New coating products & technologies

Carl Perry BSc(Mat Sc) Hons, Ass Dip Met

22nd Galvanising & Coil Coating Conference Abu Dhabi, Sept 2017

Perry Advisor Limited London & Sydney carl@perryadvisor.com Mobile +44 7743 887120 Skype : carlbhp

New & emerging Corrosion Protection Coatings & processes & what drives their use.

ZINC (Z) GALFAN (ZA) GALVALUME (AZ) ZINC + MAGNESIUM (ZM) GALFAN + MAGNESIUM (ZAM) GALVALUME + MAGNESIUM (AM) Perry Advisor Pty Ltd carl@perryadvisor.com Mob +44 7743887120

Client Base

Perry Advisor Pty Ltd carl@perryadvisor.com Mob +44 7743887120

What I propose to cover Some Global Drivers of our industry & the Impacts it has on our product A brief discussion on why some markets specify thicknesses as BMT vs TCT vs TCTP A review of the commercial drivers of new coating technologies A review of the technical drivers of new coating tecnologies A very brief examination of ARCEO’s development of new continuous Physical Vapour Deposition (PVD) coating technologies

Perry Advisor Pty Ltd carl@perryadvisor.com Mob +44 7743887120

GLOBAL TRENDS we have already heard about, but to summarise; Continued population growth particularly in what is defined developing economies.

As a result economic power is shifting toward to the faster growing economies.

The population growth & the low Kg/capita of steel consumption make these markets very fertile ground for steel investment & organic growth strategies

The steel industry has been in overcapacity for >5yrs & demand growth is decreasing; dropping from 4-6% CAGR to 1-2% CAGR for the next 10 years Green & sustainable issues will continue to drive our industry & the rate of change is accelerating. Pb free, Cr free, Energy efficiency, electric cars, increased durability, recycling, reuse etc etc Customers at all levels of the channel want value for money and more for less Perry Advisor Pty Ltd carl@perryadvisor.com Mob +44 7743887120

Is there an economic driver for new coatings? - Coated steel is a composite of materials each designed for a different role.

1. Steel – Offers the strength for the material & is used for Engineering calculations of spans, deflections, loads etc. Its critical to make sure that the material performs as expected in a bridge, a house of high rise building.

Pre painted steel as a Composite

TCT

Base Steel

Painted Surface

BMT

TCTP

Zinc coated layer

2. Zinc Coating – Offers the corrosion protection to ensure that the material is durable enough to meet the design Life of the building & to keep maintenance costs down.

3. Paint Coating – Primarily offers Aesthetics & dependent upon the paint some level of functionality in corrosion, heat reflection, textured finishes, or other functionalities.

Perry Advisor Pty Ltd carl@perryadvisor.com Mob +44 7743887120

Zn, Zn/Mg, Zn/Al/Mg coatings & BMT vs TCT a significant driver of coating costs particularly at <0.50mm thicknesses

0.55mm TCT

0.55mm TCT

0.53mm TCT

0.50mm Base Steel

0.52mm Base Steel

0.50mm Base Steel

BMT

BMT

BMT

TCTP

TCT - Traditional Z275 coated steel order as a TCT specification

TCTP

TCT - Coating mas is reduced to Z120 or AZ150 or AM120 as examples Increase the steel thickness to compensate for the reduction in Coating mass but no one knows what the steel thickness is.

TCTP

BMT - Coating mas is reduced to Z120 or AZ150 or AM120 as examples but the steel thickness stays the same & the overall thickness TCT reduces giving the same functionality but increased m2 & less coating metal costs Perry Advisor Pty Ltd carl@perryadvisor.com Mob +44 7743887120

THE PROVEN SCIENCE Steel Strength

deflection is directly related to thickness. By maintaining the steel thickness we are delivering exactly the same spans or dent resistance

Corrosion Performance

in any given environment is directly related to the coating thickness & the efficacy of the coating alloy.

0.3mm Z275 = 0.3mm ZA275 = 0.20mm ZAM180 = 0.19mm AZ150 = 0.14mm AM100* *The ability to work to these thicknesses is dependent upon line speed control & wiping technology/performance. Data is indicative only as zinc coating thicknesses are an unreliable measurement.

There are some technical challenges in getting the same surface brightness with Al/Mg additions which may restrict its use in some architectural applications due to aesthetics. However the surface is smooth & unfirom & ideal for painting.

