Steel Times International January February 2018

FUTURE STEEL FORUM 2018

TESTING & ANALYSIS

DIRECT REDUCED IRON

PERSPECTIVES

Industry 4.0 conference and the steel industry – go to page 54 now!

Improved technology for mill roll inspection

Low CO2 ironmaking in the new hydrogen economy

CONDAT’S Franck Dufresne answers our difficult questions

www.steeltimesint.com January/February 2018 - Vol.42 No1

STEEL TIMES INTERNATIONAL – January/February 2018 – Vol.42 No.1

THE MEXICAN STEEL INDUSTRY – A GBR REPORT STI Cover jan feb.indd 1

22/01/2018 10:55:23

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CONTENTS - JANUARY/FEBRUARY 2018

FUTURE STEEL FORUM 2018

TESTING & ANALYSIS

DIRECT REDUCED IRON

PERSPECTIVES

Industry 4.0 conference and the steel industry – go to page 54 now!

Improved technology for mill roll inspection

Low CO2 ironmaking in the new hydrogen economy

CONDAT’S Franck Dufresne answers our difficult questions

www.steeltimesint.com January/February 2018 - Vol.42 No1

STEEL TIMES INTERNATIONAL – January/February 2018 – Vol.42 No.1

Picture courtesy of: CMI Groupe

THE MEXICAN STEEL INDUSTRY – A GBR REPORT STI Cover jan feb.indd 1

22/01/2018 10:55:23

2 Leader

By Matthew Moggridge, editor, Steel Times International.

4 News Astounding facts and figures, industry news and diary dates.

EDITORIAL Editor Matthew Moggridge Tel: +44 (0) 1737 855151 matthewmoggridge@quartzltd.com Consultant Editor Dr. Tim Smith PhD, CEng, MIM Production Editor Annie Baker Advertisement Production Martin Lawrence SALES International Sales Manager Paul Rossage paulrossage@quartzltd.com Tel: +44 (0) 1737 855116

6 Innovations The latest new products.

1

Direct reduced iron 31 Low CO2 ironmaking in the new hydrogen economy 37 Metal granulation and steelmaking at TATA Steel’s new steel plant in Kalinganagar, Odisha in India.

Testing & analysis 45 Improved technology for mill roll inspection 51 Continuous online measurement

12 USA update Is section 232 the ‘silver bullet’?

57 Perspectives CONDAT are really optimistic, says Franck Dufresne

14 Latin America update Peruvian steel - looking good.

60 History Early rolling in the USA.

Sales Director Ken Clark kenclark@quartzltd.com Tel: +44 (0) 1737 855117

CONTENTS

Managing Director Steve Diprose stevediprose@quartzltd.com Tel: +44 (0) 1737 855164

18. A vote of confidence in Mexico.

Chief Executive Officer Paul Michael

22. Macroeconomic determinants.

SUBSCRIPTION Elizabeth Barford Tel +44 (0) 1737 855028 Fax +44 (0) 1737 855034 Email subscriptions@quartzltd.com

25. Mexican automotive: Key drivers

Steel Times International is published eight times a year and is available on

28. Distribution and services: Service centres must up their game

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Contents.indd 1

January/February 2018

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2

LEADER

Future Steel Forum 2018 – 6-7 June, Warsaw...

Matthew Moggridge Editor matthewmoggridge@quartzltd.com

January/February 2018

Leader.indd 1

They say time flies when you’re enjoying yourself and I guess that’s true. This time last year Steel Times International was about to embark upon the inaugural Future Steel Forum, a conference that discussed, in-depth, Industry 4.0 and its benefits for steel producers.

If you’re not familiar with the term “Industry 4.0” one might ask where have you been? Smart manufacturing, as it is known in the USA, is on everybody’s lips at the moment, and I’m pleased to say that our Future Steel Forum is leading the way in terms of offering a ‘steel specific’ event focused entirely on digitalisation, although there are many Industry 4.0 purists who would probably argue that the term ‘digitalisation’ is not Industry 4.0. Let’s not argue about that here, but if you want to know more about definitions and terminology, come to Warsaw where I guarantee you will be enlightened.

If I was to make any parallels between the Future Steel Forum 2018 and the world of rock music, you would be forgiven for thinking that I had taken leave of my senses, but there is one similarity. When rock bands head back to the studio after a number one album, they then embark

upon ‘the difficult second album’, which effectively is what we are doing with our conference.

When we closed the doors on the 2017 event, I found myself in an excellent restaurant called Kaiser, a short walk from the Sheraton, and sat there with a large glass of Merlot pondering the future.

Well, now ‘next year’ is ‘this year’ and we have an interesting programme of speakers in place and ready to ‘go live’ on the Future Steel Forum website – keep an eye on www.futuresteelforum.com for more details.

The Future Steel Forum is a European event and from 2019 onwards we will be looking at other European venues.This year, however, we are staying put in Poland, mainly because the venue (the Sheraton Hotel, Warsaw) was fantastic and received glowing reports from last year’s delegates, and also because Warsaw proved to be an excellent city in which to hold a European Industry 4.0 conference.

So, we’re back and I think we’ve cracked ‘that difficult second album’ – although I would say that, wouldn’t I? Whether the event is considered a rip-roaring success depends on you. I hope I’ll see you there.

www.steeltimesint.com

22/01/2018 13:57:27

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4 NEWS IN BRIEF ArcelorMittal steel for Antarctic vessel An Antarctic supply research vessel (ASRV) currently under construction in Romania, will be built using steel supplied by ArcelorMittal Galati. The world’s largest steelmaker supplied heavy plates in grades ranging from AH36 to EH36 – strong marine steels (up to 620Mpa) with a low carbon content. Delivery is scheduled for April 2020.

US Steel urges ‘swift and decisive action’ Following the submission of the US Commerce Department’s report of its 9-month investigation on whether steel imports into the US are a threat to national security, US Steel has urged President Trump to take swift and decisive action. “Our nation cannot afford to allow the continued rise of foreign imports that undermine America’s capacity to produce the steel necessary for our country’s national and economic security.”

Celsius steel used on ‘iconic roof’ The new Louvre gallery in Abu Dhabi, UAE, was built using steel produced by Tata Steel’s plant in Hartlepool, UK. Almost 2,000 tonnes of premium Celsius steel was used to build ‘the vast engineered roof’ suspended above the gallery.

According to Tata, the Louvre cost £1 billion and houses ‘hundreds of precious artworks’.

NLMK improves steel sales During 2017, Russian steelmaker NLMK increased steel output to 17.1Mt and improved sales by 3% year-on-year to 16.47Mt. The company recovered demand in its home markets of Russia, Europe and the USA, and grew demand in external markets. Sales of finished steel increased by 5% to 10.8Mt and accounted for more than 65% of the Group’s total sales.

Get yourself to Dusseldorf If you want to know more about the European and global steel plate market then you ought to be considering the 4th Steel Plate Conference Europe, organised by Metal Expert, which takes place on 23 March in Dusseldorf, Germany.

For further information, log on to www. https://metalexpert.com/en/ products/4EuropeSteelPlate

Five-strand billet caster for Saarstahl A five-strand billet caster from SMS Concast has been ordered by Saarstahl AG of Volklingen, Germany. The new equipment will be designed for an annual capacity of 850kt/yr of billets.

The new casting machine, to be named S1, will produce 180mm x 180mm square billets in a wide range of steel grades, including bearing steels, spring steels, cold heading wire rod and free-cutting steels.

Products made of these steel grades are used in the automotive industry and in mechanical engineering applications.

The S1 will come with state-ofthe-art equipment such as Convex molds, hydraulic mold oscillator, electromagnetic mold and strand

stirrers, mechanical soft reduction and modern automation and communication technology in line with Industry 4.0 standards.

Saarstahl was the first steel producer worldwide to apply mechanical soft reduction in billet casting, says SMS group.

According to SMS group, the investment in a new caster further strengthens the company’s leadership position in mechanical soft reduction technology.

Saarstahl is a leading global manufacturer of high-quality steel grades and has a longstanding business relationship with SMS Concast, going back to 2002 when the company supplied a first continuous caster to Saarstahl, followed by a second one in 2007.

MMK to build new 5.5Mt sinter plant Russian steelmaker Magnitogorsk Iron and Steel Works (MMK) is preparing to buld a new sinter plant in Magnitogorsk worth an estimated RUB22 billion (USD390 million).

The current works include driving piles, laying foundations and installing the required metal structures. The installation of the main technological equipment is planned for March this year.

According to MMK, work onsite began in December 2016 with construction of electric substation No. 68. Currently, 90% of construction and wiring are completed and by end January – early February, it will be connected to

the high voltage line. By the end of February it will be ready for additional voltage supply for the construction site of the sinter plant.

Currently, the builders are fully supplied with a temporary supply of electricity.

Last December, MMK received around 2,500 tonnes of equipment from the Chinese company Sinosteel, total deliveries of which should amount to 22,000 tonnes.

The installation of the main technological equipment is scheduled for March, firstly on sinter machines No. 1 and No. 2.

According to MMK, the plant should be operational by the end of 2019.

600 steel cans or tin cans are recycled every second.

Source: American Iron and Steel Institute

Stainless steel has excellent resistance to corrosion because, as an alloy, it contains a minimum of 10.5% chromium by mass.

Source: metalscut4u.com

Over half of all types of steels present in today’s automobiles did not exist 10 years ago.

Source: American Iron and Steel Institute.

Steel food cans are the most recycled food package.

Source: American Iron and Steel Institute

January/February 2018

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DIARY OF EVENTS

INDUSTRY NEWS

Astounding Facts and Figures...

A green steel tube produced from charcoal taken from a forest unit ‘captures’ more carbon from the atmosphere than it emits, resulting in a positive carbon balance.

Source: Vallourec.

Steel parts are more dentresistant and are up to 30% stronger than they were a decade ago.

Source: LodhaGoldTMT

Because steel and iron expand when heated, the Eiffel Tower in Paris, France, is about six inches taller in the summer than in the winter.

Source: Kaempf and Harris.

More than 95% of the water used for making steel in North America is now recycled.

Source: American Iron and Steel Institute.

While the Porsche 928 was one of the earliest production cars to use aluminium throughout its construction, it also uses rust-resistant galvanised steel for floor pans, roof and rear quarter panels.

Source: Automobile Magazine.

Asphalt roofs weigh twice as much as steel roofs.

Source: American Iron and Steel Institute

Steel is the main material used in delivering renewable energy like solar, hydro and wind power.

Source: Kaempf and Harris.

Car seat belt buckles are made of steel.

Source: American Iron and Steel Institute.

The North American steel industry has achieved a 90% reduction in the discharge of air and water emissions versus 10 years ago.

Source: American Iron and Steel Institute.

5

March 2018 19-20 Metals in the Future conference, Hilton London Paddington. Organised by CRU. A new conference exploring the long-term impact of green technology on metals supply and demand. The conference covers steel, aluminium, base metals, minor metals and ferroalloys.

For further information, log on to www.crugroup.com

April 2018 16-19 IEEE PES T&D Conference & Exposition, Denver, Colorado, USA. Organised by IEEE. A conference focused on the power and energy industry.

For further information, log on to www.ieeet-d.org 16-20 Tube Dusseldorf, Dusseldorf Fairgrounds, Germany. Organised by Messe Dusseldorf.

Steel tubes of all types and sizes and also plants and machinery for the production and processing of tubes will be the focal point of this event.

For further information, log on to www.tube.de 24-26 EuroCoke 2018, Radisson Blu Scandinavia Hotel, Dusseldorf, Germany An annual event focused on the world of coke and cokemaking that provides a unique opportunity for senior decision makers from the global coke, coal and steel markets to hear the latest market trends, as well as technical and operational developments within the industry.

For further information, log on to www.metcokemarkets.com

May 2018

Steel comprises approximately 75% of all major appliances.

Source: American Iron and Steel Institute More than 80Mt of steel are recycled in North America every year.

Source: Kaempf and Harris.

7-10 AISTech 2018, Pennyslyvania Convention Centre, Philadelphia, PA, USA If you want to know what's going on in the US steel market then you need to be in Philadelphia in May. AISTech is THE conference and exhibition if you want to hear what the big players have to say about the industry's present and future.

For further information, log on to www.aist.org

January/February 2018

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6

INNOVATIONS

Continuous slab caster at the Ha Tinh Steelworks in Vietnam, operated by Formosa Ha Tinh Steel Corporation

Primetals receives FACs from Vietnamese steelmaker Primetals Technologies has received a Final Acceptance Certificate (FAC) from the Formosa Ha Tinh Steel Corporation of Vietnam following the commissioning of three continuous casters last June.

According to Primetals, all three casters were started in fully automated mode with an automatic start of casting and Level 2 functions.

The order covered two slab casters and one sixstrand bloom caster ordered by Formosa Heavy Industries from Primetals in 2012.

Formosa Ha Tinh Steel Corporation is a subsidiary of Taiwanese steel producer Formosa Plastic

Group.

All three casters were installed in the Vung Anh Economic Zone in central Vietnam and two months later an eight-strand billet caster went live when liquid steel was ‘fully up to speed’.

The two slab casters are designed to produce 2.7Mt/yr (metric) of slabs, ranging from 900mm to 1,880mm in width and with thicknesses of between 210mm and 270mm.

The six-strand bloom caster has an annual capacity of 1.5Mt/yr with bloom dimensions of 260 x 300mm and 360 x 450mm.

All three casters are ‘bow-type’. The slab cast-

ers each have a radius of 10m while the bloom caster is 14m.

The eight-strand billet caster has an annual production capacity of 1.2Mt/yr of billets with square cross sections ranging between 130 x 130mm and 180 x 180mm. It is designed to cast a wide variety of different steel grades, claims Primetals, and is also a bow-type configuration, with a radius of 9m.

For further information, log on to www.primetals.com

NISCO invests in six-strand billet caster from SMS Concast National Iranian Steel Company (NISCO), which is part of the state-owned Iranian Mines and Mining Industries Development and Renovation Organisation (IMIDRO), has ordered a six-strand billet caster from SMS Concast AG, part of the SMS group. The plant will be part of a newly built EAF-based meltshop and designed for an annual capacity of more than 800kt of billets.

The caster’s home is a new steel complex built in Miyaneh, a city in the province of East Azerbaijan in the north-west of Iran. The complex is expected to serve as a basis for the industrial development of the province.

SMS Concast will supply the latest technology to enable NISCO to achieve its specified quality and productivity targets in the shortest possible time. The six-strand caster will produce billets of low, medium and high-carbon steels, among others for rebar production.

The six-strand Concast CONVEX CCS casting machine will have a casting radius of nine metres and will produce billets of 130mm, 150mm and 200 mm square in lengths ranging between six and 12 metres. Depending on the steel grades and casting mode (open or submerged), casting speeds will vary between 4.5 and 1.5 metres per minute.

The casting machine will come with CONVEX mold, a well established technology, claims SMS, January/February 2018

innovations.indd 1

which provides a higher heat transfer and more uniform solidification in corner areas. Efficient guiding of the strand shell inside the mold with maximised cooling symmetry provides for higher casting speeds while achieving an improved quality of the ‘as-cast’ product, says the company.

