Steel Times International October 2015

October 2015 Vol.39 No.7 – www.steeltimesint.com

IRON MAKING STEEL MARKETS PERSPECTIVES

STEEL TIMES INTERNATIONAL – October 2015 – Vol.39 No.7

WORLD STEEL ASSOCIATION CONFERENCE

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CONTENTS OCTOBER 2015

Picture courtesy of CMI Groupe

October 2015 Vol.39 No.7 – www.steeltimesint.com

IRON MAKING STEEL MARKETS PERSPECTIVES

STEEL TIMES INTERNATIONAL – October 2015 – Vol.39 No.7

WORLD STEEL ASSOCIATION CONFERENCE

Sept.indd 1

11/4/15 11:09 AM

EDITORIAL Editor Matthew Moggridge Tel: +44 (0) 1737 855151 matthewmoggridge@quartzltd.com

2 Leader 4 News The latest steel industry news from around the world 10 China update Little to smile about in China 12 USA update Rising Chinese exports a global issue

1

10

Consultant Editor Dr. Tim Smith PhD, CEng, MIM Production Editor Annie Baker

SALES International Sales Manager Paul Rossage paulrossage@quartzltd.com Tel: +44 (0) 1737 855116

17

Area Sales Manager Anne Considine anneconsidine@quartzltd.com Tel: +44 (0) 1737 855139

15 Iron ore Alderon/Hebei alliance ready to roll

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

Advertisement Production Martin Lawrence

23

23

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

17 Conference report: World Steel Association To infinity... and beyond!

Ironmaking 23 Innovations in blast furnace charging

Steel Times International is published eight times a year and is available on subscription. Annual subscription: UK £168.00 Other countries: £240.00 2 years subscription: UK £302.00 Other countries: £432.00 ) Single copy (inc postage): £38.00 Email: steel@quartzltd.com

33 Stockhouse-based de-icing, drying and pre-heating

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Published by: Quartz Business Media Ltd, Quartz House, 20 Clarendon Road,

39 Role of Al2O3 and MgO on viscosity of blast furnace slag

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Steel markets 43 Demand weakens in US OCTG market Perspectives 46 Overcapacity creates opportunities

©Quartz Business Media Ltd 2015

History 48 Cornwall’s industrial heritage ISSN1475-455X

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Contents oct.indd 1

46 October 2015

11/4/15 11:15 AM

2

LEADER

Regulating foundation industries into oblivion...

On two occasions this month I have spent time in the BBC Radio 5 Live studios answering questions on the ailing British steel industry. My on-air ‘appearances’ were the result of SSI UK and Tata Steel closing plants and slashing jobs in Redcar and Scunthorpe in the United Kingdom – and it’s all China’s fault.

The Chinese economy is slowing but China is producing more steel than it needs. Result? It ‘dumps’ excess metal on foreign markets, the global steel price dips and steel producers struggle to survive. It’s happening all over the world, but unlike in North America – where anti-dumping and countervailing duties are imposed on ‘rogue nations’ like the Chinese – Europe’s lumbering bureaucratic machinery is slow, and some would say unwilling, to react.

Something must be done, but I doubt if David Cameron, the British Prime Minister, will jeopardise his rather dangerous nuclear power deal with the Chinese by berating Xi Jingping for dumping cheap Matthew Moggridge steel on the UK market.

Editor The Chinese problem is one that requires a multi-lateral approach. Xi Jingping matthewmoggridge@quartzltd.com needs to be told – in no uncertain terms that Seite China2 can’t expect to be granted Anzeige A1/4-TS-HP_Inserat 1/4 S-D 31.07.13–08:35

B

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‘market economy status’ (which it craves) if it doesn’t behave like one. Make no mistake: Chinese steel producers, unlike those in the west, don’t have to generate a return on capital. We’re back to what western steel producers crave most: a level playing field. But will they ever get one and does anybody really care? Not the UK government, it seems.

The proverbial ‘man on the Clapham omnibus’ must be wondering whether the British Government is serious about the survival of its homegrown heavy industry and, indeed, the much talked about ‘northern powerhouse’ it promised to create if a high speed rail link is established between London and ‘the north’. It’s all beginning to sound like empty rhetoric.

How is it that we find ourselves in a position where, through countless European directives and punitive green taxes, we have regulated our foundation industries into virtual oblivion? Why have we given steel producers in other regions of the globe an unfair advantage when it comes to competing on the world stage?

Applauding ‘globalisation’ is fine, but why should western steel producers play with both hands tied behind their backs?

