Steel Times International October 2018

USA UPDATE

STEEL MARKETS

IRONMAKING

INNOVATIONS

The Port of Brownsville – gateway to sunny Mexico

The agility imperative and automotive steelmaking

DRI, sintering and advances in ironmaking technology

Two pages of the latest contracts and products news

www.steeltimesint.com October 2018 - Vol.42 No7

STEEL TIMES INTERNATIONAL – October 2018 – Vol.42 No7

BRAZILIAN STEEL ASSOCIATION – ANNUAL CONFERENCE REPORT STI STI Cover.indd cover ad1 9.2018.indd 1

10/10/2018 9/12/1809:41:58 4:29 PM

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CONTENTS - OCTOBER 2018

Picture courtesy of Midrex

USA UPDATE

STEEL MARKETS

IRONMAKING

INNOVATIONS

The Port of Brownsville – gateway to sunny Mexico

The agility imperative and automotive steelmaking

DRI, sintering and advances in ironmaking technology

Two pages of the latest contracts and products news

www.steeltimesint.com October 2018 - Vol.42 No7

STEEL TIMES INTERNATIONAL – October 2018 – Vol.42 No7

2 Leader

By Matthew Moggridge, editor, Steel Times International.

4 Innovations The latest new products.

BRAZILIAN STEEL ASSOCIATION – ANNUAL CONFERENCE REPORT STI cover ad 9.2018.indd 1

9/12/18 4:29 PM

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 Sales Director Ken Clark kenclark@quartzltd.com Tel: +44 (0) 1737 855117 Managing Director Steve Diprose stevediprose@quartzltd.com Tel: +44 (0) 1737 855164

8 USA update The ‘Gateway to Mexico’ “Gateway”.

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

14 Conference report: Brazilian Steel Institute Annual Conference Under political distress.

1

Ironmaking 25 A new and flexible technology 29 Transforming the steelmaking process.

34 Abstract: Raw material granulation and sintering.

36 Data mining and modelling The agility imperative.

40 Digitalisation NLMK’s digital transformation.

46 Perspectives: Tebulo Making heavy industry lighter.

48 History 300 Years of industrial might.

21 Steel markets The agility imperative.

Chief Executive Officer Paul Michael SUBSCRIPTION Elizabeth Barford Tel +44 (0) 1737 855028 Fax +44 (0) 1737 855034 Email subscriptions@quartzltd.com Steel Times International is published eight times a year and is available on subscription. Annual subscription: UK £195.00 Other countries: £270.00 2 years subscription: UK £350.00 Other countries: £485.00 ) Single copy (inc postage): £45.00 Email: steel@quartzltd.com

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Published by: Quartz Business Media Ltd, Quartz House, 20 Clarendon Road, Redhill, Surrey, RH1 1QX, England.

Tel: +44 (0)1737 855000 Fax: +44 (0)1737 855034 www.steeltimesint.com Steel Times International (USPS No: 020-958) is published monthly except Feb, May, July, Dec by Quartz Business Media Ltd and distributed in the US by DSW, 75 Aberdeen Road, Emigsville, PA 17318-0437. Periodicals postage paid at Emigsville, PA. POSTMASTER send address changes to Steel Times International c/o PO Box 437, Emigsville, PA 17318-0437.

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ISSN0143-7798

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Contents.indd 1

October 2018

10/10/2018 10:00:17

2

LEADER

It could all go Pete Tong at any moment...

Matthew Moggridge Editor matthewmoggridge@quartzltd.com

It might be a good time to be making steel, as John Ferriola was quoted as saying recently, but who are the pigs in poo? Are they the big bosses of the steel mills, or are they the steel workers, the loyal Trump supporters who helped put the great man in the White House in the first place?

It’s an interesting question, and according to an article by Brian Padden, writing for VOAnews.com, there might be ‘trouble at mill’. The article focused on steel workers at the Bull Moose Tube steel piping factory in Georgia, where union members have been locked out for more than six weeks having rejected a new contract offer: in essence a modest pay rise, but more expensive health insurance.

The worker’s ain’t happy and they’re beginning to question whether Trump’s tariffs are all they’re cracked up to be.

Padden quotes one steelworker as saying: “I’m going backwards instead of forwards.”

The steel mill has brought in non-union workers while the striking steel workers have set up a protest camp outside the plant.

While metal prices generally have soared by 30% and profits are seemingly going

through the roof, all is not well for the humble steelworker, argues Padden, most of whom thought that Trump’s tariffs would mark the end of ‘belt tightening’.

Perhaps uncertainty is at the root of the problem. Perhaps the steelmakers worry that Trump’s tariffs are little more than a temporary measure and that if they start giving their workers huge pay rises, it might all coming crashing down around them. Padden quotes labour analyst Ian Murry: “In the long run the jobs that are created or saved are unsustainable. And eventually, if the tariffs go away, that industry is going to suffer very, very badly.”

And let’s face it, we are talking about a volatile US President, somebody who might change his mind on something (anything) on the flip of a coin.

Padden’s article questions whether tariffs alone constitute ‘a comprehensive strategy in and of themselves’ – quoting Josh Nassar, legislative director of the United Auto Workers. Furthermore, Padden argues that striking union members disagree with Trump on immigration and the easing of environmental regulations. It looks as if it could all go Pete Tong at any moment.

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4

INNOVATIONS

Daehen Steel Company plans mill modernisation South Korean steelmaker Daehan Steel Company is planning to modernise the bar mill at the company’s Sinpyeong plant in the area of Busan, a large port city.

The company has approached German plant builder SMS group with whom it already has a history of long-standing co-operation, according to SMS. The Sinpyeong plant is designed to produce 130 tons/hr of rebar in diameters ranging from 16mm to 32mm up to grade SD500.

According to SMS group, which has taken on the contract, the modernisation project comprises the replacement of the existing quenching line with a new one designed with the very latest technology, including systems for precise

pressure control and the exact setting of water flow rates.

“Two dividing shears with associated pinch rolls and a bar braking system will be supplied, as well as a HSD (High Speed Delivery) line that will be integrated in to the existing cooling bed,” SMS group explained, adding that the new HSD system will enable Daehan Steel Company to feed bars on the cooling bed via rotating channels, which are precisely synchronised with the soft bar braking unit, the cooling bed cycle movement and the bar position monitoring system.

The bars, claims SMS group, can be cut to all product sizes at any speed and the shears cut bars in diameters up to 32mm.

An automation package supplied by SMS group will fully integrate the newly supplied equipment.

SMS group claims that the purpose of the modernisation is to reduce the ferro-alloys content of the billets produced by the plant, leading to ‘a substantial cost reduction’. It will also increase the size of the steelmaker’s product range, enabling Daehan to add 13mm rebar to the size range and produce new steel grades up to SD600.

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

Manitowoc selects CM Labs as simulator partner Montreal-based CM Labs has been chosen by Manitowoc Cranes, a leading global manufacturer of cranes and lifting solutions, to develop and deliver a series of simulators that showcase Manitowoc’s intuitive Crane Control System (CCS).

Unveiled at Manitowoc’s 2018 Crane Days event in the USA, Manitowoc’s initial order of

CCS-driven Vortex Simulators was intended to help dealers market and educate crane operators on the benefits and capabilities of CCS equipped models. Simulators are being delivered to Manitowoc clients for operator training, including locals of the International Union of Operating Engineers (IUOE).

Manitowoc’s CCS operating platform provides a common human-machine interface across multiple crane product lines. Each CCS unit features the same control layout, with standardised symbols, and is made up of several common components (crane controller, safety controller, small IO (input/output), large IO, joysticks, jog-dial and display).

Manitowoc engaged CM Labs to integrate the new control technology into a simulator, with the goal of allowing dealers and customers to experience and train with the CCS on a true-to-life worksite. Drew Carruthers, product line manager for construction equipment, commented: “Our

design starts with a relationship with the machine so that the user interface feels very close to the real thing. This was important for Manitowoc so that the end product both looked and acted like their brand.”

John Alexander, director of all-terrain crane service, mobile training and telematics at Manitowoc, said that CM Labs was selected because of its market-leading position in crane simulation.

“Their top-quality solutions [are] already widely deployed at training organisations,” he said, adding that many Manitowoc clients are already using the simulators on a daily basis.

According to CM Labs, the simulators replicate the functionality and behaviour of a 35-ton (40 US ton) Grove RT540E crane as manufactured by Manitowoc, but do so under the control of an actual CCS user interface.

Vortex simulators are powered by Vortex Studio, a high-fidelity physics-based real-time simulation platform. The simulation includes actual on-board crane computers and load moment indicators, different boom configurations, accurate simulation of machine behaviour, plus cable physical property simulation for winch line, slings, and load, and multiple rigging options.

Visuals and sound effects complete the immersive experience. “This overarching accuracy ensures skills learned on the simulator will transfer better to the live equipment,” claims CM Labs.

Arnold Free, chief commercial officer of CM Labs said that the company works well with OEMs because of its ability to leverage authentic OEM control sets and programmable logic controllers and control systems. “This Manitowoc CCS simulator is an effective way for dealers to easily demonstrate the capabilities of the CCS hardware and for operators to get the expert training they need, he said.”

For more information, log on to www.cm-labs.com.

October 2018

innovations.indd 1

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09/10/2018 10:42:10

INNOVATIVE TECHNOLOGIES

FOR THE METALS INDUSTRY CMI INDUSTRY METALS designs, installs, modernises and services installations and machinery for the steel and non-ferrous industries throughout their whole life cycle in order to improve the economic, technological and environmental performance of this equipment. CMI’s clients benefit from: a unique combination of expertise in engineering, maintenance and the management of international technical projects, a vast geographic and technological scope, and an ability to innovate in accordance with the concrete needs of its customers.

CMI Industry is established in North America, China, Europe, India and Russia. It can also rely on the worldwide network of the CMI Group.

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6

INNOVATIONS

Russian steelmaker buys Danieli coal test oven Severstal has chosen Italian OEM Danieli to supply it with a new coal test oven for installation in the coke sinter BF shop.

The oven will be used by the Russian steelmaker to carry out semi-industrial tests with different coal burdens, the aim being to determine the optimum parameters for coking processes and to evaluate new coal blends for OpEx optimisation.

Danieli Centro Combustion will supply the Russian steelmaker with a 400-tonne oven, gas treatment section and post combustion system.

The company will also provide all mechanical, electrical and automation equipment as well as laboratory ancilliaries and technical assistance during erection and commissioning.

According to Danieli, ‘among the main technical characteristics to be noted are the stamp charging process and coke dry quenching system’.

Coke oven gas is treated through a scrubber, cyclone and tar separator and is burnt by a post-combustion system, reducing emissions with the most stringent of standards, claims Danieli.

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

Zumbach launches its latest Profilemaster ZUMBACH Electronics, a leading supplier of non-contact measuring technologies for the metal and steel industry, has introduced the latest PROFILEMASTER SPS 80 gauge for in-line measurement of any rebar type.

According to Zumbach, the latest machine offers ‘sophisticated capabilities’ that allow the measurement of rebar products in hot rolling processes. It is claimed that the full contour of a rebar can be captured and the cross section extracted in such a way that core diameter, rib height, width and height among other characteristics can be measured and monitored.

Zumbach claims that the PROFILEMASTER SPS 80 is specially designed to measure the rebar in the rolling mill without having limitations in terms of rolling speed. “Since many rolling mills produce rebar in more than one strand, the PROFILMASTER SPS80 can handle up to three strands simultaneously with one single gauge,” said the company.

Every individual strand is measured and related statistics can be generated.

The PROFILEMASTER family consists of various

models. They are available with four to eight laser/camera modules measuring continuously the cross section of the moving product. A powerful PC-based processor combines the captured line images of the individual cameras to yield the momentary cross-section of the profile. All relevant dimensions such as width, height, angle and radius or other geometric quantities are computed to characterise the full cross-sectional picture.

An operator-friendly graphic display of this data allows the monitoring of the product during the whole process. The nominal values for the profile can be directly imported from CAD design files, which, it is claimed, allow easy and problem-free configuration of the device.

Customer benefits include a reduction in start-up time, multi-strand measurement of rebar up to three strands in one measuring gauge, Industry 4.0-ready and reliable operation in harsh conditions.

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

Steelmaker Severstal orders new coal test oven Severstal has chosen Italian OEM Danieli to supply it with a new coal test oven for installation in the coke sinter BF shop.

The oven will be used by the Russian steelmaker to carry out semi-industrial tests with different coal burdens, the aim being to determine the optimum parameters for coking processes and to evaluate new coal blends for OpEx optimisation.

Danieli Centro Combustion will supply the October 2018

innovations.indd 2

Russian steelmaker with a 400-tonne oven, gas treatment section and post combustion system.

The company will also provide all mechanical, electrical and automation equipment as well as laboratory ancilliaries and technical assistance during erection and commissioning.

According to Danieli, ‘among the main technical characteristics to be noted are the stamp charging process and coke dry quenching

system’.

Coke oven gas is treated through a scrubber, cyclone and tar separator and is burnt by a post-combustion system, reducing emissions with the most stringent of standards, claims Danieli.

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

09/10/2018 10:42:14

AIR KNIVES & BATH EQUIPMENT

FOR CONSISTENT STRIP QUALITY CMI INDUSTRY METALS provides unique expertise and know-how in steel processing. As a market leader for galvanizing technology, CMI supplies the benchmark for many of its robust, yet innovative equipment designs for processing lines.

While these lines are designed to apply different coatings, including the very latest AluSi coatings, with the highest surface uniformity, the modular design of CMI’s state-of-the-art AIR KNIVES & BATH EQUIPMENT stand for improved and homogenous strip quality and reduced zinc consumption through most effective strip stabilization and high-performance jet wiping.

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8

USA UPDATE

The ‘Gateway to Mexico’ “Gateway”

The mood at the “gateway” to Mexico and Latin America, as Port of Brownsville (PoB) likes to profile itself, is upbeat as it tries to implement its expansion plans, aided by the prospect of a number of bigticket projects being set up on its land. By Manik Mehta* ARKANSAS-based Big River Steel has cast its gaze on PoB as the site for a steel mill which, according to PoB sources, will entail a $1.6 billion cost for construction.

