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EDITORIAL Dear Readers,
Stalwarts pondered over a vision for Indian steel in 2020 at the recently held Worldsteel conference in Delhi. It was agreed that the variation and range of issues faced by the industry were numerous and a strong policy and implementation method can only help achieve the goal. According to industry insiders there is a possibility that India can produce 202 mt crude steel by 2020 equating to 150 mt of finished steel production. But this requires greater emphasis on smaller capacity expansions as large projects take too long to implement. Greenfield sites would be required to provide 60% of the increase from the present 72 mt crude steel production. It is well known that India is a net importer of steel – mainly special grades like line pipe; grain orientated etc. Adoption of new technologies is the need of the hour. Currently, infrastructure projects represent the largest market for steel growing at an average rate of 9.6% CAGR since 2002. The automotive sector has grown at an even faster CAGR of 14.4%, packaging at CAGR 8.2% and construction at CAGR 8.7%. Deliberations showed use of steel in construction in India is low. The ratio of the use of steel and cement being 0.29 compared with 0.36 in China and even more in western Europe. Per capita consumption was forecast to grow at 8% from 58kg in 2011-12 to 115kg by 2020-21. The mining sector contributed just 2.5% of GDP in 2011-12 – a low figure compared to contribution from industry of 6.8%. To produce 202 mt by 2020 the demand for ore would increase from 115 mt to 282 mt, coking coal from 43 mt to 121 mt, non-coking coal (for DRI) from 35 mt to 39 mt. The country is a net importer of coal and will require 108-110 mt to be imported in 2020. There is urgent need to increase beneficiation of low grade ore fines, with ores of 45%Fe content now. Industry experts called for beneficiation of the large piles of fines and slimes stockpiled at mines due to the preference for lump ore by Indian blast furnace operators. On the other hand, only about 40% of the scrap needs could be sourced within India with 5-6 mt imported in 2011-12. This was one of the reasons for the growth of coal based DRI which is melted in induction furnaces or could be used as a coolant in the BOF. There is also need for improved logistics services as major dependence on rail transport in the country and 70% of raw materials expected to be moved by rail in 2020 compared with 64% in 2011. In 2010-11, 183 mt of steel related cargo was moved by rail. This will need to increase to 300 mt by 2016-17 and 445 mt by 2020-21. The largest ports are located on the East coast – seven in total – and participation between private and public sectors are required to develop these and link them by rail to inland locations. Lastly, by 2020, more than 13 million people will be required to work in the Indian steel industry and there is already an acute shortage of metallurgical and refractory graduates. In this context we examined the various research and development activities undertaken by India when placed with the world leaders. The edition also carries insights into Tata Hitachi’s plans to grow its export base and Danieli’s HSM at Baosteel Meishan, China. Happy reading!
Disclaimer: This document is for information purpose only. Certain information herein has been acquired from various external sources believed to be reliable. While we have taken reasonable care to compile this report, we in no way assume any responsibility for any error or discrepancy in regards to information contained herein. Readers are requested to make appropriate judgment without any prejudice or compulsion.
(Rakesh Dubey) Steel Insights, December 2012
Contents 31 India’s illegal mining hunt leads to imports 32 Coking coal firms up in Nov despite low appetite in India 33 Ferro alloys show mixed trends in Nov 34 Steel sector challenges highlighted at four-day meet 35 NATCOM meet focuses on sustainable supply chains 36 Steel projects with 63 mtpa capacity in limbo: Verma 38 Tata Steel in pact with SMS Mevac on VIM 39 Tata Steel to commission Kalinganagar plant by July-Dec 2014 40 Essar Steel supplies steel plates to subsea tankages in North Sea 43 Steel companies report mixed Q2 results 45 Jayaswal Neco to expand capacity despite slowdown 46 SAIL consortium may sign pact for Hajigak project in Jan 51 Iron ore handling by major ports down 49.7% y-o-y 52 Railways freight traffic revenue up m-o-m in Oct 53 Macroeconomic indicators of India 54 Global crude steel production increases 55 Domestic flat and long markets 58 Price data 60 Production data 61 Ferro alloy price trend 62 Iron ore data 63 Summarised ferro alloys data
6 | Cover Story
R&D in India needs a big push India needs to invest in research in order to become efficient.
28 | INTERVIEW
Tata Hitachi looking at larger export share Managing director Ranaveer Sinha speaks on the company strategies.
37 | FEATURE
Auto sector gets a spurt from festive sales Maruti acts as dampener in otherwise upbeat October.
42 | Corporate
RINL plans larger dealership base Company launches unique rural dealership scheme.
47 | Technology
Danieli supplies state-of-the-art HSM to Baosteel Advanced technology ensures fast turnaround time.
Call 9163348243 for more details
4 Steel Insights, December 2012
R&D in India needs a big push Tamajit Pain
he Indian steel industry is now the fourth largest steel producer in the world with a growth rate of 9 to 10 percent. Production level is soon expected to cross the 100 million tons (mt) mark leveraged by developmental needs of the burgeoning Indian economy – currently one of the fastest growing economies in the world. Apart from a large domestic market, India’s steel industry has also benefited from indigenous availability of key raw materials such as iron ore. Entrepreneurs in the steel sector added 57 mt of capacity in the last two decades of deregulation. The last two decades have also seen far reaching changes in the contours of the
6 Steel Insights, December 2012
industry in more ways than one. The new units brought in new technologies to this century old industry in India. Existing units in both private and public sectors have undertaken extensive programmes of modernisation, expansion and debottlenecking. Most commendably, the new age entrepreneurs have shown a rare foresight in embracing state-of-the-art technologies and have innovated with alternate and mixed routes of production in keeping with the exigencies of raw material availability. With all these structural changes, the globalised industry has proved its resilience during economic downturns of 2002 and 2008.
Time has now come for the industry to consolidate the gains made in the last two decades, to sustain and further add to the growth momentum generated by favourable changes in the economic environment and policy shift towards liberalisation. This would also mean course correction wherever needed, based on critical evaluation of its performance so far. Industry experts believe that a second push to the Indian steel industry must come from within through focused efforts to enhance efficiency in all areas of operation – from mining of raw materials to finishing of the final products. This must come in two ways – firstly, by improving operational
Cover Story efficiency of steel production through benchmarking to best practice levels globally; secondly, and more importantly, by continuous and concerted R&D efforts to add to the body of existing knowledge and adapting such knowledge for application in Indiaâ€™s steel industry. All such efforts for upgrading of technology profile of this resource-intensive industry must centre around and calibrate issues of sustainability and economic development. In this context, it is imperative to find out the research and development needs of the steel industry in which small units co-exist with large and very large producers. Till now R&D efforts, whether sponsored by the government or by the corporate, have been sporadic and have taken place mainly in the field of product engineering. Little attention has been paid towards better utilisation of domestic raw materials for increasing efficiency of Indian steel plants. It is therefore necessary to set out a roadmap to channel research with a focus on beneficiation of our own raw materials thereby leading to higher efficiency and productivity. Compared with other steel producing countries, India is definitely lagging behind in terms of efficiency as enough attention has not been paid to research and development. The industry, therefore, needs a roadmap for increasing R&D in their organisations thereby reaping the benefits of improved productivity and efficiency in the long run. In an increasingly globalised and competitive marketplace, such efforts are necessary for the survival and growth of the individual producers. The policy makers should also devise an appropriate technology and R&D policy for the Indian steel sector aimed at maximising economic welfare of the nation at large for the present and for future generations. Current status
Essentially, steel is composed of iron and small amounts of other elements like carbon, manganese, silicon etc. Steel by itself is one of the most environment friendly products used in our daily lives. It has been a material of choice for innumerable applications all along in the past, and it is likely to continue to be an important material for use in the foreseeable future.
8 Steel Insights, December 2012
The world steel production has been Indian perspective increasing from year to year and has already The Indian steel industry is characterised by crossed the 1 billion tons mark for the first a mix of old and new technologies exhibiting time in 2004. During the intervening period, poor to excellent techno-economic steel production has grown very fast, and in performance parameters. The origin of the 2010, global steel production has exceeded modern iron and steel industry in India 1.4 billion tons. The rapid increase has been dates back to pre-independence era when led by China accounting for more than 45 the Tata Iron & Steel Co Ltd (TISCO) was percent of world steel production. China is set up in 1907 at Jamshedpur. At the time not only the largest producer of steel (627 of independence in 1947, the country had million tons), it is also the largest consumer three ore based steel plants (TISCO, IISCO, of steel (576 million tons) followed by the VISL) and a few electric arc furnace (EAF) United States and India. based mini steel plants. An analysis of the technology profile Between the fifties and the seventies, large of the world steel industry shows that 70 integrated steel plants were set up in the public percent steel is produced through the Basic sector at Bhilai (BSP), Durgapur (DSP), Oxygen Furnace (BOF)/LD Convertor Rourkela (RSP) and Bokaro (BSL), and Steel route, 28.8 percent through electric steel Authority of India (SAIL) came into being as making route and the balance 1.2 percent the largest steel producer in the country. Plants through the open hearth route. The open like Rourkela Steel Plant (RSP) adopted the hearth route of production is almost extinct state-of-the-art technologies of the time, from the world map except in some of the namely LD steel making. Another greenfield erstwhile CIS countries like Russia, Ukraine public sector plant i.e Visakhapatnam Steel etc. Another technical feature of the world Plant (VSP) was set up in the 90s, which steel industry is its increasing output of incorporated a few modern technologies and continuously cast steel thereby phasing out practices of the day. the obsolete ingot casting route. In several The economic liberalisation of the 90s countries, the continuous casting ratio is witnessed the entry of several large integrated as high as 100 percent and in most of the steel plants in the realm of private sector technologically advanced countries, the ratio (Essar Steel, JSW Ispat Steel and JSW Steel). varies in the range of 90-95 percent, global The country experienced rapid growth in steel average being 95 percent approximately. making capacity mainly owing to two factors The iron and steel industry is a major â€“ new players streaming in to join the race contributor of greenhouse gases (GHGs), and modernisation and expansion of existing particularly carbondioxide, which is one of plants. During this period, a large number the main contributors for climate change of coal based sponge iron plants and electric and hence a major concern of the world induction furnace based steel making plants iron and steel fraternity. Naturally, the main came into existence. With these, production agenda of the steel producers across the capacity of steel increased from 21 mt (crude globe is directed towards development of steel) in 1990-91 to over 78 mt in 2010-11. strategies and technologies Year-wise Steel production and consumption to substantially reduce consumption of coal and Crude steel Growth Finished steel Growth Period bypass the use of carbon in production (MT) (%) consumption (MT) (%) iron and steel production as 1991-92 17.1 14.38 far as possible. Towards this 1996-97 26.5 9.2* 23.3 10.1* objective, steel companies all 2001-02 31.9 3.8* 28.5 4.1* over the world are investing 2006-07 50.8 9.7* 46.8 10.4* in state-of-the-art iron and steel making technologies, 2007-08 53.8 6.0 52.1 11.4 and old practices and 2008-09 58.4 8.5 52.4 0.4 uneconomical plants are 2009-10 65.8 12.7 59.3 13.4 being phased out. China 2010-11 69.6 5.7 65.6 10.6 has also come up a strategic 2006-11 8.4* 9.6* agenda to close smaller, energy intensive units. * 5-Yearly Growth (CAGR) Source: Ministry of Steel, GoI
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Cover Story In 2010, India produced 68.32 mt crude steel and was ranked the fourth largest steel producer in the world, after China, Japan and the US. The industry is growing fast at the rate of 9-10 percent and such a growth rate is considered necessary to sustain the economic development of the country. Per capita steel consumption in India is low at 55 kg as against the world average of 200 kg. This justifies the need for a rapid increase in capacity and production of steel in the years to come. As per the present projections, it is expected that India will emerge as the second largest steel producer within the next 2-3 years. With such rapid growth continuing, it is projected that India’s ambitious target of 200 mt steel production by 2020 may also get fulfilled. The greenfield steel plants set up in the 90s or thereafter, have adopted most of the modern, state-of-the-art technologies. Within a very short span of time, most of these plants have expanded their capacities manifold, adopting thereby clean and green state-of-the-art technologies. Plants like Tata Steel have made special efforts in the last two decades to gradually replace most of the older facilities, thereby checking obsolescence to a great extent. However, the pace of modernisation, renovation, and expansion in other older plants remained slow, resulting in technological passé in the plants. This, together with constraints in raw material quality, summarily explains the poor technoeconomic performance of these steel plants in the country. This is particularly true for older production facilities in public sector plants of SAIL and also in the mini steel sector. To improve the technological face of the existing plants and also to sustain the projected high growth rate, there is a massive need for concerted technology development and research & development (R&D) programmes in the iron and steel sector in India. Technological profile
Globally, there are two main process routes for steelmaking – the “primary or integrated route” based on Blast furnace (BF) and Basic oxygen furnace (BOF)/LD Converter using iron ore as the basic raw material and the Electric Arc Furnace (EAF) route using steel scrap as basic raw material with or without sponge iron.
10 Steel Insights, December 2012
Compared with other steel producing countries, India is definitely lagging behind in terms of efficiency as enough attention has not been paid to research and development. In India, steel is produced adopting three main process routes – Basic Oxygen Furnace (BOF), Electric Arc Furnace (EAF) and Electric Induction Furnace (EIF). An interesting feature of the Indian steel industry is that about 32 percent of total crude steel production comes from the electric induction furnace (EIF) sector. This is the one of outcomes of liberalisation and is hardly found in any developed or developing countries. With 23 percent steel being produced through the EAF route, proportion of total electric steel making in India has crossed 55 percent. Only the balance 45 percent steel is being produced through the BF-BOF route with marginal quantity from the Twin Hearth Furnace (THF). Metallic iron inputs used for steel making through the three process routes vary widely from plant to plant. Hot metal produced in Blast Furnace and Corex Furnace is the predominant source followed by direct reduced iron (DRI) produced in gas based or coal based plants and the last but not the least is the steel scrap. In these processes scrap has a dual role to play – while in BOF it serves mainly as a coolant, in standalone Electric Furnaces, it is the chief source of metallic iron for direct melting. The structure of the Indian iron and steel industry is quite diverse. On the basis of inputs/feed-mix used in iron and steel making processing, the profile of the Indian steel industry has been summarised under the following sub-groups: ♦♦ Integrated steel plants comprising Coke Oven – sinter plant - Blast Furnace (BF) – Basic Oxygen furnace (BOF)/Twin Hearth Furnace (THF): using coking coal and iron ore (lumps/sinter) as basic inputs. ♦♦ Integrated steel plants comprising Pellet Plant - Corex Furnace – Basic Oxygen Furnace: using primarily non-coking
♦♦ ♦♦ ♦♦
coal/ weak coking coal and iron ore (lumps/pellets) as basic inputs. Integrated steel plants comprising gas based Direct Reduced Iron (DRI) plant/ Blast Furnace – Electric Arc Furnace (EAF): using natural gas, Coke/Coal and iron ore (lumps/pellets) as basic inputs. Integrated plants comprising coal based Direct Reduced Iron (DRI) plant– Electric Arc Furnace (EAF)/ Electric Induction Furnace (EIF): using noncoking coal and iron ore (lumps) as basic inputs. Integrated plants comprising coal based Direct Reduced Iron (DRI)/ Blast Furnace (BF) – Electric Arc Furnace (EAF)/ Electric Induction Furnace (EIF): using iron ore, non-coking coal and coke as basic inputs for steel production using hot metals from Blast Furnace to partially substitute DRI in EAF to optimise power/ electrode consumption. Mini Blast Furnace (MBF) – Energy Optimising Furnace (EOF): using coke, iron ore lumps and scrap as basic inputs. Standalone Electric Arc Furnace (EAF) / Electric Induction Furnace (EIF) units: using steel scraps and purchased DRI. Standalone Mini Blast Furnaces (MBFs): using mostly iron ore lumps and coke as basic inputs producing pig iron mostly for iron castings. Standalone gas/coal based DRI Furnace: using iron ore lumps/pellets and natural gas & non- coking coal. Standalone Hot Rolling/Rerolling Mills: using purchased/imported semis as basic inputs for production of mostly long products. Standalone Cold Rolling Mills/ Processing Mills: using purchased/ imported HR/CR coils as basic inputs for production of CR/Coated flat products.
Designing, engineering and manufacturing capability of iron and steel plant equipment in India is limited. Therefore, in most cases, technology is imported, and equipment and machinery is designed and fabricated out of India. This is particularly true for large plants viz, the integrated steel plants, which is why the capital cost of such plants is excessively high. The high capex is one of the major deterrents for growth and development of Indian steel industry. It is also one of the primary reasons for small, medium and first generation steel entrepreneurs for selecting cheaper routes of steel making viz. the induction furnace route with or without captive sponge iron facilities. With the setting up of greenfield steel plants based on modern state-of-the-art technologies and also gradual phasing out of old and obsolete facilities in the course of modernisation and expansion of existing plants, the technological profile of the Indian steel industry has been continuously changing for the better, ensuring higher productivity, improved quality and competitive cost. Since availability of high grade iron ore as well as lumpy ore is limited, processes such as beneficiation and agglomeration are receiving prominence. Energy conservation and environment friendly measures like recovery of waste heat from hot blast stoves, sinter cooler, coal based sponge iron, Pulverised Coal Injection (PCI), Coke Dry Quenching (CDQ), Top pressure Recovery Turbine (TRT) etc and charging of hot DRI and hot metal in EAF are drawing attention of the industry.