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October 2015

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4 NEWS IN BRIEF

INDUSTRY NEWS

Samson wins ThyssenKrupp contract ThyssenKrupp Europe’s coal yard in Duisburg, Germany, has recently purchased a BF0415 boom feeder from Samson, part of the Aumund Group.

Andreas Hartung of ThyssenKrupp Europe said the decision to buy the boom feeder from Samson was ‘due to their experience in the industry, proven reliability and the durability of their equipment.’

Tata opens new UK R&D centre

McDonald travels to China Chris McDonald, managing director of the UK-based Materials Processing Institute (MPI) travelled to China earlier this month to address delegates at the 10th Biennial Conference of the Chinese Society of Metals.

McDonald believes that the MPI can act as an effective source of information on published research from China.

According to McDonald, his presence at the conference will encourage engagement with other companies, not just in the Far East but across Europe.

The MPI is based in Teesside in the United Kingdom.

ArcelorMittal restructuring agreement ArcelorMittal, the world’s largest steelmaker, and IMETAL, a stateowned Algerian company, have reached an outline agreement on restructuring the shareholding of ArcelorMittal Algeria, ArcelorMittal Pipes and Tubes Algeria and ArcelorMittal Tébessa.

Algeria’s government wants the country to be self-sufficient in steel while ArcelorMittal has adopted a strategy of ‘asset portfolio optimisation’. Both plans, therefore, seem to fit together nicely.

Braun wins major Chinese contract Braun Maschinenfabrik GmbH of Austria has received a major order from Shijiazhuang Iron & Steel (SHIGANG) of China. The company, part of the HBIS Group, has ordered six large-scale, high-performance abrasive cut-off machines and associated equipment for a large plant relocation and modernisation project.

For more steel industry news and features, visit www.steeltimesint.com

October 2015

Industry news oct.indd 1

Lord Kumar Bhattacharyya and Hans Fischer at the official opening Tata Steel’s new research centre at the University of Warwick’s Science Park has officially opened, marking phase one of the steelmaker’s UK R&D relocation.

Engineers and researchers will develop a range of new materials to meet the future needs of customers in areas such as renewable energy generation and fuel-efficiency.

Lord Kumar Bhattacharyya, chairman of the Warwick Manufacturing Group, and Hans Fischer, chief technical officer of Tata Steel’s European operation, opened the new centre.

Hans Fischer said that the new facility demonstrated Tata’s determination to develop innovative

products to help its customers become more competitive. “We will be working with world-class scientists and researchers to create new steels for customers who are shaping the low-carbon technologies of tomorrow,” he said, adding that he was delighted to be strengthening Tata’s ties with UK academia.

The new centre will house a combination of metallurgists, product engineers, data scientists, researchers and technicians.

In the next development phase further laboratory facilities will be built, ultimately leading to the establishment of a hub for advanced steel research, which will accommodate Tata Steel’s three profes-

sorial chairs in steel research at Warwick, together with their academic research teams and an array of research equipment.

John Collingham, surface engineering department manager at Tata, and one of the first people to move into the new building, said that the university campus was a dynamic and inspiring place to work, with many new buildings under construction, including the National Automotive Innovation Centre and the Advanced Steel Research Centre.

“Our new facility and our team of highly motivated and enthusiastic researchers will be the catalyst for a new generation of innovation,” he said.

Tata sheds 1,200 UK jobs Tata Steel in the UK is planning to shed 1,200 jobs at the company’s Scunthorpe plant and jobs at two plants in Scotland.

The move comes as the British steel industry is still reeling from SSI UK’s decision to close its blast furnaces and coke ovens at Red-

car on Teesside at the heart of UK steel production. Surging imports of cheap steel from China and a strong pound are being cited as key reasons behind the decision.

According to Roy Rickhuss, general secretary of the Community union, the government needs to

take action. Tony Burke, assistant general secretary at Unite said the industry had reached crisis point.

According to Burke, the government should keep SSI’s Redcar plant up and running to enable the British steel industry to benefit from big projects like HS2.

Sustainability under discussion Steel in a Sustainable World is the name of a series of CEO insights available from the World Steel Association (worldsteel) and designed to highlight the role of the global steel industry in creating a

sustainable future for the planet.

There are seven CEOs involved in the project and they are John Ferriola of Nucor Corporation, Paul O’Malley of Bluescope, Nippon Steel & Sumitomo Metal Corpo-

Dr. Edwin Basson

John Ferriola

ration’s Kosei Shindo, JSW Steel’s Sajjan Jindal, Louise Schorsch of ArcelorMittal Americas, Martin Lindqvist of SSAB AB and Paolo Rocca of Techint Group.