Perry Advisor Pty Ltd carl@perryadvisor.com Mob +44 7743887120

What is the Impact on Cost of Metal Coating?

USD$/t Cost of metal coating - Ignores Si Zinc 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

$1,180 $1,003 $794 $782 $1,002 $1,250 $2,009 $3,780 $2,510 $1,200 $2,160 $2,380 $2,006 $2,036 $2,004 $2,110 $1,171 $2,710

Al/Zn $1,252 $1,284 $1,100 $1,093 $1,261 $1,459 $2,059 $3,131 $2,462 $1,283 $2,038 $2,415 $2,063 $2,057 $1,867 $1,918 $1,350 $2,155

Galfan Al/Zn/3% (5%Al ) Mg AZ150 $1,187 $1,029 $822 $810 $1,026 $1,269 $2,014 $3,721 $2,506 $1,208 $2,149 $2,383 $2,011 $2,038 $1,992 $2,093 $1,187 $2,660

$0 $0 $0 $0 $0 $0 $0 $0 $2,524 $1,327 $2,063 $2,433 $2,085 $2,094 $1,905 $1,937 $1,365 $2,169

$683 $700 $600 $596 $688 $796 $1,123 $1,708 $1,343 $700 $1,112 $1,317 $1,125 $1,122 $1,018 $1,046 $737 $1,175

AM120

USD/t of metal

$0 $0 $0 $0 $0 $0 $0 $0 $1,101 $579 $900 $1,062 $910 $914 $831 $845 $596 $946

Perry Advisor Pty Ltd carl@perryadvisor.com Mob +44 7743887120

What is the Impact on Cost of Metal Coating with increased efficacy?

USD$/t Cost of metal coating - Ignores Si Zinc 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

$1,180 $1,003 $794 $782 $1,002 $1,250 $2,009 $3,780 $2,510 $1,200 $2,160 $2,380 $2,006 $2,036 $2,004 $2,110 $1,171 $2,710

Al/Zn $1,252 $1,284 $1,100 $1,093 $1,261 $1,459 $2,059 $3,131 $2,462 $1,283 $2,038 $2,415 $2,063 $2,057 $1,867 $1,918 $1,350 $2,155

Galfan Al/Zn/3% (5%Al ) Mg AZ150 $1,187 $1,029 $822 $810 $1,026 $1,269 $2,014 $3,721 $2,506 $1,208 $2,149 $2,383 $2,011 $2,038 $1,992 $2,093 $1,187 $2,660

$0 $0 $0 $0 $0 $0 $0 $0 $2,524 $1,327 $2,063 $2,433 $2,085 $2,094 $1,905 $1,937 $1,365 $2,169

$683 $700 $600 $596 $688 $796 $1,123 $1,708 $1,343 $700 $1,112 $1,317 $1,125 $1,122 $1,018 $1,046 $737 $1,175

AM120

USD/t of metal

$0 $0 $0 $0 $0 $0 $0 $0 $1,101 $579 $900 $1,062 $910 $914 $831 $845 $596 $946

Densities - Steel 7.85Kg/cm3, Zinc 7.1 Kg/cm3, Aluminium 2.7 Kg/cm3, Magnesium 1.74Kg/cm3 Perry Advisor Pty Ltd carl@perryadvisor.com Mob +44 7743887120

What is the Impact on Cost of Metal Coating with steel thickness?

Cost of coating mass/t Coating g/m2 Steel BMT (mm)

0.15 0.18 0.20 0.25 0.30 0.35 0.40 0.45 0.50 0.55 0.60 0.65 0.70 0.75

100 Zinc (m2/t) Z100 $205 $174 $158 $129 $108 $94 $83 $74 $67 $61 $56 $52 $48 $45

275 150 110 125 Zinc Al/zinc Al/Zn/Mg Al/Zn/Mg 2 (m /t) (m2/t) (m2/t) (m2/t) Z275 AZ150 AM110 AM125 $511 $252 $186 $207 $440 $213 $157 $176 $410 $193 $142 $160 $332 $156 $115 $130 $282 $131 $97 $109 $246 $113 $84 $94 $218 $100 $73 $83 $195 $89 $66 $74 $177 $80 $59 $67 $162 $73 $54 $61 $149 $67 $50 $56 $139 $62 $46 $52 $129 $58 $43 $48 $121 $54 $40 $45

USD/t of metal

BMT (mm)