12 Steel Insights, December 2012
The industry has started thinking beyond conventional continuous casting towards thin slab casting. Here we take a look at salient features of major iron and steel making technologies, particularly in the context of integrated steel plants. Coke making
Coke making is a high temperature dry distillation process that removes and captures the gaseous chemicals in coal, leaving a residue of solid and porous lumpy mass of carbon known as coke. Coke serves four basic functions in the blast furnace iron making. Besides being the sole reductant to reduce iron ore into iron, it is the chief source of heat required for the reduction process. Solid coke also provides the required permeability inside the blast furnace to enable gases to pass through the bed and supports the heavy column of material in the furnace. Most of the integrated plants in India have set up top charged by-product coke oven batteries and some like JSW Steel, Jindal Steel & Power Ltd (JSPL) and Tata Steel have set up non recovery and heat recovery ovens. A few plants have also adopted CDQ in their quest for achieving the environment norms. The scenario of coke making has been changing over the years on techno-economic and environmental considerations. From the conventional top charged, low and medium height coke oven batteries, the present trend is to go in for taller batteries and leak proof oven doors to economise on land use, increase productivity and reduce
environmental pollution caused due to oven leakage. SAIL, RINL, Neelachal Ispat have installed 7-metre tall batteries. Several plants have adopted pre and post carbonisation techniques to enable economic production of coke using inferior quality and cheap coking coal in an environment friendly manner. Towards these objectives, Stamp Charging and Partial Briquetting of Coal Charge (PBCC) have been adopted respectively by Tata Steel and SAIL plants, particularly with an aim to improve productivity and quality of coke even with relatively inferior coal. RDCIS, SAIL has developed a computerised coke oven heating system, which ensures consistent coke quality, reduced energy consumption, improved battery life and avoids wrong pushing. Life of by-product recovery coke oven in India remains much lower as compared to Japan or other western countries. Some of the by-products released during coke making are carcinogenic. This is an area of concern and hence control on emission and by-product recovery is very important. Some steel plants in India like Tata Steel have made special efforts to reduce the stack and other emission in top charged as well as stamp charged batteries. Iron making
Iron making is the process of extracting iron from iron ore (oxides). This is primarily done in the blast furnace using coke made from coking coal, which is the most widely adopted technology for iron making in view of its scale of operation and thermal and
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Cover Story chemical efficiency. BF iron is supplemented by Direct Reduced Iron (DRI) produced in gas based or coal based plants. Of late, Smelting Reduction processes like Corex and Finex have been developed to supplement the production of iron. The salient features of three routes in the Indian context are as follows: BF iron making There are around 50 large and medium sized blast furnaces in India; and their sizes till recently varied in the range of 530 cubic meter to 3200 cubic meter. Over the years, quite a few older furnaces have been phased out or upgraded to be equipped with some of the latest technological innovations such as Bell Less Top charging, Coal Dust Injection, Oxygen enrichment, High Top Pressure, higher hot blast temperature, etc. Reduction of coke rate by injection of coal or other substitutes is gradually becoming the main agenda of Indian blast furnaces to substitute the use of scarce and costlier coking coal. However, overall scenario in the BF sector in India, particularly the older installations, is pretty bleak and a lot needs to be done to improve the level of technology and techno-economic parameters through well-defined technology intervention programmes. Since the availability of lumpy ore is very limited, there is a need for charging prepared burden (sinter & pellets) in place of lumps. Successful use of pellet in BF is also expected to increase bed permeability inside BF which not only improves furnace operation, but also enables higher coal injection thereby reducing coke rate. On account of the spiralling prices of raw materials (especially coking coal and coke), there is increasing need to carry out research on the following to make blast furnace iron making cost competitive:
• A chieve benchmark norms in consumption of vital raw material inputs; • Harness the thermal and kinetic energy of the entire system; • Increase the BF campaign life; • Produce good quality coke from cheaper coal blend; • Produce sinter and pellets from cheaper iron bearing materials; • Beneficiate inputs and reduce slag generation. Sponge iron making Direct reduced iron (DRI) or sponge iron is the solid metallic iron obtained upon direct reduction of high grade iron ore. There are two established process routes – one, a gasbased process using natural gas and the other, a coal-based process using non-coking coal. There are further two gas-based DRI processes in the world i.e. MIDREX and HYL-III (now called Energiron) and both have been successfully adopted in India. Essar has also developed and mastered the hot charging of gas-based DRI technology that remarkably reduces power consumption in EAF steel making. Since natural gas availability in India is limited besides being very expensive, these processes have not found wide acceptability. To reduce the dependence on natural gas, Essar Steel is setting up a new gas based plant using Corex gas for reformer heating. JSW Steel, on the other hand, is setting up one DRI plant using Corex gas as process gas in place of natural gas utilising the concept adopted in Saldhana, South Africa. A revolutionary and challenging new alternative likely to be suitable for Indian conditions is non-coking coal gasification by the well-established coal gasification process of Lurgi and use of the synthesis gas (syn-gas) thus generated as reductant in shaft furnace to produce gas based DRI.
JSPL is putting up two gas based modules at Angul, Orissa using syn gas produced from coal gasification. Besides all the other advantages already mentioned, the process is also quite environment-friendly. Some of the coal based plants (Jindal Steel & Power Ltd, Raigarh, Tata Sponge and others) have also taken a number of initiatives to improve efficiency and address environmental issues. Today, India is the world’s largest producer of sponge iron as also of coal based sponge iron. In 2010-11, total production of sponge iron was reported to be around 27 million tons, of which the contribution of coal based plants is approximately 75 percent. A large number of coal based plants of smaller modular size of 50-100 tpd or below have mushroomed recently, adopting indigenous and retrofitted technologies. These plants are trailing behind in terms of productivity, quality, energy efficiency and environment friendliness. To address the problem of quality, the BIS specification for coal based sponge iron needs to be revisited by specifying a cap on the minimum level of metallisation, Fe metallic and Fe total to qualify as DRI. The sector also requires stricter enforcement of pollution control measures. Complete utilisation of char (Dolochar) generated from coal based plants remains a chronic problem and R&D solutions may be needed to address the same. Alternative iron making Some alternative iron making technologies are as follows: Corex iron making Corex is a proven smelting reduction process developed by Siemens VAI for the cost-effective and environment friendly production of hot metal from iron ore (lumps & pellets) and coal without resorting to coke making. In India, JSW Steel has successfully adopted the Corex process (C-2000 Module) in Karnataka. Finex iron making
There is a need to increase R&D investment to at least 1 percent of total turnover in the immediate future by 2015-16, which may be increased to about 2 percent in the next 10 years by 2020.
14 Steel Insights, December 2012
The limitations of the Corex process with respect to use of iron ore fines directly led to the development of Finex process at Pohang, Posco, South Korea. In this plant, the process has been successfully demonstrated at 1.5 million ton modular capacity. The process seems particularly relevant for high alumina and high phosphorous Indian iron ore and
Cover Story therefore positioned to become a technology of choice for future iron making. ITmk3 iron making ITmk3 process uses low grade iron ore and non-coking coal to produce high purity iron nuggets in a rotary hearth furnace. The process is relatively less energy intensive, less capital intensive and more environmentfriendly. The first commercial plant (0.5 mtpa) is in operation since 2005. Steel making
There are three main process routes for steel making in India namely, BOF, EAF and EIF which together contribute over 98 percent of total steel production. While BOF and EAF processes are well established processes to produce quality steel, for high end product, EIF units are handicapped to produce high quality steel and mostly cater to the need of construction steel. Salient features of different process routes adopted in India are as follows: BOF steel making In the BOF steelmaking process which is commonly known as LD process, molten hot metal from blast furnace is poured into a BOF vessel where it is mixed with scrap steel. Pure oxygen is blown into the mixture through a lance. The carbon and silicon in the hot metal are oxidised generating huge quantities of heat which melts the scrap and produces molten steel. In India also, the obsolete open hearth process of steel making has been phased out in favour of BOFs. The left out OHFs have been converted into Twin Hearth Furnaces which are relatively more energy efficient and are operating at BSP and ISP. However, these are also being phased out soon. Some of the steel melting shops are still far behind in adopting modern practices and are operating at much lower level than the international benchmark. In the area of process development for handling and utilisation of SMS slag and sludge in steel making process too, the Indian steel plants have failed to keep pace with their international counterparts. Worldwide attention is being focused towards reducing the quantum of slag generation and utilising them gainfully so that wastes become valuable materials. Besides, many processes are being mastered
16 Steel Insights, December 2012
to use the generated solid and liquid wastes resulting in waste recycling and zero waste disposal. These are still areas of concern in the Indian industry. EAF steel making Electric arc furnace is the second most predominant process of steel making contributing about 30 percent of global steel production. In India, a large number of EAFs have been phased out in favour of EIFs in the post-liberalisation period and today, the contribution of EAF has been reduced to about 23 percent. Notable features of these units are geographical distribution in the country and also catering to the requirement of alloys and value added steel in the country. Today, there are 36 units in the EAF sector having divergent sizes and technology profile. Units like Essar, the erstwhile Ispat, JSPL and Bhushan have adopted large, world class EAFs including DC EAFs and Conarc Furnace fitted with most of the modern gadgets and innovations. Electric Induction Furnace steel making India is the largest producer and user of induction furnaces for production of steel. Today, there are 1,074 operating induction furnace units with total capacity of over 24.4 million tons producing approximately
20 million tons of steel which accounts for 32 percent of total steel production in the country. The salient feature of this technology is that the units are very flexible and can be set up at lower capital costs. This sector has proved to be a good source in making available structural steel at all corners of the country without the use of coking coal and iron ore with minimum emission of carbon dioxide gas or other GHGs. However, most of units have installed captive coal based DRI units thereby increasing the environmental pollution and carbondioxide emission. The induction furnace industry is undergoing changes in terms of its size profile, adoption of continuous casting, adoption of secondary refining etc. However these improvements are not significant and these initiatives need to be adopted by others for survival of the industry. Efforts are also necessary on the part of the industry and government to address the quality problems by suitable technological interventions. These may include finding out ways and means to refine the steel, if possible in the IF furnace proper or outside the IF (Ladle Refining Furnace and Induction Refining Furnace) to reduce the harmful elements viz sulphur, phosphorous, inclusions, slag entrapment etc. and thereby make quality steel as per relevant standards.
We must create and develop the required infrastructure for research, identify relevant research programmes, develop a dedicated team and provide adequate budget.
Secondary metallurgy The steel making process is usually followed by post-treatment including a number of diverse metallurgical operations, referred to as ‘secondary refining or secondary metallurgy’ to improve the quality of steel and overall productivity. Secondary metallurgical practices have been adopted by some of the integrated plants and alloy and special steel producers for the production of high quality steel. However, there are still gaps in this area because of which some of the Indian plants are unable to produce stringent quality steel for high end applications. Continuous casting The liquid steel produced in steel melting shops is converted into solid intermediate products by casting into specific shapes, adopting the ingot casting or continuous casting process. Today, ingot casting is becoming obsolete and the method of choice is continuous casting which offers several advantages such as improved energy efficiency, reduced emissions and reduced water utilisation due to the elimination of slabbing mills and billet mills, high yield in excess of 96 percent and hence high productivity, among others. Most of the integrated steel plants and EAF units in India have adopted the continuous casting technology and proportion of continuously cast steel has reached 70 percent. However, still 30 percent steel is cast through the obsolete ingot casting route mainly by some of the integrated plants and most of the EIF units. In view of increasing demand for productivity, quality and consistency, the steel plants are expected to switch over to CC route and also improve the casting technology in line with the modern technological innovations.
18 Steel Insights, December 2012
Near net shape casting The present trend world over is to cast a profile, which is very near to the final product in size and shape (called Near Net Shapes). Casting of thin slab, beam blank, near net shape strip casting also known as direct strip casting (DSC), and thin strip casting falls under this category. Technology for casting of thin slab, beam blank is well established today on a commercial scale. Thin slab caster coupled with on- line hot rolling stands has been available on full commercial scale producing most of steel grades and has been also implemented in India at JSW Ispat Steel formerly, Isapt Industries and Bhushan Steel. Tata Steel and Essar Steel are in the pipeline. JSPL has commissioned two beam-blank casters. ISP (SAIL) is setting up one 4-strand beam blank/bloom caster for production of H Beams upto 700mm. Near Net shape strip casting is the futuristic technology and India would do well to develop as well as adopt this technology. Rolling mills & processing lines
Hot rolling mills Several state-of-the-art hot rolling mills have been set up by the steel plants, and others are
in the process of acquisition of such mills. JSW Steel has recently commissioned one of the most modern and the widest hot strip mills (2.2 m wide) in India. Bhushan Steel and Essar Steel have also set up modern hot strip mills adopting the CSP route recently. Tata Steel is in the advanced stage of setting up a second hot strip mill adopting CSP technology. Essar Steel has also set up the widest (5 m wide) and one of the most sophisticated and state-of-the-art plate mill capable of producing all high quality plates including API, Q&T and normalised plates hitherto imported from abroad SAIL (RSP) is already setting up a wide (4.3 m) plate mill with all modern features. Modern bar and rod mills have been set up by JSW, JSPL, Tata Steel and others which are capable of rolling products with tight dimensional tolerances. SAIL is also setting up a universal Rail mill at Bhilai Steel Plant. Older hot rolling mills however, are still handicapped with obsolete rolling technology and practices resulting in poor productivity, poor dimensional tolerance and higher energy consumption. The level of technology in these mills has to be changed through modernisation and renovation. Cold rolling mills Like HRMs, the CRM sector is also getting a facelift with setting up of modern, stateof-the-art mills with best productivity and quality. To improve the overall yield and reduce the scrap, PLTCM (pickling line and tandem cold rolling mill) has been installed. Seeing the success of PLTCM at Tata Steel and Essar, many other steel producers such as Bhushan Steel are following suit. Tata Steel is planning to set up a wider PLTCM at Kalinganagar. JSW Steel and Uttam Steel have established twin stand reversing mill in recent times.
R&D investment (in Rs Cr and as % of turnover) in India Company
25 ( 0.21%)
Source: Ministry of Steel, GoI
Cover Story The annealing technology in cold rolling mills has also undergone a big change in the country in the last few years. The need for product consistency and high strength steel grades is growing and this seems to be the major driver for the introduction of Continuous Annealing Technology in the country. Tata Steel is in the process of establishing the first CAPL (0.5 million tons annual capacity) in association with Nippon Steel Corporation, Japan. Other steel majors (Essar Steel, JSW Steel, Bhushan Steel etc) also have plans to adopt continuous annealing. Processing lines Finishing lines, like galvanised and colourcoated, have undergone a sea change for the better. Till recently, most of the galvanising units were producing only zinc coated steel, primarily for the housing sector. But today, demand for galvanised steel for engineering applications is on the rise. Secondly, the galvanisers normally produce Zn-Al Coatings. But today, Zn- Mg, Zn-Ni, AlSi etc. are becoming popular and hence the steel producers are expected to gear up for the new requirement. Further, products like Galvalume and colour-coated, pre-painted and pre-coated steels have become popular for applications such as roofing and cladding. Several Galvalume lines and colour coating facilities have been set up (Uttam, JSW, Bhushan, Sree Pre-coated Steel (Essar), National Steel etc), and Tata Steel â€“ Blue Scope JV is likely to be commissioned shortly. Production of CRGO electrical steel sheets has so far remained a challenge and technology is also not readily available from abroad. Therefore, the Indian steel industry has to take up this challenge to indigenously develop the technology and produce CRGO electrical steel sheets including amorphous sheets for transformers. Year-wise disbursement of SDF funds during last 5 years S. No.
Investment (Rs. Crore) 19.41
20 Steel Insights, December 2012
Beneficiation & agglomeration of raw materials
Presently, most of the steel plants wash and (partially) beneficiate their primary raw materials particularly, iron ore and coal. But adoption of modern or deep beneficiation techniques has been very limited. Indian coals are characterised by high ash content with very difficult washability characteristics. These coals require high precision washeries with much finer technological controls. These are not available in the washeries of Coal India Limited (CIL), which is the main supplier of washed coal in India. As a result, against CILâ€™s commitment to supply washed coking coal with 17 percent ash, actual ash content of coal being supplied is 19-20 percent. This has resulted in dependence on imported coking coal for more than 75 percent in plants like SAIL, to meet the quantitative gap and also to meet quality requirements. Tata Steel has adopted superior beneficiation technology and is producing 13-14 percent ash coal with good yield. Tata Steel is also pioneering towards production of 8 percent ash coking coal for the first time in India. However, scenario on iron ore and coal beneficiation remains unsatisfactory and requires improvement. It is the need of hour that CIL undertakes necessary due diligence of their existing and upcoming washeries to explore the possibility of further lowering ash content from the current level of around 20 percent to at least 12-13 percent. This is one of the biggest challenges facing Indian steel industry and must be addressed on priority basis, experts feel. Because of the specific nature of the feed materials, plants end up with high volume of slag resulting in poor productivity and higher energy consumption. The undesirable gangue from ore and coal needs to be removed as early as possible in the overall process, and wherever possible at room temperature. This calls for extensive beneficiation of iron ore and coal by developing relevant technologies. In India, the reserves of prime coking coal is very low and most available reserves of coking coal fall under the low volatile medium coking (LVMC) coal which are not used in iron making because of technological limitations in washing these coal, which are inherently of very high ash content (2535 percent), with optimum yield in the conventional washeries. Coal India Ltd and
Status of SDF assisted R&D Projects No. of projects approved since inception (1998)
Total cost of the 68 projects ( Rs. Crore)
Total SDF assistance (Rs. Crore)
No. of Projects Completed so far
No. of Projects stopped
No. of Projects under implementation
steel companies must find out some alternate and innovative method for beneficiating such coal for the use in iron and steel industry. Present status of R&D
The first R&D Laboratory (or R&C Laboratory) in steel sector in India was set up in 1936. SAIL set up their R&D Centre in 1972. Newer plants, such as RINL, JSW, Essar, Ispat and JSPL came into being in 1990s. Most of them have R&C set up and R&D laboratories are at different stages of development. Besides these steel plants government has set up several national and regional Laboratories and institutes under CSIR under Control of Ministry of Science & Technology. Among them, National Metallurgical Laboratory (NML), Jamshedpur, Institute of Minerals and Materials Technology (IMMT), Bhubaneswar and to some extent AMPRI, Bhopal and ISM, Dhanbad are associated with R&D in iron and steel including minerals and fuels. In addition, Academic Institutes like IIT, Kharagpur, IIT, Kanpur and others are also engaged in carrying out sponsored research work in the area of iron and steel. Among the steel companies, substantial R&D is carried out only at Tata Steel Ltd., Jamshedpur and Research & Development Centre for Iron & Steel (RDCIS), SAIL, Ranchi. Both these companies have accomplished some significant work in the area of product development. However, major focus of work in these companies generally relates to incremental technology development in order to address the present and short term needs of various production units viz. improvement in energy efficiency, reduction in cost of production and short to medium term product development. Their contributions towards disruptive technology development like innovative and path breaking processes or technologies have not really been noteworthy. No doubt,
Cover Story some sporadic efforts were made but nothing notable has been commercialised. This is mainly because of limited interest and low priority accorded to R&D by the management of the steel companies, thereby resulting in limited allocation of resources â€“ funds, time, infrastructure and dedicated manpower as well as lack of high-end visionary research programmes in the pursuit of development of innovative technologies. The R&D policy also varies from company to company. For example in PSU steel plants of SAIL and RINL, the approach is mainly bottom-up. Though some projects of basic research and scientific investigation are pursued, majority of the programs at RDCIS are plant driven, focusing mainly on plant performance improvement lacking long term strategic issues. In Tata Steel, top-down approach is pursued in respect of strategic and thrust area projects under which specific projects are pursued by the R&D Centre. Tata Steel has taken up some major initiatives and have identified several thrust area projects for development of new technology to reduce ash in Indian coking coal to 8 percent without reducing yield, finding ways and means to utilise iron ore slimes in iron making, generation of hydrogen gas for use as fuel from the excess heat of the steel plants and developing next generation steels for light weight automobiles etc. JSW Steel also pursues a top-down approach. A sub-committee of the board monitors and reviews R&D projects. JSW Steel has also initiated programmes to develop process for beneficiation of low grade iron ores and BHQ, utilisation of plant wastes including dust, sludge and slime, briquetting of coal fines for Corex, etc.