According to SMS, the CONVEX mold is part of the cartridge-type mold unit, a pre-assembled quick-change affair. Its self-centred design and self-sealing connections for the water that cools the mold ensure ‘optimal alignment and safe

Handshake between M R Taheri, managing director of MMTE (Mines & Metals Engineering GmbH) and Pierpaolo Rivetti, SMS Concast. From left: Abdolreza Amirsoleimani, SMS Iran branch manager; Carlo Cascino, SMS Concast; Mojtaba Rastegar, MMTE

operation’. In case of a section change or for maintenance work, the mold assembly can be quickly changed – in five to 10 minutes, reducing downtimes to a minimum. The secondary cooling process is divided into four zones, with the cooling parameters set according to section size, steel grade and casting speed. The first two section-dependent zones operate with water cooling only. Zones three and four are section-independent and use air-mist cooling. Level-2 automation means that the secondary cooling process can be dynamically controlled on the basis of a software model.

The machine will be equipped with a cantilever-type tundish car on the casting platform, a tundish stopper system for submerged casting, the latest generation hydraulic short-lever oscillation system and fully integrated PLC for fully automatic operation of the entire plant.

SMS Concast’s level 2 process control system integrates process control philosophy, production strategy and metallurgical models. The software offers user-friendly intuitive applications and graphical interfaces to support the operators and allow them to interact with the systems and monitor the entire production process.

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

19/01/2018 14:18:45

8

INNOVATIONS

Nucor chooses Danieli minimill technology Danieli’s MI.DA micromill technology has been chosen by America’s biggest steelmaker, Nucor Corporation. The US steelmaker is building a new operation at Sedalia, Missouri, designed to produce over 350kt (short tons) of rebar.

The design of the mill will allow for the future installation of a spooling line for the production of twist-free, easy-to-store and transport, compact heavy coils weighing up to 11,000lbs.

By Q3 2019 the new mill should be operational. It will be the third MI.DA mill in the USA and will join eight others dotted around the world.

Endless casting rolling technology ensures ‘the best CapEx and OpEx for mill operators’ thanks to the process itself plus the high yield capabilities it offers. The company believes that micromills with capacities ranging from 300kt/yr to 800kt/year will become more common.

For further information, log on to www.danieli.com

Giacomo Mareschi Danieli, CEO of Danieli & C. Officine Meccaniche SpA, Italy; Dave Sumoski, executive vice president of engineered bar products, Nucor Corporation; John Brandon, Manager, Technical Business Development, Nucor Corporation; and Paolo Losso, president, Danieli Corporation USA

FIVES wins prestigious industry award Fives OTO SpA (Italy), a leading company in the welded tube mill lines market, received Lloyd’s Register Foundation’s best Italian client award in the quality, safety and environment management category.

Lloyd’s selected 20 companies in Italy to award the title of Best Italian Clients for fiscal year 2016/2017 in three nominations: energy, offshore and business improvement services. The ceremony brought together more than 200 peo-

ple in the Villa Wolkonsky, residence of the British Ambassador in Rome, on 4 December last year.

Fives OTO was awarded for its commitment to achieve the highest quality and environmental protection standards, having incorporated those principles into the development and production of high-tech products globally. The company received three certifications over a short time period: the OHSAS 18001:2007 health and safety management system and ISO 14001:2015 envi-

ronmental management system in March 2017, as well as ISO 9001:2015 quality management in June 2016.

“We are very proud and honoured being recognised as one of the best Italian companies for quality, safety and environment management,” said Elisabetta Spiller, health, safety and quality manager of Fives OTO S.p.A. For further information, log on to www.fivesgroup.com

The Fives OTO team receiving their award

innovations.indd 2

19/01/2018 14:18:51

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10

INNOVATIONS

Timken Steel opts for Tenova high-tech package TimkenSteel’s Faircrest Plant in Canton, Ohio, USA, has placed an order for Tenova’s proprietary off-gas based technology package including a NextGen off-gas analysis system, iEAF dynamic process control technology and Water Detection Technology.

TimkenSteel, a leading producer of carbon and alloyed steel including large diameter SBQ bars and seamless mechanical tubing, believes that, when fully implemented, the new equipment will bring a number of operational, safety and environmental benefits to the plant, including reduced energy consumption, water leak detection, increased productivity and yield and reduced greenhouse gas (GHG) emissions.

Tenova claims that its technologies are designed to work in tandem to provide a com-

plete process solution combining leading edge hardware, fundamentally sound process control models, web-based automation and the most comprehensive water detection available in the steel industry.

NextGen is a proprietary hybrid multi-point laser/extractive off-gas analysis system that delivers exceptionally fast analytical response times, requires minimal maintenance and reduces hardware and installation costs.

A single, multi-point NextGen analyser will be located in the control pulpit at Faircrest and will provide simultaneous and continuous full spectrum off-gas analysis at both upstream and downstream locations. iEAF process control software to be installed at Faircrest will optimise EAF energy consumption,

maximise operating cost savings and reduce power-on-time. NextGen® off-gas analysis forms part of the system together with proprietary optical off-gas velocity and temperature sensors, a PLC link and a real-time EAF mass and energy balance to dynamically control chemical and electrical energy inputs and to optimise refining and endpoint control practices.

Water Detection Technology uses NextGen off-gas analysis of both H2 and H2O vapour and proprietary software and is designed to quickly detect and alert Faircrest’s operators when there are abnormally high water levels in the EAF.

For further information, log on to www.tenova.com

Hitachi High-Tech launches user-friendly spectrometer A new optical emission spectrometer for metal analysis has been introduced by Hitachi HighTech Analytical Science.

The product is claimed to be ‘the ideal analyser’ for metal manufacturers as well as processors and the foundry industry, claims Hitachi, as it features ‘innovative technology’ – such as a read-out system developed specifically for spectroscopy applications, which out-perform conventional photo tube-based systems.

A superior plasma oscillator ensures ‘straightJanuary/February 2018

innovations.indd 3

forward and precise analysis’, according to Hitachi High-Tech.

The equipment in question is called the Foundry-Master Pro2 and is described as ‘the analysis instrument of choice for the metals industry’.

“The new unique middle pressure technology helps to achieve clear transparency for the complete spectral range, including lowest UV. The optics is essentially maintenance-free and has significantly lower operating costs than

alternative inert gas purged systems.

The innovative detector system with improved dynamics and resolution provides excellent analytical performance,”claims Hitachi High-Tech.

In fact, Hitachi concludes that its new equipment makes analysis easy, thanks to its intuitive user interface, its ease-of-use and its simplicity.

For further information, log on to www.hitachi-hightech.com www.steeltimesint.com

19/01/2018 14:18:54

12

USA UPDATE

Is Section 232 the ‘silver bullet’?

The widespread belief among many in the US steel industry is that the much-touted Section 232 could be the “silver bullet” against the rising tide of cheap imports of foreign steel, particularly from China. By Manik Mehta* LAST year, President Donald Trump ordered a probe under Section 232 of the Trade Expansion Act of 1962 to investigate whether steel imports threaten US national security. The probe’s findings, already sent to President Trump, were not publicly released as of writing this update.

“After the president’s decision is announced, the department will publish a summary of the report in the Federal Register and make the report available to the public after removing any business confidential or classified material,” the Commerce Department said. The President has 90 days to act on it.

Commerce Secretary Wilbur Ross, who comes with considerable hands-on experience in the steel industry, had earlier raised the bogey of what he described as an “assault” on the US steel industry by foreign suppliers dumping their heavily-subsidised products in the US market.

The opponents of imports are quick to point out that imports have contributed to the woes of US steel companies – be it Bethlehem in Pennsylvania, which closed its plant, or the collapse of two facilities in Lorain and Warren in Ohio.

The US steel industry has called on the President to take fast action following the completion of Section 232. US Steel and the United Steelworkers (USW) have been leading the charge against imports, calling

for fast action to protect US companies after the findings of the probe were sent to President Trump.

The USW International President Leo W. Gerard, in a statement released after the Section 232 report was sent to President Trump, expressed dismay over the long period of time taken to produce the report, and said that he would wait for a quick decision, claiming that the nation’s steel sector had been “under attack by unfair foreign trade and that the sector is vital to our national security”. The USW claimed that closures continued to be announced in the steel industry amid a surge in foreign imports.

In a statement, US Steel also called for “swift and decisive action” and emphasized that the country could not afford to allow the continued rise of foreign imports “that undermine America’s capacity to produce the steel necessary for our country’s national and economic security”. The US steel industry expects the probe to bring about a sustainable reduction in steel imports, and has been using all of the remedies available under existing laws to curb higher imports. US steel producers say that while imports fell after a successful trade case, they were followed by imports from new locations, and cite several examples including the flat-rolled cases in 2016, leading to a rise in imports from

countries like Vietnam after the Commerce Department slapped duties on imports from countries including China that resulted in a decline in Chinese imports.

The slew of stringent trade actions and threats of additional future actions has, so far, not stemmed the tide of cheap steel imports. Indeed, according to the American Iron and Steel Institute (AISI), based on preliminary US Census Bureau statistics, total US steel imports surged 17.5% year-over-year to roughly 35.6Mt (net tons) million net tons in the first eleven months of 2017. Finished steel imports for the same period also increased 14.3% to around 27.6Mt (net tons). The market share of finished steel imports is estimated at 27%, which is still higher than 26% recorded in full-year 2016.

According to AISI data, steel imports from China fell roughly 5% year-over-year through the first 11 months of 2017.

However, imports from other countries such as Germany, Taiwan, Brazil and South Korea have surged during that period.

US steel makers continue to pin their hopes on President Trump imposing new restrictions on imported steel.

Senior executives of major steel companies are optimistic that Section 232 would yield a sharp decline in imports, with some like Nucor’s chief financial officer, Jim Frias, expressing confidence about President

* USA correspondent January/February 2018

USA.indd 1

www.steeltimesint.com

19/01/2018 14:20:56

USA UPDATE

13

Trump fulfilling his commitments to the steel industry. US Steel’s CEO, David B. Burritt, during third-quarter call, observed that Section 232 would have a “meaningful impact on the continued unfair trade practices that are harming domestic steel”.

The President of the Steel Manufacturers Association, Philip K Bell, joined the chorus and said the industry believed that the investigation findings would confirm what domestic steelmakers already know: Imports of certain steel products to the US should be restricted on national security grounds. “The President now has 90 days to determine what actions and remedies will be taken to deal with this existential threat. We are confident that President Trump takes actions and proposes remedies that are broad, meaningful and impactful. That is the only way we can begin to significantly reduce the many tons of illegally and unfairly imported steel that finds its way to our shores.”

However, the American Institute for International Steel (AIIS), which advocates free trade and global growth in steel, reminded President Trump that he would do well to remember the value that quality affordable steel produced overseas provides to the US and the costs that would be incurred by restricting their import.

“Imposing tariffs or quotas on steel imports certainly invite retaliation by other countries. One does not need to be an expert on the early-20th century Smoot-Hawley Tariff Act to know that abandoning the principles of free trade can spark a trade war and, potentially, a global recession or worse. And economic instability is often a proximate cause for violent conflict,” the AISS president Richard Chriss cautioned in a statement.

The US steel sector’s focus on painting imports as the root cause of their problems has also raised eyebrows in other sectors which fear that an escalation could unleash a trade war that could harm their exports to major global markets. US Wheat Associates (USWA), for example, was alarmed by the Commerce Department’s submission of its Section 232 report to President Trump on its investigation of the national security implications of steel imports. The USWA said that the Commerce Department action, prodded by a large segment of the U.S. steel industry, ignored the “disastrous implications” for other US sectors from extreme trade protections for commonly traded steel.

The USW said that it, specifically, believes that there is no greater national security interest for a country than being able to feed its people, which is best achieved through open markets. “If the United States restricts steel imports under a national security claim, some countries may use the same pretense to restrict imports of US wheat and other agricultural products,” it warned in a statement.

“While we don’t yet know the contents of Commerce’s recommendations to President Trump, if they’re anything like what the steel industry has proposed, we hope the President will do the right thing and reject it,” said USW President Vince Peterson. “Under the pretense of asking for fair trade, the steel industry is looking for sweeping protection, and that threatens to undermine the global trade rules that have helped keep our country secure and our farmers competitive.”

This brings us to the question: is Section 232 the proverbial “silver bullet” against imports? We do not know. But many fear that any drastic measures could escalate into a full-fledged trade war and, as one steel analyst, speaking on strict anonymity, told Steel Times International, “you can’t bludgeon others without getting bludgeoned yourself”. That’s the nature of the beast called globalisation! �

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14

LATIN AMERICA UPDATE

Peruvian steel – looking good The Peruvian economy has registered high growth rates along this decade, boosted by the mining boom. In this sense, it is an interesting example of a medium-sized Latin American economy whose dynamism is dependent upon exports of primary commodities. By Germano Mendes de Paula* Macroeconomic situation The country’s GDP performance was relatively high in the 2010-2016 period, equivalent to a Compound Annual Growth Rate (CAGR) of 5.2% (Fig.1).

Nevertheless, according to Ricardo Cillóniz, executive chairman of Aceros Arequipa (who delivered a presentation at the 58th Alacero Conference, which was held in early November 2017 in Cancún, México), there has been a deceleration of domestic aggregate consumption. The main drivers are: a) construction activity CAGR diminished from 7.7% in the years 2000-2010 to 3.6% in the period 20112016; b) the political arena characterised by disagreements between the executive and legislative powers; c) the impacts of the El Niño phenomenon; and d) the Odebrecht effect.

Odebrecht is a giant Brazilian construction company, which in 2016 admitted it had paid roughly $800M in bribes for lucrative projects worldwide.

Odebrecht acknowledged that it paid $29M for gaining projects in Peru. On 15 November 2017, political parties in the Peruvian Congress submitted an impeachment motion against President Pedro Pablo Kuczynski, due to accusations of receiving illegal payments from

Odebrecht. According to documents sent to Congress, the construction firm paid $782k in advisory fees to Westfield Capital, an enterprise Kuczynski owns. Most payments occurred between 2004 and 2007, when Kuczynski served as economy minister and prime minister. On December 2017, the Peruvian Congress voted not to impeach President Kuczynski over corruption allegations.

Even considering that the economic and political environment are not as good as they were at the beginning of this decade, in the latest economic outlook published

by BBVA Bank, unveiled in October 2017, Peru is expected to expand its GDP by 2.4% in 2017 and 3.9% in 2018. Meanwhile, the construction activity would amplify only 0.8% in 2017, but 6.4% in 2018.

The bank stressed the boost in spending on reconstruction and infrastructure work, which will be reflected in greater momentum in the construction sector.

In the same direction, according to the World Economic Outlook, released by the International Monetary Fund (IMF) also in October 2017, Peru’s GDP is projected to amplify by 2.7% in 2017 and 3.8% CAGR along the period 2018-2022 (Fig. 1).

