously considered winning a trip to Spain when he entered last year’s ‘Backing the Aussie Spirit’ campaign. But he and wife Trudie were soon sunning themselves in Valencia after Bertazzo Engineered was drawn as a grand prize winner.

The ‘Backing the Aussie Spirit’ campaign promoted XLERPLATE® steel’s quality, technical back-up, sales support and Australian-made qualities.

“I’ve been an XLERPLATE® steel customer for 11 years and purchasing BlueScope Steel products for over 20 years, but I never expected it would have anything Major Metals Queensland has constructed “Transport by Boom Logistics of these steel to do with an overseas holiday,” large steel caissons, pivotal to the Gold Coast casings from Dalby to Pinkenba in Brisbane Mr Bertazzo said. desalination project being built at Tugan. caused a bit of drama, especially travelling down the Toowoomba Range. They weighed In Spain the Bertazzos watched the Swiss Desalination works by separating salts from up to 115 tonnes, so progress was slow yacht Alinghi win the 32nd America’s seawater using a reverse osmosis process. and methodical.” Cup yacht race and experienced many The new plant will produce 125 megalitres of other highlights. drinking water per day by January 2009. By barge “The food and wine were excellent and Major Metals Queensland manufactured The caissons were then barged from Brisbane we did a lot of touring. The beaches two steel caissons for the GCD Alliance (the to Tugun and dropped into 20 metres of water were beautiful. company commissioned to deliver the project). around 1.5 kilometres off the coast, before These will be used for the intake riser that being driven 40 metres into the ocean floor “On Spain’s version of the autobahn we collects seawater and the outlet riser that by a 100-tonne piling hammer. From there, the were flat out on a Vespa and had trucks disperses the brine. intake riser is connected to the desalination whizzing past us at 140km/h – it was plant via a 2.8 metre tunnel which has been like something out of Mr Bean.” Both pipes were made from Grade 350 excavated around 40 metres below the ® XLERPLATE steel in 36mm, 40mm and 50mm sea bed. Bertazzo Engineered processes in excess thicknesses, and constructed in segments of 200 tonnes of XLERPLATE® steel before being welded together and encased The reverse process will apply to the outlet annually, specialising in laser-cutting in concrete. riser and tunnel. and fabrication. “We work to exacting Manufactured in sections More to follow standards so the quality of our material is paramount. The intake riser dimensions are 3100mm In light of the continuing drought, the ® in diameter and 66 metres long and it is Queensland Water Commission has announced “We choose XLERPLATE steel manufactured in three sections of six, 24 a range of measures for the state’s water mainly for A d a p ti n g t o c h a n g in g c o n d it io n s its excellent and 36 metres. The outlet riser is shorter supplies, including a proposal for six more k e e p s c h a m p i o n s i n t h e r a c e . and manufactured in two sections of desalination plants. consistency,” 18 metres and 36 metres. Mr Bertazzo It is predicted that almost one-third of south- said. “Our involvement with this infrastructure east Queensland’s water supply could come ® from recycled water and desalination plants project was to use XLERPLATE steel because X ERLP AL TE s ’ ® l e t s f le x ib il it y o fs u p p ly k e e p s y o u r within 50 years. customers in the race. That’s why you can rely on XLERPLA it was an easily available material and TE s t eel. To meet your customers’ needs, you need to control and tailor the deliveries of XLERPLATE steel.

PULL With XLERPLATE steel you get short lead times allowing you the capability of last minute choice when ordering, making you a champion with your customers and promoting repeat business.

What’s more, XLERPLATE steel’s flexibility of supply helps you with better stock control and asset management. That’s the competitive fitted our design brief,” said Major Metals edge XLERPLATE steel gives you. Queensland General Manager, Ina Hirovanaa.