NML, Jamshedpur, IMMT Bhubaneshwar, BESU, Howrah and some of the IITs have recently taken up some innovative R&D programmes relevant to the Indian steel industry. In overall terms, the steel companies in India invest very little on R&D and actual investment varies in the range of 0.150.25 percent of the total turnover of the companies. R&D in steel companies abroad
The R&D scenario in steel companies abroad, particularly in China, Japan and South Korea, is rather different. Not only are the companies equipped with full-fledged in-house R&D laboratory, they also have visible tie-ups with external laboratories and academic institutions with large outlay of funds earmarked for R&D. Naturally, annual R&D investment is very high and reportedly varies in the range of 1-2 percent of their turnover. No wonder then, that the steel industry of India with limited R&D infrastructure, limited manpower and a minimal investment on R&D suffer with poor techno-economic parameters. SAIL has its corporate R&D centre (RDCIS) at Ranchi, but the total strength of their R&D manpower (2009) is around 267 and the number of PhDs were only 41. Further, their R&D investment is also very meagre. In Tata Steel, the scenario is only marginally better as in terms of their total R&D manpower of around 13,037 are PhDs. In other plants, R&D investment or the strength of technically qualified manpower is only notional. Moreover, in most of these companies, R&D programmes are bottom driven with a
R&D Expenditure of global steel companies as percent of sales turnover (%) Company Name Nippon Steel
Source: Department for Business, Innovation & Skills, Government of UK
22 Steel Insights, December 2012
nominal involvement of the top management. Naturally, R&D and technology issues or associated work do not get due priority. R&D engineers generally have poor rapport with operating personnel in the plants. Owing to their slow results & delivery, these engineers are generally thought to distract the production process. Government initiatives
In order to augment R&D initiatives and to step up investment for in the steel sector, the government had decided in 1997-98 to fund up to `150 crore per year for R&D projects in the iron and steel sector, from the interest proceeds of Steel Development Fund (SDF). An empowered committee has been set up under the chairmanship of secretary (steel) and members from Ministry of Science & Technology, steel producers, research laboratories and academic institutes. There is a two-tier structure for evaluation of R&D proposals under this scheme. An evaluation group evaluates the proposals and its recommendations are placed before the EC for consideration and approval. For large value projects, there are independent boards of experts for each project for review and monitoring progress. The Cabinet Committee on Economic Affairs (CCEA) while approving the R&D scheme, had suggested creation of an institutional mechanism i.e Research & Technology (R&T) Mission headed by a Mission Director for evaluation of proposals, monitoring of on-going projects, and also serving as secretariat of the EC. However, the Committee of Secretaries on rightsizing and downsizing of government departments decided otherwise, and directed that technical wing of the MOS will function as the Secretariat of the EC. Actual R&D and investment even under this scheme has not been very encouraging over the years. This is mainly because of limited number of overall R&D infrastructure in steel companies or in Laboratories resulting in limited number of applications. In between, R&D work under the scheme also had a slow pace because of limited availability of liquid fund in the SDF. Ministry of Steel took some pro-active initiatives. However the result is not very encouraging. Since inception, `146 crore (approximately) has been disbursed from SDF on completed and ongoing R&D projects.
Cover Story The government has allocated `118 crore from the Plan Fund, for promotion of R&D in the iron and steel sector during the Eleventh Plan. As per the approval of the Expenditure Finance Committee, the three broad areas to be pursued under this scheme are: ♦♦ Development of innovative technologies for utilisation of iron ore fines; ♦♦ Beneficiation of raw materials like iron ore, coal etc. and agglomeration; ♦♦ Improvement in quality of steel produced through the induction furnace. Eight R&D projects have so far been approved within the three broad areas with a total cost of `144 crore involving Plan Fund of `96 crore approximately. Actual work in these projects started w.e.f. 2010-11. So far `39.02 crore has been released. Major projects covered under the scheme include exclusive R&D initiatives to upgrade Indian low grade iron and Indian coking and non-coking coal. These projects are at the preliminary stage but when completed, and if results are successful; these may go a long way in making available high quality inputs from lean ore and coal for the iron and steel industry. Having noted that the outcome of SDF assisted projects was not satisfactory, the ministry of steel reviewed the position and after thorough brain storming and consultations with the scientists technologists and industrialists, a task force was set up with an aim to review the existing institutional infrastructure, identify gaps, assess present and the future needs of the industry and suggest a blueprint for pursuing innovative technologies.
Highlights of achievement with respect to a few flagship projects ♦♦ A high value joint project given to NML, Tata Steel and SAIL has helped in better understanding of the intricacies inside blast furnace using probing techniques for the first time in India, resulting in improved productivity and reduced energy consumption. ♦♦ A real time process simulator has been developed by NML, Jamshedpur with a purpose to facilitate better Blast Furnace operation and improve its productivity, reduce coke rate etc. This was implemented at Bokaro Steel Plant and is also under implementation in Bhilai Steel Plant. ♦♦ A nother joint project between SAIL and Tata Steel has helped them to develop Casting technology/ process to enable them to produce improved quality steel in respect of certain critical applications like forging quality steel, welding electrode quality steel, PC strand quality steel and Crank Shaft Quality steel through the adoption of EMS and closed casting route resulting in substantial savings in cost of production and significant improvement in yield and quality of such steel. This has also led to substantial savings on the part of the consumers i.e. Engineering Industry. ♦♦ A project given to RDCIS, SAIL has resulted in development of intelligent mill setup model for dynamic and adaptive control of plate mill resulting in rolling of plates with much closer tolerance. ♦♦ A project on development of customized zonal lining design and programme maintenance schedule has helped RSP (SAIL) to reduce refractory consumption in LD converter and steel ladles. ♦♦ A project on simulation of thermo-mechanical processing and hot workability of high strength steel has enabled SAIL (RSP) to produce HSLA steel with higher strength and superior impact toughness properties. ♦♦ A project on modeling and control of microstructure and mechanical properties during hot strip rolling at Bokaro Steel Plant has helped them to control quality and productivity of hot rolled strip. ♦♦ A R&D project given to Tata Steel and Jadavpur University on development and characterization of spot welding techniques has helped in recommending welding process parameters for coated steels to several automotive customers. ♦♦ A project on fatigue behavior analysis given to Jadavpur University and Tata steel has given insight in to the performanceofweldedhighstrength steels.
Global R&D initiatives
The steel industry across the world, and particularly in the advanced countries, have identified climate change as a major challenge for more than two decades and have been proactive in reducing energy consumption and greenhouse gas emissions by aggressive R&D and technology intervention adopting clean and green and state-of-the-art technologies in all areas of production. In most of the advanced countries, these improvements have led to reductions of nearly 50 percent in specific energy consumption since 1975 and most of them are now operating close to the theoretical limits, leaving limited scope for any further large
24 Steel Insights, December 2012
reductions. However, the Chinese and Indian steel industry roughly account for about 50 percent of world steel production and are high in energy intensity and carbondioxide emissions. Though they have also taken various steps, a lot more needs to be done to reach the level as in advanced countries. To improve further in terms of energy efficiency or carbondioxide efficiency, a paradigm shift is needed in industrial production processes to reduce or bypass the consumption of coal and coke in iron and steel making. Towards this objective, the World Steel Association launched the Carbondioxide Breakthrough Programme in
2003, an initiative to exchange information on regional activities all over the world. Research is happening for development of new technologies in several countries. Some of them are EU (ultra-low carbondioxide steelmaking or ULCOS), the US, Canada, South America, Japan (the Carbondioxide Ultimate Reduction in Steelmaking by innovative technology for Cool Earth 50 Committee or COURSE-50 initiative), South Korea, China, Taiwan and Australia. The R&D programmes are aimed to bring in major changes in the way iron and steel is made, within a time frame of 2020 and beyond, pursuing the following five key areas:
Cover Story Coal Minimise coal consumption by adopting oxygen operation in modified BF and smelting reduction like Finex or similarly designed furnaces along with in-process carbondioxide capture rather than oxy-fuel combustion and pre-post combustion capture of carbondioxide and further reduction. Hydrogen To be used as reducing agent in place of coal and coke, partly or fully. Electron To be used as reducing agent like hydrogen. Biomass To be used to generate reducing gas. Carbon Capture & Storage (CCS) To find out ways and means to capture cabondioxide gas and store it in deep saline aquifers, depleted oil or gas fields, in coal mines as geological storage or turned back into carbonate etc. The research programmes are mostly joint collaborative research programmes involving the government, steel producers, consultants, technology providers and equipment manufacturers, academic institutions, design organisations and others. Conclusion
The Indian steel industry is trailing behind in several areas in technology and R&D which are reflected in poor techno-economic performance parameters. Main problems relate to technological obsolescence and lack of timely modernisation and renovation as well as inferior quality of raw material and other inputs, inefficient shop floor practices, lack of automation and control and lack of R&D intervention. A committed effort with a well thought out programme of action is, therefore, necessary to bring the Indian steel industry at par with its overseas counterparts. Collaborative R&D projects at a national level with academic and research institutes and laboratories of repute as well as the industry to share expertise seem evident and necessary. Steel companies in developing countries, which are normally smaller in capacity, look for strategies of quick returns for further investment in production facilities. Naturally,
R&D programmes which are essentially longterm strategies do not get due recognition. When the industry develops in tandem with the economic growth, investment in long term options like R&D becomes considerably profitable. In Japan, US and some countries of EU, the government investment in R&D, except for joint research programmes of national importance, is minimal. On the other hand, in developing countries like China and Russia, the government directly or indirectly facilitates R&D for all sectors of economy including steel. The Indian situation is similar to these developing countries and government support and intervention are considered logical and necessary for pursuing fundamental as well as applied research in a vital sector of economy like steel. Such a positive intervention is also considered necessary to step up R&D initiatives and investments. Investment in R&D at present is very low, at only 0.15 to 0.25 percent of sales turnover. There is a need to increase this R&D investment to at least 1 percent of total turnover in the immediate near future (by 2015-16) which may be increased to about 2 percent in the next 10 years (by 2020). This could be done by pursuing a few large value R&D projects and programmes at the national level which may comprise laboratory scale, bench scale and large scale demonstration plants. It is often argued that R&D investment may be expressed as a percentage of PAT or EBIT and not on turnover. The matter has been looked into and it is felt that the present system i.e. expressing R&D investment as percentage of turnover enables us to compare the R&D investment with other plants abroad and hence it may
be continued. However, R&D content and investment thereof may be uniformly defined by all companies to include all investment relating to projects for improvements and innovations. The government of India has already allowed tax benefits under Section 35 of IT Act by which any expenditure on scientific research is eligible for deduction up to 200 percent from the total taxable income of the company, thereby giving relief in income tax for encouraging R&D. This method of giving incentive has not been very attractive to increase R&D investment in the steel industry, and requires streamlining with regard to its coverage of R&D content. Most of the technological challenges we face in India are â€˜country specificâ€™. For example, high alumina in iron ore, high ash in coal, low interest of academic institutions on metallurgical education and research, low priority on research and technology in steel industry etc., are typical Indian problems. It is, therefore, imperative that the industry must resolve to change the scenario, by finding innovative solutions to these problems by pursuing relevant R&D
Steel Insights, December 2012
Cover Story programmes, for its long term survival and growth. We must create and develop the required infrastructure for research, identify relevant research programms, develop a dedicated team and provide adequate budget. Appropriate solutions to address the problem of poor techno-economics lies in phasing out of old and obsolete production facilities and technologies and adoption of modern, state-of-art, relevant technologies including those specifically designed for improvement in energy efficiency and environment friendliness, commercially available elsewhere. This may be supplemented by R&D support particularly directed towards adaptation of imported technologies and finding out solutions to day-to-day problems faced by the industry. Towards this objective, the Japanese and Chinese approach for conservation of energy and environment needs to be pursued. The approach consists of the following: ♦♦ Coke dry quenching technology; ♦♦ Improved productivity of sinter plants adopting micro pelletisation; ♦♦ Coal moisture control, where ever necessary and relevant; ♦♦ Hot stove waste heat recovery; ♦♦ Waste heat recovery in sinter plant from main exhaust and sinter cooler; ♦♦ Blast furnace top pressure recovery turbine (TRT);
♦♦ V VVF (Variable voltage variable frequency) control for motor applications; ♦♦ Higher efficiency operation of energy equipment; ♦♦ High efficiency turbine in plant power generation; ♦♦ Increased use of automation at all levels; ♦♦ Strip casting; ♦♦ Utilisation of waste material, recycling, recovery etc; ♦♦ Consolidation in production by gradually phasing out small, inefficient units in the long term perspective. New units are being set up in the country in greenfield locations. It must be ensured that all state-of-the-art and relevant technologies are adopted to ensure productivity and energy efficiency at par with international benchmark. Conventionally, production capacity and profitability have been the key considerations for planning for any brownfield or greenfield expansion in India like other developing countries. It is felt that in the light of global environmental concerns, the planning process needs a shift to also include important parameters like energy efficiency and environmental emission towards achievement of international benchmark. Several alternative iron making (smelting reduction) technologies have been developed and commercialised which directly use non-
coking coal and iron ore fines, viz. Finex and ITmk3. These or similar technologies which are relevant to India in view of indigenously available resources viz. non coking coal and also abundant iron ore fines. New concepts and technologies such as Romelt, Hismelt/ Hysarna seem particularly relevant for Indian iron ore containing high alumina and high phosphorous which are strong deterrents for cost effective production of steel in India. There are problems and issues with regard to optimum size plants, capex and revenue expenditure of these technologies. Apart from Finex, the global success rates of fluidised bed technology development for iron ore have not been very high. Relevance of some of these technologies including their suitability to treat Indian raw materials must be examined by a designated expert or experts group before considering or taking decision towards adoption of these technologies in India. Such efforts may also require extensive R&D intervention. Generally speaking, smelting reduction is a relevant area for R&D in India. We may therefore, encourage a national programme for such development of relevant iron making technology suitable to the Indian conditions and applicable to Indian raw materials. Electric induction furnace industry is plagued with technological constraints and
Short-Medium Term Programmes a) Beneficiation/up-gradation of low grade iron ores adopting known technologies and development of relevant technologies to beneficiate difficult-to¬beneficiate iron ore including banded hematite quartzite (BHQ)/Banded Hematite Jasper (BHJ) as well as highLOI,high Blainenumber ores andslimes. b) Development of relevant technologies for Beneficiation of high ash, difficult-to-wash Indian coking/non coking coal (from 25+% to <10% ash) including low volatile medium coking coal without loss on yield, and production of better quality coke using weak/non coking coal/LVMCC. c) Development of innovative products like CRGO electrical Steels, Amorphous Silicon Alloys (Met-glass) etc, technologies for which are not readily available from abroad. d) Development/Adaptation of direct smelting technologies for iron making using iron ore fines and non-coking coals on line similar to Finex, Hismelt, ITmk3 or any other innovative concepts. Simultaneously, Pursuing fundamental research work for development of innovative alternative iron making technologies from low grade ore/slimes without pursuing beneficiation/ agglomeration and without use of coking coal/coke like smelting reduction processes. e) Development of appropriate beneficiation techniques for Indian magnesite (Almora & Salem sources) and bauxite (using wet leaching and firing- densification). f ) Development of niche steel products e.g ultra high strength steel with good formability and ultra fine grained steel plates/ coils/ rods (YS: 800-1000 MPa), specifically designed for Automotive Sector, Construction & Infrastructure and Energy Sector. g) Development of suitable technologies for production of quality steel with low phosphorous & low sulphur in Induction Furnace or evolving a suitable innovative technology to produce steel economically in smaller scales of operation in place of induction furnace.