Cillóniz highlighted some important factors that should underpin the Peruvian

economy’s recovery. Public investment and mining exports will be the reactivation engines. Indeed, private investment will return after a drop observed in the period 2014-2017. In addition, the construction of mining projects for a combined investment of $10bn will commence in the years 2018-2019. Mining, hydrocarbons, infrastructure and irrigation projects will be the locomotives of the country’s economic growth.

Steel market Peru’s crude steel production increased from 880kt in 2010 to 1.17Mt in 2016 (Fig. 2). The annualised figure for 2017, based on the first 11 months, reaches 1.22Mt, implying a 4.9% improvement compared with the previous year. Steel production in Peru is concentrated in only two companies: Aceros Arequipa (totally dedicated to longs) and Gerdau Siderperu (88% longs, 12% flats, in 2016). In 2016, Peruvian hot rolled production reached 1.39Mt, surpassing crude steel output.

In November 2016, Aceros Arequipa announced the definitive closure of its Arequipa plant (a 250kt/yr rolling mill).

However, in February 2017, the company disclosed plans for the optimisation of the Pisco steelworks, through the construction

* Professor in Economics, Federal University of Uberlândia, Brazil. E-mail: germano@ufu.br

Fig 1. Peru’s GDP growth, 2010-2022 (%)

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Fig 2. Peru’s crude steel production, 2010-2017 (Mt)

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LATIN AMERICA UPDATE

15

of a new electric furnace. Pisco’s current installed capacity is equivalent to 792kt/yr crude steel and 1.1Mt/yr rolled steel products. The respective numbers for Gerdau Siderperu are 720kt/ yr and 573kt/yr.

In 2016, the Peruvian fabrication of rolled products was predominantly long products (96%), while the share of flat products was very limited (4%).

In 2015, the last year with available disaggregated information, the main long products were rebar (46%), other bars (36%), wire rod (10%), and light sections (8%).

Fig. 3 shows that net direct imports of steel products from Peru rose from 1.6Mt in 2010 to 2Mt in 2016.

Therefore, the volume of net direct imports is almost double domestic production, suggesting the existence of opportunities for import substitution.

Direct steel imports were flats (890kt), longs (820kt), semis (341kt) and tubulars (195kt) in 2016. In addition, net indirect imports have remained relatively stable at the level of 1Mt/yr, because of a relatively small processing industry. Data for 2016 is not available yet.

Apparent consumption of rolled products in Peru enlarged from 2.4Mt in 2000 to 3.3Mt in 2016, implying an average annual rate of 5.1%, in line with GDP growth. In other words, this is a small market with a high expansion rate.

Per capita consumption has also grown from 82 to 103 kg per inhabitant in the period under discussion.

Alacero estimated that steel demand in Peru would decline roughly 2% in 2017.

According to Alacero statistics, in 2016, the composition of steel demand in Peru was 66.3% for long steel, 31.8% for flat steel and 1.9% for seamless pipes.

Consistent with this standard, construction is the most important sector regarding steel consumption with a participation of some 52%.

Cillóniz complained that Peru, among Latin American peers, has been relatively inactive in terms of applying anti-dumping measures.

He declared that there is just one anti-dumping action in force aimed at protecting Peruvian steelmakers.

Nonetheless, in November 2017, Peru started an anti-dumping investigation of rebar imports from Brazil and Mexico, due to a request by Aceros Arequipa in June 2017.

At this moment, Peru is facing strong political instability, which has negatively affected investments and steel demand. However, the mid-term macroeconomic and sectorial perspectives seem to be quite positive for the country’s steel industry. �

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Fig 3. Peru’s net direct and indirect steel imports, 2010-2016 (Mt)

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THE MEXICAN STEEL INDUSTRY A REPORT BY GBR

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SPECIAL SUPPLEMENT - MEXICO’S STEEL INDUSTRY

A vote of confidence in Mexico Despite headwinds such as the NAFTA renegotiations, Mexico’s steel sector is seeing large investments by the likes of Ternium and ArcelorMittal and is moving up the value chain, driven by a booming automotive sector. By Raquel Picornell, Kevin Norchi and Matt Lomas* AT 13:14 on 19 September 2017, a 7.1 magnitude earthquake struck central Mexico, leading to the death of 370 people, as well as widespread property damage.

In a harsh episode of coincidence, the earthquake occurred on the anniversary of the even deadlier 1985 earthquake. One week earlier, another earthquake off the coast of Chiapas in the south – and the second strongest in Mexico’s history – left 98 dead.

Alongside acts of nature, Mexico has been hammered by political tremors in its neighbour to the north. The United States is driving a hard bargain in the NAFTA renegotiations, which have become a priority since President Trump came to office in January 2017. This has made investors wary and has led to gyrations in the Mexican peso, which in turn has negatively affected the performance of some Mexican steel companies.

Despite these rumblings, Mexico’s economy is relatively resilient, and prospects for its steel industry are positive.

Since coming to power in late-2012, President Peña Nieto’s administration has introduced a highly ambitious reform programme, including liberalisation of the energy sector and significant changes to financial markets, labour environment and education. While the IMF expects growth of 1.9% in 2018 — and the Mexican government predicts between 2-3% — Mexico is performing better than its major Latin American peers, and its manufacturing industry, especially its automotive sector, is booming.

Reflecting its relatively strong performance, Mexico is expected to consume 27.6Mt of steel in 2018, compared to 19.7Mt in Brazil, its regional

rival. “We have shown that we have macroeconomics under control. All recent finance ministers have had a clear vision about working with macroeconomics, which has given certainty to investors,” remarked J. Rogelio Garza Garza, undersecretary of Industry and Commerce, Ministry of Economy of Mexico.

Investment boost, high value-added steel Mexico produced 14.1Mt from January to September 2017, representing 36% of Latin America’s steel production, closely behind Brazil, which produced 16.6Mt (42% of total output). Growth in production is positive: Mexico’s steel production is set to grow 7.5% in 2017. In addition, ArcelorMittal, the world’s largest steel

producer, and Ternium, Latin America’s leading flat steel manufacturer, announced combined investments of US$2.1 billion in the country, which will further push up production.

Ternium plans to install a new state-ofthe-art hot rolling mill with a production capacity of 3.7Mt/yr at its Pesquería industrial centre in the northern state of Nuevo León. Its US$1.1 billion investment represents a significant technological upgrade to Mexico’s steel capacity. The investment will expand Ternium’s product range to include the most advanced steel grades and is aimed at replacing high value-added steel imports with domestic production. The new line will be operational by the second half of 2020, and the investment plan includes an option to

Devastation in Mexico after September 19th earthquake

* Article written by GBR. January/February 2018

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19 “In Mexico, electric arc furnaces are still the most popular technology. Only AMHSA and ArcelorMittal Lazaro Cardenas use basic oxygen furnaces. Electric arc furnaces are still the most popular technology in the United States, as well, but the basic oxygen furnaces route, and direct reduction iron, are becoming more popular there to produce higher grades of steel.”

Guillermo González Jiménez, CEO, Primetals Technologies Mexico

further increase production capacity by an additional 1.1Mt/yr. “Mexico imports approximately 3.7Mt/yr of steel products.

Following this trend, Ternium’s investment will create an industrial pole in Pesquería, Nuevo León, and will replace approximately 2Mt/yr of products imported to Mexico,” commented Juan Carlos Rodrigues Goncalves, president of the Association of Iron and Steel Technology (AIST)’s Mexico Chapter and plant manager at Ternium Mexico.

The new mill will integrate Ternium’s upstream operations in Brazil, which it obtained after its acquisition of CSA’s steel mill from ThyssenKrupp for US$1.3 billion, along with its downstream operations in Mexico. It will allow Ternium to produce technologically advanced products for the demanding industries in Mexico, such as the automotive, home appliances, machinery, energy, and construction sectors.

Likewise, ArcelorMittal is making a US$1 billion investment over three years focused on building downstream capabilities, improving the competitiveness of its mining operations, modernising its asset base, meeting expected increased domestic demand and realising its production capacity of 5.3Mt/yr. The company will construct a new hot strip mill and enhance its proportion of high value-added products serving domestic, non-auto, and general industry customers. “The investments will help us to meet the demand requirements for higher value-added products we expect to see from domestic customers, which today are heavily dependent on imports,” remarked Victor Cairo, CEO, ArcelorMittal Mexico.

The investment is a significant boost to the local economy of Lázaro Cárdenas in the southern state of Michoacán, the primary base for ArcelorMittal’s steelmaking operations. Lázaro Cárdenas was named as one of Mexico’s five Special Economic Zones (SEZs) in southern Mexico as part of a policy introduced by President Peña Nieto in September last year to attract www.steeltimesint.com

Mexico 1 overview.indd 2

infrastructure investments into poorer areas of the country.

The ‘Big Four’ Steel production in Mexico is dominated

by ArcelorMittal, Altos Hornos de México (AHMSA), Ternium and Deacero.

ArcelorMittal is the leading supplier of steel products globally in all major markets, including automotive, construction, household appliances and packaging. It operates six facilities in Mexico, employs more than 6,000 people, and is the largest employer in Michoacán. Globally and within Mexico, ArcelorMittal is an integrated producer, operating the Las Truchas mine and the Consorcio Minero Benito Juarez Peña Colorada in a joint venture with Ternium, which holds the most important iron ore deposits in the country and supplies 30% of the steel industry’s needs.

In Lázaro Cárdenas, ArcelorMittal produces slabs of different grades and has a capacity of 4Mt/yr of liquid steel from four electric arc furnaces (EAFs). In the same location, it also produces long products, rod, and wire for the construction industry, and its blast furnace has the capacity to produce 2.4Mt/yr of steel. The company also produces rods of different grades at its two mills in the central city of Celaya, with billets sent for production by rail from Lázaro Cárdenas. To serve the country’s mighty automotive sector, ArcelorMittal produces tailored blanks at its San Luis Potosí facility, as well as pipes at its two tube mills in Monterrey.

Ternium vies with AHMSA for being the largest producer of steel in Mexico, with production at around 5Mt/yr. It produces bars, billets, hot- and cold-rolled steel, coils, sheets, slabs, wire rod, sections, pipes and tubes, and galvanised steel. It is part of the Italian-Argentine conglomerate Techint Group and has facilities in Nuevo León, Puebla, Coahuila, Jalisco, Colima, Michoacán, and San Luis Potosí, as well as in the United States, Guatemala, Colombia, and Argentina. 66% of its total shipments originate from Mexico. In late

2016, the Central Eléctrica Pesquería, a 900 MW combined cycle gas power plant in Monterrey, was inaugurated. The plant is 48% owned by Ternium, 30% by Tecpetrol, and 22% by Tenaris. Ternium is able to purchase up to 78% of the power output, reflecting its desire to have more control over the natural resources it uses.

Unlike ArcelorMittal and Ternium, AHMSA’s roots are in Mexico. It operates the largest integrated steel plant in the country, located in Monclova in the northern state of Coahuila, and owns iron ore and coal mines in close proximity to its plant. It is a national leader in hot-rolled coil, wide plate, cold-rolled coil, and tinfree steel. The company has experienced distinct peaks and troughs in its long history. It was forced to file for bankruptcy protection on US$1.86 billion of debt in 1999 but, in April 2016, successfully exited the bankruptcy process after a court approved an exit proposal for AHMSA to repay US$1.7 billion over three years.

Indeed, things are looking up for AHMSA. It achieved record production of 4.65Mt of crude steel in 2016, a result, the company said, of its ‘Fenix Project,’ which focused on maximising installed capacity and generating a greater variety of valueadded steels. With the company now out of the bankruptcy process, it has a more solid base to focus on strategic ventures, such as expanding its operations and strengthening its offerings in the automotive, energy, and specialised markets.

Privately owned and 100% a Mexican manufacturer, Deacero produces around 2.5Mt/yr of steel. It began in the 1950s as a producer of steel mesh fencing, but became increasingly competitive in the production of mesh and other wire. Today, the company has its own scrap metal collection and processing infrastructure, steel mills, manufacturing plants and distribution centres across Mexico and the United States. Recently, the company has been targeting the automotive sector. In September 2016, Deacero announced it was investing US$300 million to introduce January/February 2018

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20

SPECIAL SUPPLEMENT - MEXICO’S STEEL INDUSTRY “Mexican companies are generally very good manufacturers but they use foreign technologies.

There are very few Mexican companies that develop innovative technologies with commercial value abroad, and Tenova HYL is one of

new products for the automotive market.

Then, in November 2017, it announced a joint venture with Japanese producer Summit Steel Corporation to establish a facility in Nuevo León that will supply wire rod for the automotive industry.

Moving up a gear What is striking about the big four producers is that they are all making

January/February 2018

Mexico 1 overview.indd 3

significant investments, in particular into producing higher value-added steel. “The iron and steel industry in Mexico has a big chance to grow. Despite every threat that shows up, like the ongoing renegotiation of NAFTA or the threat of foreign products, the Mexican industry has shown strength in its resources and capabilities and it has increased production and investments,” remarked Juan Carlos Rodrigues.

them.” Stefano Maggiolino, president and CEO, Tenova HYL There are signs that competition is heating up in the flat products market, with the three main players in this segment, ArcelorMittal, AHMSA, and Ternium, all producing hot-rolled steel. “AHMSA has set up a Steckel mill so that it can produce coils up to 96 inches wide. ArcelorMittal will produce coils up to 80 inches wide and Ternium, with its new investment, will produce 84-inch wide coils. This will fundamentally change the steel sector. It is going to be a blood battle,” predicted Francisco Pontón, director general of service centre Steel Warehouse Mexico.

Just as competition is becoming more intense and producers are moving up the value-chain, technology is becoming more sophisticated as companies adopt Industry 4.0. “Mexico is getting there but it is not ahead of the game. There are some Mexican steel companies that are quite advanced, such as Ternium, especially when it comes to digitalisation,” commented Leopoldo Cedillo, CEO of Metalsa, a structural component manufacturer for the automotive industry.

The steel industry has traditionally been conservative regarding change and Mexico is no exception. However, as Mexico’s steel industry moves to prioritising quality over mass production, the adaptation of new technologies will only become more important. As Karl Purkarthofer, senior vice president of Primetals Technologies remarked, “Industry 4.0 is the biggest technological challenge but also opportunity facing the steel industry.” � www.steeltimesint.com

22/01/2018 10:58:42

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SPECIAL SUPPLEMENT - MEXICO’S STEEL INDUSTRY

Macroeconomic determinants As Mexico’s steel industry is propelled into the future, there are plenty of factors that should give the industry optimism. The construction of the new Mexico City International Airport (NAICM), the introduction of Special Economic Zones (SEZs), earthquake reconstruction, and other major infrastructure plans are expected to stimulate steel demand significantly. However, the ongoing NAFTA renegotiations continue to loom over the industry, creating a precarious business environment for companies that otherwise might be making investments into Mexico. By Raquel Picornell, Kevin Norchi and Matt Lomas*

* Article written by GBR.