CEO Insights and films will be published weekly. The first, which is now available, highlights the steel industry’s environmental standards. Edwin Basson, director-general of worldsteel said that the CEO insights were a tremendous way of demonstrating ‘our members’ commitment to the future of steel.’ www.steeltimesint.com

11/4/15 9:44 AM

INDUSTRY NEWS

Euro solutions for EU ETS EUROFER has published a position paper setting out how it believes the European Union Emissions Trading System (EU ETS) can be improved.

Axel Eggert, EUROFER’s director-general (pictured right) argues that the current proposal for the EU ETS post-2020 ‘puts the viability of the steel industry at risk’, including its most efficient producers.

EUROFER claims that recent research shows that the current EU ETS set-up would cost the steel industry around 34 billion Euros in direct and indirect carbon costs between 2021 and 2030, wiping out the industry’s ‘already squeezed margins’.

The European Commission recently discussed the fourth reform of the EU ETS, which Eggert believes ‘presents an existential

threat to the 330,000 jobs that the industry supports’.

The latest EUROFER position paper suggests a number of ‘practical solutions’, including 100% free allocation for the top 10% best performing installations for sectors at risk of ‘carbon leakage’. It calls for ‘realistic benchmarks’ based on real industry data and reflecting

actual technological progress, and asks for the removal of the linear reduction factor of benchmarks and the cross sectoral correction factor in order to prevent free allocation falling below technically and economically feasible levels.

Lastly, it wants compensation for indirect carbon costs on the level of best performers throughout Europe.

EUROFER believes that its solutions would ‘better reconcile industrial competitiveness in the post-2020 EU ETS and strengthen overall environmental progress.

“Fundamentally, world steel demand is expected to rise between now an 2050. As a necessary product for economic activity, steel will continue to be produced globally.

The question for EU policy makers is: Do they want this production to take place in Europe, or abroad?”

Raw materials prices down The China Iron and Steel Association (CISA) claims that raw materials costs for steelmaking dropped sharply over the first eight months of 2015.

The average steel scrap price for

the period dropped 30.9% when compared with the same period in 2014.

Data collected from monitored steelworks showed that the average price of imported iron ores

and Chinese homegrown iron ores decreased 40% and 35% respectively year-on-year over the period.

The price of coking coal dropped 18% and metallurgical coke fell 20%, according to CISA.

Circular economy for metal Boosting the Circular Management of Metals is the title of a position paper released by the combined European metals industry outlining how it looks forward to ‘an ambitious circular economy package supporting growth, innovation, competitiveness and jobs’.

The gist of the document is that using materials efficiently creates ‘more with less’ and delivers greater value for society with fewer inputs, according to Eurofer (the European Steel Association).

“Metals are perfectly suited for a circular economy as they can be infinitely recycled and are, as such, true enablers of that same circular economy,” Eurofer claims.

There are, however, a number of challenges and opportunities, according to Eurofer, for improving the circular management of metals in the economy and these include: enhanced recycling of valuable materials; formal recogwww.steeltimesint.com

Industry news oct.indd 2

nition of permanent materials and the fostering of their collection; product design; the quality use of waste and end-of-life products and by-products; investment in innovative technologies to improve collection; sorting and quality recycling; and consistency across different legislations to support recycling.

The European metals industry, says Eurofer, seeks better recognition for the role of metals in circular economy, claiming that metals and metal products offer durability, conductivity, versatility and recyclability and can contribute significantly to improving sustainability in consumer and business applications.

5

NEWS IN BRIEF NLMK signs with Novatek

Russian steelmaker NLMK has signed a long-term contract with Russia’s largest independent gas producer Novatek. The gas company will supply all of NLMK’s production facilities.

The contract comes into effect on 1 January 2016 and provides for the supply of annual volume of 2.8 billion cubic metres of natural gas, covering all of NLMK’s natural gas needs, which were previously met by Gazprom and other suppliers.

Nucor JV with Yamato Kogyo A joint venture between Nucor and Yamato Kogyo Co (NYS) is installing a $75 million quench and selftempering process at an NYS plant in Blytheville, Arkansas, USA, to be used on its 1.4Mt of Mill 2 rolling capacity.

The project is likely to be commissioned during H2 2016.

Upon completion, NYS will be able to produce ASTM A913 Grade 65 and Grade 70 structural sections with a high-strength, low-alloy grade chemistry offering excellent weldability while achieving good toughness at low temperatures, claims Nucor.

NLMK’s Verona upgrade NLMK, Russia’s largest steelmaker, which claims to be one of the most efficient producers in the world, has completed the commissioning of upgraded press equipment at its Verona plate plant in Italy.