Indeed, according to speculation in the steel industry, Big River Steel is expected to send representatives to Brownsville before the end of this summer to discuss its plans in detail.

PoB and Big River Steel signed an option agreement covering up to 800 acres of property enabling the steelmaker to continue its due diligence pursuant to the company’s interest in developing a steel manufacturing plant, storage and distribution facility.

PoB, the only deep-water seaport directly on the US-Mexico border, and the largest land-owning public port authority in the nation with 40,000 acres of land, transships more steel to Mexico than any other US port. Indeed, Mexico is today Latin America’s most dynamic economy, having overtaken Brazil as the region’s largest steel consumer.

“In 2017, the Port of Brownsville moved 10.6Mt of cargo. The port’s foreign trade zone No. 62 is currently ranked second in the nation for the value of exports, reporting more than $2.8 billion in exported goods in 2016,” said Steve

Tyndall, the port’s senior director (marketing and business development) in an interview with the American Journal of Transportation at the recent Steel Success Strategies-XXXIII conference in New York.

Indeed, steel is a major commodity moved by the port.

With more than $43 billion worth of projects currently in the works, PoB is transforming the Rio Grande Valley by providing what Tyndall called “positive investment opportunities” and creating jobs. Activity at the port would provide an additional $2 billion impetus to the region’s economy, $3 billion to the Texan economy, and create more than 44,000 jobs.

Another important development for the PoB is Texas LNG’s proposed liquefied natural gas project at the port. Texas LNG, which had been waiting for approval from the Federal Energy Regulatory Commission, announced end June that it had received letters from the US Coast Guard, the US Department of Defence and the US Department of Transportation Pipeline and Hazardous Safety Administration, thus paving the way for the project’s progress.

Texas LNG described the letters as “important milestones” for the project and required for the FERC approval process.

The company said full approval and a “final

investment decision” on whether to build the terminal, which would liquefy and ship domestic natural gas to foreign buyers, is expected in 2019. Texas LNG, which anticipates first-phase production of 2Mt/ yr to begin in 2023, has secured long-term offtake term sheets from LNG buyers in China, Southeast Asia and Europe.

Then there is the $1.5 billion Valley Crossing Pipeline project. In June 2016, Valley Crossing Pipeline, LLC, was awarded the 168-mile intrastate gas pipeline project by the Comisión Federal de Electricidad (CFE) − Mexico’s state-owned utility serving 37 million customers − to provide natural gas transportation services to meet Mexico’s growing electricity generation needs, and other shippers in South Texas. The US Federal Energy Regulatory Commission has authorised construction of Valley Crossing, Pipeline’s 2.6-Bcf/d Border Crossing project for natural gas delivery to Mexico.

“All three projects … the Big River Steel, the Texas LNG and the Valley Crossing Pipeline will be built on the Port’s land,” Tyndall said.

Tyndall also confirmed that PoB had, meanwhile, received authorisation from the US Congress to carry out dredging work that will increase the depth of the port from its present level of 42 feet to 52 feet. The

* USA correspondent October 2018

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USA UPDATE

dredging work is expected to start in five years; the entire dredging project should be completed by 2025.

The growing trend of larger ships in the international maritime fleet is influencing big changes in the shipping industry’s infrastructure, necessitating expansion as in the case of the Panama Canal and enhanced port infrastructure around the world. PoB received on 31 January, 2018 the M/V Nordic Pollux, the largest cargo vessel to call at the port to date.

The huge oil tanker made its way from Philadelphia to Brownsville where it loaded approximately 150,000 barrels of heavy naphtha.

Completion of the port’s channel deepening project will allow it to accommodate deeper draft cargo ships, making visits by ships like the Nordic Pollux a more common sight. Bigger ships are seen as a source of larger cargo volumes and, consequently, also as a source of more jobs for moving cargo onto and off the giant vessels.

Like other ports, PoB is also pursuing

further development of its foreign trade zone which is the nation’s second biggest FTZ after the one in South Carolina. Tyndall said that all the projects, excepting the one involving dredging, will be under way in 24 months, adding that “never before have there been projects of such scale”.

Trump’s tariffs Since it handles a large volume of steel, PoB is also closely monitoring the ongoing national debate on steel and aluminium tariffs on imports.

“We are concerned about it (the imposition of steel and aluminium tariffs).

If the tariffs go into effect, it will change the pricing of steel, although that will not affect the efficiency of our port or the superior logistics platform we have built. We move more steel into Mexico than any other port.

Despite the apprehensions and doubts of many, we are going to see more traffic and not less,” Tyndall said, adding that “new avenues of opportunities” would open up.

PoB’s senior director underscored the importance of “shared cultures and shared

borders” with Mexico. “We have a lot more in common with Mexico than what separates us,” he observed, somewhat philosophically, pointing out that besides steel, PoB also receives limestone for buildings, sugar, bunker sea fuel, celestite, etc. “Export shipments from our port to Mexico include steel, slabs, scrap, pig-iron and petroleum,” he said.

PoB had a record year in 2017, and it is “strong and getting stronger”, as Brownsville Navigation district vice chairman John Reed put it in his annual state of the port address on 8 March.

The port’s total operating revenue reached nearly $24 million in unaudited total revenue, exceeding the previous highwater mark of $19.9 million set in 2015 by more than $4 million.

On the annual tonnage side of the business, the volume of cargo handled at the port topped 10.3Mt, also a new record.

Vessel traffic recorded a 21% increase; a total of 1,317 vessels called on the port in 2017 – up from 1,091 vessel calls registered FY 2016. �

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PIONEERS AT HEART

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12 NEWS IN BRIEF Bhushan Steel is renamed Following Tata Steel's recent acquisition of Bhushan Steel, the Indian steelmaker has decided to rename the company Tata Steel BSL. According to online media reports, the name change is part of the process to integrate Bhushan Steel operations 'within the Tata Steel fold'.

Tata Steel is planning to raise the current production level of Bhushan Steel to 4Mt by the end of the current financial year.

NEWS

Would you like to speak at Future Steel Forum 2019?

Safety first for SAIL Plant safety is to be top priority at the Steel Authority of India Limited (SAIL) now that newly appointed chairman Anil Chaudhary is in charge.

Mr Chaudhary has listed safety as an organisational priority and has placed emphasis on maximising profit from capital investment and achieving all production targets – with a strong focus on rail and structural steel.

Following his appointment on 22 September, Chaudhary said he wants to strengthen preventive maintenance processes and stabilise operations through logistics.

Source: Economic Times

China reduces steel tariffs A report in the Washington Examiner claims that China's finance ministry plans to reduce import tariffs on steel.

The plan is to reduce steel tariffs from 11.5% to 8.4%.

However, it is likely that US tariffs against Chinese steel will rise from 10% to 25% before the year end.

US President Donald Trump believes that unfair trade policies are hurting the US economy, but his critics argue that consumers will have the cost of tariffs passed on to them.

Source: Washington Examiner

Kerkhoff appointed TK CEO Guido Kerkhoff, who was named ThyssenKrupp's interim CEO in July following Heinrich Hiesinger's departure, has now been given the job permanently.

Bernhard Pellens, who has been on ThyssenKrupp's supervisory board since 2005, is now chairman, succeeding Ulrich Lehner.

For more global steel news, log on to our news website, www.steeltimesint.com

Matthew Moggridge, programme director, writes: The Future Steel Forum 2019 will take place in two different locations: Budapest and New Delhi; and for both events we are now calling for papers.

Budapest marks the Industry 4.0 and steelmaking event's first move away from Warsaw where it experienced two very good years.

The New Delhi Forum is the first of many Future Steel Forum Asia conferences, which will move around the region.

Since the inaugural event in June 2017, the Future Steel Forum has continued to focus its energies on the relationship between Industry 4.0 and the steelmaking process. The programme has attracted steelmakers, academics and technologists from around the world as speakers and as the event progresses, its remit widens.

The 2019 events are promising to be of continued interest to steel-

makers looking for high-tech solutions to the challenges presented by the process of steel manufacturing.

Next year's events will focus on a variety of topics, including artificial intelligence, augmented reality, robotics, supply chain, business planning, issues surrounding Industry 4.0 and the workforce and cobots.

As always, we are particularly interested in hearing from steelmakers, but also plant builders, research and development organisations, technical universities and anybody with an interest in digital manufacturing and the application of Industry 4.0 and its associated technologies to the steelmaking process. Anybody who wishes to present a paper at either or both of next year's conferences, should email me directly at:matthewmoggridge@quartzltd. com

FUTURE STEEL FORUM ASIA 2019

What’s the difference between NAFTA and Naphtha?

The Port of Brownsville in Texas, USA, loaded approximately 150,000 barrels of heavy Naphtha on to the M/V Nordic Pollux, the largest vessel to call at the port to date. But what is Naphtha? Well, it’s got nothing to do with the North American Free Trade Agreement – that’s NAFTA – but is, infact, a flammable oil containing various hydrocarbons, obtained by the dry distillation of organic substances, such as coal, shale or petroleum.

• Although privately-owned enterprises in China produced around 60% of output in 2016, it is important to remember that eight out of the top 10 largest producers are still state-owned enterprises (SOEs).

Source: Steel Times International

• Steel produced in Pennsylvania has found its way into American icons like the Golden Gate Bridge, Empire State Building, World Trade Centre, US Navy ships and submarines, and so much more.

Source: National Iron & Steel Heritage Museum, Coatesville, PA, USA.

20-21 NOVEMBER • NEW DELHI • INDIA

October 2018

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DIARY OF EVENTS 13

INDUSTRY NEWS

Astounding Facts and Figures...

October 2018

• In 2016, 22 of the world’s 100 largest steelmaking companies were state enterprises. In that year, state enterprises represented at least 32% of global crude steel output. Source: OECD. • In 1954, the USA's steelmaking capacity was 124Mt and Pennsylvania’s capacity was more than one quarter of the nation’s whole.

Almost half of the state’s population also lived in a community with some type of iron or steel making facility.

Source: National Iron & Steel Heritage Museum, Coatesville, PA, USA.

“Today’s modern steel is very different from that of 30 years ago – matching and surpassing many other beverage packaging alternatives. It’s now thinner, lighter and stronger. Modern steel is a real, widely available alternative with 100% recyclability credentials.”

Source: Clare Broadbent, Head, Product Sustainability, worldsteel

• Mexico is Latin America’s most dynamic economy and has overtaken Brazil as the region’s largest steel consumer. Source: Steel Times International.

Every recycled steel can saves energy: the same amount required to power a TV for one hour, one laundry load in a washing machine or 24 hours of a 10W energy-efficient LED light bulb. Source: worldsteel

• US Steel was once the largest business enterprise ever launched in America and during its first year, the corporation made 67% of all steel produced in the country.

Source: National Iron & Steel Heritage Museum, Coatesville, PA, USA • Historically, during an economic boom, steel development outweighs GDP growth; during economic downturns, steel demand decelerates much faster than GDP. Source: Steel Times International.

• The Port of Brownsville in Texas, USA, tranships more steel to Mexico than any other US port and is the largest land-owning public port authority in the nation with 40,000 acres of land. Source: Steel Times International.

• ArcelorMittal Coatesville is the longest operating steel site in America.

Source: National Iron & Steel Heritage Museum, Coatesville, PA, USA

17-18 International SAP Conference for Mining and Metals Location: Prague, Czech Republic. Organised by SAP and TA Cook Conferences.

A two-day conference where delegates will gain an insight into SAP's strategy and road map for the mining and metals industry.

Further information, log on to https://tacevents.com 23-25 IAS Conference and Expo Location: Rosario, Argentina Organised by Instituto Argentino de Siderurgia.

The Instituto Argentino de Siderurgia is inviting the whole steel community to participate at the 22nd IAS Steel Conference and Expo IAS 2018. The event covers everything from raw materials to end products, including Industry 4.0.

Further information, log on to https://siderurgia.org.ar/ conf18 25-26 The 2nd Global Casting Summit China Location: Crowne Plaza Hotel, Shanghai. Organised by Datom Events.

Billed as the most influential event for the casting industry, the 2nd Global Casting Summit will cover the latest rules and requirements for casting in China as well as the application of digital technology, Industry 4.0 and casting data management.

Further information, log on to https://www.datom-events. com

November 2018 05-07 Latin American Steel Conference Location: Centro de Convenciones Cartagena de Indias, Columbia. Organised

by The Latin America Steel Association.

The annual conference of the Latin America Steel Association (Alacero) offers delegates an unrivalled opportunity to get to grips with the current situation in the region regarding steelmaking Further information, log on to https://www.alacero.org October 2018

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CONFERENCE REPORT: BRAZILIAN STEEL INSTITUTE ANNUAL CONFERENCE

Under political distress

Aço Brasil – or the Brazilian Steel Institute – organised its annual conference in mid-August in São Paulo. Approximately 460 delegates attended the event, a slight increase when compared with last year.

The conditions of the domestic steel market in the country have improved significantly, but the current situation is characterised by high instability, due to the Presidential election, which will occur in two rounds next October. By Germano Mendes de Paula*

OUT of the 13 candidates in the Presidential election campaign, five have the potential of reaching the second round, including a far-right candidate who stands a real chance of winning as the electorate has become increasingly polarised. The incumbent President Michel Temer, who has a rejection rate of around 80% from the population, delivered a speech at the conference. He emphasised governmental actions in order to defend sectoral interests, such as efforts made by the International Trade Ministry in negotiating quotes for Brazilian steel products with the US

administration, aiming to avoid the 25% import tariff derived from the application of Section 232. However, for the Brazilian steel industry, the key issue is not what the government can do until late December 2018, but what policies will be adopted by the new government from January 2019.

In addition to the President, the election will decide new governors, the entire low chamber and two thirds of the high chamber (Senate).

One simplistic way to summarise Brazil’s high uncertainty is the fact that the exchange rate has devalued roughly 25%

since the beginning of last April. Presently, one US dollar (USD) is equivalent to 4.15 Brazilian reals (BRL). Some financial analysts predicts that this rate can achieve 3.50 if a reformist candidate is elected or 4.50 in the case of a populist.