January/February 2018

Mexico 2 macroeconomic.indd 1

Pure speculation At this point, predicting the outcome of the NAFTA renegotiations would be speculation, so American OEMs with operations in Mexico are still understandably worried about the risk. In November 2017, the CEOs of General Motors, Fiat-Chrysler, and Ford Motor Company met with the United States administration to voice their concerns about potentially high tariffs and a possible withdrawal from the agreement. General Motors’ CEO Mary Barra has decided to continue producing the 2018 Chevrolet Cruze in Mexico, despite threats of large tariff increases, citing investments that have already been made, as well as long lead times required by the automotive industry.

“The automotive industry works very well because there are few constraints on trade in the NAFTA region. If more constraints are added, consumers across the region may end up paying higher prices,” said Leopoldo Cedillo, CEO of Metalsa. “NAFTA countries may also lose competitiveness as, for example, a German supplier may calculate that there is little benefit to basing itself in Mexico if it can ship from Germany and pay the same import duties under World Trade Organisation rules. The United States is proposing that more components be built there, but getting rid of NAFTA does not make sense because it kills the whole point of being based there, unless the United States decides to quit the World Trade Organisation, which would be total www.steeltimesint.com

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23

“We are big believers in free trade but it must be fair trade as well. For that Ministry of Economy - Underscretary Rogelio Garza

reason, we take actions quickly when we detect non-fair trade practices in markets.”

J. Rogelio Garza Garza, Undersecretary of Industry and Commerce, Ministry of Economy

protectionism.”

The NAFTA renegotiations, the United States tax reform, and the Mexican presidential election are all reasons for Mexican companies to be cautious, as any combination of outcomes could have significant ramifications on international trade. “These macroeconomic factors could affect our industrial base and possibly limit our supply,” said Jorge Zambrano, CEO of Zimmer Recycling, whose scrap metal sourcing depends directly on the manufacturing activity of its suppliers.

“We are being more cautious in terms of investments and we are deferring many of our capital expenditures until after these factors are better defined.”

On the other hand, some businesses seem to be back on track after an initial hesitation phase. If heavy equipment sales are a strong indicator of the industry’s health, then perhaps Mexican companies have begun to stop worrying about the NAFTA results. According to David Decker, vice president of the NAFTA region of induction furnace manufacturer ABP Induction Systems: “Several of our clients held off on making any critical decisions for about the first six months after the new US administration took over. After being at a standstill from January to July 2017, companies restarted their growth strategies.

Despite the slow start, 2017 has been a record year for our systems sales.”

Regardless of any investment hesitations, www.steeltimesint.com

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January/February 2018

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SPECIAL SUPPLEMENT - MEXICO’S STEEL INDUSTRY

most players in the industry are optimistic that NAFTA will incur some necessary updates, but ultimately not come to an end. Steel distributor Ferrecabsa’s chief operating officer, Ricardo Fernandez, concisely summed up the Mexican market’s widespread sentiment: “The general consensus is that NAFTA will remain alive and that all of the rumours about it are mostly just noise. Mexico has good deals with the United States and both economies are too heavily engaged with each other for there to be any major changes.”

Steel stimulants On the other extreme of the market confidence spectrum, uncertainty surrounding NAFTA can be offset by some of the sizable construction projects and public sector initiatives 2018 has in store. The most important construction project affecting Mexico’s steel and iron industry is the NAICM, which is expected to be the world’s second largest airport upon its full completion in 2065. The first terminal, with an expected capacity of 68 million passengers, is in the early stages of construction and is expected to open by October 2020. The project is estimated to cost US$13.3 billion, 60% of which will be funded by the Mexican government, and steel will be the most highly demanded material.

Seven of the 45 companies that bid on the construction of the airport were awarded contracts, forming a consortium that includes Mexican companies Carso Infrastructure and Construction (CICSA),

January/February 2018

Mexico 2 macroeconomic.indd 3

GIA, the ICA Group, La Peninsular, and Prodemex; and Spanish companies FCC and Acciona. “All of the companies working on the NAICM construction are bringing their expertise to the specific areas in which they are needed,” said Sergio Ramírez, general director of Acciona Infraestructuras. “The consortium operates as a joint venture, and the project is quite complicated. All of the people on the project are working hard to keep the timeline moving according to plan.”

Earthquake reconstruction will also be a significant boost to the steel sector, as the majority of the buildings that fell during the disasters would not have fallen had steel been used instead of concrete.

According to Gustavo Arballo, president of the Mexican Chamber of Construction (CMIC): “In total, earthquake reconstruction will cost more than US$2.5 billion over a wide range of states. Steel and iron will be used much more than before, including in the construction of 30,000 to 40,000 new houses, regardless of size.

We are recommending that these houses have a certain standard of earthquake resistance. Most of the houses or buildings that fell had none of the basic structural requirements. The reconstruction will all be completed within the next 12 to 18 months, which is a difficult deadline to meet.”

In 2016, President Peña Nieto signed legislation allowing for the creation of five Special Economic Zones (SEZs) which will offer tax breaks for companies considering investing in underdeveloped Mexican states.

Three of the five SEZs are currently open for development; Puerto Chiapas, Lázaro Cárdenas, and Coatzacoalcos. The SEZs in Salina Cruz and Oaxaca have been delayed, the latter due to earthquake damage.

“Meeting all the infrastructure needs will require materials from the iron and steel sector that have not been considered before, including imported products,” said Gustavo Arballo. “In a short period of time, we are expecting direct investments to build the factories and plants required in those areas. The increase in professional training is a major benefit of these investments, which means bigger salaries and better jobs.”

Ironically, some of the optimism around the Mexican steel sector may have emanated from the United States government.

Guessing whether or not the United States administration’s infrastructure promises will come to fruition is as good as flipping a coin, but companies must prepare for the demand nonetheless. In a sardonic turn of events, it is likely the United States would have to import much of its steel from Mexico if these plans, including the elusive border wall idea, are executed.

“We export about 20% of our total volume to the US,” said Mario Tijerina, chief financial officer of scrap metal recycling company Roca Acero. “In general, the ‘Trump Effect’ has had the biggest positive short-term impact on the steel market because of the infrastructure promises the current US administration has made.” �

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SPECIAL SUPPLEMENT - MEXICO’S STEEL INDUSTRY

25

Mexican automotive: the key drivers Of all the macroeconomic factors impacting Mexico’s iron and steel industry, the booming automotive sector is, perhaps, the most important catalyst. By Raquel Picornell, Kevin Norchi and Matt Lomas* ACCORDING to the Mexican Association of the Automotive Industry (AMIA), Mexico is the world’s seventh largest vehicle producer and fourth largest vehicle exporter. In terms of total vehicles produced, the country yielded 3.6 million units in 2016, marking a 56% increase from 2010, and produced 1.9 million in the first half of 2017. When large iron and steel investments are made in Mexico, the automotive industry is frequently cited as a motive. According to Rogelio Garza Garza, Undersecretary of Industry and Commerce, Ministry of Economy of Mexico: “All of the steel that the automotive sector needs is premium steel. Ternium specialises in such steel and has a new plant next to KIA Motors supplying its needs. When we help automotive, we are also helping the steel industry.”

The Mexican automotive industry’s success can be largely attributed to NAFTA. Since NAFTA’s conception in 1994, Mexican automotive exports have grown at an 11% compound annual growth rate.

According to AMIA, Mexico exported 2.7 million vehicles in 2016, equating to US$55 billion in export revenue and 15% of the country’s total exports. Mexico’s top vehicle exporters in 2016 were General Motors (540,000 units), Nissan (500,000 units), Fiat-Chrysler (443,000 units), Ford Motor (377,000 units), and Volkswagen (334,000 units), and KIA recently began to produce cars in the northern state of Nuevo León in May 2016. “In 2016, Nuevo León’s automotive industry exported a bit more than US$11 billion, and we are expecting to reach US$12 billion in 2017,” said Manuel Montoya Ortega, general director of the

Automotive Cluster of Nuevo León (CLAUT).

“Until 2014, 100% of steel products for the exterior of cars was imported. Tenigal, a joint venture between Nippon Steel and Ternium, started to produce this kind of steel in 2014 and is reducing our dependency on imported steel for these purposes.”

Hitting the gas pedal The iron and steel industry most directly interacts with the automotive industry when metal castings are used for vehicle components. According to the National Industry of Auto Parts (INA), Mexico currently produces about US$83 billion in auto parts per year, and the sector employs about 800,000 people. It also contributes US$25 billion to Mexico’s trade balance and comprises 10% of Mexico’s

* Article written by GBR. www.steeltimesint.com

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SPECIAL SUPPLEMENT - MEXICO’S STEEL INDUSTRY

manufacturing GDP. In this context, Ternium and ArcelorMittal have cited the large automotive industry as the principle reason for their major investments into Mexico.

Of the 1,500 auto parts factories in Mexico, about 30% are Mexicanowned. Due to the pace at which the automotive industry is growing, many Mexican foundries that supply iron and steel castings to auto parts manufacturers are finding it difficult to meet demand.

Foreign companies are seeing this as an opportunity. “Foundries from around the world are coming to Mexico to install capacity to supply the OEMs here.

Additionally, we are seeing many Tier 1 automotive suppliers moving to Mexico from abroad and they are also using iron castings,” said Patricio Gil, CEO of Blackhawk, one of the largest foundries in Mexico. “Even though our capacity has been growing, it is still not enough to meet the demands of the industry. In the past five years, there have been at least 26 new foundries in Mexico, most of which are foreign.”

This issue is staunchly different from

January/February 2018

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several years ago, when low-cost metals from Asia were undercutting the fair market value of iron and steel in Mexico and posed a significant threat to local mills and foundries. To combat the threat, the Mexican government has implemented several anti-dumping measures since 2015, most recently a duty set between 22.2% and 76.3% on flat coated steel from China.

The government also launched a probe on imported steel plates from Italy and Japan in November 2017. According to Raúl López, general director of American Axel & Manufacturing’s Monterrey-based casting division: “Until 2016, there was a problem with the availability of high-quality castings and there were a lot of cheap materials coming from China and Turkey, in particular. Now, most of Mexico’s imported steel comes from the United States, and the price is linked to the American metal market indexes.”

Speed bumps Of Mexico’s 3.6 million vehicles produced in 2016, 75% (2.7 million units) were exported. Furthermore, 90% of all auto

parts produced in Mexico are destined for another country, whether directly or indirectly. The issue is that, compared to the rest of North America, there is very little domestic automotive demand, which limits the potential of the industry.

As it stands, domestic auto parts suppliers, many of which are familyowned, continue to struggle to meet the high demand of the automotive industry, while foreign automotive companies continue to bring their best suppliers with them from abroad. Thus, it will be interesting to see how Mexican SMEs plan to maintain a significant piece of the pie and keep the investment capital within the country’s borders. According to Manuel Montoya: “Nuevo León is certainly the most integrated when it comes to working with Mexican suppliers, but we still import about 60% of our supplies. That is much better than other states that are importing over 80% of their supplies, on average.”

Oscar Albin, president of Mexico Autoparts Association (INA), added: “The majority of Mexican auto parts suppliers are categorised as Tier 2 suppliers, and the

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foreign Tier 1 suppliers are the ones making large investments. The problem is that it is very difficult to convince Mexican investors to invest in the automotive sector because it is more of a long-term investment. They tend to prefer high-volume investments with quick returns.”

To keep up with demand, Mexican suppliers must adapt to the industry’s imminent trend toward ultra-highstrength steels, which are used to produce lighter-weight vehicles without sacrificing performance.

“Currently, there is a lack of such steel production in Mexico, but investments are being made as we speak, so shortly we will have more availability,” said Mauricio Morales, general manager of service centre Galvaprime. www.steeltimesint.com

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Down the road Fortunately, as OEMs continue to invest in the country, the growth rate of Mexico’s automotive industry appears to be sustainable for at least the short-term.

Echoing the industry’s positive outlook on its future, Oscar Albin stated: “We expect to see the industry plateau around 4.5 million vehicles per year in 2020. BMW and Mercedes Benz recently built new plants in Mexico, Infiniti will complete construction of a plant by the end of 2017, and Toyota recently broke ground on their new plant.

Mexico’s automotive industry very much depends on demand from the rest of North America. As long as the American and Canadian economies are healthy, Mexico’s automotive and auto parts industries will also be healthy.” � January/February 2018

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SPECIAL SUPPLEMENT - MEXICO’S STEEL INDUSTRY

Service centres must up their game For a number of years, commentators have diagnosed an overcapacity in the Mexican steel distribution and service centres market, especially for commercial steel, and, so far, the expected consolidation of the market has not materialised. In fact, more companies have entered the fray, mostly serving the thriving manufacturing sector. By Raquel Picornell, Kevin Norchi and Matt Lomas* A striking characteristic of Mexico’s steel sector is the large participation rate of distribution companies, which is unlike any other Latin American nations, such as Brazil or Argentina, where producers tend to operate their own distribution. The roots of this lie in a market traditionally made up of small, highly localised metal processing shops, but the characteristic has remained even as customers have grown larger and gained greater purchasing power.

Unsurprisingly, the distribution and service centres market is large, accounting for approximately 22,000 jobs and around 20% of total employment in the steel sector. It is also extremely varied, from distributors focusing on stocking large inventories to highly specialised service centres whose goal is to add value to the base steel they supply.

The market can be split into two distinct segments: commercial and industrial.

Commercial players typically service the construction market, while industrial players focus on the wider manufacturing industry.

For years, commentators have identified overcapacity in the commercial distribution and service centre market, and the logical extension of this is that consolidation in the market must be just around the corner.

However, this has not materialised. “There are many players with thick skins and deep pockets that have survived the storms. One or two have gone bankrupt, but there have been no acquisitions or mergers,” remarked Francisco Pontón, director general of service centre Steel Warehouse Mexico.

Construction Industry Chamber (CMIC).

2017 growth is expected to be around 1.5%, but aforementioned megaprojects should serve as signs of vitality for distributors and service centres.

“Construction of the NAICM airport will also drive the industry. We received a quote for 100kt of steel from one of the construction companies that has been contracted to help build the airport, but this is an unrealistic request,” commented Héctor Morales, general director of trader and distributor Aceroteca.

There also appear to be spikes in demand in certain regions, with distributors such as Dalsa reporting strong demand in the northern state of Chihuahua and construction engineering company Ameristeel seeing robust construction growth in Querétaro. “Steel for

construction, such as rebar, has grown due to the large number of high-rise buildings that have been built,” explained Jorge Treviño Portilla, general director of Dalsa.

On the other hand, public sector demand in the construction sector has slowed as the government attempts to consolidate debt.

Follow the money Despite the resilience of construction, the industrial steel market still looks far more promising in comparison, and service centres are rushing to gain a slice of that pie. “Overall, there are too many service centres in the market, but it depends on the end use. For automotive and home appliances there is not an overcapacity, whilst in commercial and construction industries there is a considerable amount,” commented Mauricio Morales, general

Mexico continues to build Construction growth was a reasonable 2% in 2016, according to the Mexican * Article written by GBR January/February 2018

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manager of the service centre Galvaprime, which focuses on the industrial market.