Backing the Aussie Spirit Campaign - 2007

6 The wagon train for more steel

In order to help meet demand for steel locally, “By adding these new wagons to our current the new wagons to the 50 wagon-strong fleet Pacific National, upon request by BlueScope fleet, we will now be able to dispatch over will increase the dispatch capacity for wide Steel, is adding five new purpose-built tilt 450,000 tonnes of XLERPLATE® steel out of plate by up to 17,000 tonnes per year, with wagons to their fleet early in 2009. the plate mill each year,” said Nigel Attwell, each wagon designed to carry 65 tonnes of Customer Service Manager, Strip & Plate. XLERPLATE®.” This increase in the available number of tilt wagons is reflective of the overarching “Pacific National has been commissioned on BlueScope Steel strategy to improve its behalf of BlueScope Steel to build these new ability to meet local steel demand. tilt wagons,” continued Nigel. “The addition of

RPG Australia secures Capital Wind Farm contract

RPG Australia has secured a contract to Wattle Point, Hallett, Snowtown, and Cathedral manufacture wind towers for the Capital Wind Rocks – many of which have also been Farm at Lake George in New South Wales. constructed using XLERPLATE® steel.

The Capital Wind Farm is an expansive RPG Australia Wind Division General Manager undertaking, with an overall capital value in Mike Lewis said RPG Australia has had excess of $300 million. longstanding success using XLERPLATE® steel in its wind tower construction projects. Leading international wind energy company Suzlon Energy Australia awarded RPG Australia “XLERPLATE® steel has proven itself as the contract to manufacture 43 wind towers. a first-choice material for our wind tower manufacturing business. It meets our stringent The giant wind towers must be sturdy enough criteria in terms of performance quality. to withstand huge wind gusts of up to 210km/h We use steel from BlueScope Steel because and are built to precise international standards it is Australian-made, supports domestic using finest-quality materials. industry and offers flexibility advantages,” RPG Australia will use over 6500 tonnes Mr Lewis said. ® of Grade 350 XLERPLATE steel in the $20 million investment construction of the towers, which when “Wind energy is a growing global market. finished will stand approximately 80 metres “We’ll be working closely with BlueScope We are now seeing the signs of sustained high with a base diameter of 4.3 metres. Steel to meet Sulzon’s exacting standards and growth in investment in wind power in to manufacture the towers on time. Australia. This is particularly exciting for The towers will be manufactured in four us – and we are positioning ourselves to ”To fulfill the Capital Wind Farm contract, sections, then fully blasted and painted. take up the challenges of this clean energy RPG Australia will require an investment of They are fitted with platforms, cables and market segment.” ladders before being transported by road to approximately $20 million to expand its facility Lake George. in Dalby, Queensland, which will result in a When complete, the wind farm will be capable major boost for the local economy.” Mr Lewis of generating in excess of 400,000-megawatt RPG Australia, which acquired wind tower said this would create up to 45 long-term hours per year of electricity without any specialists Air Ride Wind in 2006, has become skilled jobs for Dalby. emissions from burning fossil fuels. This will a leading manufacturer of wind towers. offset the equivalent of approximately 390,000 “This project has had positive implications for a Its plant has manufactured and tonnes of CO emissions per year.* number of different regions,” Mr Lewis said. 2e supplied many of Australia’s existing wind *Calculated using the NSW pool greenhouse gas coefficient. farms including Starfish Hill, Lake Bonny,