Yield Benefit m2/t - 0.30mm BMT Z275 vs AZ150 4.7% benefit,

0.50 BMT Z275 vs AZ150 2.7% benefit + 0.2% for ZM

Dependent upon coating control capability Perry Advisor Pty Ltd carl@perryadvisor.com Mob +44 7743887120

IS THERE A TECHNICAL DRIVER for new coatings? Why does the addition of sma amounts of Magnesium (Mg) improve the corrosion performance of galvanized steel Mg2+

Mg(OH)2

Zn2+

Zn(OH)2

Zn5(OH)8Cl2-H2O

The addition os Magnesium into the Zinc coating accelerates the formation of a very stable dense corrosion product called “Simonkolleite” which itself acts as a corrosion barrier slowing down oxidation.

Zn-Mg-Al

Base Steel Red Rust

Zn5(OH)8Cl2-H2O

Red Rust

Zn5(OH)8Cl2-H2O

Base Steel

Similarly the formation of “Simonkolleite” also migrates to the cut edge acting as a corrosion barrier, preventing Oxygen & Water from getting to the steel surface effectively slowing down oxidation and smothering any initial corrosion sites.

Perry Advisor Pty Ltd carl@perryadvisor.com Mob +44 7743887120

What other technical drivers are there for Zn/Mg Zn/Al/Mg coatings?

Improved corrosion performance allowing thinner coatings for better performance.

This is particularly so if you order in BMT & use thinner steels Better cut edge protection than traditional products Excellent corrosion performance in severe environments Reduced maintenance cost through the life of the product

Superior formability, erosion & weldability performance â&#x20AC;&#x201C; based upon automotive Excellent surface for painting & other surface treatments.

Sources - Wheeling/Nisshin, Arcelor Mittal, Nippon Steel, Posco, TATA, TKS, SSAB, Stahl-Zentrum, BlueScope, Dongkuk Perry Advisor Pty Ltd carl@perryadvisor.com Mob +44 7743887120

Most steel Companies agree the product works & have options but their solutions are all slightly different in chemistry.

Producer

Product

Mg %

Al %

BlueScope (Aust)

Zincalume

3%

55%

Arcelor Mittal

Zagnelis

3%

3.7%

TKS

ZM EcoProduct

1%

-

TATA (UK)

MagiZinc

1-2%

1-2%

NSSMC

Superdyma

3%

11%

Wheeling/Nisshin

ZAM

3%

6%

POSCO

PosMac

3.5%

2.5%

EU Code EN 10346 allows for >0.2% Mg to a max of Al + Mg combined of 1.5-8% ASTM A1046 Allows for 1-4% Mg & 5-13% Al Perry Advisor Pty Ltd carl@perryadvisor.com Mob +44 7743887120

Market Acceptance to date BlueScope Australia converted their total Zincalume production to a new generation Zinclaume with 3% Magnesium in 2011.

Nippon/BlueScopes Asian plants are planned to begin changing

Aust 100%

Galvanised capacity in Australia does not have a Mg product Approx 12-15% of the total European coating capacity is a Magnesium enhanced product

EU 12-15%

Most Japanese & Korean suppliers have solutions The product is readily accepted in automotive & construction markets Sources - Wheeling/Nisshin, Arcelor Mittal, Nippon Steel, Posco, TATA, TKS, SSAB, Stahl-Zentrum, BlueScope, Dongkuk Perry Advisor Pty Ltd carl@perryadvisor.com Mob +44 7743887120

Physical Vapour Deposition (PVD) Coatings – An emerging technology What is Physical Vapour Deposition (PVD) • The adjacent schematic is an illustrative process for PVD • A filament or coating material source is passed through a heat source the vapourises the coating metal in a vacuum.

• That coating material is then streamed into a plasma jet which is directed onto the target material for coating.

• The coating thickness is very clean & pure & remarkably uniform with very little environmental impact.

• The coating thickness & quality is dependent upon - The coating metal chemistry - Its heat of vaporization - The feed rate - The speed of the target sheet - The various geometries of the coating head http://electroiq.com/blog/2003/02/jet-vapor-deposition/ Perry Advisor Pty Ltd carl@perryadvisor.com Mob +44 7743887120

Jet Vapour Deposition Coatings by ARCEOâ&#x20AC;&#x201C; An emerging technology

Arcelor Mittal in a JV with Sogepa (Societe de gestion et de Partisipations) called ARCEO has built a â&#x201A;Ź64mill plant in Kessales (Leige) Belgium to produce continually coated JVP sheet steel.