Asian companies have entered the industrial market in recent years, especially from Japan and Korea. Typically, they base themselves in the Bajío region due to the high concentration of automotive OEMs there, such as Toyota, Honda, General Motors, and Volkswagen, and bring with them high quality equipment.

The strong performance of the automotive and appliances sectors has driven the demand for higher value-add from service centres. Indeed, their increased sophistication mirrors the growing production of specialised steel for the automotive industry in Mexico. This has necessitated that service centres invest in state-of-the-art technology, something the sector has been criticised for not doing in the past. Instead, it has tended to buy used, out-of-date equipment from US companies.

“All of the equipment we have bought since 2010 has been brand new equipment mostly from Europe so that we can guarantee good flatness and squareness and meet the requirements of ‘Class A’ exposed materials for the automotive industry,” commented Morales.

Just as the big producers are moving up the value-chain and producing more sophisticated steel, so must the service centres invest in upgrading their capabilities to serve the changing needs of Mexico’s maturing economy. �

www.steeltimesint.com

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January/February 2018

22/01/2018 11:01:02

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Ironmaking with an H2 energy source This article looks at how the hydrogen economy will influence next-generation iron and steelmaking, specifically by examining the MIDREX H2 concept of using the proven MIDREX process with an H2 energy source. By Jayson Ripke, PhD, John Kopfle** and Chris Ravenscroft*** There has been increasing interest and work to explore and mitigate CO2 emissions over the past few decades in the iron and steel industry. The natural gas-based MIDREX® Direct Reduction Process paired with an electric arc furnace (EAF) has the lowest CO2 emissions of any commercially proven steelmaking route; yet, there is even more room for lower emissions through use of hydrogen as a fuel and chemical reactant. The best possibility for drastically reducing the steel industry’s CO2 footprint is the use of pure hydrogen as the energy source and reductant for direct reduced iron (DRI) production in a MIDREX shaft furnace. This concept, known (and trademarked) as MIDREX H2, holds great promise to be developed and realised in either new or existing DRI plants.

The difficulty of producing pure hydrogen without a large CO2 footprint is a major obstacle to implementing hydrogen direct reduction ironmaking. Still, this idea may be closer than many realise as the idea of the ‘hydrogen economy’ evolves.

From hydrocarbon to hydrogen economy Most energy today comes from one of three hydrocarbon sources: petroleum, coal or natural gas. This is called the ‘hydrocarbon economy’ when talking about energy and its relationship to global markets. The hydrogen economy is a proposed system of delivering energy using hydrogen. It has been put forth to solve some of the negative effects of using hydrocarbon fuels, which release carbon to the atmosphere as CO2, CO, unburnt hydrocarbons and so on.

Proponents of a world-scale hydrogen economy argue that hydrogen can be an

Fig 1. Improving the economics of renewable H2; Department of energy H2@scale FCTO webinar - july 28, 2016

environmentally cleaner source of energy to end-users without the release of pollutants, such as particulate matter or carbon dioxide at the point of end-use. However, there are many issues to overcome for hydrogen to become a major economic factor. For instance, hydrogen has a high energy density by weight, but a low energy density by volume when not compressed or liquefied. Thus, the high cost of a hydrogen fuel cell has been a major obstacle in its development. Other related issues, such as storage, distribution infrastructure and hydrogen purity, and concerns for safety, will have to be overcome for the hydrogen economy to take off.

Also, there is the classic ‘chicken and egg’

Fig 2. Ironmaking reactions

* Manager, R&D, Midrex Technologies Inc. **Director, corporate development, Midrex Technologies Inc. ***Manager, global marketing and communications, Midrex Technologies Inc. www.steeltimesint.com

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syndrome. Potential producers are eagerly awaiting consumers to come forward so they can demonstrate the use of hydrogen at scale, while consumers appear ready once sufficient amounts of hydrogen can be produced at a competitive cost.

Full realisation of the hydrogen economy will require the co-operation of industry, academia, government, and the consumer.

Getting to know hydrogen There are two major uses for hydrogen today. About half is used to produce ammonia (NH3) for use in fertiliser.

The other half is used to convert heavy petroleum sources into lighter fractions suitable for use as fuels, which is known as hydrocracking. Because this can effectively enhance poorer source materials, such as tar sands and oil shale, hydrocracking is considered a growth area.

In 2016, 96% of global hydrogen production was from fossil fuels; 48% from natural gas, 30% from oil and 18% from coal. Water electrolysis accounted for 4%. Linking the centralised production of hydrogen to a fleet of light-duty fuel cell vehicles would require the siting and construction of a costly distribution infrastructure. Further, the technological challenge of providing safe, energy-dense storage of hydrogen on board the vehicle must be overcome to provide sufficient range between fill-ups. Therefore, of the four methods for obtaining hydrogen, partial combustion of natural gas in a natural gas combined cycle (NGCC) power plant appears to offer the most efficient chemical pathway and the greatest off-take of usable heat energy.

Most hydrogen is produced in a steam methane reformer (SMR) using natural gas as the feedstock. This is similar technology to a MIDREX reformer. The reformer produces a gas containing H2 and CO, then the CO is removed. While largescale hydrogen production utilising steam reformers is a reality today, it does not provide a solution for greatly reducing CO2 emissions because it is made from natural gas; therefore, an SMR has significant CO2 emissions.

Another technology for H2 production is electrolysis, which uses electricity to split water into hydrogen and oxygen. This is done today, but there are two problems for its use in the hydrogen economy: 1) in most countries, electricity is generated primarily with fossil fuels so there remains a large January/February 2018

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Fig 3. Midrex process with hydrogen addition

CO2 footprint, and 2) the cost of hydrogen is too high for many applications at prevailing electricity prices (about twice the cost of hydrogen from steam reforming).

There are 1.0 MW electrolysers available today, but the total world installed capacity is only about 50 MW. In 2016, the US Department of Energy (DOE) identified H2@Scale as an underemphasised major opportunity, which they term a ‘Big Idea.’ DOE is focusing on it in a combined effort with 14 of their 17 national labs. Rather than generating H2 by electrolysis using electricity produced during times of peak demand, DOE envisions the use of lower cost off-peak power, storing the H2 produced, then transporting it to users when required.

Fig. 1 shows its vision of the economics.

Using $0.01/kWh electricity, the cost of hydrogen is about the same as from a steam reformer (see second bar from left in Fig. 1). Further R&D advances could result in an even lower cost for electrolytic hydrogen. The volumes that could be produced at this cost lead us to the very real possibility of using H2 for iron and steelmaking.

Using hydrogen for ironmaking There is tremendous interest and work underway worldwide to reduce CO2 emissions. A very promising solution is use of hydrogen as a fuel and chemical reactant rather than fossil fuels.

The steel industry accounts for as much as 5% of total world greenhouse gas emissions because of its significant

use of coal. About 75% of the world’s steel is made using blast furnace (BF) iron processed in a basic oxygen furnace (BOF).

The BF uses coke (refined coal) as the energy source and reductant. This process route generates about two tons of CO2 for every ton of steel produced.

The natural gas-based MIDREX process, paired with an electric arc furnace (EAF), has the lowest CO2 emissions of any commercially proven steelmaking route. This occurs because natural gas contains much more hydrogen than does coal. The process gas of a typical MIDREX plant contains about 55% H2 and 36% CO, whereas BF gas is nearly all CO. As a result, the MIDREX/EAF combination produces about half the CO2 emissions per ton of steel as a BF/BOF. By adding CO2 scrubbers, Midrex can lower CO2 emissions even more by removing CO2 in the flue gas. Emissions can be halved again, versus the BF/BOF route, if the CO2 can be used and/or sequestered.

Despite the benefits of natural gas-based DR/EAF steelmaking, there is interest in an even lower emissions process route to dramatically reduce the steel industry’s CO2 footprint. Major initiatives are underway worldwide to use hydrogen to make iron.

This is not a new concept. ClevelandCliffs, Lurgi and LTV Steel built a 400kt/ year Circored direct reduction plant in Trinidad that used hydrogen from a steam reformer as its reductant and energy source.

The plant was started up in 1999, but the fluidised bed reactor had numerous problems and it produced only about 150kt by the time it was shut down in 2001. www.steeltimesint.com

19/01/2018 14:23:00

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The ultimate low CO2 ironmaking solution would be to produce pure hydrogen using a low carbon energy source such as solar, wind, hydro, or nuclear and use the hydrogen in a shaft furnace to make DRI. Midrex is now developing the MIDREX H2 process to do just that.

An iron reduction primer Before going into the details of ironmaking with hydrogen, let’s review some basics.

Pyrometallurgical (high temperature) ironmaking uses CO and H2 to accomplish reduction, which is the removal of oxygen from ore (opposite of oxidation). There are many reactions occurring in a direct reduction reactor or a blast furnace, but the primary ones are shown in Fig. 2. Iron is represented by Fe and methane (a primary component of natural gas) is represented

by CH4.

In a blast furnace, almost all reduction is done using CO (reaction 2), which is generated from coke. In direct reduction, reduction is accomplished with CO and H2.

In the case of the standard MIDREX process using natural gas, 60% (ratio of H2 to CO) of reduction is done with hydrogen. Since reduction occurs in a BF at about 1300°C and in a DR furnace at about 900°C, temperature control is very important.

Reaction 1 is endothermic (requires heat) while reaction 2 is exothermic (gives off heat). The MIDREX process, using the typical gas content of 55% H2 and 36% CO, is easy to control because the temperature in the furnace stays relatively constant.

The carburisation reactions occur automatically in the BF because of all the carbon present. In a direct reduction process, they occur if the reducing gas contains CH4 and CO. The reforming reactions occur when methane is present either in a BF or a DR furnace. Many BFs now inject methane (natural gas) into the furnace to reduce coke consumption.

Hydrogen use in Midrex plants As noted in the paper, ‘Future of Direct Reduction in Europe – Medium and LongTerm Perspectives’, co-authored by Midrex and Primetals and presented at the ESTAD Conference in June 2017, hydrogen can be used in two ways in a DR plant. Some H2 can be introduced in a natural gasbased plant as a substitute for part of the natural gas, or the DR plant can be based on 100% H2. In the case of H2 addition to a MIDREX plant, one-third of the required January/February 2018

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Fig 4. Midrex H2TM process

natural gas can be substituted. For example, 60,000 Nm³/h of H2 can be substituted for approximately 20,000 Nm³/h of natural gas in a 2.0 Mt/yr plant, which represents approximately 30% of the total natural gas consumption. The flowsheet for this approach is shown in Fig. 3. This can be done with an existing or new plant.

MIDREX H2 refers to the use of 100% hydrogen as the feed gas. Midrex has vast experience using hydrogen to make iron in a shaft furnace. Since 1969, MIDREX plants have produced more than 955Mt of DRI with over 50% hydrogen. MIDREX plants utilise three different ratios of H2 and CO. Most use natural gas and a standard MIDREX reformer that produces a reducing gas with 55% H2 and 36% CO (H2/CO of 1.5). The FMO MIDREX plant in Venezuela uses a steam reformer, and H2/ CO has varied from 3.3 to 3.8. There are six MIDREX modules that utilise gas made from coal, and these have hydrogen to CO ratios from 0.37 to 0.56. Thus, the MIDREX process has successfully produced DRI at H2/ CO ratios from 0.37 to 3.8.

Based on initial modeling and laboratory experiments, it is possible to use almost pure hydrogen to make DRI in a MIDREX shaft furnace. The flowsheet is shown in Fig. 4. It is like the standard MIDREX process except the H2 input gas is generated external to the process. Thus, there is no reformer and a gas heater is included to heat the gas to the required temperature.

In practice, the reducing gas H2 content is about 90%, with the balance CO, CO2,

H2O and CH4. These constituents result from the addition of natural gas for temperature control and carbon addition, as described in the following section.

Because H2 is converted to H2O and condensed in the top gas scrubber, no CO2 removal system is necessary. Hydrogen consumption is approximately 550 Nm³/t DRI. Additionally, up to 250 Nm³/t DRI of H2 or other environmentally friendly heat sources such as waste heat, electricity, and/ or natural gas, is required as fuel for the reduction gas heater. With this process, CO2 emissions could be reduced by up to 80% versus the BF/BOF steelmaking route.

There are a few considerations for the MIDREX H2 process, first of which is temperature. With so much hydrogen, the DRI cools off as the reducing gas enters the shaft furnace because of ironmaking reaction 1 (Fig. 2). Thus, it is necessary to add natural gas to maintain the desired reduction temperature. According to Midrex modeling, the addition of natural gas at a rate of 50 Nm3/t DRI should accomplish this.

The second issue is DRI carbon content.

The majority of DRI is used in EAFs. EAF steelmaking practice today generally employs carbon addition either in metallic charge materials such as DRI, HBI and pig iron or as pure carbon. Burning this carbon with injected oxygen creates significant heat, which reduces electricity consumption and enables faster melting. Since pig iron is made from BF hot metal that is saturated www.steeltimesint.com

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with carbon, it contains 4-4.5% carbon. DRI can have 1-4.5% carbon depending on the process, reducing gas used and the way the DR plant is operated. Most EAF steelmakers prefer to use DRI with 1.5-3% carbon, but the optimum carbon level varies based on metallic charge mix and the steel grade produced.

With high amounts of hydrogen in the reducing gas, it will be necessary to add hydrocarbons at some place in the process to achieve the desired carbon level. DRI carburising options include the addition of hydrocarbon to the cooling zone or in the furnace lower cone. Addition of 50 Nm3/t of natural gas for temperature control results in DRI carbon of about 1.4%. The next evolution in steelmaking will be to melt iron without using carbon, but this will be very energy-intensive since the melting point of steel increases as carbon content decreases.

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Conclusion Today the best possibility for drastically reducing the steel industry’s CO2 footprint is the use of pure hydrogen as the energy source and reductant for iron ore. There are many efforts underway worldwide to achieve this goal. The use of hydrogen in a MIDREX shaft furnace, known as the MIDREX H2 process, holds great promise to be developed and realised in either new or existing DRI plants.

The main obstacle to implementing hydrogen direct reduction ironmaking is in the difficulty of producing pure hydrogen without a large CO2 footprint. Despite this hurdle, governments and industry are looking at ways to make a hydrogen economy a reality as soon as possible, and with it a cleaner way to make iron and steel. � EDITORS NOTE: This article is based on the paper ‘Future of Direct Reduction in Europe – Medium and Long-Term Perspectives’, co-authored by Primetals and Midrex and presented at the ESTAD Conference in June 2017.

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IRONMAKING

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Metal granulation and steelmaking UHT has delivered and commissioned the world’s largest GRANSHOT metal granulation unit for TATA Steel’s new steel plant in Kalinganagar, Odisha, in India. The delivery enables a seamless industrial route for excess blast furnace iron with a design granulation capacity of 360 tonnes/hr. This article will discuss the TATA KPO plant and analyse operational experiences and the usability of the granulated product by the end users. By Dr. Kristina Beskowi* and Rajiv Singh**

THE GRANSHOT unit is engineered for tapping directly from the torpedo to enable easy metal transfer between the blast furnace and the granulation site. This has provided better internal logistics during start-up of the blast furnace and steel plant by allowing the independent operation of the two units.