26 Steel Insights, December 2012
Cover Story are generally ill-equipped to produce quality steel, particularly with low phosphorous level as per standards. The government may consider encouraging and helping this sector to find out innovative solutions to produce quality steel by pursuing and adopting R&D and other technological solutions. Towards this objective, industry and the induction furnace manufacturers may consider evolving suitable schemes for upgradation of the technology in the sector in collaboration with the government, if necessary. Such schemes may also be developed for EAF units and re-rolling mills to upgrade their technology to improve upon techno-economic parameters. With the growth of Indian steel industry at 8-10 percent per year, demand on iron ore and coal is bound to rise manifold. On the other hand, availability of high grade iron ore or low ash coal is very limited and increasing dumps of low grade ore as well as slimes are causing environmental hazards, besides wasting valuable resources. Therefore, relevant beneficiation techniques need to be developed with the help of R&D intervention. There are similar but critical issues with regard to cleaning of high ash coking and non-coking coal (25+ percent ash) and beneficiation of other minerals required by the steel industry. It is high time that the industry takes up this program high on its agenda. Government assistance, if any, may be extended to pursue such initiatives. This should also include adequate production facility for beneficiation and agglomeration of beneficiated fines through pelletisation or innovative sintering processes. Some of the issues are complex and may require long term programs, or joint collaborative programmes. Today, climate change and global warming are the prime areas of concern in the realm of growth and development of the iron and steel industry. India has already committed to reduce its emission intensity of GDP by 20-25 percent over the 2005 level by the year 2020, through pursuit of proactive policies. Programmes for energy efficiency improvement and carbondioxide reduction for steel industry are therefore, not only desirable but necessary to pursue the low carbon, green growth strategy. It is therefore, essential for the government and industry to address these key issues together by planning programs
through joint collaborative research programs. Carbondioxide breakthrough or similar programs pursued by international communities may be referred to in order to evolve such programs in India. Studies on carbon footprint analysis need to be initiated urgently on chosen production paths so that the role of carbondioxide emission is clearly emphasised. The government is supplementing R&D in the iron and steel sector in the country through the SDF and government budgetary support. However, most of the projects under SDF have been directed towards problem solving approach with incremental benefits and path breaking innovation is lacking. It is, therefore, important to modify the strategy and include large value programmes for raw material beneficiation for the benefit of the steel industry. A fresh look is also required for the present institutional mechanism for evaluation and approval of R&D proposals and monitoring of ongoing projects. The ongoing system seems inadequate and an empowered and dedicated institutional mechanism seems necessary for identification, selection of projects, monitoring of progress and ultimately implementation of research results in the industry. The emphasis has to shift from R&D to innovation with an associated business model. There are in-house R&D establishments in some of the major steel companies, though with limited focus and programmes. This position calls for a change. R&D establishments in the steel sector, particularly in steel PSUs, have to be revamped and fortified rendering due importance to R&D experts with attractive promotional and higher financial packages in order to encourage people joining and working in R&D centres. Recruitment of qualified manpower with an aptitude for R&D and qualification, through direct recruitment including lateral entries, seems essential to change the present state of affairs. It must also be recognised that in addition to suitable compensation, the need for job satisfaction, motivation, appropriate working condition, and comfort must be provided to attract and retain the best candidates once they join. Industry experts feel that R&D centres must be headed by a full time R&D Manager of national or international repute who may
directly report to the chairman or CMD and preferably be a member of the board. Further, at least one of the board members must be an expert or technologist preferably in iron and steel making or related areas capable of guiding and directing the company on R&D and technology matters. They feel that R&D programmes in most steel companies are rarely directed by the top management or the board room and that needs to change. R&D and technology issues must be top driven to get due attention at the plant level. Development of human resources is also essential to sustain the growth of the iron and steel industry and to pursue R&D in steel sector. A positive involvement of the government in association with the industry to set up centres of excellence for development of manpower for iron and steel including R&D is a dire need of the day. There is considerable dilution of metallurgical education in India on the whole. Even the premier institutes have converted metallurgical engineering into material engineering and lack faculties with expertise in metallurgy. Thus, industry leaders feel engineering graduates need extensive training to become useful for working in steel industry or to pursue R&D for steel sector. The situation needs to be reversed with suitable Government intervention. Definite steps are required urgently to modify the curriculum in the Indian engineering colleges to suit Indiaâ€™s need rather than teach the students subjects that are irrelevant or more applicable to other countries where iron and steel production is no longer a priority. There is a need to have dedicated customised courses on iron and steel making in engineering institutes. Chinaâ€™s example is noteworthy here as they have customised courses at graduation and post-graduation levels. On similar lines, specialised courses or dedicated specialisation from currently available graduate courses can be modelled for the IITs and the NITs in India. A concerted approach is necessary in India for development of indigenous capabilities for designing, engineering and manufacture of complete plants or projects by involving competent and reliable designers and consulting engineers from India or abroad. Design and engineering capabilities are essential to convert the knowledge gained in the laboratory into commercial products or processes.â€‚
Steel Insights, December 2012
Tata Hitachi looking at larger export share Tamajit Pain
elcon, originally a division of Tata Motors, has been in the forefront of the construction equipment business since the early sixties. A technical collaboration with Hitachi Construction Machinery Co Ltd (HCM), Japan started since 1984 for the manufacture of world class hydraulic excavators in India. The construction equipment business was made an independent entity in 1999 and over the years HCM acquired stake in this entity, which is currently 28 Steel Insights, December 2012
at 60 percent, the rest being with Tata Motors. The product range of the company addresses the critical infrastructure building activity in the country. Telconâ€™s equipment is present across diverse applications such as roads, power projects, irrigation works, urban infrastructure and agriculture applications. The company also caters to the mining and quarrying sector. Over the 50 years that the company has served these segments, Telcon has carved a niche for itself in the construction equipment space.
Recently, Telcon was renamed Tata Hitachi Construction Machinery Company Ltd to capture these strength and vitality of two powerful brands. Going forward, Tata Hitachi plans to set up its third plant at Kharagpur in West Bengal developed on an area of about 250 acres as a hub to meet both domestic and international demand. The company has also taken up initiatives to host other Japanese companies to set up production bases in the adjacent vendor park built over 90 acres of land. At this juncture, Steel Insights spoke to the companyâ€™s managing director Ranaveer Sinha to know the current and future strategies of the company.
interview Excerpts: Why did you choose to set up your third plant in Kharagpur? The most important reason is that the Kharagpur plant is located near our mother plant at Jamshedpur. Secondly, it is near to our exporting bases â€“ the neighbouring countries. When did you start operations in Kharagpur? In 2009, we got the land and in a short time we could construct the plant and make it operational by the end of 2011. Now we are rolling out 160 machines from this plant and employing around 600 people, mostly around 85 percent local people and many are local land givers. We have started this facility with a 30-year perspective and this facility with inhouse R&D facility can meet the demand of India and its neighbouring countries. What percentage of your current capacity in Kharagpur is currently being utilised? What is your plan going forward? We can produce close to 6,000 machines. Currently, around 35 percent of the capacity is being utilised. This is mainly because the
industry has been undergoing a slowdown since 2008. However, demand will certainly improve as India plans trillions of dollars of investment to develop infrastructure. The situation is similar in China too.
plant is around `570 crore, out of which around `450 crore has already been spent for creating infrastructure for the plant. We need more infrastructure and better life for our employees in Kharagpur.
What has been your investment at your Kharagpur plant?
What kind of infrastructure are you planning in Kharagpur?
The total investment for the Kharagpur
We have approached the West Bengal government for a township near the plant as we need to give better life for people working in the plant. What will the township consist of? The township will consist of residential complexes, schools, hospitals, shopping complexes, playgrounds, clubs and it is proposed to be developed by Tata Hitachi. What is your plan for exports of your products? Currently, our products are being exported to neighbouring countries like Bangladesh and Sri Lanka. We have already sent some trials to Africa and Middle East. A delegation from Middle East will be visiting our manufacturing hub shortly. We are currently trying to position our products for the lower end of the market as I feel there is a gap there. For example in Africa the quality of fuel is an issue and we need to find ways
Steel Insights, December 2012
interview to handle this. That is the reason we are looking at a product for the lower end of the market. What is your product profile? Are you planning to introduce any new products? Our product profile includes excavators, wheel loaders, rigid dump trucks, road equipment like vibrating compactors. We are planning to bring in smaller excavators below 7 tons, maybe in the 2-5 tons range. What is the total capacity of the three plants? Our three plants at Jamshedpur, Dharwad and Kharagpur have a combined capacity of 15,000 machines per year. However, we are currently rolling out 160 machines from the Kharagpur plant. What is your current market share in
30 Steel Insights, December 2012
the excavator segment and who are your competitors? In the excavator segment our current market share is 37-38 percent and our main competitor is L&T Komatshu, which holds below 25 percent market share and new entrant Hyundai is holding less than 16 percent share in the segment. What is your current revenue and what is your target going forward? Our current revenue from operations is around `3,000 crore and we plan to be a billion dollar company in the next five years’ time. How much do exports contribute to your overall revenue and what is your target going forward? Currently, exports make up 2-3 percent of our revenue. We intend to take this to 15 percent in the next two to three years’ time.
What is the biggest challenge you are facing? Our biggest challenge in Kharagpur is the level of attrition of 10 percent because of lack of proper living infrastructure in the area. That is the reason we are planning to build the township to offer them modern amenities and a better living standard. How will the new brand identity help the company? The announcement of the new brand identity marks an important milestone in shaping the future trajectory of the company. The new brand captures the vitality of two powerful brands ‘Tata’ and ‘Hitachi’. The Tata name embodies ‘leadership with trust’ and stands for a distinct value system and ethics. HCM symbolizes the Japanese quality ethic, with the parent Hitachi Ltd setting a bold new direction ‘inspire the next’ that will infuse the next generation and future societies.
India’s illegal mining hunt leads to imports
Steel Insights Bureau
ndia’s efforts to clamp down on illegal mining have slashed output and exports from key producing states of Karnataka, Goa and Odisha and forced steel mills to import raw material, which is in abundance in the country. Now the Shah Commission, whose report on Goa led to the state government’s ban on mining in September, has turned its attention to the last major iron ore producing state of Odisha. The exit of India, the world’s third-largest iron ore exporter, has helped miners in other countries seeking alternatives for their growing supplies as appetite from China slowed. The world’s biggest producers Vale, Rio Tinto and BHP Billiton have taken some of India’s market share in China, Japan and South Korea, and now are even eyeing exports to India. Smaller miners like Australia’s Fortescue Metals Group also benefit, as they supply the lower-grade ore that competes directly with India in the Chinese market.
India’s campaign to end illegal mining – which authorities say has cost Goa and Karnataka states around `51,000 crore in lost revenue in the last decade – has cut its iron ore output by more than 20 percent in 201112 and its exports by almost double that. Annual exports, which in the past decade peaked at nearly 106 million tons, may dwindle to as low as 5 million tons over the next year, analysts feel. India’s role switch is one reason for a rebound in iron ore prices, which this year fell below $87 per ton to their lowest since 2009 due to China’s slowing economic growth. India’s iron ore exports to China fell to less than 300,000 tons in October – the lowest in at least two decades – after the ban in Goa. That followed a mining ban in Karnataka in 2011, after shipments there were halted a year earlier. Goa’s once-bustling mining hubs have turned into ghost towns, with scores of empty trucks parked by the roadside. Trains, some still loaded with ore, are stopped on the tracks. In January-October, India’s shipments to its biggest market stood at 32.6 million tons,
down nearly half from a year ago, Chinese customs data showed, with South Africa edging it out as the No. 3 supplier. Shipments from Australia and Brazil were up 20 percent and 12 percent, respectively. India as a buyer The flipside is that India is also starting to ship in iron ore in significant quantities. Importers include big producers Essar Steel, Bhushan Steel Ltd and JSW Steel Ltd, sources said. Of the 800 iron ore leases in the country, only around 300 are operational, sources said, adding that the supply squeeze should be short-lived. The mining bans in Goa and Karnataka, which at one point shut all mines in the two states, could now spread to Odisha, which was visited by the Shah Commission earlier this month. The state government has fined several mining companies nearly `68,000 crore for excessive mining of iron ore over the past 10 years, reports said adding none of those fined has been paid up so far. However, Tata Steel and Aditya Birla Group-owned Essel Mining refuted the allegations. A major difference from Goa and Karnataka is that Odisha’s ore is high grade and intended for the domestic steel industry rather than export. If mining in Odisha is stopped, Indian steelmakers may need to import 30 million tons of high-grade ore a year, sources said adding that overall exports could fall to as low as 5 million tons. The Indian government maintains that the way to crack down on illegal mining is through better enforcement of existing laws, higher export duties and improved tracking of transport. The mines ministry has rejected a recommendation by the Shah Commission for a blanket ban on exports. The government instead decided to impose a 30 percent duty on all iron ore exports despite opposition from the mines ministry. It could raise this further or hike rail freight rates, where it already charges a much higher rate for ore intended for export. State measures have otherwise been motivated by a range of concerns from damage to the environment by unregulated mining to loss of state revenues from illegal movements of the ore. However, some mines in Karnataka are expected to restart by year end but will only be allowed to produce about a fifth of pre-ban volumes.
Steel Insights, December 2012
Coking coal firms up in Nov despite low appetite in India
Steel Insights Bureau
he spot coking coal market strengthened in November on continued buying appetite from Chinese end-users and limited supply for December loading cargoes. Premium low-vol HCCs traded at around $161 per ton fob in November, up from $149 per ton fob Australia in October. Low vol PCI prices recovered to $129 per ton in November compared to $115 per ton in October with some buying interest. The semi soft variety was quoted at $112 per ton in November compared to $100 per ton in October.
China still remained the destination with majority of spot transactions taking place in the country. Some sources feel spot prices might continue to rise throughout December to January due to the rising logistical costs associated with the winter season in China. While some other sources said domestic Chinese coking coal and coke prices have increased recently even as iron ore prices have seen a slight dip. This may put pressure at prices as Chinese buyers may look at cheaper options. In India, the spot market remained in a lull. Demand from India remained downbeat, with Indian steel mills facing problems
Coking coal FOB India ($/ton) HCC Peak Down fob Australia ($/Ton)
Premium hard coking coal prices (premium low vol) fob Australia ($/ton)
HCC 64 Mid Vol fob Australia ($/Ton)
Low Vol PCI fob Australia ($/Ton)
Semi soft coking coal rates fob Australia ($/ton)
Met coke price cfr India (($/ton)
32 Steel Insights, December 2012
relating to credit issues. All mills, from big to small, are facing cash flow problems and generally preferring smaller coal quantities as a result of the credit issue. This explains why mills were looking to port stocks rather than new spot cargoes. There is also an apprehension about the possibility of Chinaâ€™s coke export duty removal. However, sources are of the opinion that the Indian market would have to pick up soon since inventory levels for mills, at 30-40 days, were not particularly high. Purchases might take place in December. However, currently the spot demand in India was low and bulk of the spot volumes were going to the Chinese market instead. An Indian coke maker said a bearish steel market, coupled with cash flow problems and a weakening Rupee combined to add downward pressure for Indiaâ€™s already low spot appetite. Sources felt that $155-160 per ton fob Australia would be the tradable range for the next round of quarterly contracts. India imports 30-35 mt per year of coking coal currently. India plans to invest about $1 trillion in the infrastructure sector during the Twelfth Plan period running from April 2012-March 2017. It is estimated this would generate some 200-250 mt of steel demand in the period and more of coking coal demand. Met coke
Metallurgical coke eased in November on low demand and higher supply. Met coke is quoted at $306 per ton cfr India in November compared to $316 per ton cfr India in October. Sources said metallurgical coke market saw some possibilities of an upside in the market after about four months of nearcontinual declines with the recent uptick in coking coal prices. An increase in Chinese domestic metallurgical coke prices also raised the possibilities of an increment in the seaborne market, traders said. Meanwhile, a trader reported a sale to an end-user concluded at around $318 per ton cfr East India for 64 percent CSR, 11 percent ash coke. In the domestic market met coke prices hovered around `17,000-17,500 per ton ex-plant in the eastern region.â€‚
Ferro alloys show mixed trend in Nov
he market for ferro alloys depicted a mixed trend in the month of November, as per market information available with Steel Insights. Some prices remained largely stable while some others witnessed some movement. Ferro-chrome: The market for ferrochrome depicted some positive movement in the month of November. The market remained more or less steady with the demand conditions depicting a stable trend. The HC Ferro chrome (60% min) saw a rise of `2,000 per ton in middle of November to prevail at `62,500 per ton (basic). Ferro-molybdenum: The ferromolybdenum market started off the month of November on weaker note with the prices witnessing a drop on the back low demand. The market did not exhibit much movement in the first three weeks of the month and the transaction activities remained thin. However, there were some movements in
the closing week and ferro moly (60%) prices scaled up slightly by `10 per kg to prevail at `965 per kg (basic). Ferro-manganese: The market for ferromanganese remained by and large stable over the month of November. According to a major manufacturing company in Raipur, silico manganese prices remained unchanged from the last week. There is some export order floating in the market, which is providing some support. The high carbon 65-70% ferro manganese prevailed at a price of `53,000 per ton (basic) on an average in the month of November. As per market sources, the market was flooded with low offers from traders in the recent past. But now, stocks with traders are over and buyers are slowing accepting the offers made by manufacturers. The market should therefore pick up gradually. Silico-manganese: The silico-manganese market too did not exhibit any movement in the month of November and have remained more or less stable throughout the month.
Pig iron prices remain flat Steel Insights Bureau
ig iron (steel and foundry) prices in India remained flat as demand did not undergo any major change. Some producers did not re-start production as iron ore prices were high at e-auctions. Pig iron prices are thus unlikely to recover soon as there are huge inventories and also weak buying from manufacturing units that are running at losses. NINL, the largest producer of pig iron in the country, reduced their pig iron price by `1,400 per ton (including the price cut & discounts) which has created a negative sentiment in the market. Currently NINLâ€™s pig iron is prevailing at `22,600 per ton (basic), including `900 per ton discount for six or more rakes). NINLâ€™s prices are fixed till December 14, 2012. As per market sources, traders are booking from RINL due to low price. At present, RINL is offering pig iron at low prices at `22,700 per ton (ex works Vizag) with a discount of `800 per ton on its actual price of `23,500 per ton (ex-works) for bulk booking. RINL has kept the prices for December unchanged so far. NINL and RINL floated a 30,000 tons steel grade Pig Iron export tender each, which is to open around the middle of December.
However, offers in Central India are a bit low as manufacturers are keen to clear stocks. The manufacturers in the southern and eastern parts of India do not have much stock but people in Central India do. So, offers in Central India are a bit low from the offers in rest of India. Silico manganese (60/14) prevailed at a price of `51,000 per ton (basic) on an average in November. As per the exporting sources, the offers in the export market were low and dollar depreciation did not have much impact.â€‚
Steel Insights, December 2012
Steel sector challenges highlighted at four-day meet
Steel minister Beni Prasad Verma lighting the lamp at the IIM organised annual technical meeting
Steel Insights Bureau
he country’s steel sector went through a four-day brainstorming session over its multiple challenges, mostly created by regulatory and policy oversights, as the Indian Institute of Metals (IIM)-organised Annual Technical Meeting got underway at Jamshedpur on November 16-19. The event attracted top executives from steel industry, high performing metallurgists from the industry and research institutes of repute. H.M. Nerurkar, President of IIM and MD of Tata Steel, said the sector was beset by a number of challenges. According to him, the principal challenges were that of land acquisition, securing raw material, power and of appropriate human resources as also technology development. Nerurkar said metallurgists have not
34 Steel Insights, December 2012
had to worry about these issues but now the time has come to sit and deliberate on the challenges that are within our control. In the context of a set target of 200 million tons (mt) of steel by 2020, the sector also needs to meet “a huge challenge” of raw material upgradation and innovation. Speaking on the occasion, C.S. Verma, chairman of state-owned Steel Authority of India Ltd (SAIL) pointed out that crude steel output in India has grown at a CAGR of 11.4 percent since 2000, production increasing from 22 mt then to 72 mt today. In this period, per capita consumption has increased from 22 kg to 57 kg, a figure still well below the average global figure (215 kg in 2011 and well below that for industrial countries like 310 kg in EU, 284 kg in USA, 506 kg in Japan, 1,156 kg in South Korea and 460kg in China). This modest consumption indicated great potential for further growth, particularly in rural India. The Twelfth Plan (2012-17) is
targeting a crude steel capacity of 150 mt by March 2017 and 200 mt by 2020. Assuming an utilisation rate of 85 percent and a yield of 90 percent, these figures equate to a finished steel output of 112.5 mt and 150 mt respectively. Consumption will be driven by $1 trillion expenditure on infrastructure during the current Plan period by a combination of public and private investments, and the challenges to meet this output were land acquisition, raw material supply, construction, equipment supply and investment capital. The enablers along the way would be selection of appropriate technology, R&D and human resource development. New plants would have a smaller footprint but increased capacity so reducing the land issue which has dogged all of the greenfield proposals to date. On raw materials, more ore fines are increasingly being employed by beneficiation and pelletising and less coke consumed by the use of alternative fuels like coal injection (PCI). IT and automation will play an increasingly important role to improve productivity and robots to improve efficiency and safety. Verma said cost of energy makes up 30 percent of the cost of the production of Indian steel mills and efficient use of energy would save costs significantly. He called for industry and government collaboration for research and development for new technologies that would enhance production efficiency and reduce carbon emission from the steel plants. Steel secretary D.R.S. Choudhary said India has one fourth of the world’s iron ore resources and mining contributes 2.5 percent to the GDP in the country. He said the Indian mining industry is at the crossroads with lack of manpower and delay in approval for projects. This is a challenge and it needs to be converted into opportunity at a time when the country is targeting 200 mt of steel production by 2020. The country needs world class design centers and breakthrough research in metallurgy for attaining higher steel production, he added. Union Steel Minister Beni Prasad Verma said that the Indian steel industry must gain competitive edge through innovation. Elaborating on the challenges before the steel industry, he said, the other thrust areas include production of ‘green steel’ and ensuring ‘zero accidents’ in operations.