The plant operates at a line speed of around 60min/m & is producing commercially available products initially targeting the automotive & industrial application industries.

Global view of the semi-industrial line used for the development and the assessment of the JVD technology http://europe.arcelormittal.com/newsandmedia/pressreleases/PR2015/PRArceoInvestment Perry Advisor Pty Ltd carl@perryadvisor.com Mob +44 7743887120

Jet Vapor Deposition enables continuous steel coating at at approx. 60m/min by projecting zinc vapor on the moving strip.

Benefits • Cost effective very thin, uniform coatings of very high quality • Very sustainable with higher yield, lower energy consumption & low emissions or effluent • Excellent coating adhesion regardless of steel grade & is particularly useful for ultra high strength ULSAB steels • Coating under vacuum and at lower temperatures removes the risk of steel or zinc oxidation.

• Allows the coating of different substrates that could not be economically coated before • It provides an option for coating new materials potentially non metallic materials onto steel sheet • Can produce layered coatings for increased functionality • Can coat different thicknesses accurately on different surfaces ie different coating thicknesses on the back & fron of sheet steels.

https://belgium.arcelormittal.com/en/inauguration-world-first-steel-industry-jet-vapor-deposition/ Perry Advisor Pty Ltd carl@perryadvisor.com Mob +44 7743887120

Applications for PVD or JVD products Arcelor Mittal are initially focusing on the automotive market with their ZEMg PVD coating's offering corrosion protection and superior surface quality for both visible and non-visible parts.

Surface appearance of ZEMg PVD coating (SEM)

These ZEMg PVD coatings have been specially developed to increase corrosion protection in hollow parts and abutments of adjoining parts. The prime benefit is the improved protection in hollow areas that are difficult to protect by other mechanisms thus considerably reducing protection & design costs.

The main applications are auto closures, body sides, underbodies, shock absorbers and all hollow beams in vehicles.

•Jetgal® is the brand for the JVD zinc coating applied to steel grades for the automotive industry including ultra high-strength steel

Cross section of ZEMg PVD coating

•Jetskin™ is the brand JVD zinc coating applied to steel grades for applications such as household appliances, doors, drums and interior building applications.

http://automotive.arcelormittal.com/europe/1509/EN Perry Advisor Pty Ltd carl@perryadvisor.com Mob +44 7743887120

THANK YOU

Perry Advisor Pty Ltd carl@perryadvisor.com Mob +44 7743887120

MY CREDENTIALS • tertiary qualifications in Metallurgy and Material Science • 40 years experience in the steel and construction markets • • • •

In Australia, the UK & Asia In bar & mesh for concrete reinforcing In steel structural products in both beams and columns & Light Gauge Steel frames (LGSF) In roofing and walling products and accessories

• worked through and in complex channels to market • developed and implemented a range of consumer focused campaigns • over 20 years experience in Business & Product Development having worked in R&D, Production, Sales & Marketing & General Management.

• creative, innovative and adept at adapting ideas for new markets • presented at many international conferences; SCI, WSA, OECD, Red Cross/Crescent, WB, ILZRO, MB, CRU, etc Perry Advisor Pty Ltd carl@perryadvisor.com Mob +44 7743887120

Global trends in Coating products & technologies 1. Global Geopolitical shifts & re imergence of Nativism • We’ve seen the impacts of Trumpism, Brexit, growth of right wing parties.

• Increased protectionism & nationalism • More restrictive movement of people, goods & services • A growing gap between the haves & the have nots – refugee crisis, immigration 2. Growth of Sustainability demands. This is particularly evident in some Developed economies & in particular Europe. European sustainability actions/strategies impacting our product include; • Energy policies & C taxes – growth of insulated panels • Recylcing strategies • Banning of Pb as a spangling agent & Cr6+ auto, whitegoods & from Feb 2106 Construction markets • REACH & RoHS non tariff barriers • Use of more durable & sustainable coatings eg Zn/Mg & Zn/Al/Mg coatings • Growth of new paint functionalities like heat reflection 3. Growth of the emerging economies & where future demand will come from. China is estimated to be the worlds largest economy by 2030, global demand engines is shifting from Europe & the US to hot tropical climates where populations are forecast to grow significantly.