7 ® In the hotseat XLERPLATE steel national sales team with Barry Duthie NSW/ACT QLD Matt Hennessy – Regional Sales Manager Tony Fotea – Regional Sales Manager [email protected] [email protected] 02 4275 3314 / 0410 312 113 07 3845 9351 / 0407 751 653 Phil Burke – Account Manager Jamie Cooper – Account Manager [email protected] [email protected] 02 4275 3388 / 0411 561 855 07 3845 9394 / 0407 377 355 Lube Dimovski – Account Manager Rob Bauer – Account Manager [email protected] [email protected] 02 4275 3536 / 0418 297 874 07 3845 9382 / 0407 544 833 Job title: State Manager OneSteel Steel & Tony Apps – Account Manager Martin Frylink – Account Manager Tube SA/NT [email protected] [email protected] No. of years with OneSteel: 18 02 4275 3536 / 0427 223 027 07 3845 9350 / 0427 160 895 My role and responsibilities involve: Zoran Sterjovski – Customer Service Officer Keven May – Customer Service Officer Satisfying customers and ensuring my people [email protected] [email protected] don’t get injured 1300 135 004 1300 135 004 My greatest working challenge: Ensuring all my people go home in the same VIC/TAS SA/NT physical condition as they arrived Simon Fieldsend – Regional Sales Manager Mike Hesketh – Regional Sales Manager The most important thing I’ve learned in [email protected] [email protected] business is: Nothing stands still 03 9586 2324 / 0418 325 836 08 8243 7352 / 0419 588 131 The secret to success is: Maintaining a Adam Cheeseman – Account Manager Dean Trenwith – Account Manager balance between home and work [email protected] [email protected] I like steel because: The people are genuine 03 9586 2282 / 0407 287 817 08 8243 7355 / 0418 840 161 I start my working day by: Reviewing the Maria Gounis – Account Manager Nathan Squires – Customer Service Officer day prior [email protected] [email protected] My favourite pastime: Chasing a little white 03 9586 2298 / 0418 386 972 1300 135 004 ball around 18 holes Scott Sheedy – Account Manager WA My favourite car: My Ford XR6 turbo [email protected] Elly Pilkadaris – Regional Sales Manager My favourite movie of all time: Rocky I, II, III, 03 9586 2273 / 0418 386 964 IV, V and VI [email protected] 08 9365 6665 / 0419 931 605 My favourite food is: Steak Florentine Peter Panteli – Customer Service Officer (Only Horsham people will understand) [email protected] Monica Macaskill – Account Manager My earliest childhood memory: I have 1300 135 004 [email protected] trouble remembering what I did five minutes ago 08 9365 6676 / 0448 976 862

My secret talent is: Many say drinking Greg Harbour – Account Manager

[email protected] If I had $1m to blow it would be on: Ensure all four of my kids’ futures were secure 08 9365 6650 / 0400 204 893

If I could have one person over for dinner, Nathan Squires – Customer Service Officer it would be: I’m greedy. I would like to have [email protected] my wife and four kids For technical enquiries call 1800 800 789 1300 135 004 Favourite holiday destination ever: Darwin

QUIZ: From which movies were each of the following quotes taken?

1. “I feel the need – the need 3. “I’m a cybernetic organism: 5. “Manny, look at the pelicans fly. for speed.” living tissue over a metal C’mon Pelicans!” (a) Independence Day endoskeleton.” (a) Pelican Brief (b) Speed (a) Judge Dread (b) Scarface (c) Top Gun (b) Terminator - Judgment Day (c) Storm Boy (c) Robo Cop 2. “Oh, they’ve encased him in 6. “It belongs in a museum!” carbonite! He should be very 4. “I AM THE NIGHT RIDER!!” (a) Jurassic Park

well protected, if he survived the (a) Ghostbusters (b) Indiana Jones: freezing process.” (b) Night Rider The Last Crusade (a) Star Wars: Empire (c) Mad Max (c) National Treasure 219 055

strikes back

Indiana Jones – The Last Crusade Last The – Jones Indiana Scarface, 6. 6.

(b) Star Trek 5.

Max Mad Day, Judgment – Terminator Back, Strikes Empire Wars: Star Gun, Top 4. 3. 2. 1. 0075 (c) Starship Troopers Answers: 32 9

The Steel in Touch Newsletter has been prepared for information purposes only. BlueScope Steel makes no representation or warranty as to the completeness or accuracy of the information contained in 8 the Newsletter and you rely on it wholly at your own risk. Xlerplate® and BlueScope are Registered Trademarks of BlueScope Steel Limited ABN 16 000 011 058. © 2008 BlueScope Steel.