NATCOM meet focuses on sustainable supply chains
Industry captains deliberating on sustainable supply chains at NATCOM 2012
Steel Insights Bureau
uilding a supply chain is difficult and it becomes even more difficult if one needs to make it sustainable. However, without building a sustainable supply chain, meeting business deliverables might be difficult. The competitive world is much more demanding today than ever before and increased customer knowledge on available service makes it more important for a business house to equip itself with emerging concepts, technology and processes to mitigate any incident which may disrupt its committed service. To bridge this gap where supply chain professionals fail to address the industry need of continued service, the Indian Institute of Material Management (IIMM) Kolkata Branch organised a two day conference NATCOM 2012 with the theme “Building and sustaining supply chain – emerging concepts, technology and process” in the Science City Auditorium Kolkata on November 23 and 24, 2012. Selection of the venue as Kolkata for this theme has a significance. Kolkata can not only become a supply chain hub of Eastern
India, but it can emerge as a hub for India as a whole leveraging its unique historical, geographical and regional importance, said chairman, IMM, Kolkata branch and ex officio chairman NATCOM organising committee, Sudhin Mitter. The timing was also important. According to Mitter, at a time when the Indian industry is not doing well, supply chain thinkers can guide the economy back to its growth path. “NATCOM 2012 is an initiative where lead supply chain thinkers have been brought under one platform keeping this issue in mind. Their thinking process might bring about a change which is eagerly awaited by Indian Industry,” he said. Keeping in mind that industry wants both knowledge and customers to survive the conference was divided into two distinct parts. One was the technical sessions wherein lead thinkers from reputed business houses such as TCS, Tata Steel Processing & Distribution Ltd, Deloitte India, IBM India, Tata Metaliks, Samsung Engg, mjunction shared their idea to build a sustainable supply chain. The other was an exhibition where the industry showcased their products to get an upfront feedback from the 200 plus
delegates, who were mainly their customers. It appeared in the technical session that the service industry requirement for an agile and customer focused supply chain has assumed immense importance. Unsold inventory for the airlines industry was the seat in the aircraft which could not be sold for improper planning. Similar failure happened in telecom industry which could not push its customers to utilise its bandwidth fully. Concepts and processes slowly emerged in the competitive service industry to meet the challenge. This concept if applied to manufacturing industry might bring a sea change in the industry, lead thinkers of the conference felt. Throughout the five technical sessions, different speakers deliberated on different proess, concepts and technology which would help the industry meet the future challenges. However, preparing for the unknown seems to be a major challenge for the industries till now. This is the biggest challenge for the service industry who have committed to their customers to provide uninterrupted service under any circumstances to get an edge over competitors. Service of Goldman Sachs, for example, was not interrupted even as Supercyclone Sandy left internet service providers (ISP) down their service for few days in New York recently, said managing director, Tata Metaliks, H.K. Jha, in the CEO panel discussion. Interestingly, ISPs continuity of service was more important, but as the ISP did not look through the future, it could not build a sustainable supply chain. It goes without saying that government support is necessary to ensure sustainable supply chain is tenable. The tsunami in Japan was perhaps the most significant example of how early thinking of the government could have saved the Japanese people from going without power for several weeks. The Northern and Southern Japan grids worked in two different frequencies and hence power restoration was impossible from the other part of Japan to the affected part, Jha said. In case the Japanese government had prepared itself for such eventuality by keeping Northern and Southern grid frequency similar, power outrage period could have been minimised by the power distribution companies by transferring from the other grid. However, there are examples where with the aid of the government, sustainable supply chains have been built.
Steel Insights, December 2012
Steel projects with 63 mtpa capacity in limbo: Verma Arindam Bandyopadhyay
ew steel plant projects with planned capacity of 63 million tons per annum (mtpa) are facing prolonged delay in different parts of the country, India’s steel minister Beni Prasad Verma has said. These include the big ticket investments of Posco and ArcelorMittal and also the expansion bids of domestic steelmakers Tata Steel and JSW. The promoters of these proposed plants had signed memorandum of understanding (MoU) with various state governments years ago, but failed to kick off due to land acquisition and other related problems, the minister said. In a written reply to the Lok Sabha, Verma said, “It is a fact that several companies could not start setting up plants as per their respective MoUs. Major factors limiting the progress of the steel projects in the country include non-availability of adequate land, raw material linkages, environmental clearances besides the effect of market downswings and opposition by the local people.”
He further said that progress of each and every steel project is not monitored by the ministry of steel. However, some of the major projects where no noticeable progress has been made from date of signing of MoUs calls for attention. These include Tata Steel’s 6 mtpa project in Odisha (for which MoU was signed in 2004) and 5 mtpa plant in Chhattisgarh (MoU signed in 2005). Also, JSW Steel’s 10 mtpa plant each in West Bengal (MoU signed in 2007) and Jharkhand (MoU signed
in 2005) are facing prolonged delay. The other major projects include Posco’s 8 mtpa plant in Odisha (MoU signed in 2005) and ArcelorMittal’s 12 mtpa project each in Jharkhand (2005) and Odisha (2006). While regretting the delay, the minister said such MoUs were “purely an understanding between the concerned state government and the respective steel investors,” and the government did not have much to do for regular monitoring of these projects.
Major steel projects facing delay Company
Year of signing of MoU
Preliminary work on land acquisition, rehabilitation and resettlement is on. Company has sought grant for mining lease from the State Government. Order for equipment and services has been placed and some consignments have already arrived
Land has been acquired by State Government, approval received for drawing water from Sabri river, Ministry of Railways has granted in-principle approval for railway corridor, public hearing for the Environment Clearance successfully conducted. Prospecting License for iron ore granted in Bailadila-I deposits
Financial closure is under planning
Approvals for setting up the project are being pursued
Land Acquisition facing local protest; MoU expired, revived with capacity scaled down at 8 mtpa from 12 mtpa
Land acquisition underway
Land availability still a major issue
Tata Steel Limited
JSW Steel Limited Posco India Limited Arcelor Mittal India Limited
36 Steel Insights, December 2012
Auto sector gets a spurt from festive sales
Steel Insights Bureau
fter a prolonged slump, the Indian automobile sector witnessed a sudden spurt in sales during October 2012 as the festive season sales jacked up the numbers. Almost all the auto majors reported healthy figures for the month while the industry clocked a record jump in nearly two years. A slew of exciting launches (eg the new Alto 800) helped increase the market’s appetite. However, a modest report card from Maruti Udyog, the country’s largest automaker, in November indicated that the spurt could be a one-off affair. According to the Society of Indian Automobile Manufacturers (SIAM), the industry produced 1,829,490 vehicles in October 2012 as against 1,596,500 in October 2011, thus achieving a growth of around 15 percent. However, the cumulative production data for April-October 2012 shows a modest growth of only 4.12 percent over the same period last year. SIAM recently slashed its projected car sales growth for the financial year to March 2013 to between 1 and 3 percent from an earlier forecast of 10 to 12 percent. The downward revision was prompted by the economic
slowdown, higher import tariffs and labour trouble at Maruti Suzuki’s Manesar plant. Domestic sales
The overall growth in domestic sales during April-October 2012 was 5.26 percent over the same period last year. However, in October 2012 overall sales grew by 14.81 percent over October 2011. The Passenger Vehicles segment grew at 10.53 percent during April-October 2012 over same period last year. Passenger Cars grew by 2.84 percent, Utility Vehicles grew by 60.54 percent and Vans grew by (-0.85) percent during April-October 2012 as compared to same period last year. However,
in October 2012 passenger car sales grew by 23.09 percent over October 2011. Total passenger vehicles sales grew by 33.65 percent in October 2012 over same month last year. The overall Commercial Vehicles segment registered growth of 4.26 percent in April-October 2012 as compared to the same period last year. While Medium & Heavy Commercial Vehicles (M&HCVs) registered negative growth at (-13.99) percent, Light Commercial Vehicles grew at 18.19 percent. Three Wheelers sales recorded growth at 2.57 percent in April-October 2012. Passenger Carriers grew by 6.48 percent during April-October 2012 and Goods Carriers registered de-growth at (-12.19) percent during this period. Two Wheelers registered a growth of only 4.47 percent during April-October 2012. Scooters, mopeds and motorcycles grew by 22.27 percent, 3.67 percent and 0.32 percent respectively over same period last year. However, in October 2012 Scooters, Mopeds and Motorcycles grew by 32.39 percent, 23.21 percent and 6.71 percent respectively over same period last year. Exports
During April-October 2012 overall automobile exports registered negative growth at (-4.94) percent compare to same period last year. While Passenger Vehicles grew by 5.74 percent and Commercial Vehicles grew only by 1.63 percent. Two & Three wheelers declined by (-3.77) and (-26.35) percent respectively in April– October 2012 compared to the same period last year. In October 2012 car exports grew by 29.16 percent compared to last year October and two wheelers exports declined by almost 4 percent during the same period.
M&M’s October auto sales up 29% y-o-y Mahindra & Mahindra Ltd (M&M Ltd.), one of the country’s leading automobile manufacturers, has recorded total sales of 53,438 vehicles, a 29 percent growth over 41,506 vehicles sold in October 2011, the company said in a release. The company’s passenger vehicles also registered all time high sales which stood at 26,932 units in October 2012, a growth of 44 percent over the corresponding period last year. Domestic sales stood at 51,316 units during October 2012, against 39,352 units during October 2011, recording an increase of 30 percent while the four-wheeler commercial segment which includes the passenger and load categories has registered a growth of 26 percent at 16,561 units. Exports for the month of October 2012 stood at 2122 units.
Steel Insights, December 2012
Tata Steel in pact with SMS Mevac on VIM undercarriage components where high-purity steel with characteristics such as enhanced ata Steel has entered into a new fatigue life, improved corrosion resistance collaboration with technology company and higher strength levels are critical. Richard Bell, commercial director SMS Mevac, which will design a of speciality steels, said, “We have been new facility for the production of high-purity supplying VIM steels for many years using vacuum induction melted (VIM) steels for ingot sourced from select third parties. the aerospace industry at the speciality steels However, our aerospace customers have business in Stocksbridge, South Yorkshire, a been eager to see Tata Steel make a solid company source told Steel Insights. commitment to them by expanding its This agreement represents an important capability and integrating VIM into its step for Tata Steel towards consolidating its existing UK asset structure.” position as a leading supplier of high-purity “We are delighted to be taking this step steels to the global aerospace market. and we look forward to working closely with The VIM production route involves key aerospace supply chains on VIM-derived melting high-purity recycled steel and products,” he added. alloys in a crucible furnace, extracting trace The managing director of SMS Mevac, elements via a degassing process in a low- Michael Thiehofe, commented, “SMS Mevac pressure vacuum and casting the purified is honoured to be the chosen supplier for the liquid steel into ingot moulds. engineering and, in case of further execution, The entire melting and casting operation the supply of a VIM unit for Tata Steel in is conducted in an oxygen-free atmosphere, Stocksbridge. Our process experts, having resulting in clean steel with very low gas more than 20 years of operational knowhow content. Alloying additions, also carried out in the field of tertiary metallurgy, will closely under vacuum, allow for very precise control cooperate with Tata Steel’s experts to design of the steel’s chemical composition. The a plant which will satisfy the requirements of ingots produced would be refined further this demanding, high-end market.” by vacuum arc remelting before being rolled VIM project manager, Stephen Carey, or forged into products for the aerospace said, “The agreement with SMS Mevac market, the statement said. means we will get a head start on the design VIM-derived steels are typically stage of the project, which could shorten the consumed in aircraft engine transmissions overall timeframe of the development by and bearings as well as aircraft structural and around six months.” The agreement with SMS Mevac is the latest in a string T.V. Narendran, VP (Safety & Flat Products), Tata Steel Ltd of investments by speciality at the launch of Tata ASTRUM steels in South Yorkshire totalling over £23 million in the last few years in support of both plant energy efficiency and improved processing capability. The most recent of these was the commissioning of two additional VAR furnaces in early 2012 to support the sales of aerospace steels. Sanjukta Ganguly
38 Steel Insights, November 2012
Tata Steel launches ‘Tata Astrum’ Tata Steel, one of the leading steelmakers of the country, has unveiled ‘Tata Astrum’, a new brand of its hot rolled products range, the company said in a statement. With this the company has made a foray into branding of HR products in the SME segment for the first time and this initiative is aimed at decommoditising steel and offering the best-in-quality product to customers, the statement said. Tata Astrum follows the success in the market of other Tata Steel brands, such as Tata Tiscon (rebars), Tata Shaktee (roofing sheets), Tata Steelium (cold rolled sheets), Tata Galvano (galvanized sheets), Tata Structura (hollow sections), Tata Bearings (bearings), Tata Agrico (agricultural implements), etc. Tata Astrum HR coils and sheets will be produced from two of Tata Steel’s mills at Jamshedpur and will be available in 1.6 mm to 16 mm thickness range. Customers will be served through Tata Steel’s authorised distributors. A total of 42 such distributors have been appointed across the country each of whom will have a tie-up with service centres that will be certified by Tata Steel for quality products. The material will be supplied to customers in processed form out of the service centres. “Tata Steel is constantly endeavouring to enhance customer satisfaction. With the launch of Tata Astrum, Tata Steel is offering convenience to its customers through consistent availability of readyto-use quality HR products,” said T.V. Narendran, vice-president, safety and flat products of Tata Steel. The Astrum product range will be used in the automotive, earth moving equipment, Railways, fabrication, Construction and Industrial Machinery segments. The size of the domestic market for hot rolled products in the SME segment is pegged at 6 mtpa.
Tata Steel to commission Kalinganagar plant by July-Dec 2014 Tamajit Pain
ata Steel is expecting to commission the first phase of its proposed 6 million tons per annum (mtpa) greenfield plant at Kalinganagar in the second half of 2014, a company executive said. “In the first phase, the steel plant will start with 3 mtpa capacity. It is expected to be commissioned during the second half of 2014, that is anytime between July to December,” Tata Steel Ltd vice president in-charge of the project, Anand Sen, told Steel Insights. Sen said a bulk of the orders has already been placed and more than 55-60 percent of the orders are in position. Siemens is supplying the blast furnace and hot strip mill, while a Chinese supplier is supplying the coke plant and the erection is being done by L&T. “The blast furnace erection has been completed 11 metres above the ground,” he said. The 6-mt project in Odisha's Kalinganagar was earlier budgeted at about
`35,000 crore. But due to huge delay in starting construction work for the project, the steel major has been incurring a huge cost overrun. “Foreign exchange fluctuations and changes in state taxes are the extraneous factors in the cost overrun,” Sen said. Tata Steel is evaluating the impact of cost overrun for the project. “We are trying to assess the cost overrun caused due to delays in the project,” Sen said. He said areas which had hit the company included forex impact, taxes and social cost. “When the project was envisaged the rupee was at 43 to a dollar and now it is at 54-55 versus the dollar,” he said. Though, the company was not able to get raw material security for the project as allotments of mines were yet to come through, Tata Steel is moving ahead with the project in full-swing and expected to begin the three million first phase production by March 2014, Sen said. The overall project progress would be about 30-35 percent, officials said. The plant will have one sinter plant,
two coke ovens, one blast furnace, one smelting shop and 1 hot strip mill among others. Sen said the plant, once operational, will have a high end product mix like Anand Sen, VP, HSM of 2000 mm Tata Steel Ltd and a 30 ton coil manufacturing unit. The plant would have (67x3) power plants and about 180-200 MW would be produced from waste gas of the plant. The coal fired power units would be a little bigger with about 7.6 meter coke oven based on stamp charged technology so that inferior coal available in India could be utilised. The power plants are likely to come up by February-March of 2014. The Kalinganagar plant is under construction after eight years of delay. Tata Steel had signed an MoU with the state government in November, 2004, for establishment of the steel plant. However, the project remained a non-starter for years following the police firing on January 2, 2006, in which at least 13 tribals were killed during an eviction drive carried out by the police. The company resumed construction work at Kalinganagar in September of 2011 after withdrawal of dharna by the local villagers, who had been on agitation, demanding jobs in the project.
Steel Insights, December 2012
Essar Steel supplies steel plates to subsea tankages in North Sea Steel Insights Bureau
s s a r Steel, t h e leading global producer of steel, has successfully supplied 9000 tons of high quality steel plates for a Dilip Oommen, CEO & MD, subsea tankage Essar Steel India project being executed in the North Sea for Premier Oil, United Kingdom by Dry Docks World Dubai. The plates will be used in building oil & gas reservoirs in the sea bed at a depth of 130 metres below sea level at a temperature lower than (-40) degree Celsius, a company release said. Essar, the fully integrated flat carbon steel manufacturer - with presence in Canada, USA, India, UK, UAE and Indonesia, is a versatile flat steel producer with integrated facilities from extra wide plates, hot rolling, cold rolling, galvanizing and colour coating, pipes with a full distribution business with Processing and Distribution Centres and Steel Hypermarts. The company wsaid that, these steel plates conform to NACE MR0175 and ISO 15156:2 2009 standard. The plates have been tested for Hydrogen Induced Cracks to ensure the ductility and impact resistance. This puts Essar Steel in the elite league of global steel makers who have developed such capabilities.The steel is designed to withstand harsh operating conditions and are maintenance-free with a life of over 50 years.