The granulated pig iron, GPI, marketed

by TATA as Ferroshots, has been very well received by its end-users. The granulated product is suitable for use in steelmaking operations such as the electric arc furnace (EAF) and basic oxygen furnace (BOF) as well as in foundries as a replacement for DRI and scrap.

The world’s largest GRANSHOT metal granulation unit has been implemented at TATA Steel’s new integrated steel plant in Kalinganagar Industrial Complex in the Jajpur district of Odisha, India.

The plant has a design capacity of up to 360 tonnes/hr of pig iron and was commissioned in March 2016. The implementation of the plant fulfils several objectives for Tata Steel: • Easy handling of excess hot metal during the ramp-up of the new steel plant.

• Creating a buffer between the blast furnaces and downstream production, increasing the flexibility for the steel plant while allowing the blast furnace to produce at full capacity.

• Selecting a sustainable process alternative with low environmental impact.

• Generating a granulated pig iron product suitable for use in various steel making operations.

• Sale of granulated pig iron to the market.

The process flow for handling of excess pig iron at TATA KPO is seen in Fig. 1.

The granulated pig iron product, marketed by TATA as Ferroshots, has been well received by the market, and around 160kt of Ferroshots have been sold so far to customers in India, Asia and Europe.

Background The problem – pacing of liquid iron feed Pacing of blast furnace throughput with steelmaking operations is an unsolved

dilemma for the integrated steelmaking plant: • The BF should preferably operate continuously at a steady pace with predefined tapping intervals and a minimum of shutdowns.

• Steelmaking operations are, by definition, batch operations of a relatively complex nature, which require planned or unplanned shutdowns on an irregular basis.

Minor disturbances in pacing between ironmaking and steelmaking are normally handled by buffering of hot metal in the torpedo car fleet. Typically, the torpedo

Blast furnace Fig 1. Handling of excess pig iron at TATA KPO

Excess pig iron

GRANSHOT® Metal granulation

Basic oxygen furnace

GPI - granulated pig iron

* Process Engineering, Uvån Hagfors Teknologi AB, Kistagången 2, SE-164 40 Kista, Sweden ** Head of Projects, Tata Steel Ltd, Kalinga Nagar Industrial Complex, Jajpur K Road 755 026, India www.steeltimesint.com

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Fig 2. The GRANSHOT plant at TATA KPO

holds a few hours of blast furnace production, which is sufficient for normal shifts in liquid iron supply and demand.

If the hot metal buffer exceeds the torpedo car fleet capacity, the blast furnace will either be put on idle or the hot metal diverted to an emergency casting system.

Historically, emergency casting of hot metal has usually been performed into an open sandpit or similar (also known as ‘beaching’ or ‘pooling’). This method produces a poor product, requires considerable post-casting efforts, and has significant environmental drawbacks in terms of fumes and dust emissions to the local community and global environment.

The solution – produce iron feedstock in an additional production system A GRANSHOT granulation plant accommodates most liquid metals at a high production rate and converts it to a prime granulated metallic product suitable for bulk handling. It will also decouple the pacing of the iron and steel making facilities and is logistically positioned in between the two plants, see Fig. 1. Excess hot metal from the blast furnace is diverted to the GRANSHOT plant, which produces granulated pig iron whenever required. This eliminates blast furnace shutdown due to steel plant interference and the produced GPI is suitable as internal feedstock as coolant in the BOF, or for external sales to be used as a prime virgin feedstock in steelmaking operations. This has also been discussed in previous papers [1,2]. The GRANSHOT process is a highly sustainable alternative to open sandpit pooling and with a minimal environmental impact.

GRANSHOT plant at TATA KPO The GRANSHOT process converts liquid metal into granules by rapid solidification January/February 2018

ironmaking granshot.indd 2

in water. The plant at Tata Steel KPO is designed to handle metal rates up to 360 tonnes/hr. The GRANSHOT unit is engineered for direct tapping from the torpedo ladle car to enable easy handling between the blast furnace and the granulation site. The plant is placed in its own building between the blast furnace and the steel plant. The layout of the TATA granulation plant is shown in Fig. 2.

GRANSHOT plant description The torpedo ladle car arrives at the granulation unit from the blast furnace.

On arrival, the torpedo ladle car is placed in position on a movable runner that can follow the tilting movement of the torpedo throughout the granulation process. Metal is poured from the runner into a tundish, placed on the GRANSHOT reactor, and further on to a refractory target (sprayhead) placed in the centre of the granulation tank. The sprayhead splits the metal steam into droplets that are distributed evenly over the granulation tank’s water surface.

The granulated metal solidifies partly

in-flight and further cooling takes place as the granules sink downwards into the granulation water tank.

The granulation rate during the process is controlled by adjusting the degree of torpedo tilting to achieve a certain operational level (or metal weight) in the tundish, in combination with the selection of the tundish nozzle outlet diameter. The metal weight is measured by load cells placed on the tundish.

The solidified granulated product is then discharged from the bottom of the GRANSHOT reactor via an air-water ejector system on to a dewatering screen, where the product is dewatered. Thereafter, the granulated product is transported on conveyor belts to an intermediate stockpile.

The cooling water system is carefully balanced in order to handle the large amount of heat added by the liquid metal during the granulation process. From a closed-circuit cooling water system, cold water is continuously pumped into the lower section of the GRANSHOT reactor through specially designed nozzles. As the water passes upwards through the granulation tank it will exchange heat with the solidifying metal. Warm water exits the granulation tank in the upper part via an overflow into a hot well. From the hot well, water is further pumped via cyclone separators to cooling towers, before being returned to the granulation tank.

A schematic description of the granulation process and its main components is seen in Fig.3.

The granulation process is rapid and the total process time from hot metal entering the granulation unit until exiting at the dewatering screen takes around

Fig 3. GRANSHOT granulation process - schematic overview

Hot metal

Tundish

Dewatering unit

Reactor

Cooling water Water Air Ejector

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IRONMAKING

Fig 4. GRANSHOT metal granulation directly from torpedo ladle car at TATA KPO

Granulation capacity

Torpedo capacity

Power input from metal

Water cooling capacity

Plant foot-print (incl. hot well)

128 MW

22 x 27 m

Nominal Design 300 tph

360 tph

300 ton

128 MW

GPI product properties The rapid quenching of the granulated material results in a product with analysis identical to that of liquid pig iron. No change in composition has been found to take place during the granulation process. The chemistry of the product can, therefore, be specified by ingoing liquid metal analysis. The granulated material has a spherical deformed shape. Some typical granulated pig iron material is seen in Fig.6.

The granule size distribution is typically in the range 3mm to 50 mm, with the main fraction between 5mm and 30 mm.

The material has a high bulk density, ~ 4000 kg/m3 and an angle of repose over 35 degrees. The granule shape and size give a material with excellent preheating properties and a fast melting/dissolution when added to metallurgical processes. This has also been discussed in previous papers [3,4] .

Table 1. GRANSHOT plant key figures for TATA KPO

30 seconds. The operator is, at all times, assisted by the control system to ensure a safe and stable granulation process.

The granulation process and the discharge of the granulated product at TATA KPO is shown in Fig. 4 and Fig.5. A summary of key figures for the TATA GRANSHOT plant is shown in Table 1.

Operational experiences Since the commissioning of the GRANSHOT plant in March 2016 more than 250kt of granulated metal have been produced (in February 2017). During the initial months after start-up of the blast furnace most of the pig iron was taken through the GRANSHOT plant. Since August 2016 the steel plant has been in full operation and the granulation facility is used more intermittently, whenever excess pig iron is available.

The number of torpedoes handled in a sequence varies depending upon available metal, ranging from granulation of a single torpedo up to several torpedoes in a row.

The maximum number of torpedo ladles handled so far in one sequence, using the same tundish, is 10, which corresponds to approximately 3kt of hot metal.

Granulated pig iron, GPI – TATA Ferroshots The granulated pig iron product, referred to as GPI, is marketed by TATA as Ferroshots.

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Within a few months of its launch the product has received a lot of interest from the steel industry and to date around 160kt of Tata Ferroshots have been sold to customers in India, Asia and Europe. The end use of TATA Ferroshots includes electric arc furnaces (EAFs), induction furnaces, cupolas, basic oxygen furnaces (BOFs) and foundries as a replacement of pig iron (pigs), scrap or DRI. Granulated pig iron is characterised as a homogeneous virgin iron product with several beneficial properties, which is further discussed below.

Easy handling of granulated product The granule size and shape allows for easy handling of the product and this makes it suitable for handling with most raw material systems, such as conveyor belt, magnet, front-end loader, bin systems and skips.

Examples of handling and loading of granulated product at TATA KPO is seen in Fig.5 and Fig. 7. From the intermediate storage area nearby the granulation unit the granules are loaded on to a truck by front-loaders and taken to the main storage area for further loading and transport to customers.

Fig 5. Granule discharge from conveyor to intermediate stockpile

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IRONMAKING

TATA Ferroshots, has been well received by the market as an excellent iron material for use in various steel making operations. � 5. Acknowledgements The authors are grateful for input and data from TATA/IBMD as well as valuable comments from colleagues within TATA and UHT.

6. References

Fig. 6. Granulated pig iron, GPI - TATA Ferroshots

Benefits of using granulated pig iron in steel making operations With increasing demand for ‘clean’ iron units to contain lower levels of residual elements such as copper and tin, the use of alternative iron sources in steel making operations are on the rise [5].

Solid pig iron is a prime raw material and offers several advantages in steelmaking operations. The granulated product is suitable for use in steelmaking operations such as the EAF and BOF as well as in foundries as a replacement for DRI and scrap: • GPI is easily used in BOF converters as a coolant material with neutral composition, cutting the need for scrap.

Handling can be by conveyors, hoppers or scrap skips. The high density and shape of the granulated material allows for efficient feeding, rapid melting and a high yield.

• GPI can be added to an EAF as a virgin feedstock material low in residuals.

Due to its size and shape, it can be fed continuously via the 5th hole, which means charging during power-on and lowering tap-to-tap times. The high carbon content in the GPI also promotes slag foaming, which is beneficial for EAF lining life. The granulated material is also suitable for loading in scrap baskets.

• Foundries have found that virgin pig iron granules are ideal for simple handling and correct weighing operations, as well as fast melting. It has also proved to be beneficial to mix GPI and DRI during induction furnace melting as the carbon and silicon in the GPI can be used to reduce iron oxide in the DRI, hence obtaining a higher overall metal yield.

• Recycling of GPI into the blast furnace burden can boost and promote iron output.

This is a special case to be considered when for instance there is a shortage of iron due to one ironmaking unit on hold for relining.

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4. Summary The world’s largest GRANSHOT granulation plant is operational at TATA Steel KPO in Odisha, India. The GRANSHOT unit enables a seamless industrial route for handling of excess pig iron from the blast furnace and is engineered for direct granulation from the torpedo ladle with a design capacity of 360 tonnes/hr. The system meets the demand on flexibility and rapid start-up to function as a back-up facility whenever excess pig iron is available, and has a very low environmental impact. During the first year of operation more than 250kt of pig iron have been granulated in the plant.

The produced granulated pig iron product,

[1] P-Å Lundström, “Iron Granulation in Integrated Steel Plants”, Nordic Steel & Mining Review (2006) [2] K. Beskow, P-Å Lundström and E. Dupon, GRANSHOT® iron granulation technology, Millennium Steel (2009) [3] K. Beskow, P. Vesterberg and C-J Rick, “Value creation by granulation of excess pig iron”, The 42nd ABM IronMaking Seminar & 13th ABM Iron Making Symposium (2011) [4] K. Beskow and U. Svensson-Pokrzywka, “Comparative study of melting stock for investment casting”, Cast Metal and Diecasting Times (2006) [5] J. Jones, Utilisation of pig iron in the electric arc furnace, International Pig Iron Association (2007, April)

Fig 7. Handling of Ferroshots at TATA Steel KPO: easy loading from intermediate storage using front loader (above), loading on truck for transport to customer (lower left) and first dispatch of Tata Ferroshots being flagged off by Rajiv Kumar, vice president at TATA Steel KPO (lower right).

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22/01/2018 08:36:33

Innovative technologies for the metals industry

Re h e at i n g f u r n ace s § P i c k l i ng § A c i d R eg enera ti o n § C o l d Rol l i ng St r ip P r oce ssi n g (m e ch a ni c a l , c hem i c a l & ther m a l ) § A utom a ti on DESIGN

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TECHNICAL

A S S I S TA N C E

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AFTER-SALES

CMI Group, two centuries of engineering in the service of the industry Cockerill Maintenance & Ingénierie: a long history, inextricably linked to that of the industrial revolution…

In 1817, the British businessman John Cockerill begins his industrial activity in Wallonia by supplying weaving looms to the wool industry. He rapidly diversifies his activities: blast furnaces, industrial boilers, warships…

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power plants, rolling mills and steel processing lines, reheating and heat treatment furnaces, boilers for thermo-solar power plants...

From the outset, the ‘Cockerill factories’ have been anticipating trends and playing a determining role in worldwide technological advances.

The tone was set. This thirst for innovation has driven the generations of engineers who, for the past two centuries, have been introducing new processes bearing the Cockerill brand onto the market: engine designed by Rudolf Diesel, guns, boat engines, water tube boilers, locomotives, heat recovery steam generators for electric

John Cockerill also laid the foundations of the international vocation of CMI today. A great industrial explorer, he made many visits abroad, always on the lookout for new technologies and new projects. His conquering spirit has thrived through the decades. Thus, in 1890, the ‘Cockerill company’ was involved in the construction of the first major Chinese steelmaking complex, located at Hanyang, designing equipment and assisting the client in raising capital, assembling the installations and training the local workers.

1 In the 19th century, a team from the ‘Établissements Cockerill’ at Seraing (Belgium) receives Viceroy Hung-Chang from the Chinese province of Zhili.

1 In the 21st century, the teams from the CMI Group perpetuate the John Cockerill tradition, sparing no effort to meet the expectations of their clients.

Today, with the benefit of this centuries old understanding of industrial processes, and driven by the conquering and innovative spirit of its founder, the CMI Group continues to design, install, modernize and maintain equipment across the whole world, and to provide its clients and partners with valueadded services and its expertise in international project management.

Technological, international, robust This technology driven group places numerous beneficial assets at the disposal of its client industries: a unique combination of engineering and maintenance expertise, a vast geographic and technological scope, and an ability to innovate in accordance with the operational needs of its customers.

CMI has never stopped enlarging its geographical reach and its portfolio of technologies. The Group today counts operational units in Africa, Brazil, China, Europe, India, New Caledonia, Russia and the United States. In all, some 4 600 members of staff within the Group constitute a pool of talent commensurate with CMI ambitions. With the benefit of this organization, CMI today serves an ever more diversified client base. Whatever their specific needs, in CMI they find a partner of choice, whether as an EPCM services provider across all technologies, for solutions involving reducing the ecological footprint of industrial processes, for specialized services or for the Group’s dynamism in terms of innovation.