Not surprisingly, one the most interesting papers was delivered by Murillo de Aragão, a top-notch Brazilian political scientist. He examined the pros and cons of the five main presidential candidates and predicted that the second round would be disputed by far-right and centre-left candidates.

If this forecast proves right, it will be a

* Professor in Economics, Federal University of Uberlândia, Brazil. E-mail: germano@ufu.br October 2018

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departure from the norm. Over the last six elections, the dispute has involved centreleft versus centre-right.

Open the Brazilian economy – or not?

One the most interesting debates was a discussion about the benefits of unconditionally opening the Brazilian economy. In reality, the panel was called “Industry: protectionism or isonomy?” In one corner, Prof. Marcos Lisboa, president of Insper, an elite business school, said that the Brazilian government has developed the wrong agenda, partially due to having been captured by the rent-seekers, including industrial companies.

He stressed that the Brazilian economy has performed badly with low productivity growth. One of the causes of this situation, in his opinion, was the government putting erroneous polices in place. One example was “Inovar-Auto”, a programme that increased import tariffs by 30% on vehicles for automakers that did not have plants in Brazil. This additional protection was www.steeltimesint.com

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severely criticised by other countries, in particular the European Union and Japan, which requested a panel in the World Trade Organisation (WTO) on the subject. The final determination of yjr WTO was that the Brazilian government should withdraw this industrial stimulus programme.

According to Prof. Lisboa, the adoption of protectionist measures have benefitted industrialists, who have supported such a policy. Consequently, the related mistakes should not be attributed only to the politicians, but also to many businesspeople (and trade associations) that have pressured in this way.

economic growth. In a sample comprised of large countries (Bangladesh, Brazil, Indonesia, Japan, Mexico, and Pakistan), income per capita in four of them has decelerated after the opening up of international trade. Bearing such evidences in mind, he criticised the view that a ‘commercial opening up’ (even without trade partners’ concessions) would be beneficial to the Brazilian economy.

In the other’s corner, José Ricardo Roriz Coelho, President-in-Office of the Federation of the Industries of the São Paulo State (FIESP), one of the country’s more powerful business associations. He mentioned initially that the Brazilian foreign trade balance had been predominantly negative over the last 10 years, mainly due to the manufacturing deficit. Indeed, in the case of high and medium-high technology industrial products, the trade deficit skyrocketed from $17.5bn in 2001 to $91.8bn in 2013.

The indicator commonly used to assess the degree of openness of a given economy is the flow of foreign trade as a proportion of GDP. Roriz Coelho said that the Brazilian ratio (25.9%) was relatively close to the USA (26.7%) and Japan (27.6%), considering average figures for the period 2001-2013.

Obviously, this index is quite distant to those observed in some countries with small populations, often cited as successful cases of opening up international trade in terms of reducing import tariffs and nontrade barriers.

Analysing average GDP growth per capita of a sample of nations, two decades before and after the opening up of international trade, Roriz Coelho concluded that it was not possible to establish an automatic relationship between this phenomenon and

sector. She organised it into three themes: a) the current status of the steel industry; b) the demand side story; c) the supply side situation.

Regarding the first issue, Dr. Han mentioned that a decade has passed since the 2008 financial crisis, and today’s global steel industry is in a very different place.

After a quick, but short-lived recovery, the sector seems to be stuck in a low growth gear since Chinese steel demand peaked in 2013. As a result, excess capacity is troubling the industry with low profits and rising trade tensions. Also, there are some significant megatrends emerging that will weigh on steel demand in the long-term and, therefore, the steel sector’s sustainability seems to be under a lot of stress these days.

Where global demand was concerned, Dr. Han highlighted worldsteel’s Short-Term Outlook (STO) which was released last April, and forecasted a 1.8% improvement in 2018 and an additional 0.7% in 2019.

It is evident that global steel demand will experience a low and decelerating growth despite the strong momentum of the global economy, which is projected to expand at 3.3% in these two years. This divergence in the performance of steel versus global GDP is worthy of mention. Although Dr. Han recognised that, in the next STO,

Global steel industry Dr. Nae Hee Han, director, economic studies and statistics of worldsteel, delivered an in-depth presentation on the global steel

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CONFERENCE REPORT: BRAZILIAN STEEL INSTITUTE ANNUAL CONFERENCE

%

Gross domestic product

Steel demand

130

15

120

10

110

2015

2010

2005

2000

1995

1990

1985

1980

1960

1975

70

-10

1970

80 1965

2018

2016

2014

2012

2010

2008

2006

2004

2002

2000

1998

-5

1996

90 1994

0 1992

100

1990

5

Fig 1. Global GDP and steel demand growth, 1990-2018 (% y-o-y).

Source: Worldsteel and IMF

the growth rate might turn out to be a bit stronger than the organisation had expected earlier, the underlying view on worldwide steel consumption is not going to be changed significantly. In addition, the effect of rising trade tensions could sour the positive momentum of the global economy.

Dr. Han stressed that steel consumption is a cyclical commodity driven by investment and that it fluctuates much more than GDP over a business cycle. Fig.1 shows a clear relationship: historically, during an economic boom, steel development outweighs GDP growth; during economic downturns, steel demand decelerates much faster than GDP. However, this has been not visible recently. Since 2016, even though the global economy has been in an expansion mode, steel consumption amplification has been far below GDP growth.

In the context of decoupling world steel demand from GDP, some structural shifts might be taking place. One such shift is the missing growth engine following China’s demise. China led the recovery until 2013, when steel demand peaked. Nonetheless, since then there hasn’t been an expansion locomotive. Secondly, recovery in the developed nations has been painfully slow and despite recent improvement, it will continue to recover slowly. Third, other emerging economies’ prospects have improved recently, but they are still too small to replace China as the growth engine for the global steel business.

Dr. Han observed that, while less visible, there are six important megatrend factors affecting steel demand. First, the current global demographic trend of slower growth and an aging population will have an adverse impact on steel demand.

Second, inequality is rising and it hurts social cohesion and can dampen economic October 2018

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Fig 2. Global steel intensity of GDP (1980 = 100). Source: Worldsteel

growth potential. Inequality is behind the rise of populism in many countries. Third, digitalisation will influence the industry value chain, leading to more efficient production and use of steel. Fourth, newly emerging economies will experience less steel-intensive growth than before, which can be termed as “premature deindustrialisation”. Fifth, the transition to a circular economy that will break the link between economic growth and resource use, and sixth, world economic order based on globalism and open trade is under attack.

According to worldsteel, the aforementioned megatrends, in general, and transition to the circular economy in particular, suggest that there will be increasing divergence between GDP and steel demand growth in future, implying that the steel intensity of economic growth (the amount of steel required to generate one unit of GDP) will continue to fall.

Steel intensity has come down by about 30% between 1980 and 2000, with some recovery after 2000 due to China (Fig. 2).

It is expected that this variable will decline again as China stabilises. Dr. Han affirmed that worldsteel forecasts about 1% growth in steel demand per year on average for the next two decades. Therefore, steel use in 2035, in crude steel terms, will amplify by only 300Mt compared to today, which is a worrying situation in light of the current overcapacity.

Regarding the supply side, worldsteel believes that global steel capacity amounted to 2.25 billion tons at the end of 2017 and this seems sufficient to satisfy projected global steel demand through to 2035.

She mentioned three factors that lead to overcapacity in the steel industry: a) misinformed optimism about future demand; b) seeking economies of scale; and

c) the pursuit of national self-sufficiency in steel drives capacity expansion, especially for newly developing economies, even in the presence of global excess capacity.

While it is easy to arrive at an overcapacity situation, resolving it seems very slow and difficult, as the steel sector has high exit barriers: low salvage value, high closing costs and geographic concentration of impact. Worldsteel has reviewed the restructuring experiences of the 1970s when the global steel industry confronted an unexpected overcapacity situation and extracted five lessons: • “It was a long and costly process; • It resulted in improved industry competitiveness and sustainability, but was accompanied by significant social impacts. The social impact of closures was exacerbated by the ongoing adaptation to labour saving technologies; • Due to high exit barriers, industry alone could not carry out restructuring.

Government was engaged to a different degree to provide guidance and accommodating measures; • Trade measures were used to provide temporary relief, but did not provide fundamental solutions. Effective restructuring required more than trade supports; • Towards the end of the process, market forces provided momentum for the restructuring process through consolidation.

Strong involvement of the financial sector was needed”.

China’s steel industry Dr. Le Xia, chief economist for Asia at BBVA bank, provided a comprehensive presentation on the Chinese steel business.

Fig. 3 shows the evolution of the annual profits of large and medium-sized Chinese steelmakers, which climbed from RMB16 www.steeltimesint.com

09/10/2018 10:43:20

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CONFERENCE REPORT: BRAZILIAN STEEL INSTITUTE ANNUAL CONFERENCE

200

70 68

150

66

100

64 62

50

60 58

0

56 54

50

52

-100

50 2001

2003

2005

2007

2009

2011

2013

2015

2017

1999

2001

2003 2005 2007

2009

2011

2013

2015 2017 2018

Fig 3. Annual profits of the Chinese large and medium-sized steelmakers, 2001-

Fig 4. Chinese steelmaker’s debt to asset ratio, 1999-2018 (%). Source: BBVA Research

2017 (RMB bn). Source: BBVA Research and Wind

and Wind

bn in 2001 to RMB145 billion in 2007, but then plummeted to only RMB2 billion in 2012 and even to a loss of RMB65 billionn in 2015. It has recovered to a profit of RMB30bn in 2016 and to RMB177bn in 2018. Even though, it should be taken into consideration that the volume of steel produced has amplified considerably during this period and, consequently, the evolution of profit per ton was, in fact, weaker.

The Chinese steel industry has also been characterised by large liabilities. The debt to asset ratio has diminished from 59% in 1999 to 51% in 2001, but reached 68% in 2012 and has hovered around this plateau since then (Fig. 4).

Dr. Xia also paid attention to the evolution of the Chinese steel industry’s installed capacity utilisation, which has varied from 76% in 2008 to 82% in 2010, to 67% in 2015 and to 85% in 2017. In addition, the joint market share of the 10 largest steelmakers has oscillated from 42% in 2003 to 49% in 2011. It diminished to 39% in 2013 and even to 34% in 2015, reverting partially to 37% in 2017. It is well known, at least since 2005, that one of the key priorities of China’s central government is to amplify market concentration.

BBVA’s economist stressed that the origins of China’s steel sector overcapacity is derived from external shocks (the stimulus package in response to the 2008-2009 global financial crisis), low technical barrier (the slow implementation of intellectual property laws made technology spread fast and wide) and an outdated development model. Concerning the latter, he commented that a GDPoriented developing model has made the steel industry one of favourites of local governments. Furthermore, state-owned enterprises (SOEs), which received more October 2018

Alacero conference.indd 4

policy support, have dominated the steel sector. Although privately-owned enterprises produced around 60% of output in 2016, it is important to remember that eight out of the top ten largest producers are still SOEs. The under-pricing of labour and natural resources such as energy, water, and industrial electricity tariffs in China (which are about one-third to one-half of the world average) also contributed to the over investment.

Dr. Xia analysed unsuccessful previous efforts to address the excess capacity problem in the Chinese steel industry. For instance, the “Blueprint for the adjustment and revitalisation of the steel industry” wanted to reduce steel output to around 500Mt and wash out a production capacity of 25Mt/yr of steel and to make sure that the top five enterprises accounted for at least 45% of national production.

Nonetheless, the plan was disrupted by the 2009 stimulus package.

The “Plan for adjustment and upgrading of iron and steel industry” was issued in November 2016. Its aim was to eliminate annual capacity of 100-150Mt/yr, to increase the utilisation rate to 80% and enlarge industrial concentration by 25%.

The building of new capacity-added projects is strictly prohibited. Moreover, future strengthened environmental restrictions should represent an additional pressure against production amplification.

Dr. Xia examined current public policies towards the reduction of overcapacity and whether they obtain good results.

There are concerns that the governments are not properly enforcing the policies, which includes: a) that local governments may provide support for steel enterprises (underreported capacity); b) that policymakers may have been focusing on

production instead of capacity; c) more importantly, in essence, they are not market-based solutions. Another important issue refers to the placement of the labour force under economic transition. It is easier to eliminate capacity rather than to deal with excess labour.

Governmental policies have the potential to decrease GDP through reduced industrial production in the short-run. Indeed, industrial output is highly correlated with that of crude steel production. It is important to ponder that a 1% decrease in steel production would drag down the industrial added value by 0.31% and GDP by 0.12%. Escalating trade tensions with the USA can impose additional obstacles to going ahead with such policies in the first place.

Dr. Xia elaborated a list of other possibilities to tackle excess capacity in the Chinese steel industry: • Enhance enterprises’ asset restructuring process, which includes but is not limited to allowing for them to go bankrupt, M&A and privatisation; • Restrict capacity from the “input” side (e.g., reasonable resources’ price, reducing subsidies or preferential policies like low capital lending rates); • Prevent SOE empire-building by redistributing profits to other social wellbeing programmes; • Encourage enterprises’ R&D expenditure and emphasise the protection of intellectual properties; • Use the current trade war as an opportunity to reshuffle China’s steel industry.

Overcapacity and domestic political and economic instability seem to have dominated the Brazilian Steel Conference once again. � www.steeltimesint.com

09/10/2018 10:43:21

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STEEL MARKETS

The agility imperative

Fundamental concepts, such as the need for product innovation and customer service, as well as the benefits of recyclability, have not faded in their importance. In fact, they have become imperatives to the survival of steel companies in the modern world, argues Dr Andrew Zoryk* EXCEPT for short periods, since the boom years between 2000 and 2007, the steel industry has faced stormy weather.

Dark clouds continue to appear on the horizon, creating headwinds that prevent steel companies from establishing a path of growth and sustained profitability, particularly in a consolidated customer market of automotive original equipment manufacturers (OEMs) with considerable pricing power. One recent dark cloud is the situation regarding tariffs on steel products, which will likely create additional trade imbalances and unwanted pressure on producers – appearing just when optimism was improving around recovery of the future growth of steel, particularly in Europe. It is quite likely that threats of increased dumping, due to overcapacity, will also negatively affect market pricing.