40 Steel Insights, December 2012
“The successful execution of this order bears testimony to the capabilities of Essar Steel to manufacture steel conforming to highest international standards,” Dilip Oommen, CEO & MD, Essar Steel India said. “Developing these grades is the result of our drive to continually excel in our efforts to become a well-known high quality steel producer,” he added. Supplying steel to the Hydrocarbon sector is one of the main strengths of Essar Steel, a company source told Steel Insights. In fact, it has consistently been able to supply various steel products to this sector conforming to API standards that include hot rolled coils, HSAW and LSAW pipes, plates etc. Essar Steel is only Indian steel manufacturer permitted by API to use their monogram on the plates. Essar Steel has set up a plate mill with an annual capacity of 1.5 million tons capable of producing up to five-meter wide plates. Equipped with state-of-the-art equipment and controls – along with cutting edge technology, the mill is the only one of its kind in the country capable of producing the widest plates conforming to global standards, the company statement added. Its product basket includes rolled, normalized rolled, furnace normalized, direct quenched, and quenched and tempered (QT) plates with a thickness ranging from 5 to 150 mm and widths of up to 5 meters and 3 m to 25 m in length – all of which are import – substitution products. Accelerated Direct Cooling Operations (ADCO) provide a highly controllable, accurate and accelerated cooling capability that will ensure homogeneous cooling over the entire plate width, while Edge Masking gets a homogeneous temperature pattern over the
HRS to exhibit energy efficient heat transfer solutions at Chemtech, 2013 HRS Process Systems Ltd. (HRS PSL), part of HRS Group, UK, one of India’s leading heat transfer specialists is all set to participate in the worldclass event in Indian chemical industry, Chemtech - 2013; which is scheduled from 15- 18 January, 2013 at Bombay Exhibition Centre (BEC), Mumbai, the company said in a statement. The company has supplied more than 8000 heat exchangers worth over $16 million and left a footprint in the chemical industry in less than a decade. HRS PSL will showcase a wide range of innovative products in this event to enable the chemical process industry evaluate better heat transfer solutions. “HRS plans to expand its reach in the processing sector through this expo by introducing and offering innovative and cost effective heat transfer solutions,” said V Gokuldas, Managing Director, HRS Process Systems Limited. “Chemtech is one of the largest events in the chemical sector in India and we look forward to it, hoping for more business opportunity,” he added. width of the plate. This avoids over cooling and under cooling of plate edges. Essar Steel has a global steel production capacity of 14 million tons per annum (mtpa). It operates seven Steel Processing and Distribution Centres in India and Indonesia with an aggregate capacity of over 4 million tons. Essar has the largest network distribution channel of Essar Hypermarts. Its products find wide acceptance in highly discerning consumer sectors such as automotive, white goods, construction, engineering and shipbuilding.
BSP installs mushroom design dome on upcoming BF No. 8 Steel Insights Bureau
he Steel Authority of India Limited (SAIL) has reached yet another important milestone in the fast progressing Blast Furnace (BF-8) project execution work in Bhilai Steel Plant, with the installation of ‘mushroom dome’ on the second of the three hot stoves of the upcoming furnace. The dome was successfully erected on Stove No. 2 on November 29, 2012, according to information available with Steel Insights. It may be recalled that the erection of dome on stove No. 1 was done on October 7, 2012. The domes of stoves in BF#8 area have a unique mushroom design to take care of thermal stresses as a result of higher dome temperature. A state-of-the-art technology being introduced for the first time in Bhilai Steel Plant, the mushroom design of the dome helps in achieving longer campaign life of stoves. The dome, weighing about 100 tons, was assembled outside and placed in position as a single piece on top of the stove at a height of 39 metres. With placement of the dome, the total height of stove increased to 45 metres. The erection activity executed by L&T was done under the supervision of Blast Furnace Zone of the plant’s project department. It is worth mentioning that the work of erection of hot stoves had been inaugurated on September 14, 2011. There are three hot stoves of special design in mushroom dome shape in BF 8. Each shell comprises the base plate, 16 rings and the dome. The total structure weighs 410 tons. Special grade plates of various thickness ranging from 25 mm to 50 mm were used for the shell. Among the other milestones in BF 8 Project crossed recently is the installation of the top cone of Furnace Shell weighing 130 tons and consisting of four shell rings on
October 19, 2012, marking the completion of erection of the Furnace Shell. Yet another critical job was begun in the BF 8 Project with inauguration of the job of layering refractory castable of furnace bottom in Furnace Proper area on October 8, 2012. Hot metal production
SAIL recorded a growth of 4 percent in hot metal and 2 percent each in crude steel and saleable steel production for October 2012 over the corresponding period last year, the company said in a statement.
Visa Steel in coke making JV with SunCoke Visa Steel Ltd. has announced that it has entered into a coke-making joint venture in India with SunCoke Energy of the US. Visa Steel will hold a 51% majority stake in the JV, while Illinois-based SunCoke Energy will invest around Rs 368 crore to acquire the remaining 49% in the transaction that is expected to close in the first quarter of 2013. The JV will include Visa Steel’s current 400,000 tons/year heat recovery coke plant in Odisha, India. “The demand for coke from large and medium-size steel producers has been increasing substantially and there is potential to grown the coke business on a standalone basis,” Visa Steel chairman Vishambhar Saran said in a statement.
Production of hot metal, crude steel and saleable steel for October 2012 stood at 1.2 million tons (mt), 1.14 mt and 1.01 mt respectively. As for the period of AprilOctober 2012, the C S Verma, Chairman, SAIL company produced 7.2 mt of saleable steel products against 7 mt produced in the same period last year. Production of hot metal and crude steel stood at 8.4 mt and 7.9 mt respectively, registering a growth of 3 percent over the same period last year. On the front of techno-economics of production, SAIL’s performance was marked with an upward trend in blast furnace productivity, coke rate and energy consumption by 4 percent, 2 percent and 2 percent respectively. SAIL to expand capacity to 18 mt
The leading steel manufacturer of the country said it will expand its production capacity to 18 million tons (mt) from existing 14 mt by the end of current financial year. “Our phase-I capacity expansion target is 24 mt. Of that, this year we will be starting two new blast furnaces, our total hot metal production capacity will go up to 18 mt by the end of the (financial) year,” SAIL chairman C.S. Verma said. Speaking to mediapersons after the halfyearly review of the company’s performance by the government, he said that two new blast furnaces at its Rourkela and Burnpur plants will become operational in next few months. Besides, the company will also be commissioning a new cold rolling mill at Bokaro plant by the fiscal end. SAIL has spent about `39,000 crore so far on capacity expansion (out of a targeted investment of `72,000 crore). According to Verma, the company is aiming to increase its market share up to 30 percent by 2020 and the steelmaker will be expanding its capacity to 45 mt by then. The company is at present the largest steel producer with a capacity of 14 mt. Besides, it has a total market share of about 18 percent.
Steel Insights, December 2012
RINL plans larger dealership base Steel Insights Bureau
ashtriya Ispat Nigam Limited (RINL), a leading steel manufacturer of India, which had set a target to increase the number of dealers in the country, has appointed 555 rural dealers and it plans to take it to 1,000 dealers very soon, a company source told Steel Insights. According to A.P. Choudhary, CMD, RINL-VSP, the company has launched a unique rural dealership scheme which is basically an inclusive scheme extending the engagement to the rural entrepreneurs. No security deposit is taken under this scheme and the rural dealers get a margin of around `1,000 to `1,200 for every ton of steel sold by them. RINL has appointed 101 dealers in Uttar Pradesh, which is the highest in the country, being a populous state with vast rural marketing opportunities. According to T.K. Chand, director (commercial), the company has launched the “Online Customer Portal”, the first of its kind in steel industry in India. Customers and consumers can directly book steel from anywhere through the Internet starting from one truck load to multiple rake loads. The portal is very user-friendly and even customers with very little knowledge of
e-booking can easily place their orders. It is planned to extend this facility to mobile phones also, and with this, the customer can book their requirement on the move. In the domestic steel market, RINL is the leader in bars and rods and has 9 percent of the market share in long products. RINL hikes prices in Dec
Looking at the present market scenario, Rashtriya Ispat Nigam Ltd (Visakhapatnam steel plant) has hiked steel prices by `500 per ton w.e.f. December 1, 2012, according to sources. After the hike, 8 mm rebar of IS1786 Fe500D grade in Vizag is quoted at `45,550 per ton (incl. ED/cess and excl. VAT/CST) for December 2012. The company achieved sales turnover of `1,085 crore in November, registering
Prices for representative steel products for Dec’12 Sl. No.
The steel ministry has asked the Uttar Pradesh government to expedite leasing of iron ore mines in Lalitpur district of Bundelkhand region to Rashtriya Ispat Nigam Limited. RINL had already applied for the lease of iron ore mines in Lalitpur district for setting up a pellet unit in the region. Meanwhile, RINL plans set up processing units in Ambedkar Nagar and Ghaziabad districts of UP. It is also establishing rural stockyards, including one in Varanasi.
Billet 125x125 mm
Channel 200x75 mm
Round 20.64 mm
Wire rod 7 mm
Wire rod 8 mm
(The above prices are Branch Level Prices incl. ED/cess and excl. VAT/CST, etc.)
42 Steel Insights, December 2012
Steel ministry seeks iron ore mines in UP for RINL
a growth of 5 percent. By-product sales of `364 crore was also higher by 13 percent. On the production front too, crude steel recorded a growth of 3 percent supported by the growth in production of hot metal and saleable steel. Production was partly affected due to deficit in power supply from the government but the situation is now likely to improve. RINL’s captive generation has also picked up with more availability of thermal coal from Coal India Ltd, the release added.
Steel companies report mixed Q2 results Steel Insights Bureau
indal Steel & Power reported a marginal growth of 2.5 percent in its consolidated net profit to `897.28 crore in JulySeptember quarter against a net profit of `875.37 crore in the same period last year, reports said. The company plans to add 1.6 million tons (mt) new steel melting shop at Odisha’s Angul by March. After, that the company’s hot metal capacity will increase to 4.6 mt new capacity by March, reports quoted JSPL Group Chief Financial Officer Sushil Maroo as saying. He forecast a rise in steel prices in the coming quarters as the economic activity in the country is expected to pick up due to recent policy initiatives of the government. JSPL is also looking to raise up to $300 million in next six months to meet the capex requirements of its international operations, he said. The money will be primarily be used at JSPL’s coal mine in Mozambique, from where it plans to begin production by next month, he added. Net sales during the period increased by 4.55 percent to `4,606.93 crore as demand was traditionally low in the last quarter due to rainy season. JSPL’s net profit was up 2.50 percent to `897.28 crore during the quarter against a net profit of `875.37 crore in the same period of FY’12. The consolidated net profit of JSPL includes minority interest and share of profits in associates. “It is virtually the same kind of number. Everything remains more or less the same, quarter on quarter, but our international operations have done better,” Maroo said. He added slowdown in the economic activities in the country and high interest regime also impacted company’s performance in the last quarter. During the quarter, the company reported a 10 percent growth in its production of steel products to 6.90 lakh tones. Against this, sales growth of the
company was 7 percent, selling 6.39 lakh tons of steel products. The company reported over 58 percent jump in its inventory levels to 4.99 lakh tons in the quarter. Tata Steel reports net loss in Q2
Tata Steel has reported a consolidated net loss of `363.93 crore for the second quarter ended September 30, 2012 as against a net profit of `212.43 crore for the same period last year. The company reported consolidated net sales of `33,867.32 crore for the given quarter against `32,507.45 crore last year. Earnings before interest, tax, depreciation and ammortisation (EBITDA) stood at `2,452.4 crore versus `3,021 crore. EBITDA margins on a consolidated basis was 7.2 percent. On a standalone basis, Tata Steel India’s net sales grew to `9,034.20 crore for the second quarter versus `8,142.19 crore, corresponding quarter last year. Its standalone net profit fell to `1350.81 crore as against `1495.22 crore. EBITDA for Tata Steel India was `2669 crore. The profit fell on account of lower steel prices in India and higher raw material costs. The costs of raw materials went up to `2537.16 crore against `1889.04 crore last year on account of higher coal prices. Steel prices over the second quarter fell by 4-6 percent because of falling international rates and lacklustre demand growth. H.M. Nerurkar, managing director, Tata Steel, said, “The Indian operations continued their steady performance against a backdrop of lacklustre demand in the marketplace and increasing imports.” Koushik Chatterjee, group CFO, Tata Steel, said, “We will be commissioning the coke oven battery in the current quarter and the cost impact will be in our favour from the fourth quarter.” Talking on the expansion plans at Tata Steel’s Odisha 3 million ton steel plant,
Nerurkar said that the plant is progressing on schedule and should start by the middle of 2014-15. SAIL PAT up 12% in Q2
Steel Authority of India Limited (SAIL) achieved a 12 percent rise in the profit after tax for the July-September period of 2012-13 at 543 crore compared to 485 crore in the corresponding period last year. Sales turnover achieved by the company during the period was at Rs.11,976 crore. With a production of 3.6 million tons (mt) of hot metal, 3.39 mt of crude steel and 3.18 mt of saleable steel , SAIL recorded a growth of 7 percent, 5 percent and 4 percent respectively in the second quarter on an year-on-year basis, the company said in a statement. Sustained emphasis on operational improvements resulted in 3 percent reduction in energy consumption and 8 percent increase in BF productivity in the second quarter. With a thrust on enriching product-mix, the company achieved a growth of 7.5 percent in the sales of value-added steels in the second quarter. “Higher production along with improvement in key Techno Economic parameters gave us profitability gains. Besides, growth in sales realisation gave us added benefits. Going forward, we are optimistic about the growth in the Indian Steel Industry and SAIL is appropriately ramping up its production to meet the growing demand,” C. S. Verma, chairman, SAIL said. Under its ongoing modernisation and expansion plan, several facilities are in different stages of completion and a few of them have been made operational. Project milestones achieved during the first half of the year include, starting of heating of new Coke Oven Battery & completion of project-work of the Wire Rod Mill at ISP, Burnpur, completion of 700 TPD ASU-4 at Oxygen Plant-II at BSP, commencement of Sinter production in the new sinter plant and heating of New Coke Oven battery at RSP. In the coming months, two large 4060m3 blast furnaces at ISP & RSP would commence production, enhancing the hot metal capacity by 5 million tons per annum.
Steel Insights, December 2012
Corporate Another important development towards raw material securitization of SAIL during the quarter was signing of an MoU with the Chhattisgarh government for development of an iron ore mines at Eklama iron ore deposit through a JV to be formed between Chattisgarh Mineral Development Corporation Limited (CMDC) and SAIL. Eklama Iron Ore Deposit would be a supplementary iron ore source for Bhilai Steel Plant, which is located at a distance of around 135 km from Bhilai. It is estimated to have a reserve of around 100 mt of good quality ore. JSW Steel Q2 net profit soars
JSW Steel said its second quarter (July-September) standalone net profit jumped by nearly 547 percent to `822.26 crore from `127.12 crore on higher volumes and rupee appreciation impact. The company has gained around `422.38 crore due to 6.4 percent appreciation in the value of the rupee against US Dollar during the second quarter and this has been treated as exceptional in nature, JSW said in a release. Net sales for the quarter stood at `8833.73 crore, up nearly 16 percent from `7625.06 crore in the corresponding quarter of 2011-12 whereas expenses rose by 16.13 percent to `7826.92 crore from `6739.90 crore, it said. The finance cost rose by nearly 60 percent to `420.75 crore during the quarter from a low of `263.54 crore in the corresponding quarter of previous year, the release added. The company’s consolidated net sales during the quarter increased by 16 percent to `9475.24 crore as compared to `8133.93 crore in the corresponding quarter of 2011-12 whereas net profit increased by 584 percent to `617.29 crore from `90.20 crore. IFGL Refractories drops 67%
IFGL Refractories Ltd reported 67 percent fall in consolidated net
44 Steel Insights, December 2012
profit in the July-September quarter of 201213 at `4 crore compared to `11.99 crore in the same period last year. Total income during the period rose marginally by 3.46 percent at `166.69 crore compared to `161.11 crore in the same period last year, the company said in a statement. Since more than 50 percent of the company’s total income on standalone basis is from exports and although rupee has depreciated, there has been an overall increase in costs including inputs, outward freight and other selling expenses, resulting in reduced profit before tax, it said. For these reasons and also that operations of Company’s new subsidiary IFGL Exports Ltd are undergoing stabilisation and performance of the Brazilian subsidiary is below expectations, profit before tax on consolidated basis has also reduced, it added. Nevertheless, measures like cost cutting, better working capital utilisation etc., which are being taken, should have a positive impact and any change in the prevailing economic situation will further enhance the overall performance of the Company and its subsidiaries. UMIL turnover up 12% in Q2
U s h a Martin I n d i a Ltd (UMIL) has posted 12 percent growth in turnover to `938.98 crore in the second quarter (Q2) ended September 2012, compared to `827.58 crore achieved during the same period last year. The company’s profit after tax (PAT) stood at `22.85 crore for Q2 FY13 against a loss of `62.69 crore reported for the same quarter last fiscal. For the half year ended September 2012, the company incurred a PAT of `26.32 crore, compared to a loss of `37.02 crore reported for the same period last year. EBIDTA for Q2 FY13 was `176.55 crore against `147.76 crore in Q2 FY12. The company’s billet production during the period under consideration was up 19 percent. Coal production from its Daltonganj mine was up 138 percent while iron ore production increased 30 percent year-onyear.
Welspun posts 25.4% rise in net profit
Welspun India Ltd has posted 25.4 percent rise in net profit to `472.8 crore in second quarter ended September 2012, compared to `376.9 crore in the same period last year. The company’s total income was up 7.1 percent year-on-year to `8,022.1 crore in Q2 FY13, against `7,487 crore during Q2 FY12. Total expenses increased by 9.3 percent to `7,177.5 crore in the period under consideration, against `6,565.6 crore in the same period last year. Adhunik Metaliks posts Q2 profit
Increased earnings from its main business, operationaliz ation of pellet plant and higher revenues from mining division helped Adhunik Metaliks Ltd to post a profit of `36.12 crore during the second quarter of 2012-13 compared with a net loss of `5.52 crore reported during the corresponding quarter of previous financial year. The company’s net sales from operations increased to `596.49 crore during the quarter from a low of `448 crore during the corresponding quarter of 2011-12 as the revenues from iron and steel business surged to `523.34 crore from a low of `399.86 crore in the corresponding quarter. The revenue from its mining division rose to `88.23 crore from a low of `72.76 crore, the company said in a release. The earnings before interest, tax, depreciation and taxation (EBITDA) saw a jump of 85.54 percent during the quarter to `138.38 crore against `74.59 crore in the last comparable quarter, it said. “After consolidating our businesses in fiscal 2012, we strategically continue to strive towards emerging as an integrated player in the business of mining, steel & power,” MD Manoj Kumar Agarwal said. However, Agarwal said that with the commissioning of their 270 MW power plant in Jharkhand in October the company has successfully moved up the value chain from being a captive generator of power to entering into long term PPAs.