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TESTING & ANALYSIS

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Improved mill roll inspection system In the fall of 2002, a revolutionary method by which to inspect mill rolls was introduced to the metals industry. This ultrasonic approach to mill roll inspection was designed to overcome the inadequacies of existing inspection techniques while maximising return on investment. Since then, a number of improvements have been made, and with input from many roll shops, the latest technologies provide the most comprehensive tool available for the inspection of all types of mill rolls. This paper provides an overview of mill roll inspection technology and the effects that various inspection technologies can have on the efficiency and costs associated with operating a roll shop. It will also highlight how new techniques provide alternatives otherwise not available. By Frank L Weinmeister* and Borja G Lopez* THE inspection of mill rolls is a requirement in the operation of a safe, efficient mill.

Work rolls used in steel production are susceptible to work hardening and accumulation of residual surface stresses leading to the production of cracks. If not completely removed prior to the reintroduction of the roll into service, the cracks can grow and result in sudden catastrophic failures, or spalling. In the aluminium industry, caster rolls are also predisposed to cracking, however the mechanism is more related to fatigue cracking as a result of thermal cycling. In both cases, rolls are periodically removed from service and sent to grind machining that mechanically remove the outer layer of material where cracks form and propagate.

Crack detection The profitability of a plant can be affected by the efficiency and effectiveness of the roll shop and its method of roll inspection.

First, the system deployed must be capable of reliably detecting ‘micro-cracks’. Microcracks are small fractures that break the surface of a roll and act as stress risers. If these flaws are not completely removed prior to reintroducing the roll back into the mill, they can quickly grow to a size resulting in a spall condition. A work roll that fails in service leads to damaged product, it can also damage neighbouring rolls and requires the line to shut down for * Innerspec Technologies, 2940 Perrowville Road, Forest, VA 24551, USA. Phone: 434-948-1310 FAX: 434-948-1313. www.steeltimesint.com

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TESTING & ANALYSIS

hours while material and rolls are removed.

Similarly, a caster roll with existing cracks can introduce small imperfections in the product that can easily go undetected until a significant amount is produced.

Therefore, it is important for the plant to employ the most effective and reliable crack detection technique available.

Prior to the early noughties, rolls were inspected exclusively using Eddy Current techniques, Ultrasonic Surface Wave (Rayleigh Wave) technique, or Dye Penetrant Testing. Each of these currently used technologies had problems and limitations that were not necessarily related to a specific system model, but is characteristic of the method itself. For example, Eddy Current methods can offer relatively good sensitivity to surface cracks, but have a problem with false calls due to localised residual magnetisation and other roll conditions. Roll magnetisation occurs when the roll temperature is elevated during use in an environment where stray magnetic fields created by high current devices (such as motors) are common. Localised magnetic fields can effectively both mask or create a false call condition making the results unreliable.

Another critical limitation of these systems is that eddy currents cannot be generated in materials with low conductivity, such as rolls with high chrome content, and thus they are ineffective for inspection of caster rolls and some work rolls. Finally, eddy currents, ultrasonic surface waves, and Dye Penetrant are all limited to surface or very-near surface defects.

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In 2002, after many requests from existing customers, Innerspec Technologies developed a patented roll inspection technique which was performed by employing uniquely designed ultrasonic sensors that generate high frequency sound that is sensitive to surface defects without being effected by surface contamination, such as grinding fluid, and water. Since then, many roll inspection systems have added ultrasound in combination with eddy current, with ultrasonic inspection limited to defects with reflectors parallel to the roll surface.

The patented sensor design from Innerspec produced a surface-skimming wave that is commonly used throughout the nuclear industry for crack detection in piping welds and other applications. The sensor design facilitated the detection of micro-cracks smaller than that possible using any commercially available equipment on the market. All other techniques, including Die Penetrant Testing, have the ability to detect cracks of 2-3mm in length.

The new technique allowed detection of cracks with lengths down to 1mm.

The probability of missing a micro crack large enough to result in a catastrophic roll failure and mill stoppage, with all its associated costs, is almost nil.

Another critical advantage of the new technique is the ability to use the same transducer assembly to inspect deep inside the roll for defects, at any orientation.

While the surface skimming wave can penetrate down to 2mm in the roll, the deeper modes can penetrate and detect defects down to 50mm or more into the

roll. Soft/bruised areas, and shell thickness and core-shell disbond on shelled rolls, can also be inspected without the need to change inspection sensors.

Roll wastage Mill rolls are a direct expense to the mill.

The grinding process is a costly procedure considering that every pass reduces the life of the roll. The cost of a new or refurbished roll can run from $100,000 to $500,000 per roll. Caster roll shells with less than 4in of usable life are equally expensive.

Although an inspection system cannot reduce the number of grinding passes over the life of a roll, it can control the number of grinding passes per production cycle. Off-line inspection systems require the operator to grind a predetermined number of passes prior to an inspection.

This is performed over and over until the roll inspects defect-free. Although effective, it commonly results in many more grinding passes than are actually needed to clean the roll of all defects.

The most efficient method is real-time inspection while grinding. This feature provides the operator with continuous roll status so that grinding can cease as soon as the roll is defect-free. The only two methods available are Eddy Current and the comprehensive ultrasonic techniques discussed above. Although available, eddy current inspection has difficulty with real-time inspection due to its sensitivity to lift-off. Slight lift-off variations of an eddy current probe can result in significant reduction in sensitivity. The lodging of grinding slurry particles between the probe www.steeltimesint.com

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TESTING & ANALYSIS

and the roll surface can lift the probe and cause a localised reduction in sensitivity.

In contrast, the ultrasonic transducers are not sensitive to lift-off variations of this magnitude. In addition, couplant ports that force filtered fluid between the transducer and the roll flush out and prevent grinding slurry from entering the crevice between the transducer and the roll surface. This realtime mode maximises roll life by minimising the number of grinding passes performed for each use cycle. When factoring the number of rolls associated with a mill and the resulting life extension earned for each roll, just the material costs savings can be high enough to justify the equipment investment in less than a year.

Equipment utilisation Inspection efficiency is directly linked to grinder utilisation. The more efficient the process, the fewer grinders that are needed to assure interruption-free operation of the mill. The most inefficient roll inspection method commonly used is found in the aluminium industry. The liquid penetrant method requires about two hours per inspection cycle and is very labour-intensive.

Many automated systems require that the entire scan of a roll be complete prior to displaying data. This process is also inefficient since the detection of one crack at the beginning of a scan could be enough to require more grinding. Therefore, to assure maximum scan efficiency, the inspection system must be capable of displaying data as it is being collected. This feature informs the operator that a crack is present as soon as it is detected so that the inspection can be halted and further grinding commenced.

In addition to this, each time a specific roll serial number is in the grinder, the

previous inspections should be available for review and automated analysis commences to determine the predicted life of the roll based on previous scans, and the condition of propagating internal defects.

Ease of use A commonly overlooked characteristic of an inspection system is the overall complexity of machine design and ease-of-use.

An inspection system should be designed so that roll shop operators can solve the majority of repair scenarios. For this to be possible, the system must be designed based on a modular component philosophy.

Significant costs can be incurred when a roll shop is required to contract specialists to visit their site to perform system diagnostics and repairs. A modular-based system containing plug-in components can be diagnosed and repaired remotely where replacement parts are shipped to the customer. Maintenance must be simple with plug-and-play, quick connect equipment, and automated notification of any component failure.

Every automated roll inspection system requires calibration to assure sufficient sensitivity during data collection. The process involved can be costly where periodic visits from the manufacturer are involved. Many calibration techniques can be very involved since the probes are sensitive to material type and probe wear (lift-off). In this case, calibration is required often to offset variations in lift-off due to probe wear, and can involve the use of several different calibration blocks that represent variations in metallurgical composition of different roll types. In contrast, newer UT technologies provide automatic self-calibration simply by positioning the transducer on top of the

roll. The process is quick (one minute) having minimal effect on productivity.

The most important aspect of inspection hardware is the presentation and ease of interpretation of the data. Automated roll inspection equipment varies greatly in the format in which data is displayed. Eddy current systems have data presentations that vary greatly. System outputs range from strip chart records to colour block maps where each block represents a region of a roll. The latest technologies produce images that can be quickly interpreted (the colour is an indicator of a crack) but also clearly shows the shape, size and location of the defect. For more detailed information on the scan, individual displays are available for each type of defect. All data is recorded for post analysis and easy output for roll database management.

Conclusions A roll inspection system is not only a necessary safety tool in any modern rolling mill, but it can also have a significant influence on the economics of the whole operation.

Designed and manufactured exclusively

by Innerspec Technologies, the Rollmate is a cost-effective inspection tool designed to provide superior rates of return by: • Increasing revenue through guaranteed crack-free rolls that will not damage the final product.

• Reducing costs in inspection time and roll material waste.

• Optimising asset utilisation in both the grinder and the rolling mill. � Acknowledgments The authors would like to thank Joe Baczynsky (WHEMCO Steel Castings), Jack Wan (Canyonspring NDT), Mark Wilcox (Innerspec Technologies).

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Continuous online measurement EMG’s IMPOC system is mainly applied to continuous galvanising and annealing lines, but it is increasingly being used in pickling lines and automotive press plants and is currently operational on Segal’s hot-dip galvanising line in Liege/Belgium in collaboration with the SMS group, Drever and Tata Steel*.

TODAY’S advances in flat steel production are predominantly driven by the significant increase in demand for advanced highstrength steels (AHSS). Despite the higher material complexity of such multi-phase steels, only minimal deviations in properties along one strip and from one strip to the next are tolerated. Typical customers for such strips are automotive manufacturers or their suppliers. Each strip is, in fact, subjected to many mechanical tests as part of its respective forming processes.

However, up until now, in most cases only a few discrete samples have been tested during production. That said, and in contrast to a few years ago, it is now possible to determine strength properties continuously over the entire length of a strip online.

The IMPOC system (Impulse Magnetic Process Online Controller) is mainly applied on continuous galvanising and annealing lines and delivers reliable online results for tensile and yield strength for ferritic steel grades. The technology is based on the measurement of the magnetic properties of the investigated materials. On the hardware side, the IMPOC system is based on two identically constructed measuring heads which are placed on the upper and lower side of the strip. Each measuring head comprises of a magnetising coil and a measuring coil. The measured magnetic values are correlated to destructive testing results anyway obtained in the production.

Afterwards mathematical models are generated delivering accurate absolute values for the material properties (Rm, Rp02) in MPa over strip lengths and widths.

The material spectrum covered by IMPOC includes IF-steels, Dual Phase steels and

TRIP steels up to tensile strength values of 1600 MPa. The system can be applied at production speeds of up to 900 m/min for material gauges up to 3 mm and for production speeds up to 600 m/min for thicker material up to 6 mm.

All-in-all, this allows a broad application in various production lines. Nowadays about 50 IMPOC systems are used in HDG, CAL and pickling lines as well as pressing lines in the automotive industry. The classical application scenarios, such as the

IMPOC measuring heads

reduction of destructive testing procedures, the avoidance of scrap production and material release, are nowadays broadened by more sophisticated applications like the optimisation of furnace models.

The intelligent furnace approach The majority of the world’s annealing lines currently use fixed annealing curves for the operation of the furnace. These are recipes that specify the temperature a strip of a certain material should have at which

point in the plant. However, these fixed annealing curves do not take into account the deviations in the alloy, which can always occur even with good process control in the steel mill. Neither do they consider any deviations in the preliminary production processes, which also occur from time-totime, and the resulting consequences for the steel micro structure and the resulting material properties.

In this context, EMG started a development project with the EMG IMPOC system on the Segal hot-dip galvanising line in Liege/Belgium in 2013 in collaboration with the SMS group, Drever and Tata Steel.

The objective of the project was, on the one hand, to improve (homogenise) the material qualities of higher-strength materials, such as dual-phase steels, while on the other hand increasing productivity and simultaneously reducing energy costs.

The optimisation of the annealing process is based on three essential components: • the IMPOC system, which allows online non-destructive determination of tensile and yield strength over the entire strip length, • the mathematical model for the automation of annealing and galvanising furnaces. This model specifies set values for the furnace, optimises temperature control at coil transitions and determines an efficient sequence of the coils in production. And • the Annealing Microstructure Model (AMM) which establishes relationships between input conditions, process control and material characteristics to predict resulting material properties. In addition, it is also possible to derive necessary adjustments to the heat treatment.

* An article by EMG www.steeltimesint.com

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Strip cooling Furnace

EMG IMPOC EMG IMPOC

Zinc pot

process (SMS group), the furnace model (Drever) and the IMPOC system (EMG) was also implemented in spring 2017 at the new hot-dip galvanising and annealing line, which the SMS group constructed for Big River Steel in Osceola, Arkansas, USA. In addition to the classic applications of an IMPOC system such as material release, reduction of destructive testing, cutting optimisation and avoidance of scrap, the combined I-Furnace approach is now also used here to ensure optimal quality results as well as high production throughput.

Continuous measurement of material properties with the EMG IMPOC system upstream and downstream of the annealing furnace at the Segal hot-dip galvanising line (principle diagram).

This combined approach is referred to as Intelligent Furnace (I-Furnace).

The I-Furnace project Since 2014, the IMPOC system has been installed near the outlet of the continuous annealing furnace of the Segal hot-dip galvanising line. The SMS group and Drever, the manufacturer of the continuous annealing furnace, continuously adapted the parameters of the mathematical furnace model by using online measuring results from the IMPOC system. The resulting adjustments made to the operation of the furnace with regard to temperatures, cooling rates and speeds in the various sections of the furnace, not only led to an increase in the quality of material produced – IMPOC is used as an additional system for material release – but also to an overall increase of 15% in production throughput.

This outstanding result naturally instilled a desire for more. A difficulty facing this line is caused by the input material.

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Due to the upstream manufacturing process, the structures in the material are irregular rather than homogenous. If these ‘inhomogeneities’ are known – therefore enabling use of the IMPOC system upstream of the furnace – the mathematical furnace models can take these into account.

Therefore, secondly, another IMPOC system was installed for a limited period of roughly 18 months until the end of 2017 at a location upstream of the continuous furnace. The objective was to determine faster and more favourable parameter settings for the mathematical model and thus for the continuous annealing process. Based on recorded IMPOC data and subsequent statistical analysis, the mathematical models for the furnace operation could be further improved, especially for dual phase (DP) and complex phase (CP) steels.

However, the Segal hot-dip galvanising line is not an isolated case. The coupling of the microstructure model for the annealing

Conclusion Continuous online measurement of material properties with EMG’s IMPOC system provides measurable benefits by its application in continuous annealing and galvanising lines. The producer gets full online transparency of the behaviour of the material properties’ tensile and yield strength for the running coil. This allows direct process interactions and a significant reduction of destructive testing procedures as well as an improved and fast material release procedure.

Combined with the physical and mathematical models for the annealing process and furnace operation (I-Furnace approach), the IMPOC data provide ideal prerequisites for the optimisation of the annealing procedure leading to a very high production throughput while simultaneously ensuring high product quality and reduced energy consumption.