Within the automotive supplier sector, steel producers are continuing to drive innovation around advanced- and ultrahigh-strength steels (AHSS/UHSS). Mild steels are clearly seen as commodity products with limited added value that are unable to meet the weight, crash and emission targets being set by OEMs. In response, producers must accelerate their ability to anticipate, translate and co-innovate around trends impacting the OEMs – a factor that is providing

opportunities for smaller, more agile producers that can react more quickly than traditional incumbents. On average, steel companies require three to five years to bring a new material innovation to market due to the extensive time needed for laboratory sample tests, pilot tests and evaluation, and pre-production tests. In the increasing pace of today’s world, such timescales are not competitive and, therefore, a shortening of the time to market is needed.

Up to now in the United States and Europe, steel producers have kept the loyalty of automotive OEMs with domestic manufacturing operations because of their willingness to work co-operatively. Steel experts have been on hand to advise how to work with new grades for both design and manufacturing. However, while core expertise in automotive-grade AHSS and UHSS currently resides primarily with US and European manufacturers, it would be a mistake to underestimate how other markets are developing their own capability.

In other words, the rest of the world is rapidly catching up.

Digital technology jump-starts agility To remain competitive, steel producers need to examine how the intelligent use of digital technology enablers could help them to change the game, transforming

the R&D function to maintain their edge, especially where competitors are chasing similar innovation areas. For example, in terms of ideation, managing and screening the portfolio of innovations, and fostering a culture of innovative thinking, steel companies could take advantage of new collaboration platform technologies to enable more effective sharing and management of information between various stakeholders, both internal and external – from suppliers through to OEMs. A second example would be using advanced analytics for automatic trend sensing and pattern recognition to support metallurgists and researchers working in the laboratories – allowing vast volumes of data to be analysed more quickly and effectively.

Returning to the theme of agility and the need to excel in customer service, steel companies also face ongoing struggles with increasing supply chain network complexity, driven in part by globalisation and the growing use of external subcontractors as part of their chain of manufacturing operations. Today, the production of steel – particularly complex automotive grades – is already complicated and will continue to grow in complexity. This poses challenges for producers to accurately plan production and reliable delivery to customers, without resorting to inventory buffers and long

* Managing director – metals, Accenture www.steeltimesint.com

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STEEL MARKETS

order lead-times that adversely impact working capital and profitability.

Many companies have started implementing supply chain strategies to address these challenges by using intermediate, semi-finished and advanced stocks scenarios (such as pre-material stocking strategies, or “supermarkets” for intermediate and finished goods) to reduce lead-times and working capital.

However, many still struggle to implement such approaches successfully within the overall context of their diverse and complex product portfolios.

In addition, the challenge of complexity is not just contained within the four walls of the mill. There is frequently a multitier network of downstream processors (subcontractors) performing galvanising, cutting and other finishing operations prior to delivery of the final product to the automotive customer. Overlaying this are consignment stock models, requiring the steel company to accurately manage inventory replenishments at various stocking points throughout the delivery network.

This kind of scenario impacts many business processes, including order-to-cash, sales and operations planning (S&OP), subcontracting and manufacturing.

Currently, many companies have a relatively opaque view of orders, inventories and external operations in such business networks. This results in the following challenges: • Limited visibility of order status at each stage of the supply chain, including external subcontractors and logistics providers.

October 2018

steel market accenture.indd 2

• Fire-fighting operational problems daily with a focus on short-term execution issues.

• Poor visibility of inventory across supply chain locations, including subcontractors, warehouses and distribution networks.

• Weak process integration with other supply chain information – such as from S&OP and logistics – coupled with teams working in silos and inconsistent use of disparate transactional systems and nonstandard spreadsheets.

• Constant changes in plans and customer orders driving increased complexity.

management. These generate a wealth of data about operations along the extended supply chain. In addition, new technologies have emerged that allow points along the end-to-end supply chain to be connected, regardless of the underlying execution applications. Furthermore, these new cloud-based technologies are dramatically reducing the cost, complexity and timeto-value of inter- and intra-enterprise integration. Coupled with this, advances in analytics are enabling companies to make effective use of this enormous amount of structured and unstructured data being collected and connected across the supply chain.

While these issues are probably no surprise, the harder problem that many companies need to address is the inertia that limits their ability to act. Such constraints make it very difficult to break out of the traditional cycles of business, which in turn negatively impacts their ability to invest in sustainable improvement programmes.

Clearly an approach is required that allows steel companies to make incremental improvements in their core business at a lower rate of investment. By building more competitive cost structures, they can improve flexibility, increase profits and, as a result, drive up their capacity to make investments.

We’ve reached the point where many steel producers and their supply chain partners are enabled with supply chain technologies, including ERP, planning and optimisation, transportation and warehouse

Supply chain control tower increases agility All of this comes together in a “supply chain control tower.” In short, a control tower is a cloud-based platform and set of capabilities, sitting on an enterprise data lake, that provides integration of supply chain processes and tools across silos via enhanced collaboration. The control tower includes an integrated framework for real-time visibility, analytics and continuous process execution improvement. Organised as a centralised shared service across the end-to-end supply chain, the control tower targets improvements in costs, inventory, quality, customer service and asset utilisation. This concept has been developed over many years, and there are numerous examples of control towers being successfully deployed in other industries, such as chemicals, oil and gas, high-tech and aerospace. www.steeltimesint.com

09/10/2018 11:08:12

Zumba

STEEL MARKETS

The availability of new cloud platforms is playing a key role in enabling control towers to be deployed quickly and at low-cost, integrating to existing ERP, transportation management and supply chain planning systems, as well as external suppliers and subcontractors. The platform then incorporates appropriate “best-ofbreed” technology applications to provide data aggregation, alert classification, simulations, workflow management, visualisation and reporting.

Implementing a control tower capability can be developed incrementally over time as a steel company matures in its thinking.

For example, the company could start with providing visibility to events and a focus on preventing disruption. It could then move to supporting cross-functional decisionmaking along with basic “what-if” analytics and managing functional key performance indicators (KPIs). As maturity develops, it could move to driving continuous value and process improvements, while leveraging complex analytics to optimise end-to-end business value and profitability. An end-

state vision for a control tower should include: • Process: End-to-end supply chain exception management, integrated planning, metrics alignment and governance.

• Organisation: Clear organisational model with defined roles and responsibilities, skills and aptitudes.

• Data visibility/integration: Easily accessible high-quality data, with a degree of integration across internal and external ecosystems.

• Intelligence: Transactional automation together with robotic process automation (RPA), advanced analytics and artificial intelligence capabilities.

Bringing it together to build an agile future Agility and responsiveness are critical for survival in the steel industry. Even the largest automotive steel producers lack essential control over what is fundamentally a cyclical industry, sandwiched between a few suppliers of raw materials with volatile

23

cost drivers, and a strongly consolidated market of automotive OEMs squeezing prices and demanding higher quality, innovative products.

Producers are already working collaboratively with OEMs, providing services to help them improve vehicle design and maximise efficiency in the primary production processes like forming and welding. More needs to be done, however. Creating greater agility across the entire supply chain will be essential to unlocking future long-term competitiveness in a world where the price of steel will no longer be measured in metric tons, but rather in terms of value. Furthermore, steel companies need to better understand how product innovation will be impacted by the circular economy, which is changing some fundamental concepts for OEMs, such as business models for automotive ownership (“products as a service”), product lifetime extensions and recycling. With digital technology enablers and a supply chain control tower approach, steel producers can change their thinking starting now. �

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• Independently adjustable met/carbon

• High availability, minimum downtime

• Simple & eco-friendly

• Unparalleled turn-up/turn-down ratio

• Simultaneous production of multiple products

Technology helps people to adapt to changing environments. It gives you control, but it should never control you.

Learn more at www.midrex.com

Designed for Today, Engineered for Tomorrow™

© 2018 Midrex Technologies, Inc. Inc. All rights reserved. © 2015 Midrex Technologies, All rights reserved.

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25

A new and flexible technology Over the five decades that the MIDREX® direct reduction process has been in operation, product carbon levels have varied based on location and use. In 2017, MIDREX plants produced 56.5Mt of DRI products with carbon levels of approximately 0.5% to 3%, controllable to meet the requirements of individual plant operators. By Michael D. Arandas and Vincent F. Chevrier* MIDREX Technologies has created a new, flexible technology that can vary the carbon content of DRI from 1-4%, with limited impact on discharge temperature.

This patent pending technology is called ACT, which stands for Adjustable Carbon Technology. MIDREX ACT allows MIDREX plants to produce DRI products with a wide range of carbon levels that can be easily adjusted during operation. The technology can be retrofitted to existing plants or integrated in the design of new plants to provide Midrex customers with the flexibility to produce higher carbon DRI and HBI. Making carbon the Midrex way In the MIDREX shaft furnace, carbon is added to DRI in three places: • The reduction zone – In the MIDREX process, the main purpose of the reduction zone is to convert the iron to the desired product metallisation using reductants CO

and H2 produced in the MIDREX reformer.

However, some carbon, derived from CH4 and CO, is added in the reduction zone.

Carbon from CH4 is endothermic (consumes heat), while carbon from CO is exothermic (liberates heat).

• The transition zone – A controlled flow of natural gas is the main means of adding and controlling the amount of carbon in MIDREX DRI products. The two main carbon-forming reactions are: 3Fe + CH4 Fe3C + 2H2 (endothermic) CH4 C + 2H2 (endothermic) These reactions are endothermic and cool the DRI, which is desirable for plants producing CDRI, but not for plants producing HDRI or HBI. • The cooling zone – MIDREX plants producing CDRI use gas to cool the DRI prior to discharge. The cooling gas contains

DRI PRODUCTS

Product Form

CDRI

hydrocarbons, which add carbon in a similar manner as in the transition zone.

Development of MIDREX ACT To meet market demands for a more flexible DRI product, Midrex Research and Technology Development (RTD) was challenged to develop a new technology to add carbon without cooling the DRI. The technology had to be flexible (carbon easily adjustable during plant operation) and capable of being retrofitted in existing plants, as well as included in the design of new plants. Midrex RTD developed the concept and performed theoretical calculations, computer modeling (thermodynamic and kinetic), and laboratory testing.

With MIDREX ACT, carbon monoxide (CO), made in the MIDREX reformer, is added to the transition zone in the form of a CO-rich gas stream. The CO contacts

HBI

Pellet & lump

Briquettes* (density> 5.0 grams per

HDRI

Pellet & lump

cubic centimetre etre (g/cc)

Product Temperature

Ambient

Ambient

550oC or higher

Where used

EAF & BOF

EAF, BOF & BF

EAF

Charging Method

Continuous & batch

Continuous & batch

Continuous & batch

Fig 1. DRI product forms

* Midrex Technologies, Inc. www.steeltimesint.com

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IRONMAKING

Iron oxide

ACT™ System

H2 rich stream

Process gas Top gas fuel Natural gas

MIDREX® shaft furnace

Top gas Scrubber

MIDREX® reformer

Transition zone natural gas

Reducing gas

Gas compression & mist elimination

Reformed gas cooler CDRI/HBI/HDRI Mist eliminator

Gas cooling & mist elimination

Membrane separation system

Fig 2. Simplified MIDREX ACT Flowsheet

the DRI bed and the resulting exothermic reactions provide extra energy, thus maintaining the desired DRI temperature: 3Fe + CO + H2 3Fe + 2CO CO + H2 2CO

Fe3C + H2O Fe3C + CO2 C + H2O C + CO2

(exothermic) (exothermic) (exothermic) (exothermic)

Transition zone natural gas is added, as described previously.

By adjusting the amount of CO in the transition zone, the plant operator can control the amount of energy added to the DRI products. Adjusting the natural gas addition will control the carbon content of the DRI. Thus, MIDREX ACT allows for independent control of the temperature increase and amount of carbon added.

MIDREX ACT at a glance • Can be used in every type of MIDREX Plant (CDRI, HDRI, HBI or a combination) • Allows amount of carbon in DRI to be adjusted up or down • Carbon can be added without cooling the DRI • 85-90% of the carbon in MIDREX DRI products will be in the form of iron carbide (Fe3C) • Can be retrofitted to existing MIDREX plants, as well as included in new ones • Can be turned on and off to suit the desired carbon level without disrupting plant operation (the MIDREX process can operate with or without it) October 2018

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MIDREX ACT design features All equipment used in MIDREX ACT is wellproven and reliable. A simplified flowsheet is shown in Fig. 2.

Reformed gas cooler All new MIDREX plants (and most existing ones) have a reformed gas cooler, which is used to control reducing gas temperature during plant start-up and occasionally during normal operation.

A relatively small stream (typically about 10% of reformed gas flow) of cooled reformed gas, rich in H2 and CO, is diverted to MIDREX ACT. Mist elimination The cooled reformed gas is then sent to a mist eliminator, which is similar in design to ones already used in MIDREX plants, to remove excess water and protect subsequent equipment.

Gas compression The gas is compressed to about 14 barg, the pressure needed for the downstream membrane unit.

Gas cooling The gas from the compressor is hotter than needed for the downstream membrane unit, so it is cooled by a syngas aftercooler and water is removed by a mist eliminator.

This equipment is similar in design to that which Midrex supplies in new plants.

Membrane separation The gas, having been suitably compressed and cooled, enters the membrane unit. This technology, which is used in gas separation industries, employs a pressure difference to selectively allow some of the gas components in the feed stream to permeate across a membrane, separating the feed into two product streams: a CO-rich stream and a H2-rich stream. The CO-rich stream is sent to the shaft furnace transition zone, where the exothermic reactions generate heat (and some carbon) and the endothermic reactions deposit carbon. The H2-rich stream (the low-pressure stream from the membrane unit) is recycled to the discharge of the process gas compressors and added to the gas recycled to the reformer.

Controls and logic The amount of carbon added to MIDREX DRI products is adjusted by the flow rate of gas to the membrane unit (affecting mostly temperature) and the flow rate of transition zone natural gas (affecting mostly carburisation), which provides operators an independent control loop for carbon and temperature.