Jayaswal Neco to expand capacity despite slowdown Sanjukta Ganguly
ayaswal Neco Industries Ltd (JNIL), one of the leading DRI makers in the country, is all set for capacity expansion and is going ahead with its plans to set up a new unit at Bilashpur in Chhattisgarh. The proposed plant is likely to begin operations by 2014, a senior official of the company told Steel Insights. The DRI plant with a total capacity of 2X500 tons per day (tpd) will be accompanied by a captive power plant with a capacity to produce 50 MW per hour. The company is also setting up a pellet plant at Raipur with a total production capacity of 1.2 million tons per annum (mtpa). This plant is also likely to be operational soon, the official said. “We have not started construction of the plant at Bilashpur yet but other necessary approvals required to set up the plant including land acquisition, MoEF approvals etc. have already been received,” he said. “In fact, we are about to start the
Jayaswal Neco’s DRI factory
construction work soon so that we can operationalise the plant by 2014,” he added. Meanwhile, the DRI industry in the country continues to suffer from adverse market conditions. Abundant availability of non-coking coal reserves in India and successful generation of power through waste heat recovery methods had prompted the rapid development of this industry in the 1990s. But the increasing coal crisis and stagnant demand from the steel market in last few years has put the sector under duress. The raw material supply is currently the main problem for the DRI sector. The move by the government of Odisha to slap huge penalties of over `50,000 crore on mining companies for alleged illegal and excess evacuation of ore has further worsened the supply of iron ore. Also, the overall scenario of the real estate sector being not so well, demand for sponge iron has dropped significantly. However, there is a possibility of the demand to increase in the next few months.
Existing DRI unit of Jayaswal Neco
For the DRI plants, high grade domestic coal gives better output than Indonesian coal as the latter contains high volatile matter (VM), high moisture, low char strength and is highly fragile. Indonesian coal can be used for DRI industry provided it is cost effective, but for most of the DRI makers, procuring imported coal is posing a problem due to the escalating cost. Hence, at the present scenario the industry needs more captive coal blocks to sustain their operations, A.K. Maitra, DGM of the DRI unit of Jayaswal Neco said. “Since we have our captive coal mines, sourcing of coal is not much of a problem for us but every DRI producer is not that lucky. However, since we mainly depend on Odisha mines for iron ore supply, we are facing huge problems. But we expect NMDC to improve supply of iron ore in the next few months,” Maitra said. From a broader perspective, the overall scenario of the sponge iron sector of India is not much satisfactory as most of the small DRI makers have stopped production. However, the midsize and big players are continuing their production at 60-65 percent of their total installed capacity. There is an expectation that with the monsoons over, the real estate sector will start pulling up the demand for sponge iron along with it. How far this expectation is fulfilled would decide the fate of the industry in the near term.
Steel Insights, December 2012
SAIL consortium may sign pact for Hajigak project in Jan Arindam Bandyopadhyay
he Indian consortium led by Steel Authority of India Ltd (SAIL) which had successfully bid for Afghanistan’s Hajigak iron ore concession, is at the final stage of signing agreement for the project, Afghan mines minister Wahidullah Shahrani said. The Afghan minister, who was recently in Kolkata for the 11th International Mining & Machinery Exhibition (IMME), said that the SAIL-led consortium, AFISCO (Afghan Iron and Steel Consortium) is expected to sort out the issues raised over some conditions put in the agreement. As per the agreement, the consortium has to start mining within six months of being granted the licence or face cancellation of licence. There is also a condition restricting ore exports from the project.
Wahidullah Shahrani, Afghan mines minister
“These things have been raised during the negotiations and negotiations are moving on. I don’t see any major difficulty in moving forward,” the minister said. He further said that in 10-12 years, the investment in the project would be around $10-15 billion, which would be one of the
German mining equipment export to India flat
n line with the slackness in Indian mining sector, including iron ore and coal mining, the mining equipment export by German companies to the country has witnessed a flat growth in 2012 and stood at Euro 40.5 million till June, according to the German engineering industry association VDMA. “Mining equipment export to India was Euro 80 million in 2011. In 2012, till June, it was Euro 40.5 million, almost the same as last year,” Rajesh Nath, MD, VDMA India, said. Construction equipment export which stood at Euro 250 million in 2011, has dropped by 12 percent till June this year, he said. However, the German companies are still upbeat about Indian markets, especially in view of the slackening of Chinese demand. Two leading German machinery makers, Wirtgen and Liebherr, have already committed to establish a presence in India and invested in manufacturing facilities in Pune, he added. Bauma 2013
Bauma 2013, the world’s largest engineering equipment fair, is going to be held in Munich on April 15-21 with a record participation of 3,300 exhibitors from over 100 countries. Announcing this in Kolkata, Thomas Loffler, deputy CEO, MMI (organisers of the event) India, said that around 42 Indian companies have confirmed their participation in the global engineering exhibition. The companies that have evinced interest include steel, mining, power and other core sector industries. “The coming event will be the largest ever and will be held on 570,000 sq. metres of total area,” Loffler said. About the Bauma India exhibition, he said the second edition of the event, which was first held in 2011, will be held in Mumbai on February 5-8, 2013.
46 Steel Insights, December 2012
biggest single project investments by India abroad. A SAIL delegation is expected to visit Kabul later this month, he said, adding: “We are expecting that we will conclude negotiations shortly. In some point in January the Cabinet as per our mining regulation would authorise the mines ministry to sign the concession." Meanwhile, another Indian consortium including Hindustan Copper and Nalco has shown interest for Shaida copper deposit project, the minister said. The bids will be opened "pretty soon, in a matter of days," he added. Tenders for ore, copper mines
Following the successful commissioning of a few mining projects, the Afghanistan government is going to float tenders for its Siya Dara iron ore project and northern Aynak copper project in January 2013, Shahrani said. “We are going to float tenders for the Siya Dara ore deposits and northern Aynak copper project in January,” he said. The iron ore deposit has a resource base of 0.5 billion tons. The Siya Dara iron mine, located in the Yakulang district of Bamiyan, reportedly consists of 62 percent iron. The copper project, on the other hand, has a reserve of 7-10 million tons. Earlier, the government had planned to invite tenders for the northern part of Aynak mine in 2011. The remaining part of this mine has already been given to a Chinese company on contract basis.
Danieli supplies state-of-theart HSM to Baosteel Sanat Bhaumik
n December 31, 2009, Baosteel Iron & Steel Co. Ltd, China and Danieli & C. Officine Mechaniche SpA, Italy signed a contract for implementation of a 4 million tons per annum (mtpa) Semi Continuous Hot Strip Mill (HSM) in Shanghai Meishan plant and the first coil from this HSM was produced on April 2, 2012, less than 28 months after signing of the contract. Some of the project milestones achieved in this state-of-the-art HSM are given below:
with the most up-to-date technologies to produce low carbon, medium carbon, high carbon, peritectic, HSLA, and C-Mo steel grades. The produced strips are of 1.2 mm to 19.0 mm thickness and 900 mm to 1650 mm wide. The maximum coil weight will be 33 tons. The mill consists of:
negative bending, work roll shifting ± 150 mm, shaped-roll technology to improve flatness control capacity; • L aminar cooling system U-tubetype in order to achieve target coiling temperature and proper material mechanical characteristics;
• Three reheating furnaces of 300tph each;
• T wo heavy-duty Downcoilers designed for thick gauges up to 19 mm of HS steel;
• High-pressure Water Descaler;
• Coil conveyor system.
• Production of first coil: April 2, 2012 and
• Vertical Edger E1
• F inal Acceptance Certificate: October 24, 2012.
• 2-high reversing Roughing Stand R1; • Vertical Edger E2;
These dates not only show an extremely fast implementation period of the HSM but issue of the FAC within six months of first coil confirms a very fast learning curve for this project. This 1780 mm semi-continuous hot strip mill has a capacity of 4.0 mtpa, and is the fifth plant of its kind supplied by Danieli in China in the past six years. It is equipped
• 4-high reversing Roughing Stand R2;
The technological layout of the plant shows the disposition of the main technological equipment – Reheating Furnaces, Descalers, Roughing Mill Stands, Passive Covers, Finishing Mill Stands, Laminar Cooling, Downcoilers, etc.
• C ontract coming into force: December 31, 2009 • Start of erection: May 1, 2011
• P assive Covers in order to limit the transfer bar temperature losses; • T ransfer bar drum-type Crop Shear for head/tail cropping; • Transfer bar Descaler; • S even 4-high Finishing Stands, equipped with hydraulic HAGC, possitive and
Three nos. of Walking Beam type Reheating Furnaces will heat slabs of the following sizes and feed the hot strip mill: • Slab Thickness – 230mm (max)
Steel Insights, December 2012
Technology • S lab Width – 1650mm (maximum) and 900mm (minimum)
uniform mechanical properties during finish rolling, the Rotary Drum Shear cuts the head ends of the transfer bars for smooth threading through the Finishing Mill Stands and reduces possibilities of cobble in the Finishing Mill area.
• S lab Length – 8000mm to 11000mm (long slab), 4500mm to 5300mm (short slab) Reheating Furnace (300 tph each)
Slabs out of continuous caster cut into required lengths are transferred near furnace approach charging table. The slabs are then placed in the heating initial zone of the furnace with a long arm charger. The slabs are heated with the movement of walking beam according to the set program. Based on the different rolling steel grade, the slabs are heated up to 1150 to 12500C. When the heated slab reaches the discharging place, it is lifted by a pusher and moved to the furnace run out roller table for roughing rolling and the Descaling unit WD1 removes the scale along the whole length of the slab with high impact pressure. High-pressure Water Descaler
After primary descaling, the slab enters the Vertical Edger (E1) and 2hi Reversing Roughing Mill Stand. The vertical edger has a maximum separating force of 8000kN and can provide maximum 100mm (50mm per side) reduction in widths. The 2hi Roughing Stand with maximum separating force of 32000kN has a roll opening of 300mm considering maximum roll diameters and can reduce 55mm in thickness for 230mm thick slabs. The transfer bars exiting the 2hi Reversing Roughing Mill enters the Vertical
Rotary Drum Crop Shear
The bar then enters a secondary Transfer Bar Descaler to ensure rust free surface during finish rolling. Transfer bar Descaler
Edger (E2) and 4-Hi Roughing Mill Stand for further reduction in thickness suitable for Finishing Mill. The Vertical Edger (E2) which can reduce the transfer bar with to maximum 60mm (30mm per side) is equipped with 6000kN separating force and the 4-Hi Roughing Mill Stand (R2) can effect maximum thickness reduction of 50mm in one pass (for 230mm thick slab) is provided with separating force of 45000kN. Vertical Edger (E2) and Roughing Mill Stand (R2)
After head end cutting and descaling and before entering the Finishing Mill train, the transfer bar passes through another Vertical Edger (E3) which can reduce the width by maximum 15mm (7.5mm per side). This Vertical Edger has a maximum roll
The transfer bar from the 4hi Roughing Stand passes through a passive heat panel to reduce temperature loss and to Rotary Drum type Crop Shear for head and tail end cropping. While the passive Heat Shield reduces the gap between the head and tail ends of the transfer bars ensuring
separating force of 1500kN. The Finishing Mill is provided with seven rolling stands. Separating forces in first four stands (F1-F4) is 42000kN where as for last three stands (F5-F7), it is 36000kN. These state-of-the 4hi Finishing Stands are provided with both positive and negative bending and shifting of the work rolls as well as inter stand hydraulic loopers, hydraulic AGC, etc. The work roll bending forces per chock is +2000kN/1200kN for first four mill stands (F1-F4) and +1500kN/-800kNfor the last 3 stands (F5F7). The maximum work roll shifting will be +/-150mm hydraulic roll gap adjustment cylinder pressure is 260 bar (each stand). Vertical Edger (E3)
During thickness reduction it is very
48 Steel Insights, December 2012
Technology important to have a constant reduction along the strip width in order to have on uniform elongation between the centre and the edge of the strip. If this condition is not reached, an internal stress condition is generated, causing flatness defects (Centre Buckles or Wavy Edges). The parameter that indicates the correctness of the rolling pass is the ratio between the Crown and Thickness (Crown Ratio) at the entry and at the exit of each pass. More is the change of this ratio during a rolling pass, more is the risk to create a flatness defect on the strip. In the most favourable case the ratio does not change and the strip will be in perfect flatness condition. Because it is a normal requirement during rolling, to change the crown ratio from the entry side to the exit side of the mill to reach the request crown target, it is necessary to change this ratio gradually, distributing the total change during the rolling passes, staying in a limit that depends on the ratio between width and thickness of the strip. Danieliâ€™s Optimised Shape Roll Technology (OSRT) in this hot strip mill has been used for perfect crown and flatness control of the strips.
Laminar Cooling U-Tube Type
The 103 meter Runout Table and Laminar Cooling Section is used to convey the strip to the coiling section and cooling the strip coming out of the Finishing Mill. The control of strip temperature is very important in order not to involve a grain growth which would bring about mechanical characteristics unsuitable for the expected final use.
This Runout Cooling system uses laminar U-tubes banks on the top and banks of multiple nozzles headers on the bottom. The headers are closed/opened by on/off valves according to strip thickness, speed and temperature at inlet so as to assure metallurgical characteristics of the end product. Top headers are located along the
Steel Insights, December 2012
Technology Runout Table following last Finishing Stand. Every header can be tilted 900 by a hydraulic cylinder to allow the cobble removal and roll maintenance. Separate control has been provided for top and bottom headers flow rates. Both headers with spraying nozzles are mounted between table rollers in fixed position. Three Downcoilers are used for coiling the strip coming from the Runout Table. The Downcoilers are of fixed type and consist of a ”plug in” type four section collapsing wedge type mandrel with mandrel expansion cylinder, three wrapper rolls, downcoiler frame and “clam shell” guides. The Downcoilers are equipped with coiling of the following size strips into coils: • Strip thickness : 1.2mm – 19mm • Strip width : 900mm – 1650mm • Coil ID : 762mm • Coil OD : 1000mm – 2080mm • Coil weight – 32.56tons (maximum) • S pecific coil (maximum)
The complete automation (L1, L2 and connectivity to L3) is by Danieli Automation. Sourcing the complete plant (mechanical, process and automation) from single supplier proved very much beneficial for both the customer and the supplier at the end which is
evident from the fact that all PG parameters were demonstrated within six months of the first coil produced. Another, very special feature of this revolutionary HSM is its main pulpit design which allows transfer the work rolls from Finishing Mill directly to the Roll Shop without using the shop EOT crane.
• M inimum Thickness (1.2 mm) rolled 2 months after 1st coil
Pulpit design allowing easy WR transfer to Roll Shop (next bay)
• C oil rejection rate < 0.4 % after 6 months from 1st coil
Some of the special achievements and success stories of this plant are mentioned below:
• Excellent coil surface condition
• A ll Performance test successfully completed within 2 months after hot commissioning conclusion
• U ninterrupted rolling campaign of 26 coils of 1.6 mm/Group 3 (breaking previous record of all Baosteel’s HSMs for thin gauges continuous campaign) • Successful production of chequered coils
• Excellent coil geometrical properties Monthly production for six months after 1st coil production
Danieli Wean United, based on its knowhow, design and operating experience as well as innovative solutions achieved through the R&D activities, is in a position to supply the most advanced technological solutions for any hot strip mill to guarantee top level performances in strip dimensional tolerances. This was once again successfully demonstrated in this state-of-the-art 4-mtpa HSM at Baosteel Meishan plant, China and it was possible due to Danieli’s innovative technology and excellent team effort with Baosteel. Sanat K. Bhaumik is senior vice-president (flat products), Danieli India. Note: The views expressed here are those of the author and not of Steel Insights. The publication does not take any responsibility for the article in part or in full.
50 Steel Insights, December 2012
Iron ore handling by major ports down 49.7% y-o-y Steel Insights Bureau
ovement of iron ore through the 12 major Indian ports stood at 18.92 million tons (mt) in the first seven months (April-October) of 2012-13, dropping as much as 49.7 percent compared to 37.63 mt handled in the same period last year. According to data released by the Indian Ports Association (IPA), Mormugao port handled the highest volume of 7.42 mt of iron ore in April-October. This volume, however, was about 33.9 percent lower than the iron ore traffic moved through the port in the same period last year. The country’s major ports handled a total of 17.66 mt of coking coal in April-October
period, up 2.98 percent as compared with 17.15 mt handled in the same period last year. However, the Traffic handled at major ports movement of thermal (During Apr-Oct, 2012* vis-a-vis Apr-Oct, 2011) coal through the (*) Tentative (in '000 tons) major ports was up April to October traffic 8.37 percent to 30.37 % Variation against Ports prev. year traffic mt during April2012* 2011 October, compared KOLKATA to 28.03 mt achieved Kolkata Dock System 6875 7291 -5.71 in the same period Haldia Dock Complex 15983 19770 -19.16 last year. The 12 major TOTAL: KOLKATA 22858 27061 -15.53 Indian ports have PARADIP 30576 32749 -6.64 handled a total of VISAKHAPATNAM 35070 42418 -17.32 315.81 mt of traffic during the period, ENNORE 9223 7686 20.00 2.82 percent lower CHENNAI 30993 33419 -7.26 than 324.99 mt V.O. CHIDAMBARANAR 16365 15954 2.58 recorded during the same period last year. COCHIN 11833 11521 2.71 Movement of NEW MANGALORE 20140 18056 11.54 container traffic in MORMUGAO 13431 20016 -32.90 terms of tonnage MUMBAI 33495 31400 6.67 showed an increase in the April-October JNPT 37829 38062 -0.61 period, while that of KANDLA 54004 46656 15.75 TEUs fell during the TOTAL: 315817 324998 -2.82 period. The major Source: IPA ports handled 70.23
mt of tonnage and 4.54 million TEUs in April-October period compared to 69.49 mt of tonnage and 4.55 mt of TEU in the same period last year. Among the major ports, Paradip port had the distinction of handling the highest volume of thermal coal of around 10.91 mt in April-October period. Visakhapatnam port handled the highest quantity of 4.03 mt of coking coal during the period. Movement of coking coal through Paradip, Kolkata, Visakhapatnam, Chennai, Cochin and Mormugao ports declined during the period when compared to the corresponding period last year. Six major ports showed positive growth in traffic handling during the April-October period of the current fiscal, while the remaining six showed negative growth on a year-on-year basis. In terms of growth, Ennore port topped the list with a 20 percent increase in cargo throughput. V.O. Chidambaranar’s growth was lowest at about 2.58 percent during the period. In terms of traffic volume, Kandla port clinched the top rank with a cargo volume of 54 mt recorded for the period. The Mormugao port registered the highest decline of 32.90 percent in traffic handling during the period due to fall in iron ore export.