The application of IMPOC is not limited to hot dip galvanising or annealing lines. The system is increasingly being used in pickling lines and automotive press plants. �

www.steeltimesint.com

22/01/2018 11:01:58

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on Industry 4.0 and associated ‘disruptive’

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Future Steel Forum 2018 – what to expect…

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Amsterdam Refreshment Area

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Join our Future Steel Forum Group

BLOCK BOOKING RATES: We are also offering a group block booking discount rate for five delegates or more. A block booking will receive a 20% discount for each pass.

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A6

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18/01/2018 10:10

20% DISCOUNT FOR GROUP BOOKINGS

EARLY-BIRD RATE (UP TO 28 FEBRUARY 2018)

£790

technologies that are affecting industry generally

STANDARD RATE

£990

and steel production in particular.

For more information: Sophie Wright, Delegate Sales, sophiewright@quartzltd.com T: +44 (0) 1737 855 022

on Industry 4.0 and associated ‘disruptive’

Expect lively conversation, animated discussion panels and plenty of networking opportunities.

Future Steel Forum 2018 – what to expect…

The ‘Learning Steel Mill’ of Big River Steel How Technology Catalyses Disruptive Change in the Steel Industry Steel 4.0 – Industry 4.0 and the Big Data Challenge: Development of a fully integrated system for the real time predictions of microstructure evolution during hot rolling The Digital Dilemma Facing Steel Mitigating GHG Emissions with Industry 4.0

Industry 4.0 for the steel industry – from a research perspective Steel 4.0 – current activities and expectations for Europe

A15 A13

2 metre space with a draped

Buffet

A9

table and access to power.

Find out more now by contacting Paul Rossage

Foyer C A8

Book your space for £1,950

A10

Coffee

A24

Coffee

A23

A22

A7

A18

A21

Foyer 1 A1

A2

A3

A4

A5

+44 1737 855 116 |

paulrossage@ quartzltd.com

Cloak Room

Safes Office

Amsterdam Refreshment Area

Official Media Partner

@Future_Steel

Organised by:

Join our Future Steel Forum Group

BLOCK BOOKING RATES: We are also offering a group block booking discount rate for five delegates or more. A block booking will receive a 20% discount for each pass.

Please contact Sophie Wright if you would like to take advantage of this offer.

Open Innovation and Social Product Development Industry 4.0 and the Workforce of Near Tomorrow Cloud manufacturing as a New Product-Service-System Smart Factories require Smart Planning

Business Ethics 4.0 @steelindustry #respect

Engineering Education and Qualifying the Industry 4.0 Workforce

How the Internet of Things in the steel industry improves safety

Industry 4.0: Future Growth and Productivity in Steel

Holistic Data Analysis

Foyer 2

A20

Delegates can expect ground-breaking papers

day. This package includes a

Lisbon (Speakers Room)

A19

of Industry 4.0.

with delegates throughout the

Brussels

mysteries and get to grips with the complexities

Register online to subscribe to the Future Steel Forum membership package which will include a subscription to Steel Times International, the Steel Times International Directory, relevant news alerts and admission to the Future Steel Forum, 6-7 June, Sheraton Warsaw Hotel, Warsaw, Poland.

Take advantage of the early bird offer: www.FutureSteelForum.com/register

A6

industry professionals who want to unravel the

you can meet and network

REGISTRATION IS NOW OPEN:

A11

will draw upon unrivalled expertise of steel

Conference Room

with a base at the event where

A12

2018. This global steel technology conference

also provides your organisation

Registration

Sheraton Warsaw Hotel, Poland on 6-7 June

and services that you offer. It

A17

Future Steel Forum is returning to the

LIMITED SPACE REMAINING

literature about the products

A14

the continuing story

This is your chance to display A16

Industry 4.0 –

Book your table-top exhibition space

Through Process Optimisation

Register now at www.FutureSteelForum.com FSF_2018_1p_Ad_A4.indd 4-5

18/01/2018 10:10

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PERSPECTIVES: CONDAT

57

Really optimistic for steel CONDAT is a leading player in the field of fire-resistant technology. The company’s range of products are already well known to the global steel industry, says Franck Dufresne* 1. How are things going at CONDAT? Is the steel industry keeping you busy?

Concerning the steel industry, we have made a lot of effort for some years on this market and we reap the benefits. We have increased our market share in this sector thanks to our wide offer of technical lubricants. Being present worldwide, our growth is, however, mainly driven by Middle East countries.

lot in the steel sector and show the greatest growth.

automotive industry and I think that it will stay that way for a while.

5. Can you discuss any major steel contracts you are currently working on?

We are supplying all major steel players in the field, such as ArcelorMittal, Posco, Tata Steel and Riva Group. We are also in contact with the main state-owned steel companies.

7. Is aluminium ‘greener’ than steel?

In my opinion, both are equivalent in terms of environmental impact. Both industries have been able to set up efficient recycling chains and have invested a lot in making their production process greener, such as effluent treatment on smoke and water.

For sure, some countries have to make improvements on that point, but they will have no other choice to adapt to this constraint over the next few years. Condat also helps these industries to become greener with its Condat D fire resistant fluid which is biodegradable and non-toxic.

2. What is your view on the current state of the global steel industry?

Specialised steel organisations forecast a growth of 50% by 2050 and global steel use has grown more than seven-fold since 1950. By 2050, steel use is projected to increase by 1.5 times that of present levels, to meet the needs of our growing global population. All this has encouraged CONDAT to make this market a priority for its range of industrial lubricants.

3. In which sector of the steel industry does CONDAT mostly conduct its business?

CONDAT’s business is mainly oriented on steel making plants and hot rolling lines.

We supply fire-resistant fluids and heavy loads greases answering the constraints and demands of major actors in this field.

Our FRF hydraulic fluids range, CONDAT D, is certified FM approved, biodegradable and non-toxic and our greases are specially formulated to resist water and temperature, they enable a decrease in lubricants consumption and recycling costs.

4. Where in the world are you busiest at present?

We are busy on the four continents, but countries in the Middle East are investing a

6. Where do you stand on the aluminium versus steel argument, especially in relation to the automotive industry?

I think there is room for both technologies depending on the sought requirements.

The steel industry has invested a lot in R&D these last years and is now able to produce thinner, lighter and more resistant steel alloy finished products. These latter are able to compete with aluminium parts in the automotive industry. At the moment, steel is still the main component in the

8. “…any hint of doubt when it comes to predictions of climate doom is evidence of greed, stupidity, moral turpitude or psychological derangement.” This is a quote from Bret Stephens writing in The Wall Street Journal. Do you sympathise with his view?

The climate must be a major concern for the steel industry, just like all other worldwide industries (aluminium, chemistry, automotive). For many years, environment has been a main concern at CONDAT and we have worked and invested to respond in a reliable, responsible and sustainable way to our customers’ needs.

Our product regulatory affairs department monitors meticulously international regulations and ensures continuity in CONDAT’s offer. Being proactive and anticipating future regulations, the group endeavours to offer its customers technical solutions allowing them to reduce the impact on workers and environment.

*Steel industry business developer, CONDAT. www.steeltimesint.com

Perspectives .indd 1

January/February 2018

19/01/2018 14:30:27

58

PERSPECTIVES: CONDAT

9. Why is Industry 4.0 so important to the future of steel production?

Industry 4.0 is more a concept than a technology. All the efforts are based on digitalisation and data exchange for better management of resources, energy and, for sure, to remain competitive. This philosophy could allow better communication between plants and customers all along the supply chain. Using digitalisation processes could help in dealing with traceability (quality and production history).

10. In your dealings with steel producers, are you finding that they are looking to companies like CONDAT to offer them digital manufacturing solutions?

We haven’t had so many requests on the subject. However we already support our customers in digitalisation by providing them solutions with appropriate equipment for lubricants.

11. Is the steel industry wellplaced to take advantage of digital manufacturing?

The steel industry has modernised over the years and it is certain that digital manufacturing will play an increasingly important role in the years ahead. Digital will certainly have its place in the future of the industry. There are a lot of possible applications for the steel manufacturing process, like quality control on finished products, control of the process chain, online control of the fluids (air, water, oil, emulsions) and predictive maintenance.

12. Where does CONDAT lead the field in terms of steel production technology?

CONDAT is a main actor with its fireresistant technology based on 4 points: Safety for people and equipment; longevity and protection of the machines; optimised maintenance costs; and respect for workers and the environment with biodegradable and non-toxic lubricants.

13. How do you view CONDAT’s development over the short-tomedium term in relation to the global steel industry?

These last years, CONDAT has reinforced its presence and its technical offer dedicated to the steel industry. Relationships have been January/February 2016

Perspectives .indd 2

strengthened with steel’s main actors and OEMs, so our future development in this field is really optimistic.

14. How would you solve the issue of global overcapacity?

This is a main issue, but in the past it was naturally auto-regulated by itself.

15. The Chinese industry still relies heavily upon Western steel production technology. What is CONDAT’s experience of the Chinese steel industry?

We are relying on our Chinese subsidiary to supply the local market. In the past, we faced some troubles due to overcapacity in China, but it seems like the market is reshaped further to government impulse.

16. Which breakthrough technologies will have a revolutionary impact and will it be something that is ‘one size fits all’ or a number of different technologies?

The main changes will obviously come from data management and it will impact different processes such as production improvement, supply chain and information flow. It will probably be addressed by several types of technology and specific software.

17. Where do you see most innovation in terms of production technologies – primary, secondary or more downstream?

We are mainly involved in the primary production sector and have noticed that the main concern is to reduce energy and resources consumption. CONDAT’s latest grease technology (CONDAT MILLENNIUM grease) meets this request as it reduces lubricant consumption by 40% compared to previous technologies.

18. How important is reputation management to the steel industry?

The steel industry is a well-established and conservative market based on trust and expertise. Risks can be high and costly when it comes to machine downtime so the reliability of lubricants is essential. We have built our reputation over the past 30 years and are recognised as a specialist in the field of lubrication.

19. How optimistic are you for the global steel industry going forward and what challenges face global producers in the short-to-medium term?

As already said in question 13, we are really optimistic and think that the main challenges remain linked to competitiveness, cost reduction, safety and environmental impact. Our product development totally fits with these requirements.

20. CONDAT is based in the USA, but how is the domestic steel industry performing?

US imports of steel mill products have increased in recent months after declining in the second half of 2016, while exports have remained relatively flat. Part of our business growth in the US is expected to be linked to our actions on this market, especially with our fire resistant hydraulic fluids range.

21. What exhibitions and conferences will CONDAT be attending this year?

We are present at the main steel events, but not as exhibitors. We are strong believers in one-to-one relationships and are more than willing to supply on-site support close to end users.

22. Apart from strong coffee, what keeps you awake at night?

As a good French guy, I drink a lot of coffee! I usually just need a couple of hours sleep. Being very active and on business trips most of the time, the jetlag also keeps me awake. I take advantage of this time at night to answer my customers’ mails as they can be located on the opposite side of the world.

23. If you possessed a superpower, how would you use it to improve the global steel industry?

I will use it to make this industry cleaner and make all governments worldwide have the same level of requirements in terms of environmental impact. I will also use this power to improve safety for the workers as it remains a really difficult and risky job.

Thank god, companies are not waiting for my superpower as they have already committed a lot of resources in this action. � www.steeltimesint.com

19/01/2018 14:30:27

60

HISTORY

Early rolling in the USA In 1917-1919, Lukens Steel Company built the 206-inch rolling mill, which stood as the world’s widest plate mill for more than 40 years. Into the 1960s, Lukens made the widest plates in the world. The mill still operates today and is the widest of its kind in the USA. By LeAnne Zolovich* BY the 1800s, Coatesville, Pennsylvania, USA, became the perfect location for an iron site. It had natural resources, access to power through the Brandywine River, and was located next to the first hard road in America. On 2 July 1810, Isaac Pennock completed the purchase of property, which he converted and established as the Brandywine Iron Works & Nail Factory.

Dr. Charles Lukens, married to Isaac’s daughter Rebecca, leased the iron works in 1817. At the time, steam power was providing a new market for iron products.

Dr. Lukens saw this as an opportunity to expand the business into the boiler plate market, so he modified the mill, which rolled America’s first boiler plate in 1818. Brandywine Iron Works’ reputation for quality boiler plate continued under Rebecca Lukens, who took over operations of the mill in 1825. She rebuilt the mill, upgraded the equipment, and established her site as a successful rolling business.

Rebecca Lukens’ immediate successors made very few changes to the technology, process, product, and operations of the mill. That changed in 1870, when the partners installed a new steam-driven 84inch two high reversing plate mill. In 1890, the business incorporated as Lukens Iron & Steel Company.

Changes and competition In the late nineteenth century, a growing demand for steel reduced the market for iron. An emerging preference for wider plates by boilermakers and shipbuilders, reduced the number of riveted seams required in their products with wider plates.

Lastly, there was the emergence of local competition in Coatesville.

In 1881, John and William Worth formed

Worth Brothers. Over the next few decades, Lukens and Worth competed for the largest mills. In 1890, Lukens’ 120-inch rolling mill, driven by a Corliss steam engine, rolled its first plates. The 120-inch mill was the largest in the USA until 1896, when Worth installed a 132-inch rolling mill. In 1901, Lukens began construction on a three high 140-inch wide mill, which began operations in 1903 as the country’s largest plate mill.

Two months later, Worth commissioned a 152-inch wide plate mill.

The world’s largest plate mill In 1915, Lukens’ engineers and the United Engineering & Foundry Company began to design a one-of-a-kind 204-inch rolling mill, the first four high plate mill. It had a 34-inch diameter, 30-ton work rolls and 50-inch diameter, 60-ton back-up rolls, all driven by a 20,000 hp twin tandem compound steam engine.

The mill rolled its first plates in May 1918 and was widened to 206 inches in 1919, standing as the world’s widest plate mill. For more than 40 years, Lukens in Coatesville, Pennsylvania, produced the

widest plates in the world.

After a 120-inch, partially automated mill was added in 1943, Lukens had three of America’s five four-high rolling mills. Lukens began to electrify its mills after World War II – first the 120-inch, then the 206-inch in April 1950 with the installation of two 4,000 horse power DC motors. A new 140inch rolling mill was installed in 1959 to relieve the load of the 206-inch rolling mill, which lost its status as the world’s widest mill in the 1960s, but remains the widest in the western hemisphere.

Lukens Steel Company was acquired in 1998 and the site changed ownership until 2006, when it became part of ArcelorMittal.

Both the 140-inch and 206-inch mills operate in Coatesville today. Although the former is the workhorse of the Coatesville facility, the latter operates weekly, rolling plates for bridges, skyscrapers, and military defence equipment. Located at the longest, continuously operating steel site in America, the 206-inch rolling mill will celebrate its 100th anniversary in 2018 as one of the widest and oldest operating mills in the world today. �

* Educational services manager for the National Iron & Steel Heritage Museum, Coatesville, PA, USA January/February 2018

History.indd 1

www.steeltimesint.com

19/01/2018 14:31:13

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