During the development of MIDREX ACT, necessary engineering was performed for piping, controls, instrumentation, gas composition measurements, isolation and control logic for normal operation, start-up, shutdown, and isolation of MIDREX ACT. Utilities MIDREX ACT has the following utilities requirements: • Electricity – Electrical consumption for the MIDREX plant will increase approximately 20 kWh/ton of DRI due mainly to the compressor and electric heater in the membrane unit.

• Cooling water – Machinery cooling water is needed for compressor cooling and the syngas after-cooler.

• Nitrogen – A small amount of nitrogen is needed intermittently for system purging.

• Instrument Air – A small amount of instrument air is needed for control valves.

First MIDREX ACT application Cleveland-Cliffs, a USA iron ore supplier, is building a 1.6Mt/yr MIDREX HBI plant in Toledo, Ohio. The plant will process iron ore from Minnesota and supply HBI to steelmakers located in the Great www.steeltimesint.com

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IRONMAKING

Lakes region. Cleveland-Cliffs decided to incorporate MIDREX ACT in the plant design so the HBI carbon level could be tailored to customer needs. The plant is scheduled to start-up in mid-2020.

Conclusion MIDREX ACT increases the product flexibility of existing or new MIDREX plants by providing an independent means to vary the carbon level of the DRI products or to increase the discharge temperature at a given carbon level. For applications where higher carbon is desired, the amount of carbon added is controllable and the DRI discharge temperature is maintained; with this technology, MIDREX plants will have a wide range of carbon amounts available to them – from 1% to 4%.

With MIDREX ACT, a MIDREX plant will have the ability to: • Produce CDRI with higher carbon content.

• Produce HDRI with either higher carbon or at higher temperature or both.

• Produce HBI with higher carbon content without detrimental loss of temperature at the briquetting machine,

27

or increasing briquetting temperature at a given carbon content.

• Merchant plants (CDRI and HBI) can tailor their product chemistry and produce a value-added product to the specifications of their end users.

• Choose to operate with MIDREX ACT when higher carbon levels are desired or to operate without it when lower carbon levels are desired.

MIDREX ACT can be included in new plant designs or retrofitted to existing plants, and the equipment used in the technology is well proven in actual operation. The design is of the same robust nature as all MIDREX Technology solutions.

There will be some additional OPEX, mainly due to increased electrical consumption.

The flexibility to adjust DRI carbon levels based on the needs of the steel producer is what makes MIDREX ACT a technology for modern steelmaking.

(This article is based on the presentation, “New Technologies for Maximising Operational Flexibility of MIDREX DRI Plants: ACT™- Adjustable Carbon Technology,” for AISTECH 2017 in Nashville, TN, USA). � STI cover ad 11.2017.indd 1

WITH THE TOUGHEST SOLUTIONS FOR THE WORLD’S MOST EXTREME PROCESSES, QUAKERTEK™ SPECIALTY GREASES KEEP YOUR MILL RUNNING SMOOTHLY. With the demands of the modern steel industry, you and your equipment are both feeling the pressure.

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e mail : Mr Vakhtang Kocharov

v.kocharov@metalloinvest.ch

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IRONMAKING

Transforming the steelmaking process Italian plant builder Tenova claims to offer steelmakers sophisticated technologies and features to meet their future needs, taking into consideration the major challenges facing the industry in terms of rapidly changing geo-political and social conditions. The company believes it has the experience and knowhow to support the transformation of the steelmaking process into a sustainable, environmentallyfriendly and economic exercise. By Markus Dorndorf1, Pablo Duarte2, Paolo Argenta3, Stefano Maggiolino4, Mario Marcozzi5 SEVERAL aspects of BF ironmaking technology will become a major bottleneck and restrict further development, even if, currently, the blast furnace (BF) process represents the globally predominant technology. Rapidly changing conditions politically and socially, approval procedures for new installations and their potential impact on public perception, raw material quality and availability, different energy sources, changing price levels, stricter environmental regulations, GHG emission reduction targets, the upcoming hydrogen era and in general difficult to predict market conditions are top-of-mind for steel makers throughout the world. These factors represent threats, but also opportunities; those who act now will play an important role in the future of the steel industry. Two main facts have to be considered midterm. First, the notion that world steel demand in future will consist of 80 - 85% recycled steel scrap and only 15 – 20% traditionally made using iron ore, based on global economic growth and the related product lifecycle in emerging markets.

Second, stricter environmental regulations will force iron- and steelmakers, driven by policy and society, to change carbon intensive processes into sustainable and environmentally friendly solutions.

The EU wants to cut its CO2 emissions by 40% over the next few years and the iron and steel industry is one of the largest producers of CO2 emissions. These are facts. From a political perspective, there will be fewer allowances over the coming years and they will be expensive. The

EU will set the permissible emissions and reduce them further on an annual basis. As international agreements and national laws increasingly call for a reduction of dust, NOx and CO2 emissions, advanced postcombustion and fume treatment solutions must be implemented to meet these targets. Emerging countries, such as China, will follow this approach in some way or another.

Potential decarburisation technologies include coke dry quenching, BOF waste heat and gas recovery, continuous casting, scrap pre-heating solutions, oxygen-fuel burners, top gas recovery turbines, CO2 capture and use for fuels/chemical production and direct reduction technologies as well as the latest analysing and measurement technologies.

Most of them are already implemented in melt shops and integrated plants, but this will not be enough to meet future needs, to fulfill today’s and future environmental

regulations and to cope with upcoming threats.

What the steel industry – and especially integrated plants – needs is a paradigm change in order to be prepared for the future and fulfill environmental laws, specifically on carbon footprint reduction, but also to cope with raw material availability and final product qualities. The steel plant of the future will be a recycling facility dealing with various input materials and producing various products next to steel, to create additional business and remain competitive.

Providing the right products and solutions Tenova recognised at an early stage the need to modify its product portfolio towards sustainability, flexibility and cost efficiency, to support iron- and steelmakers with the right products and solutions

Fig 1. Products and solution to meet future needs and to support transformation process

1Tenova Metals Deutschland product manager; 2Tenova HYL commercial vice president; 3Tenova SpA, executive vice president (metals); 4Tenova HYL, president & CEO; 5Tenova SpA, upstream marketing & sales director

www.steeltimesint.com

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IRONMAKING

Fig 2. Corner tube boiler, Tenaris, Dalmine (Italy)

Fig 3. FMF concept for highest flexibility in raw material and energy source – a perfect transition technology

and to walk the path of transformation together. Examples of products and solutions supporting each phase of this transformation process are the iBOF measurement and automation package, energy recovery solutions (iRecovery) to minimise energy losses, the flexible modular furnace (FMF) concept representing a transition technology utilising almost any type and mix of raw material for high flexibility; and finally direct reduction technology using the ENERGIRON-ZR process to substitute BF/BOF processes via DRP and EAF plant solutions, which have a positive effect on carbon footprint and primary energy demand. iBOF: A stepwise transformation process starts with optimising existing plant capacity and maximising efficiency by reducing energy losses. Tenova’s iBOF – or “intelligent Basic Oxygen Furnace” – is a modular technology designed to reduce GHG emissions while improving yield, productivity and scrap-melting capability and cutting operating costs.

It includes NextGen, a multipoint hybrid laser/extractive off-gas analysis hardware for improved process control and safety, robust mass and energy balance endpoint process models, intelligent slop mitigation technology and automatic tapping control for improved safety, reduced slag carryover and minimum ladle reversion. This package represents the first of further steps and provides features to enhance energy efficiency, process predictability and off gas treatment. iRecovery: Minimising energy losses is the key driver for economical steel production based on increasing energy prices and, in some places, energy availability or legal pressure to decrease October 2018

ironmaking tenova.indd 2

consumption and avoid GHG emissions.

Despite improvements in terms of energy input, it’s common knowledge that an EAF loses around 30% of all primary energy in the off gas and is thus the biggest part of the process for energy savings.

Tenova’s iRecovery technology consists of several heat recovery cooling systems for different industrial furnaces including electric arc furnaces (EAF), submerged arc furnaces (SAF), the flexible modular furnace concept (FMF) as well as walking beam furnaces and a combination of different modules such as ECS, WHB, turbines and off gas treatment. The difference between iRecovery technology and conventional cooling systems is that energy losses through waste gas are now recovered as steam. This means that iRecovery technology can recover 35-70% of these

losses, and bring back 10-25% of the primary energy input (Fig. 2 – corner tube boiler for Tenaris Dalmine downstream to a rotary hearth furnace). Current developments incorporate molten salt, a well-known technology in the solar thermal power plant industry, to homogenise heat transfer and enhance plant efficiency up to 30%.

FMF: Tenova has developed a new furnace concept, specifically targeted to steelmakers using a significant amount of hot metal in their charge mix yet are ready to move to scrap-based steelmaking via the Flexible Modular Furnace (FMF). This solution is suitable for steelmakers looking for a transition technology from BOF to EAF-based steelmaking and for EAF steel shops that want to increase the hot metal percentage in their charge mix for a certain time period.

The main advantage of the FMF concept is that it allows the user to freely and seamlessly modify the mix of metallic input materials and, consequently, energy inputs. The technology enables the use of hot metal percentages of up to 90% and the same configuration can operate as a standard EAF with 100% solid charge including scrap, HBI, DRI and solid pig iron, but also unconventional charge materials such as beach iron and skulls from BF or BOF. Flexibility is the greatest advantage of this solution for all the markets that are looking to develop lower footprint steelmaking operations.

H2O Heat recuperator

Iron ore (3.2 - 18mm)

PG compressor PG heater CO2 absorber

Make-up: Natural gas Reformed gas Syngas COG Hidrogen

- High temp: >1050oC - Operating pressure: 6-8 bar

Reactor

Fig 4. ENERGIRON ZR process

Humidifier

scheme

O2 Tail gas Fuel

Cold DRI

Hytemp system

Pig iron

HBI

Hot DRI to EAF

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10/10/2018 10:28:04

IRONMAKING

31

CO2 emissions - steelmaking routes (based on ENERGIRON-ZR process) BF

BF-BOF

BOF

DRI (w/100% NG) to BF (*) DRI (w/100% NG) to BF (**) DRP

BF

BOF

DRI-EAF (w/100% NG) (*) DRI-EAF (w/100% NG) (**)

DRP

EAF

DRP-EAF (w/35% H2) (*) DRP-EAF (w/35% H2) (**) 0

800

400

1200

1600

CO2 emissions (kg/tonliquidSteel) Fig 5. Stepwise transformation process w/wo CO2 off-taking and utilisation of hydrogen in varying quantities

The FMF is a modular concept of smelting furnace that can be developed starting from core equipment – or ‘base module’ – by means of specific add-ons following an “investment on demand” approach. The base module can be configured for hot metal-based steelmaking and, depending on the characteristics of the charge, it can operate efficiently without electric power (similar to a BOF; see Fig.3 – new designed water-cooled roof with HMTD and short preheating tunnel). The complete foundation – the basic template to build up all the modular configurations – is already structured to take into account potential upgrades. With its special shell design to meet performance needs in converter mode, the re-shaped water-cooled roof, a new hot metal tilting device (HMTD), multipoint-injection system and off-gas monitoring package, the base module is a perfect arrangement to handle hot metal in a smooth, continuous and safer way.

The electric power module (transformer, electrodes etc.) can be installed later, as the most convenient charge mix changes, introducing larger amounts of scrap and DRI, according to the market. In its final configuration, the FMF can be transformed into a fully featured EAF Consteel with continuous scrap feeding and pre-heating.

With additional modules for energy recovery and the latest robotic solutions, the FMF provides a ‘steelmaking on demand’ technology to meet future needs and restrictions. This modular approach can be the first step for the modernisation of integrated steel plants offering a smoother transition to the scrap era.

DRP / ENERGIRON-ZR + Hydrogen: The basic ZR scheme permits not only the direct www.steeltimesint.com

ironmaking tenova.indd 3

Equivalent to CO2 emissions by

4.650.000 cars ~ 10,5% all vehicles in Germany

Equivalent to CO2 absorbed by

500.000.000 trees ~ 6,6 times Berlin city area

Fig 6. Equivalents for CO2 reduction of SALCOS project

use of natural gas (NG) but the same basic process scheme is used regardless of the reducing gas source, be it reformed gas from an external reformer, syngas from coal gasification, pet coke and similar fossil fuels, hydrogen or coke-oven gas, among others, depending on availability.

A distinct advantage of this process scheme without an integrated reformer is the wider flexibility for DRI carburisation while using NG. As indicated in Fig. 4, the ENERGIRON ZR scheme can produce cold DRI (CDRI) or hot DRI (HDRI) which can be directly fed to a: 1) Hytemp System for transport and direct feeding to an adjacent EAF, 2) briquetting presses for production of HBI and 3) a smelting furnace (designed by Tenova) for production of pig iron. The latter is a breakthrough approach for pig iron production using NG as a reducing agent, decreasing to ~50% the carbon footprint compared with conventional coal-based technologies (BF, Corex, etc.).

One of the key features of this technology is the inherent selective elimination of both by-products of the reduction process: H2O and CO2. About 62% of the total carbon input to the process and fuel is selectively removed via a CO2 amines-based

system. This CO2 can be (and is) being commercialised as valuable by-product for different industries such as carbon capture and Use (CCU).

The use of direct reduced iron (DRI) or hot briquetted iron (HBI) as a metallic charge to a BF allows for a significant reduction of fossil fuel consumption.

In general, for each 10% of burden metallisation in the mix charge, the coke rate can be decreased by 6% to 7% while productivity can be increased by 7% to 8%. These results are based on the use of traditional DRI/HBI, which implies carbon levels not higher than 2.0%C. A further decrease of PCI/coke consumption and an increase of BF productivity can be reached whenever High-C DRI/HBI (≥4.0%C) is used instead of standard DRI/HBI (<2.0%C). With ENERGIRON DRI, more than 90% of the carbon contained in the High-C DRI is in the form of iron carbide (Fe3C).