The 9 million Euro upgrade will enable NLMK Verona to expand its product mix and increase the reliability and stability of deliveries to customers as well as reduce production costs.

SSI UK closes Redcar UK works The Thai-owned SSI UK has announced plans to close its Redcar steelworks with a loss of 1,700 jobs in the Teesside area.

The news of closure follows hot on the heels of plans to simply ‘pause’ production, but now Britain’s second biggest steelmaker has made it official and, according to some news reports, by mothballing its Redcar plant, the company threatens to ‘bring the curtain down on 160 years of steelmaking’ in the Teesside area.

For more steel industry news and features, visit www.steeltimesint.com

October 2015

11/4/15 9:45 AM

6

INDUSTRY NEWS

Chinese crude down 3% China’s crude steel production for September 2015 was down 3% at just over 66Mt. Pig iron output was 56.69Mt, down 4.9% on the year and steel production was down 0.6% to 94.69Mt, according to figures released by China’s National Bureau of Statistics (NBS).

The figures were part of a report on China’s economic development between Q1 and Q3 of 2015.

Between January and September 2015, China’s crude steel output totalled 608.94Mt, down 2.1% on the year. Pig iron output was down 3.3% at 528.38Mt and steel was up 1.1% at 840.24Mt, according to NBS figures.

• Steel prices in 36 large and mid-sized Chinese cities declined by 0.5% on average between 1218 October, according to China’s Ministry of Commerce.

Cold-rolled steel sheet dropped 1.1% on the week and hot-rolled strip steel was down 0.9%.

Source: China Metals

US import permits down 8% Based on the US Commerce Department’s most recent Steel Import Monitoring and Analysis (SIMA) data, the American Iron and Steel Institute (AISI) reports that steel import permit applications for September reached 2.89Mnt (million net tons). This represents an 8% decrease from the 3.13Mnt recorded in August and a 6% decrease from the August Final imports total of 3.06Mnt. Import permit tonnage for finished steel in September was 2.22Mnt, down 10% from the final imports total of 2.47Mnt in August. For the first nine months of 2015 (including September

SIMA and August Final), total and finished steel imports were 30.9Mnt and 25.1Mnt respectively, down 5% and up 3% from the same period in 2014. The estimated finished steel import market share in September was 25% and is 30% year-to-date (YTD).

Finished steel imports with large increases in September permits versus the August final included standard rail (up 334%), cut length plates (up 59%) and cold rolled sheet (up 19%). Products with significant year-to-date increases versus the same period last year include rebar (up 48%), line pipe (up 35%), standard pipe (up 21%), tin plate (up 15%), sheets

WISCO focused on cost cutting

Fives’ furnace

contracts finalised Fives Group has signed contracts to design and supply four new reheating furnaces this year in India: two for the Rourkela Steel Plant, and two others for another Indian steel mill on India’s western coast.

Primetals Technologies Japan, has entrusted the French company with the design and supply of two 300 tons/hr walking beam furnaces for reheating steel slab. They will serve a new 3Mt/yr hot strip mill installed at the Steel Authority of India Ltd. (SAIL) Rourkela Steel Plant, located in the eastern state of Odisha. The mill is scheduled for commissioning in 2018 and will provide coil for a proposed autosheet JV with ArcelorMittal.

Fives will supply its Stein Digit@l Furnace AT technology, equipped with the AdvanTek combustion system and controlled by the level 2 Virtuo® Edge-R package.

Fives claims that its AdvanTek burners provide ‘a unique feature of fuel flexibility’ allowing customers to use available fuels efficiently and easily.

Stein Digit@l Furnace AT technology was awarded the Fives Engineered Sustainability accolade for being best-in-class.

October 2015

Industry news oct.indd 3

and strip hot dipped galvanised (up 13%) and wire drawn (up 11%).

In September, the largest finished steel import permit applications for offshore countries were for South Korea (306kt net tons), up 1% from August Final, Japan (188kt net tons) down 13%, Germany (153kt net tons) up 80%, Turkey (148kt, down 13%) and China (127kt net tons, down 19%). Through the first nine months of 2015, the largest offshore suppliers were South Korea (3.9Mnt, down 1% from the same period in 2014; Turkey (2.1Mnt) up 48%; and China (2.08Mnt) down 11%.

SMS Group wins Shandong contract The SMS group has been taken on by Shandong Iron and Steel Rizhao to supply a complete flat steel complex including a newly developed quality assurance system and operational know-how. The flat steel complex will comprise a hot strip mill, a pickling tandem mill, a hot-dip galvanising line and two annealing lines.