Steel Insights, December 2012
Railways freight traffic revenue up m-o-m in Oct Steel Insights Bureau
evenue from commodity-wise freight traffic increased month-on-month in October, mainly due to higher transportation of coal and iron ore. Revenue earnings from commodity-wise freight traffic during October 2012 stood at `7,165.82 crore, up 18.62 percent compared with `6,040.96 crore in September, according to information available with Steel Insights. Commodity-wise revenue Commodity
Quantity (in mt) Oct’11
Earning (in ` cr)
Coal (i) for steel plants
(ii) for washeries
(iii) for thermal power houses
(iv) for public use (v) Total Raw material for steel plants except iron ore
Pig iron and finished steel (i) from steel plants
(ii) from other points
Iron ore (i) for export (ii) for steel plants
(iii) for other domestic users
(i) Domestic containers
(ii) EXIM containers
Mineral Oil (POL) Container Service
Balance other goods Total revenue earning traffic
52 Steel Insights, December 2012
Revenue from transportation of iron ore for exports, steel plants and for other domestic user in October rose to `523.67 crore, up 1.08 percent from `518.07 crore in September. The quantity of iron ore transported rose to 8.67 mt as compared to 8.2 mt in the previous month. Revenue earnings from transportation of coal also moved up to `3,130.05 crore in October from `2,509.01 crore in September. Revenue from transportation of cement in October stood at `712.42 crore (8.91 mt) as compared to `575.41 crore (8.01 mt) in September, while that from foodgrains transportation increased to `569.17 crore (3.85 mt) in October from `488.2 crore (3.57 mt) in September. The Railways revenue from transportation of fertilisers in October rose sharply to `580.98 crore (5.2mt) from `479.86 crore (4.77 mt) in September. Revenue from transportation of petroleum oil and lubricant (POL) in October stood at `415.21 crore (3.54 mt), while the same from pig iron and finished steel from steel plants and other points was `417.36 crore (2.66 mt). Revenue from container services was `302.67 crore (3.41 mt) and from transportation of other goods was `426.74 crore (5.07 mt).
Macroeconomic indicators of India Steel Insights Bureau
India’s foreign exchange (forex) reserves went up by $1.45 billion to $294.98 billion for the week ended November 23 due to increase in foreign currency assets. The foreign currency assets (FCA) – the biggest component of the forex reserves increased by 1.44 billion at $260.13 billion during the week. The forex reserves had gone down by $32.7 million to $293.52 billion in the previous week while it had declined by $781.5 million to $293.55 billion for the week ended November 9. The gold reserves value had remained unchanged at $28.18 billion since the week ended November 2. The special drawing rights (SDRs) increased by $4.8 million to $4.40 billion during the week ended November 23, while SDRs had decreased $10.8 million to $4.39 billion during the week ended November 16. Reserves with the International Monetary Fund (IMF) were up by $2.5 million to $2.25 billion during the week ended November 23.
Wholesale price index (Selected categories) 230 220 210 200 190 180 170 160 150 140 130 120 110
8.00% 7.00% 6.00%
in Rupees crore
in Million $
Inflation rate in India 9.46%
The INR fell against the USD for most of month in November but managed to gain towards the end of it as Moody’s Investors Service maintained its stable outlook on the nation’s credit rating and Goldman Sachs Group Inc. raised local shares to overweight. A brighter economic outlook for India may improve value of INR in the coming weeks. The INR lost 1.3 percent in November to end the month at 54.53 per USD.
in million $
Source: rbi in Rs crore
Foreign Exchange Assets
73 71 69 67 65 63 61 59 57 55 53 51 49 47 45 43
INR vs GBP
INR vs USD, Yen
INR movement against select major currencies
Source : OEA, GoI, Ministry of Commerce & Industry
Inflation, as measured by the Wholesale Price Index (WPI), declined marginally to 7.45 percent in October this year from 9.87 percent in October last year even though prices of food items like rice, wheat, pulses and potato showed a rise. In September this year inflation stood at 7.81 percent while inflation for August was revised upwards to 8.01 percent from 7.55 percent as per provisional estimates.
Index of Industrial Production
185 165 145 All Commodities Manufactured Products Basic Metals Alloys & Metal Products
Primary Articles Fuel & Power Steel
Source : OEA, GoI, Ministry of Commerce & Industry
India’s wholesale price index (WPI) (Base 2004-05=100) stood at168.7 in October almost similar to 168.4 recorded in the previous month. Also WPI for August this year was revised to 167.3 this month. The index for primary articles group increased by 8.21 percent to 220.2 from 203.5 in October the previous year. The index for manufactured products group also rose by 5.95 percent to 147.9 from 139.6 in October 2011. Fuel and power index rose 11.71 percent to 189.9 from last year while index for basic metals and metal alloys rose by 6.45 percent to 166.8 on rising prices of the product globally. Steel index however remained unchanged.
125 105 Aug- Sep- Oct- Nov- Dec- Jan-12 Feb- Mar- Apr- May- Jun- Jul-12 Aug- Sep11 11 11 11 11 12 12 12 12 12 12 12 Mining & Quarrying Electricity
Manufacturing General Index
Source : Govt. of India, MoSPI
The index of industrial production (IIP) in September 2012 fell 0.4 percent point-to-point doing away with hopes that industrial slowdown may have bottomed out. The reason for the contraction was sluggishness in manufacturing which was down 1.5 percent, along with capital goods which dropped 12.2 percent, consumer goods which declined 0.3 percent and consumer durables which fell 1.7 percent.
Steel Insights, December 2012
Global crude steel production increases Chandrika Mitra
orld crude steel production for the 62 countries reporting to the World Steel Association (Worldsteel) rose to 126.145 million tons (mt) in October 2012 as compared to that reported in September 2012 at 123.893 mt. Again, crude steel production for October 2012 was higher by 2.11 percent compared to October 2011. In October 2012, Asia produced 81.727 mt of crude steel, an increase of 4.37 percent over October 2011. The EU produced 14.224 mt of crude steel in October 2012, down by 6.38 percent compared to the same month of 2011. North America’s crude steel production in October 2012 was 9.763 mt, 1.31 percent lower than the corresponding month of 2011. China, the single largest producer, produced 59.096 mt of crude steel in October this year, an increase of 8.09 percent as compared to the corresponding period in 2011, when production stood at 54.673 mt. Again, m-o-m production saw a fall of 1.98 percent as compared to September’s produce of 57.946 mt. Elsewhere in Asia, Japan produced 8.841 mt of crude steel in October 2012, a decrease of 6.72 percent compared to the same month last year. Crude steel production growth rate (Y-o-Y)
54 Steel Insights, December 2012
India’s production for October 2012 stood at 6.510 mt, up 5.85 percent compared to October 2011. South Korea produced 5.790 mt during the same period, a 4.88 percent decrease on the same month 2011. In the EU, Germany produced 3.7 mt of crude steel in October 2012, a slight increase of 0.3 percent on October 2011. Italy’s crude steel production was 2.4 mt, down by 10.4 percent compared to October 2011. France’s crude steel production was 1.3 mt, a decrease of 7.2 percent on October 2011. Spain produced 1.1 mt of crude steel, 15.6 percent lower than October 2011. In October 2012, Russia produced 6.4 mt of crude steel, an increase of 11.95 percent compared to the same month last year. World steel capacity utilisation ratio
Ukraine’s crude steel production for October 2012 was 2.8 mt, 8.47 percent less than October 2011. Turkey’s crude steel production for October 2012 was 2.9 mt, a decrease of 6.9 percent compared to October 2011. The US produced 6.9 mt of crude steel in October 2012, down by 3.3 percent on October 2011. Brazil’s crude steel production for October 2012 was 3.2 mt, an increase of 7.7 percent compared to October 2011. The crude steel capacity utilisation ratio for the 62 countries in October 2012 declined to 76.5percent from 77.7percent in September 2012. Compared to October 2011, it is 1.4 percentage points lower. It is to be noted that the March to October 2012 data covers 62 countries against 64 in March to October 2011. In January and February 2012, only 59 countries are covered as three African countries, Algeria, Libya & Morocco while two Middle East countries Iran and Qatar did not provide monthly production statistics.
Domestic flat & long markets
Prices remain soft on weak fundamentals
market fundamentals failed to send out any optimistic signals. The real demand fundamentals in the market continued to remain feeble in the face of growing economic worries both at home and abroad. The end user segments for both long and flat steel products failed to provide any impetus to their backward integrating sectors. Long products
he month of November failed to provide any resurgence to the steel sector and the steel market continued to limp and stumble at regular intervals. The festivals kept the first fortnight of the month of November busy with festivities and diverted the marketâ€™s attention from further investments. Though Diwali is considered the symbol of good business fortune in India leading to revival in business sentiments but the sluggish domestic steel price movement in the first half of the month exhibited that the economic worries and lags have overpowered the good fortunes. All the speculation about a plausible revival of the market in the post Diwali period, precisely the second half of November, also appeared to be far-fetched one as the
A lacklustre trend was observed across the long steel market of the country throughout the month of November mostly due to sluggish demand, high input costs, delayed projects, lack of cash flow, late payments and power problems. The prices on the other hand remained brittle and transaction activities hit rock bottom. All speculation and expectations of a market revival in the second half of November was belied as market fundamentals continued to stay weak. The semi-finished long steel manufacturers of billets and blooms have been forced to bring down the output level to more than 70 percent as cost of production was not matching with the sales. It became extremely difficult for the sellers to get rid of the material as the buyers were not interested to procure in large quantities as the demand from the final end-users continued to remain dull. The demand for finished steel items continued to remain droopy as the construction and infrastructure sector continued to remain inactive. Long products price trend
Price in `/t is basic
Steel Insights, December 2012
Market Report Outlook
CR products price trend
Going by the current market situation, there is nothing to indicate that December will be a better month. However, a section of market speculation says that since the dry season has resumed, the construction sector may pick up once again in the near future. Moreover, the announced projects are nearing the completion dates with FY 12-13 getting into its final lap so it may also hike up the demand for the long steel. However, the speculations can turn into reality only if all backend factors triggering long steel demand, changes gears and contributes. Scrap buyers material
Higher offers in global market and weakening Rupee in currency market have made the overseas scrap dearer in Indian market. Indian mills preferred to use domestic material over the imported one as it is being transacted with cheaper rates. Currently, domestic scrap is lower by `1,000-1,500/ton against the overseas material which is being imported. Few suppliers are selling at loss as there are no buyers in the market at the expected levels from suppliers. They are offering HMS grade at $400-405/ton CFR but buyers are expecting at $385-390/ton CFR. In domestic market, HMS (80:20) is being transacted with `22,200/ton (basic) in Mumbai. Sponge, ingot, billet markets weak
Sponge manufacturers have cut production
Price in `/t is basic
to 40-50% this quarter say market sources on low availability of iron ore and depressed prices in Indian market. Sponge market has been subdued for long on low availability of iron ore, as most of the mines in Odisha and Karnataka are non-operational due to probe against illegal mining by Shah Commission. Sponge prices hovered around `20,200400/ton in Raipur and Raigarh. Meanwhile, the ingot prices also remained weak at around `30,000/ton (basic) in Mumbai. Billet prices hovered around `30,300/ton (basic) in Mumbai.
HR products price trend
November failed to inspire the flat steel market too as market sentiment remained pessimistic and glum. Flat steel prices across the country remained subdued amid weak demand and liquidity crisis. As there was no scope of further correction as the mills were cutting their productions on heavy losses the situation became extremely difficult for the steel mills to decide on the prices with the demand dwindling every now and then. Some of the steel makers started to offer retroactive discounts on domestic base prices for their material to push their sales in order to manage their piling inventories. The cheap imports flowed into the country in considerable amount from South East Asia in the first half of November, which kept the domestic market and domestic demand depressed. However, though the Indian Rupee depreciated in the latter half of the month and the import threats were reduced but the flat steel market failed to capitalise on it as the demand fundamentals in the market continued to remain frail. Outlook
Price in `/t is basic
56 Steel Insights, December 2012
The flat steel market has bottomed out and there is hardly any scope to go down further. Some of the steelmakers are going ahead with their plans to lift their domestic base prices for hot rolled coils for the month of December. It would be interesting to see the marketâ€™s behaviour once the prices are hiked up.â€‚
Indicative market price for October 2012 Steel Insights Bureau (Rs. Per ton)
BILLETS 100 MM
BLOOMS 150X150 MM
WIRE RODS 6 MM
WIRE RODS 8 MM
ROUNDS 12 MM
ROUNDS 16 MM
ROUNDS 25 MM
TOR STEEL 10 MM
TOR STEEL 12 MM
TOR STEEL 25 MM
ANGLES 50X50X6 MM
ANGLES 75X75X6 MM
JOISTS 125X70 MM
JOISTS 200X100 MM
CHANNELS 75X40 MM
CHANNELS 150X75 MM
PLATES 6 MM
PLATES 10 MM
PLATES 12 MM
PLATES 25 MM
H. R. COILS 2.00 MM
H. R. COILS 2.50 MM
H. R. COILS 3.15 MM
C. R. COILS 0.63 MM
C. R. COILS 1.00 MM
G. P. SHEETS 0.40 MM
G. P. SHEETS 0.63 MM
G. C. SHEETS 0.40 MM
G. C. SHEETS 0.63 MM
MELTING SCRAP H M S - I
MELTING SCRAP H M S - II
SPONGE IRON (COAL BASED)
NOTE: 1) All prices are in Rs./Tonne and has been compiled on the basis of average of Main & Others producers’ price. (2) Prices are inclusive of Excise Duty & Sales / Vat Tax (3) All prices are as on 16 day of every month (4) Prices are indicative.
58 Steel Insights, December 2012
Production, Imports, Exports, Availability & Apparent Consumption (provisional) April - October 2012 Steel Insights Bureau (in â€˜000 tons)
FINISHED STEEL Non-Alloy Steel (Carbon)
% Variation 5.4
Less: IPT/Own Consumption
c) Total Production for Sale
d) Imports $
e) Exports $
b) Prod. of Major Producers $ Others
e) Availability (c+d-e) f) Variation in Stock g) Apparent Consumption (e-f) Less : Double Counting Real Consumption Source: Steel Ministry
60 Steel Insights, December 2012
2011-12 (Prov.) 5479
2012-13 (Prov.) 5777
a) Prod. of Main Producers
Ferro alloys & metals price trends Steel Insights Bureau Ferro alloys & Metals
Ex-works Rs/ ton Ferro Silicon (Si - 70%) 72000
Ex-works Rs/ ton HC Ferro Chrome (Cr - 60%) 67750
Ex-works Rs/ ton HC Ferro Manganese (Mn - 70%) 53250
Ex-works Rs/ ton Silico Manganese (Mn - 60%, Si - 14%) 53500
Ex-works Rs/ ton MC Ferro Manganese ( Mn - 70%, C -1.5) 76500
Ex-works Rs/ kg Ferro Vanadium 735
Ex-works Rs/ kg Ferro Moly (Mo - 60% min) 985
Ex-works Rs/ ton Ferro Titanium (Ti - 30%) 162000
Steel Insights, December 2012
Iron Ore data
Iron ore export data for October 2012 Steel Insights Bureau Port GANGAVARAM
Destination Country CHINA
Product Category FINES
Fe Content 63.5
Unit Price (in Rs/ton)
KOLKATA Total PARADIP
Quantity (in tons.)
62 Steel Insights, December 2012
Iron Ore data
Iron ore import data for October 2012 Steel Insights Bureau Port
Date 1-Oct-12 3-Oct-12
Country Of Origin AUSTRALIA
Unit Price (in Rs.) 9,699
Unit Price (in $)
IRON ORE LUMPS (FE 63.50%)
IRON ORE PELLETS
IRON ORE LUMPS (FE 63.50%)
IRON ORE PELLETS IRON ORE PELLETS
IRON ORE PELLETS
IRON ORE PELLETS
IRON ORE LUMPS (FE 63.50%)
IRON ORE PELLETS
18-Oct-12 22-Oct-12 23-Oct-12 26-Oct-12 29-Oct-12 31-Oct-12
IRON ORE PELLETS
IRON ORE LUMPS (FE 63.50%)
IRON ORE PELLETS
IRON ORE PELLETS
IRON ORE PELLETS
IRON ORE PELLETS
IRON ORE PELLETS
IRON ORE PELLETS
IRON ORE PELLETS
Quantity (in tons)
Item Description IRON ORE PELLETS
IRON ORE LUMPS (NON SIZED)
IRON ORE LUMPS (NON SIZED)
IRON ORE LUMPS (NON SIZED)
IRON ORE LUMPS (NON SIZED)
IRON ORE LUMPS (NON SIZED)
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Steel Insights, December 2012
Ferro Alloy data
Summarised Ferro Alloys Imports August - October 2012 August 2012 Product category FERRO BORON
Quantity (in tons)
Average unit price (`/ton)
Quantity (in tons)
Average unit price (`/ton)
VIZAG FERRO SILICON BARIUM
Product and portwise quantity total (In tons)
Average unit price (`/ton)
Quantity (in tons)
FERRO SILICON CALCIUM
FERRO SILICON ZIRCONIUM
CHENNAI FERRO TITANIUM
VIZAG FERRO TUNGSTEN
Monthwise Quantity Total (in tons)
64 Steel Insights, December 2012
Ferro Alloy data
Summarised Ferro Alloys Exports August - October 2012 August 2012 Product category
Quantity (in tons)
Average unit price (`/ton)
Quantity (in tons)
Average unit price (`/ton)
Quantity (in tons)
Average unit price (`/ton)
Product and portwise quantity total (in tons)
FERRO SILICON VIZAG FERRO SILICON MAGNESIUM
FERRO SILICON MANGANESE
KOLKATA MORMUGAO VIZAG
Steel Insights, December 2012
Tear along the dotted line
Tear along the dotted line
66 Steel Insights, November 2012
Steel Insights is a monthly magazine providing he widest coverage of the Indian steel industry. From iron to finished steel, technology for...