Hydrogen in ENERGIRON-ZR process As observed in Figure X above, the ZR process scheme configuration is the same for any application, regardless of whether using natural gas (CH4), hydrogen (H2), reformed gas from an external steam/NG October 2018

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IRONMAKING

reformer, syngas from coal gasifiers, or COG. This provides a significant flexibility when compared to other DR technology.

For HYL/ENERGIRON DR technology, there are some characteristics which makes this process scheme the most suitable for H2 use: • The ZR process scheme is “natively” suitable for any reducing gas make-up, specifically H2.

• H2 make-up directly replaces NG in the process.

• High operating pressure to better handle the lightest and more diffusible compound in nature.

• Vast experience with high H2 concentration (~70% volume) in HYL/ ENERGIRON plants. Since the 1950s, the HYL/ENERGIRON plants, using reformed gas as source of reducing gas, include a conventional steam/NG reformer.

• Extensive pilot plant campaign in Monterrey during the 1990s, using ≥ 90% H2 as reducing gas.

ENERGIRON is the only available DR technology fitted for the proven, efficient Campaigns of intensive hydrogen use in direct reduction pilot plant in Monterrey, Mexico.

and reliable use of H2. For this industrial application to comply with CO2 emissions targets, H2 shall be generated by high efficiency electrolysers, like reversible hightemperature electrolysers (HTE), powered by a renewable energy source such as eolic or solar PV. A stepwise replacement of BF/BOF plant capacity by DRP/EAF facilities – CDA The ENERGIRON-ZR process with its characteristics and features such as selective CO2 removal, hydrogen utilisation and High-C DRI production already provides the technology to meet future challenges. The SALCOS (Salzgitter Low CO2 Steelmaking) project, a study initiated by Salzgitter AG together with Tenova and FraunhoferGesellschaft (FhG) in 2015, investigated the capabilities of already existing technologies to reduce GHG emissions and their implications on integrated steel works.

The advantage of the SALCOS approach and the incorporation of ENERGIRON-ZR/ HYL technology is the possibility to go directly for a large industrial-scale pilot plant avoiding the necessity for laboratory scale studies. Taking into consideration visible changes of climate, the changed perception of global society and the defined climate targets for 2050, this concept provides the possibility to act now.

The general approach in comparison with CO2 usage (CCU) or disposal (CCS) concepts is the avoidance of carbon carriers and the usage of hydrogen instead.

Hydrogen can replace carbon in iron ore reduction processes, leading to the final formation of water (H2O) rather than CO2. Additionally, process heat for steelmaking may be supplied by electrical energy instead of carbon.

Based on these simple facts Salzgitter defined the term CDA

– “Carbon Direct Avoidance” – in order to underline the difference to already existing but not consequently utilised concepts.

Avoidance of CO2 formation in steelmaking processes is more sustainable and also energetically more useful than any further utilisation.

A major result of the SALCOS study could be to demonstrate the possibility to follow stricter CO2 reduction targets in Europe after 2030 by realising a stepwise transformation process in integrated iron and steel works towards direct reduction and electrical energy-based steelmaking processes. This process, realised in subsequent steps, will reduce the environmental impact in terms of CO2 emissions by up to 95% depending on framework conditions.

Fig. 5 visualises the potential transformation process with/without CO2 off-taking and utilisation of hydrogen in varying quantities as well as its effects on carbon footprint from the BF/BOF route to DRP/EAF route in general (approximate values).

This stepwise transformation process requires considerable investment in new plant equipment adjustments to given regulatory and economic frameworks in order to avoid an unreasonable OPEX increase such as taxes on electrical energy (EEG allocation). These conditions must first be adapted in order to facilitate the realisation of the transformation project.

To make this transformation process and its effects on GHG emissions more tangible, the numbers has been transformed into analogies (Fig. 6). With the final configuration of the Salzgitter site, after transformation, the reduction of CO2 emissions will be equivalent to the CO2 emissions of around 4.6 million cars (around 10.5% of the emissions of all cars in Germany per year) or 500 million trees (around 6.6 times the area of Berlin covered with trees).

These comparisons illustrate the tremendous effects and the important role the steel industry can play in future.

The major problem, however, remains and can be reduced to a simple formula: the European steel industry has to act locally on CO2 emissions, but must compete globally. This implies the willingness of society to invest (public funding) to avoid carbon leakage to non-ETS countries and keep steelmaking in Europe beneficial and economic. � www.steeltimesint.com

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34

ABSTRACT: IRONMAKING

Raw material granulation and sintering Granulation of raw materials is the single most important factor in controlling the permeability of the sinter bed and hence the productivity of the sinter line. Treatment of the binding water in a magnetic field reduced its surface tension enabling better binding of the small fraction size and so producing a stronger green ball generating fewer fines on feeding to the sinter bed, improving bed permeability and so enabling line speed to be increased by 11%. This paper reviews the literature and applies the findings to sinter machines at the Bokaro Steel Plant. By S Dhara, M Roy, M K Singh, S Acharya, G M Chowdhury & S K Pan SINTERING is a thermal process by which a mixture of iron ores, return fines, recycled products of the iron and steel industry (furnace dusts and mill scale), slag-forming elements, fluxes and coke are agglomerated by incipient fusion caused by heat produced by combustion of the solid fuel within the mass itself. The aim is to produce a sintered product of a suitable chemical composition, quality and granulometry to be used as burden material in the blast furnace. The products that are usually agglomerated have a particle size lower than 8mm, while the resulting sinter, has a screened size of 5-40mm, and can withstand the pressure and temperature conditions in the blast furnace. The first step is acquiring a homogenous mixture of diversified raw materials, so as to obtain a sintered product of suitable properties. The second stage is raw materials granulation. This process is based on the homogenisation of the raw mix in a mixing drum for several minutes with the addition of 6-8% water. The product of this process of granulation, ie ball formation, is subsequently delivered as a layer onto the continuously moving grates or ‘strands’ of the sinter line – the commencement of the third stage of sintering. The coke breeze within the product is ignited with gas burners at the entry end of the strand, while air is drawn down through the bed causing the fuel to burn. In the sintering process, strand displacement speed and gas flow are controlled (flame front) with the purpose of completing the coke burn prior to the

Primary water Raw mix belt weighter

Secondary water

Return Coke fines fines Raw mix hopper

Mixing drum

Flux (lime stone)

Blend (ores)

Burn through area

Ignition hood

Spiked roll crusher

Sinter strand Wind boxes

Cooling fans

Gas cleaning

Strand draught fan

Hot screens Hot return fines To cold screening

Rotating cooker To discharge bunker

Blast furnaces Cold return fines Fig 1. Process flow of conventional sintering plant

sinter being discharged. The temperatures reached in the process (1250-1350°C) cause the partial melting of the raw mix, that, after a series of reactions, crystallises into several mineral phases of different chemical composition and morphology (mainly hematite, magnetite, ferrites and gangue). The sintered product is broken up and screened when it reaches the end of the strand. As a result of the breaking and screening process, a fine fraction (<5 mm, return fines) is generated. These return fines are recycled to the beginning of the process. Fig 1 depicts the process flow of a conventional sintering plant.

Granulation mechanism The objective of balling is to eliminate fines by layering them on the coarser size fractions which act as seed or nuclei, that is, by an auto-layering mechanism of growth1. The product, known as a green sinter ball (quasi-particle), is larger in size – with a mean size of 3.02mm – and has a smaller size distribution than the raw feed.

Moreover, fines which react and melt readily at lower temperatures, are situated in the outer layers of green balls; while coarser particles, which are more reducible and resistant to hot degradation, form the core.

The full article can be found on the Steel Times International website.

Please click the following link: https://tinyurl.com/y93geasb

The authors are with the R & D Centre for Iron and Steel (RDCIS), Steel Authority of India Ltd (SAIL) e-mail: subhra@sail-rdcis.com October 2018

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09/10/2018 11:32:43

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36

DATA MINING AND MODELLING

This article presents a robust and flexible framework that combines theoretical development and several technological solutions based on the RapidMiner software to data mining of time-series, Kasem software for knowledge management and MongoDB for data management.

Finally, we demonstrate the use of the developed theory and the tools on an industrial case for prediction of the scattering of temperature in annealing furnaces.

By Amaury De Melo Souza1, David Arnu2, Fabian Temme2, Edin Klapic2, Ralf Klinkenberg2, Marcus Neuer3, Xavier Renard1, Patrick Gallinari4, Christophe Mozzati5, Claudio Mocci6, Gabriel Fricout1

Data mining and modelling IN recent years, state-of-the-art data mining approaches have provided invaluable insights for business. Where process experts can provide no obvious solution statistical models based on artificial intelligence techniques have gained

considerable attention and nowadays they are very often used to drive the process, increase its reliability and can even be applied to predictive maintenance applications. Most of the time, in the steel industry, the object studied in data mining

is the coil, and average values per coil are considered (average temperature, average rolling force, average pickling time). Besides the aggregated data that specifies each coil and its production life cycle, time-series data is largely available in steel plants due

1 ArcelorMittal Global R&D, Voie Romaine, 57280 Maizières-lès-Metz, France. 2 RapidMiner GmbH, Westfalendamm 87, 44141 Dortmund, Germany.

3 VDEH, Sohnstraße 65, 40237 Düsseldorf, Germany. 4 Université Pierre et Marie Curie, UPMC LIP6, Place Jussieu, 75252 Paris, France. 5 Predict, 19 Avenue de la Forêt de Haye, 54500 Vandœuvre-lès-Nanc. 6 SSSUP, Piazza Martiri della Libertà, 33, 56127 Pisa PI, Italy.

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DATA MINING AND MODELLING

to the vast amount of sensors collecting data for process control. It is desirable, therefore, to build both methodology and tools to refine this “classic” data mining approach to exploit “time-series” that can describe more precisely the behaviour of process parameters over the length of a coil rather than only average values. In order to overcome challenges posed by the large volume of data in time-series databases, new software tools are needed from both the theoretical and computing efficiency point of view.

Methodology: Developed framework Shapelets-based approach for information discovery Information extraction from time-series is a well-known problem and several approaches have been developed in the past decades[1-5] to tackle this challenge.

Among those, the most classical approach is to compute one or many statistical quantities from the time-series (mean values, standard deviation, correlation function, Fourier transformations), and use them as input variables (or ‘global features’) for machine learning tasks. In order to go beyond the classical approach of “global features” computation, we present our most recent development within the “shapelet” paradigm called “EAST” (Enumerate And Select discriminant Temporal patterns[5]).

The Shapelet algorithm (SA) is based on the presence of particular “motifs” or “patterns” (also called shapelets) in the time-series that contain valuable information regarding the process and, therefore, of the product quality. From the physics point of view, these “events” revealed by specific behaviour (for instance strong drop or rise, oscillations, or even more subtle patterns) of specific time-series, can trigger or be related to the occurrence of defects. One of the key challenges is how to identify such patterns in gigabytes of time-series. The traditional SA is based on the exhaustive search of motifs for all the time-series present in the training data set.

For each metal unit and for each candidate pattern found, the distance information between the metal-unit time-series and the candidate pattern is calculated. The distance is a measure of how likely there exists a sub-sequence in a given time-series of a given metal unit that is close to the candidate pattern, or how much a metal www.steeltimesint.com

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unit “contains” the specific pattern. The pattern is relevant only if it can discriminate between “good” and “bad” metal units in the training set. Thus, if the pattern is only present in a ‘bad’ metal unit, then the presence of this pattern is a key feature for classification. Nonetheless, the traditional SA becomes computationally prohibitive for large data sets. The EAST algorithm is a successful attempt to circumvent this problem (see Ref. 5 for a detailed description of the EAST algorithm), i.e. by combining random sampling with variable selection methods prior to the shapelet selection, while improving the performances of classification tasks when compared to benchmark (“global features”) for timeseries processing. Fig. 1 schematically shows how the EAST algorithm is used to transform the raw time-series information into a set of features that can be used by machine learning algorithms.

Technological Solutions: RapidMiner, KASEM and MongoDB The EAST algorithm was implemented in the data science platform RapidMiner[6], which offers a versatile framework to designing of data models for industrial cases. The server version of the platform contains a shared repository of data mining scripts and dashboard tools to visualise data and display model outputs[7]. Timeseries data mining scripts have also been developed, including pre-processing, timeseries transformations (derivative, filtering), feature extraction (including shapelets, and python interface), model building, model validation and cross-validation for robustness estimates.

One key part of our framework is a smart recording of the knowledge generated during the model building process with RapidMiner. This is accomplished through knowledge management tools based onn ontologies[8], which provide a formal way to describe industrial cases, where concepts from the metallurgy or steel production process are added (e.g., crystallography, phase transform, typical process conditions for different steel grades, steel defects).

This information can be linked to data mining concepts, such as machine learning, classification tasks; variable selection, training type, algorithm and so on.

Moreover, it benefits from past studies in order to speed-up the data mining process on new industrial problems. For example, past studies/models could have proven that

37

certain variables, and their transformations and relevant features extracted, significantly improved the results from the statistical modelling. The software used for ontology management and similarity search is Kasem[9] and it was integrated with the RapidMiner platform.

In the context of time-series, the data base is really seen from a “big data” perspective, where data mining software interacts with a very large instance of the data base, in a parallel way, storing considerable additional information in the database for further re-use.

The NoSQL MongoDB technology[10] is well suited for such interactions, allowing a very flexible data model (as presented in the next section) suitable for many different industrial cases.

Fig. 2 illustrates the framework developed for data mining and modelling of time-series within the context of steel production. Data coming from different parts of the production process in different formats are fed into the MongoDB database. All the data preparation and transformations (including the shapelets development) as well as model creation and deployment are handled by the RapidMiner Server that is connected to the database.

The last stage is handled by the knowledge management layer, where the most important inputs and findings are stored in Kasem tools that can be used for speeding up future analysis of similar industrial problems.

Application to industrial case Prediction of the scattering of temperature in annealing furnaces The scattering of annealing temperature for specific steel grades is known to be correlated to mechanical properties scattering. Therefore, it is highly desirable to be able to predict these scatterings that affect the quality of the product.