Perry Advisor Pty Ltd carl@perryadvisor.com Mob +44 7743887120

Four Macro trends that are likely to impact coated products & technologies 1. More steel Companies investing downstream & in new geographies – Steel investment will follow margins ie capturing value by moving downstream & geographically seems sensible.

2 Growth of Sustainability demands. This is particularly evident in some Developed economies & in particular Europe 3. Customers wants more for less.

• Better yields - m2/t continued drive for thinner & higher strength steels • Long lasting - increased durability, longer colour retention, graceful aging • Increased functionality – heat & light reflective coatings, anti bacterial, anti fungal coatings, dirt shedding & self cleaning coatings, different aesthetics low glare, different glosses, colours, shades, wrinkle finishes etc. NO2 absorbing or cigarette smoke absorbing paints All of these are available now in some part of the world. What are tomorrows demands & capabilities?

4. Value for Money for me. In a range of areas, Up front purchase costs, reduced costs over the life of the product, reduced hassles through its use. Meet my needs cheaper than an alternative.

Perry Advisor Pty Ltd carl@perryadvisor.com Mob +44 7743887120

THE SPECIFICATION CONUNDRUM Steel Companies like tonnes as they fill up blast furnaces Rollformers/profilers/end user companies like m or m2 as it covers a lot of area provided it does the required engineering & durability task

Engineers like performance, load carrying, erosion resistance or durability Steel Companies like TCT as it sells more steel as coatings efficiency improves.

However as customers drive for value for money, they push thicknesses lower which is supported by BMT specs.

With todays technologies, higher strength steels & the newer coating metals opportunities are being lost due to entrenched traditions.

Perry Advisor Pty Ltd carl@perryadvisor.com Mob +44 7743887120

History of the Galvanising Industry T i m e L i n e

SUSTAINABILITY

2005-15 Enviro Arguments No leads Forever Cr6+ free Cost

M A R K E T D R I V E R S

POST P 2020 T E C H

2000s Zn/Al/Mg & Zn/Mg Coatings

2015 PVD Coatings

E N A B L E R S

Perry Advisor Pty Ltd carl@perryadvisor.com Mob +44 7743887120

Impact of technology changes on zinc usage

Larger

=

Very strong markets for zinc & zinc products

An offset by exponential growth in new markets & applications

+

Smaller

Pre 1800

New Coating alloys & technologies Steel thicknesses

+

Galv

An offset by reduced thicknesses & hence more surface area

Galvanised

+

Reduced coating masses

ZnAl

ZAM

Thinner 200 g/m2

400 g/m2 600 g/m2

Thicker Perry Advisor Pty Ltd carl@perryadvisor.com Mob +44 7743887120

Global trends â&#x20AC;&#x201C; Population Growth & shifting economic power Worlds largest Economies in PPP (int $) 2017

https://www.un.org/development/desa/publications/world-population-prospects-the-2017-revision.html

2022 (USD Trill)

2017 (USD Trill)

China

34.3

23.2

USA

23.8

19.4

India

15.4

9.5

Japan

6.2

5.4

Germany

4.9

4.1

Indonesia

4.7

3.3

Russia

4.7

3.9

Brazil

3.9

3.2

UK

3.5

2.9

France

3.4

2.8

Mexico

3.0

2.4

Turkey

2.75

1.6

http://statisticstimes.com/economy/countries-by-projected-gdp.php Perry Advisor Pty Ltd carl@perryadvisor.com Mob +44 7743887120

Steel usage per capita â&#x20AC;˘ Steel demand per capita is very low in developing countries; - Kenya <25Kg/person - South Africa aprox 110/person - Thailand approx. 290Kg/person - USA 300Kg/person - Japan 550Kg/person

â&#x20AC;˘ As disposable income grows economies move toward steel intensive properties.

http://cornerstonemag.net/urbanization-steel-demand-and-raw-materials/ Perry Advisor Pty Ltd carl@perryadvisor.com Mob +44 7743887120

4. BUT Steel is in over capacity & the rate of growth is declining

The world steel industry has been in overcapacity for >5 years Steel demand growth is decreasing dropping from 4-6% CAGR to 1-2% CAGR for the next 10 years As demand is flat & we are in over capacity, mills will move to high value added products & further downstream Growth in demand in hot humid, tropical climates will be a target for surplus capacity, Africa, South America, SE Asia Moving downstream now will capture more value for longer Perry Advisor Pty Ltd carl@perryadvisor.com Mob +44 7743887120