Furthermore, the underlying physical mechanisms leading to temperature scattering are highly complex and depend on surface properties (cleanliness, emissivity), microstructure as well as on metallurgical properties that will impact the calorific capacity of the steel and, therefore, its temperature during annealing.

Surface and metallurgy can be impacted by more or less all process steps from hot-rolling to annealing; this also leads to difficulties in terms of data quality and data collection. For instance, the length of the product can change during rolling, where parts of the coil can be cut, and head and October 2018

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DATA MINING AND MODELLING

EAST representation Minimal Euclidean distance between each drawn candidate and every time series

Time series (training set)

Draw candidates among every subsequence

#1 #2 #3

Set of candidates selection with advanced feature selection

Representation as a feature space

Min Eucl. distance between TS & candidates

Min Eucl. distance between TS & candidates

#1 #1 #2 #3 #4 ...

9.2 1.5

9.8 8.6

9.6 1.1

#2

8.5 1.3 ...

9.9 8.7

8.8 1.4

#4

...

...

#3 ...

9.2 1.5

9.8 8.6

9.6 1.1

8.5 1.3 ...

9.9 8.7 ...

8.8 1.4 ...

#4 Typical classifier training Fig 1. Schematic picture showing the discovery of discriminant patterns for time-series (TS). (1) Subsequences are enumerated from the data set; (2) the distances between subsequences and the time-series are computed; (3) a feature space is generated from the distances and (4) the discriminant set of patterns are used fed into feature selection schemes and subsequently used on classification tasks

Fig 3. (a) Time-series for cold-rolling speed extracted from the data set with a selected shapelet superimposed in red. (b) Distributions of shapelet distances for the population of “good” (green) and bad (red) products.

Fig 2. (left) Data model concepts. Various possibilities of “metal unit” and various associated process data collected in different process steps

tails are switched at each process step. This has to be taken into account while treating the data.

Our strategy is two-fold, firstly, we aim at predicting the temperature scattering at the beginning of the annealing furnace in the direct flame furnace pre-heating section. A quality label is defined and “bad” products are those that show high standard deviation (STD) for the pre-heating temperature (when compared to a defined average STD). Secondly, to predict the temperature scattering in the final step of annealing, i.e., the “soaking” area, and the same strategy for labelling the product is used. In both cases the goal is to identify several process conditions or events that lead to a high probability of being a “bad” product. The collected variables come from three process steps: hot-rolling (rolling temperature, cooling actuators, coiling temperatures, reduction, forces, speed), pickling (pickling October 2018

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speed, acid bath information), cold rolling (speed, traction and strength for each stand, thickness) and galvanising (speed, different annealing temperatures). The database contains ~500 products.

Fig. 3 shows a schematic view of the data structure with all the transformations needed to take into account data phasing for the different steel making process steps.

It starts with the “metal units”, which can be, depending on the situations, heat, slabs or coils. Each metal unit evolves through different process steps, and for each of these process steps, data are collected.

These data can be either time-series and/or “static variables”.

Each process step has its own referential related to the metal unit, and each time point of each time-series can be associated to one particular position of the metal unit. For instance, a time-series representing a temperature measurement

over the length of the coil at the hotstrip mill can be stretched to match the temperature measurements made in the annealing furnace, if the reduction rate applied at the cold-rolling mill is known.

The correspondence between time-series of the different process steps can be either computed when importing the data in the database, or computed “on demand”, only if required by the “data mining” algorithms.

The focus of the present work was the quality label associated to the whole metal unit. However, it is also possible to use continuous quality information over the metal unit lengths.

Modelling and results Several models with different classifiers and feature selection schemes where built using the RapidMiner platform. The data sets were split into train and test with 30% for testing. From a business point of view, the www.steeltimesint.com

09/10/2018 10:51:19

DATA MINING AND MODELLING

Bad products Good products

Cold rolling speed (a.u) 0

500

1000 Product length (m)

performance indicators are very important in order to compare prediction results quantitatively. In the present work, the true positive rate (TPR) at 10% of false positive rate (FPR), i.e., TPR@10%FPR, was used as performance indicator. For a RandomForest 10-fold cross-validation model, when the shapelets features extracted from the timeseries are included in the model (see Ref.[5] for details) a 10% improvement is observed when compared to the benchmark model, i.e., only “global features”.

In addition to the performances improvement, one of the most interesting added values of using the shapelet on such data sets is to highlight very specific patterns on specific variables leading to more scattered temperature, especially when the phenomena is not necessarily known by process experts beforehand. For instance, in Fig. 3(a), a time-series corresponding to cold-rolling speed is shown in blue and a particular discovered shapelet is highlighted in red. It corresponds to a strong drop in the speed before the end of the product. Fig. 3 (b) (right panel) shows the histograms of two types of product population coming from the scattering data set (“scattered” and “not scattered”) and highlights the fact that this shapelet is more frequently present in “scattered” product (smaller distances, i.e., red distribution is slightly shifted to the left) suggesting the role of the cold-rolling speed in temperature scattering in annealing furnaces.

For the prediction of scattering of the temperature in the pre-heating section, the cold-rolling mill variables were found to be the most important ones (70% of the most meaningful shapelets come from the cold-rolling time-series). On the other hand, when considering the soaking temperature at the end of annealing, the most important variables come from the hot-strip mill. This tends to illustrate the fact that variation www.steeltimesint.com

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39

-1

0

1

2

3

Shapelet distance to raw time-series

in the cold-rolling process can modify the surface of the material. Yet, cold-rolling parameters are less important on soaking temperature scattering, probably due to the temperature regulation loop which somehow compensates for variations observed at the beginning of the furnace.

Furthermore, the scattering analysis of soaking temperature highlights hot-rolling parameters as key explaining parameters (60% of the most meaningful shapelets).

These insights on the model obtained through shapelets are valuable for the understanding of physical processes in steel manufacturing.

Conclusion We presented a flexible and robust framework by combining in-house theoretical developments and technological solutions for the efficient data mining of time-series data and applied the methodology to the relevant industrial problems of the steel making process. In particular, the framework includes the data collection and pre-processing steps, the specification of a generic data model in MongoDB, the development of specific and interpretable algorithms for data mining based on the shapelets paradigm, the integration of these in RapidMiner, as well as model building and comparison to the benchmark models. Practical tools for capitalising the output of data mining studies were also developed based on Kasem software. This provides a very innovative way of speeding up the new analysis while taking benefit of process expert knowledge and past results/ experience in statistical modelling. � Acknowledgements The authors and partners are thankful to the EU-Research Fund for Coal and Steel for funding through the RFSR-CT-2014-00031 (PRESED) project.

References [1] Tak-chung Fu, A review on time series data mining. Enginnering Applications of Artificial Intelligence, 24, 164, 2011.

[2] B. D. Fulcher, N. S. Jones. Highly comparative feature-based time-series classification. IEEE Transactions on Knowledge and Data Engineering, 26, 3026, 2014.

[3] J. Lin, E. Keogh, L. Wei, S. Lonardi.

Experiencing SAX: a novel symbolic representation of time series. Data Mining and Knowledge Discovery, 15, 107, 2007.

[4] S. Zhong, J. Ghosh. HMMs and coupled HMMs for multi-channel EEG classification. In Neural Networks. IEEE. - Proceedings of the 2002 International Joint Conference, 2, 1154, 2002.

[5] X. Renard, M. Rifqi, G. Fricout, M. Detyniecki. EAST representation: fast discovery of discriminant temporal patterns from time series. ECML/PKDD Workshop on Advanced Analytics and Learning on Temporal Data, Riva Del Garda, Italy. 2016.

[6] I. Mierswa, M. wurst, R. Klinkenberg, M. Scholz, T. Eueler et. al. Yale: Rapid prototyping for complex data mining tasks. Proceedings of the 12th ACM SIGKDD international conference on Knowledge discovery and data mining, Philadelphia, 935, 2006.

[7] D. Arnu, E. Yaqub, M. Neuer, G. Fricout, X. Renard and P. Gallinari, A Reference Architecture for Quality Improvement in Steel Production. iDSC 2017, Salzburg 2017.

[8] A. Voisin, J-B. Léger, G. Medina-Oliva, M. Monnin, B. Lung. Health monitoring and prognostic assessment in a fleet context.

Annual Conference of the Society For Machinery Failure Prevention Technology, MFPT 2014, 2014.

[9] M. Monnin, J-B. Leger, D. Morel.

KASEM: eMaintenance SOA Platform.

Proceedings of 24th International Congress on Condition Monitoring and Diagnostics Engineering Management, 2017, [10] K. Banker, MongoDB in action. Manning Publications Co., 2011.

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DIGITALISATION

NLMK’s digital transformation Digital transformation is one of the main trends of industrial developments over recent years. According to the International Data Corporation, today two thirds of corporations from the Global 2000 list put a priority on digitalisation within their corporate strategy. It is a time of changes and even those who are still talking about the impossibility of breaking technological foundations understand the obvious irreversibility of change. By Kirill Sukovykh*

FOR NLMK Group, digital technologies represent another tool, which helps to maintain leadership in efficiency. This is an opportunity to speed up changes in production and business processes. In 2017, together with SAP, NLMK created the first Co-Innovation Lab in Russia. The laboratory focuses on research, ideation and prototyping of innovative solutions not only for our company, but for the entire metals and mining industry.

Digital steelmaking Today mining corporations, such as Rio Tinto, BHP Billiton and Fortescue Metals Group, have already tuned up the unmanned trucks operations at their mines. The steelmaker POSCO is close to the establishment of a smart plant. Many Russian industrial companies have also

launched major projects. With the help of digital technologies Russian companies try to predict equipment failures, to determine the required amount of raw materials with the maximum accuracy in order to get the desired parameters of finished products, to improve equipment efficiency, to track transport and employees.

There are a great many of those who try to fall into the world of digital technologies.

But it is important to bear in mind that steel companies have been shaping for decades, a certain culture, and technologies have been developed, both product range and business process have been automated.

Therefore, of course, it is not possible to change everything overnight, but everyone is moving this way applying different methods and approaches.

At the beginning of 2017 NLMK Group

and SAP created a joint innovation laboratory. The laboratory team consists of only 10 people from NLMK and SAP but we can engage experts from various functional areas of NLMK and SAP consultants with the necessary skills set to help with our projects.

We do not invent computer technologies and do not produce computer equipment.

The Laboratory objective is to evaluate innovative technologies and trends – such as machine learning, Internet of Things, virtual reality – and see if they can be applied to the current business processes of NLMK Group. Thus, we get the opportunity to confirm or oppose the efficiency of innovative technologies in reality, understand the economic benefits and feasibility of various solutions.

The Laboratory helps to consolidate technological experience.

* Co-Innovation Lab Lead, NLMK October 2018

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DIGITALISATION

Objectives of NLMK-SAP Joint innovation laboratory

Implementation of innovative ideas.

Development of new competitive capabilities of NLMK

Brainstorming the topic We started generating ideas during designthinking sessions. The first one took place in the SAP representative office in Potsdam.

There NLMK Group top managers proposed eight ideas including a smart warehouse and predictive maintenance. Four of those were taken to task: three machine learning and one IoT project.

The main feature of a design-thinking session is not a critical analysis in contrast to analytical thinking, but a creative process, which triggers the most unexpected ideas.

In fact, creativity makes people take an unconventional perspective on things that seems to be quite usual. This allows them not only to create something new but also to hit on non-standard solutions applied to various problems. This feature is in high demand in any field – it does not matter if you are a writer or a manager who tries to build up desired relations with a customer.

That is why, today such a creative way of thinking is one of the main business trends. Indeed, if you master this skill, you can become a successful “designer” of any business process.

Today employees of all levels including top managers and operational personnel, participate in design-thinking sessions.

Within one year more than100 ideas were developed during several sessions and workshops. At least 10 of them may lay down the foundation for innovations.

When an idea is approved, a prototype development starts and takes about six months. It cannot take any longer otherwise a lot of changes, which might be critical for the project, can take place.

October 2018

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Partnership with other processoriented partners, foreign mining and steelmaking companies and universities

Creation of a platform for development of SAP innovative solution strategy in mining and steelmaking industry

Personnel positioning Creation of a prototype 3D-Employees positioning system based on SAP SCP is one of the first projects of the joint innovation laboratory. The prototype was created on a real Hot-Dip Galvanising Line at NLMK’s Lipetsk site. The system allows the plant to receive and analyse information on changes in equipment operation and all personnel movements in real time. Events, which are recorded and stored in the database, analyse employees’ actions and prevent accidents, reduce safety risks and improve operating efficiency.

At the beginning of the shift an employee puts a tracker into his chest pocket. This tracker can show where this employee is at any particular moment. The tracker is additionally equipped with accelerometer, help button and vibration sensor, which turns on to warn a person, if, for example, he enters a hazardous, gas contaminated place.

Many companies produce such systems nowadays, but a real production facility imposes a number of process restrictions.

First of all, in production conditions, due to shielding and radio interference, the signal of the device is unstable. Secondly, due to the low capacity of the battery, the tracker often needed recharging. Thirdly, in order to have the right positioning, we had to know where an employee was within a half-metre accuracy, which most technical solutions could not provide.

We had several design-sessions to elaborate possible scenarios of the system operation: crossing a hazardous area, activation of the help button on the

tracker, fall or loss of consciousness of an employee, methane or carbon monoxide emission detected. With the assistance of SAP specialists and the National Centre of Internet of Things, a process-oriented partner in the framework of this project, a required technology was selected - UWB (Ultra-Wideband). Positioning accuracy and resistance to the rough conditions of production premises, such as radio interference and shielding, characterise UWB. We developed a new solution using a SAP Cloud Platform, RTLS-UWB positioning system; LoRaWan 3D-visualisation and wireless data transfer technologies.

Today a number of positioning products are present on the market and this is far from being an innovation. However, we are the first who combined a RTLS positioning system and data collection from LoRaWAN environment sensors in the SAP Cloud platform with visualisation of all the data on a 3D-model in the Unity game engine.

Such a seemingly complex software and hardware package can be easily replicated and upgraded according to the needs of any division concerned.

Innovations in machine learning In 2017 NLMK Group was the first in Russia to switch over to the SAP S/4HANA, a most advanced IT-platform. It will not only speed up the current business processes, but also implement cloud solution technologies, Internet of Things and machine learning into production without installation of any additional systems.

Currently, the SAP S/4HANA solution is www.steeltimesint.com

09/10/2018 15:33:24

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DIGITALISATION

Results of design-sessions Beginning of 2017

Beginning of 2018

Only top managers participate

Top managers and operational personnel participate

integrated with more than 20 information and production systems of Russian and European companies within the NLMK Group. More than 6,500 users are working with it. On the basis of this new platform a number of projects were implemented within the NLMK-SAP joint innovation laboratory.

We developed a model that compares invoices with bank statements and automates financial routines. Across the company’s foreign assets the operational accuracy of the model was 90%. But at the Russian sites the programme had to learn the word “advance payment”. In the group’s Russian divisions around 25% of all the payments are advance payments.

The model under testing did not “know” about this and for each payment tried to find an open account. Such comparison was not possible, which led to mistakes.

We changed the current model so that it corresponded to the needs and special aspects of the company. And now, based

RFID

on linguistic analysis of the text in a bank transaction (purpose of payment), the model identifies the advance payment correctly in 95% of cases.

The same procedure was followed during implementation of the cash flow forecasting project.

We had a request from the financial division of the company, employees of which wanted to know when a contractor was going to pay a certain invoice over a one-month period. The task was not easy, but we managed to implement it.

Having analysed historical data regarding contractors’ payments in the previous periods, the model could forecast with a 90% probability when the contractor was going to pay his next invoices. Forecast accuracy of the model can be improved using more complicated types of machine learning model, for example, recurrent neural networks.

Another project implemented with machine learning is the creation of a

Wi-Fi +RFID tags

LoRa

Positioning accuracy 1-3m 1-3m 1-3m Speed of data transfer 1-3m

GPS

Mb/s

-

9km

200m-1,2km

50-100m

-

Mark operation time

several years several years several years

+

6 mon. and more

GSM

1-2m 5m 50m

6Mb/s

50m-200m* 50m-200m

October 2018

30cm

BLE

300kb/s

Effective range without recharge Resistance to radio

NLMK.indd 3

1-3m

UWB

predictive model, which can predict failure of one of the HSM 2000 units and thus significantly reduce costs of unscheduled downtime. By means of the model it is possible to analyse the mill sensor information and make a forecast of operating conditions for the nearest time period. If the parameters are deviating from the standard, the operator gets a corresponding warning.

The existing forecasting timeframe – only seven minutes – is not enough to take the required measures and prevent a failure. However, we confirmed the possibility of similar forecasting models building using SAP technologies in practice and determined possible ways of further development in this direction.

Chat bots and digital speech-controlled assistants, virtual and augmented reality, block chains, drones which will measure the quantity of bulk materials at the outside storages as well as drones for inventorytaking procedures, are the key lines along which the innovation laboratory plans to develop in 2018.

Today, the laboratory has only taken the first steps of the journey but even today, a number of Russian steel and non-ferrous metal companies have shown a real interest in our projects. The systems are developed in line with the most advanced technologies: support of Internet of Things, machine learning and processing of big data files.

They will be able to solve business tasks, which used to be tough to implement due to a lack of technological development and high costs. In the near future the prototypes created by the laboratory will not only be able to cover the business processes of NLMK Group, but will also become a foundation for the development of future steelmaking. �

-

several years ~2 days

5 days

+

www.steeltimesint.com

09/10/2018 15:33:26

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46

PERSPECTIVES: TEBULO

“Making heavy industry lighter” Industrial automation specialist Tebulo, based in Canada and the Netherlands, is very busy in the steel industry and sees plenty of opportunities globally within the steel market. In this special Q&A, Rob Beentjes* and Hans Spaans**, argue that Tebulo robotic systems make heavy industry lighter.

1. How are things going at TEBULO? Is the steel industry keeping you busy?

Things are going great, we are very busy in the steel industry with new developments and selling our standard products, like coil markers and de-strappers to make the industrial world safer, more efficient and more reliable.

busiest in Europe and China. In Europe with specials and de-strappers and in China with mainly standard coil markers.

The expectation is that the US-market will follow this development.

Rob Beentjes (left) and Hans Spaans

7. “Vehicles will continue to be predominantly steel.” Right or wrong?

In my opinion he is right. The developments in steel grades are going on and on. Those steel grades are more sophisticated and really competitive.

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

We see a lot of opportunities in the steel industry. Many process steps need to be robotised, because of safety and efficiency reasons. A hot topic at the moment is ‘robotics and the 4 Ds: Dirty, Dull, Dangerous and Difficult. Robots are commonly applied in situations where it’s dirty, dull and dangerous. The fourth D of ‘difficult’ can now be added due to the availability of sophisticated sensor technology, making it possible to have the robot perform difficult and precise work.

3. Where does TEBULO mostly conduct its business?

We conduct our business mainly in the steel and aluminium strip sector. We can divide our product range into four pillars namely: ‘identification’, ‘de-strapping’, ‘product handling’ and ‘specials’. For example: hot strip mills, cold strip mills, pickling lines and so on.

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

We are covering the globe with our robotic equipment from our offices in the Netherlands and Canada. In addition to the company’s own branch offices in the Netherlands, Tebulo Industrial Robotics operates an extensive network of agents worldwide. At this moment, we are the

are competing with one another in different applications, such as in automotive and construction. Innovation in the steel industry is still strong. There are more new types of steel becoming available, such as high-entropy alloys, which are as light as aluminium and as strong as titanium alloys.

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

We have developed a robotised solution for a prominent French steel producer for the currently manually operated repair station for 30-tonne steel coils with a width of up to 1.85 metres. Every employer in the steel industry has a legal obligation to offer his or her employees a safe workplace. At the aforementioned repair station, operator safety has been an issue for a long time.

We recently received a big contract from a large German steel producer to solve completely different handling issues.

6. Where do you stand on the aluminium versus steel argument?

More and more the two types of materials

8. “Within the next 15 years or so there could be a nearly even split between steel, aluminium and carbon fibre content in the average North American produced light vehicle.”

So said the Centre for Automotive Research. What’s your view?

I am not really sure if this is going to happen. Carbon fibre has definite benefits in terms of weight reduction and emissions, but it is very expensive and difficult to recycle. In other words, substituting it for steel or aluminium is not really an option, because the result is a higher total cost of ownership.

9. Is aluminium ‘greener’ than steel?

Aluminium needs an incredible amount of energy, much more than for the production of steel. In terms of sustainability, aluminium has a greater potential, because, for recycling, only a tiny portion of that energy is needed to re-melt. However, recycled aluminium is rarely the preferred form and, therefore, it is still produced, usually with a very high expense of ‘non-green’ energy. Aluminium is not greener than steel.

* CEO and ** CTO of Tebulo October 2018

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PERSPECTIVES: TEBULO

10. “…any hint of doubt when it comes to predictions of climate doom is evidence of greed, stupidity, moral turpitude or psychological derangement.” This was Bret Stephens writing in The Wall Street Journal.

What’s your view?

The bold statement contains a lot of truth and we should not stick our head in the sand. Living in a country that is, for a large part, under sea level, the global industry and governments should act.

robotic equipment for the steel, aluminium and heavy industry, in order to realise a high system uptime, a fast return on investment and a low Total Cost of Ownership (TCO).

11. In fact, talking of ‘green issues’ and emissions control, how is the steel industry performing in this respect?

Things are going well, but not fast enough.

In order to realise the international goals for ‘Klimaatverdrag 2020-2050’ steel producers will constantly have to optimise their processes and ultimately invest in new steelmaking technology with a lower carbon footprint and focus more on recycling. In Europe already a lot of companies in the steel industry are taking steps to reduce emissions. They are taking responsibility. In high polluting countries, like China, steps to reduce emissions should be strengthened.

16. How should the industry react to global overcapacity?

For the short term in Europe we should focus on innovation. It is only a matter of time before labour and energy costs in China are on the same level as in Europe, because the Chinese government wants to change the country’s image from low-cost producer to a high tech industry. That’s why there is more competition between Western and Eastern technologies.

12. In your dealings with steel producers, are you finding that they are looking to companies like TEBULO to offer them solutions in terms of energy efficiency and sustainability? If so, what can you offer them?

Sustainability has always been one of our top priorities. Our robots are the most energy efficient on the market. For our marking robots, we only work with certified paint systems and ink, which are even approved in California (USA).

15. How do you view Tebulo’s development over the short-tomedium term in relation to steel?

We constantly innovate in order to offer the best solution possible. Through openness and transparency we invite customers to help us understand their needs.

17. What is TEBULO’s experience of the Chinese steel industry?

Because the Chinese are quick learners, we will witness growing competition in the near future. They always try to keep an installation as simple as possible (KISS). Our engineers often try to create perfect products, with features that most customers might never use. The result is a higher TCO and higher maintenance costs.

18. How optimistic are you for the

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global steel industry?

In the short-to-medium term steel producers will have to deal with overcapacity and strong competition, as well as rising raw materials and fuel prices.

The steel industry has to find solutions for these problems in the short term, otherwise the future will be very challenging.

19. What exhibitions and conferences will TEBULO be attending in the near future?

We will be exhibiting at the following exhibitions: ALU 2018, METEC 2019 and AIST 2019. To stay in touch with the market and developments in our field, we will attend other exhibitions.

20. TEBULO is based in Canada and The Netherlands. What’s happening steel-wise in those countries?

We expect more investment from the industry in the USA, due to the American policy of getting production back to the USA. So they have to invest in robotising to upgrade out-dated production in order to compete with Europe and China. The Netherlands is home to TATA Steel Europe, which is investing in a new caster and upgrading its existing lines for high strength steel grades. We are close to many European steel producers.The European market is competitive and characterised by high-quality products. It is also the region where Tebulo Industrial Robotics has installed a large number of robotics solutions. �

13. How quickly has the steel industry responded to ‘green politics’?

Every country in the world has its own rules and regulations. Producers located in regions with higher emissions requirements have a strong feeling that they are treated unfairly if they have to compete against international competitors who live in regions with weaker regulations. To level the playing field globally, it is necessary to realise that global co-ordination is needed.

14. Where do you lead the field?

We produce very innovative and reliable www.steeltimesint.com

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HISTORY

300 Years of industrial might Pennsylvania, once considered the steel capital of the world, has experienced more than 300 years of iron and steel making. For three centuries, the state’s iron and steel industry has had both national and global influence. By LeAnne Zolovich* PENNSYLVANIA’S iron and steel industry began in 1716 when Thomas Rutter established Rutter’s Bloomery in Berks County, in southeastern Pennsylvania.

The following year, Samuel Nutt founded Coventry Forge, a few miles south of Rutter’s Bloomery in Chester County.

Pennsylvania quickly became the ironmaking centre of colonial America, largely due to its natural resources: iron ore deposits, forests for charcoal, coal beds, limestone deposits, and rivers for water power. Sizeable and growing markets for iron also existed.

Over the next decades, the colony’s iron industry experienced rapid expansion due to a rising demand for iron products.

The success of America’s iron industry led Britain to attempt to reduce production in the colonies. Britain was unsuccessful, however. Pennsylvania became the colonies’ leading producer and by 1775, a year before the colonies declared independence, America was one of the world’s largest iron producers.

Following independence, iron production spread from eastern to western Pennsylvania as iron ore and coal were discovered. The opening of canal networks and railroads led to better transportation and increased iron production. The mid1800s witnessed the use of coal and coke (instead of charcoal) as fuel, rolling mills replacing forges, unskilled labour replacing skilled labour, and the formation of unions to protect workers.

The time also saw the transition from iron to steel. Steel was first made cheaply and successfully in the 1850s and it quickly replaced iron as the metal of choice because of its strength. Pennsylvania began to mass produce steel in the 1870s.

Bessemer converters and open hearth

furnaces transformed steelmaking into a profitable endeavour, and Pennsylvania took great advantage of these changes.

By 1900, the United States produced the most steel in the world. Pennsylvania was the leading state in production and emerged as the “steel capitol of the world,” a title the state would hold for decades. The early twentieth century was also marked by consolidation and organisation of the steel industry, especially in Pennsylvania.

The greatest merger of all occurred in 1901, when 10 companies merged to form United States Steel Corporation, centred in and around Pittsburgh, PA. US Steel was the largest business enterprise ever launched in America and during its first year, the corporation made 67% of all steel produced in the country. In 1904, a second merger in Pennsylvania occurred. Bethlehem Steel Corporation formed, becoming America’s second largest steel producer, behind US Steel. These two companies dominated not just Pennsylvania steel making, but the national industry, for decades.

The top producer By the 1950s, the United States had six steelmaking districts, and the PittsburghYoungstown district was the top producer.

In 1954, the US steelmaking capacity was 124,000,000 tons and Pennsylvania’s capacity was more than one quarter of the nation’s whole. Almost half of the state’s population also lived in a community with some type of iron or steel making facility.

Steel had been woven into the fabric of Pennsylvania and American life.

In the 1960s the United States began to experience strong competition from foreign steel markets. Other nations adopted new technologies like the basic oxygen

furnace and continuous casting, which out-performed the open-hearth furnaces and ingot casting that many American steel mills used. Thus began the collapse of the American and Pennsylvanian steel industries. Layoffs, bankruptcies, and closures dominated the 1980s, 1990s, and early 2000s. Companies that adopted new technologies and implemented conservative policies, however, made it through the collapse. Two examples in Pennsylvania are US Steel (headquartered in Pittsburgh) and ArcelorMittal Coatesville, the longest operating steel site in America.

Although Pennsylvania’s steel industry is much reduced from past centuries, it remains a crucial part of the state’s economy and an influence on the national industry. The state’s current steel producers include more than 20 companies operating more than 30 sites. For many years to come, Pennsylvania will continue to have influence on the American and world steel industries. � Post Script: Pennsylvania steel has been manufactured into American icons like the Golden Gate Bridge, Empire State Building, World Trade Centre, US Navy ships and submarines, and so much more.

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

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