The German production technology provider will supply the electrical and automation systems for the all the equipment and claims that Shandong will have one of the most up-to-date plants in the world. In addition to the production of tube grades and cold strip for the construction and household appliances industries, the focus will lie on sophisticated steel grades for the automotive industry. The equipment is scheduled to commence operation in 2017.

TMK’s puts in strong financial performance A strong performance by TMK’s Russian division, more efficient working capital management and better financial contracts with Russian customers have resulted in stronger cash flow for the steelmaker and significantly reduced debt in Q3 2015.

The company shipped 2.9Mt of steel pipe over the first nine months of 2015, down 7.1% year-on-year due to a decrease in

sales at the company’s American division, which was partially offset by increased shipments at the Russian division, which increased 9% year-on-year. During Q3 2015 shipments increased 1.5% quarter-on-quarter to 977kt.

Seamless pipe shipments during the first nine months of the year fell 2.7% year-on-year to 1.79Mt and were down 1.3% during Q3 at 588kt.

Wuhan Iron and Steel (WISCO) has taken sole charge of the Fangchenggang steel project following the termination of a JV with Guangxi Liuzhou Iron and Steel.

Guangxi Iron and Steel was established to develop the Fanchenggang project in the eponymous coastal city. The project received state approval in May 2012 and is permitted to have an annual capacity of 8.5Mt of iron, 9.2Mt of crude steel and 8.6Mt of steel products.

Originally the two companies were supposed to jointly develop the plant in the coastal city of Fangchenggang.

WISCO recorded a deficit in June and July and is now focused on cutting costs and reducing losses.

The company made a net profit of 522 million yuan in H1 2015, down nearly 10% from 2014.

By withdrawing outsourcing businesses during H1 2015, WISCO managed to cut costs by 90 million yuan.

Meanwhile, Chongqing Iron and Steel Company plans to raise 4.96 billion yuan to repay bank loans and invest in a POSCO cold-rolled sheet project and a zinc-coated steel sheet venture, both of which aim to increase the proportion of automotive steel on the company’s production line.

A total investment of 6.2 billion yuan is required and annual production capacity is expected to reach 2.4Mt once the projects are up and running. www.steeltimesint.com

11/4/15 9:45 AM

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PRODUCTION 60%

8 DIARY OF EVENTS November 01-02 2015 ASEAN Iron and Steel Sustainability Forum Kuala Lumpur, Malaysia. Organised by South East Asia Iron and Steel Institute.

This event covers waste management, safety management and emissions control.

For further information, log on to www.seaisi.org 03-05 MPPE 2015 Leoben, Austria. Organised by the Austrian Society for Metallurgy and Materials (ASMET).

This wide-ranging event covers many topics including materials synthesis and processing.

For further information, log on to www.mppe.org 08-10 31st International Ferro-Alloys Conference Hilton Bomonti, Istanbul. Organised by Metal Bulletin Events.

Over 600 delegates from more than 400 companies will be in attendance at this event, held in one of Istanbul’s most luxurious hotels.

For further information, log on to www.metalbulletin.com/ events/ 10-13 Metal Expo Moscow. Organised by Metal Expo.

A major metals industry exhibition in the Russian capital.

For further information, log on to www.metal-expo.ru 12 STAHL 2015 CCD Congress Center, Dusseldorf.

Organised by Steel Institute VDEh. A one-day conference attended by senior executives from the international steel industry.

For further information, log on to www.stahl-online.de 17-19 Stainless Steel World 2015 Maastricht, the Netherlands. Organised by KCI Publishing BV. A comprehensive conference with the added benefit of excellent networking opportunities.

For further information, log on to www.stainless-steel-world.net/ ssw2015 For more steel industry news and features, visit www.steeltimesint.com

October 2015

Industry news oct.indd 4

INDUSTRY NEWS

Chinese imports up 5% China shipped 5.7Mt of finished steel to Latin America between January and August 2015, up 5% on the 5.4Mt shipped during the same period last year.

Over the same period, regional finished steel production went down 3% compared with last year.

According to Alacero (Latin American Steel Association) total exports of Chinese finished steel continue to grow, totalling 65.4Mt over the first eight months of 2015, up 28% on the previous year. Latin America accounted for 8.7% of China’s exports, 1.9 per-

centage points below January to August 2014 figures.

Latin America received 712kt of Chinese finished steel in August, up 21% on July’s 590kt and roughly the same as August 2014.

Latin American destinations for Chinese finished steel were Central America (961kt and representing 17% of the region’s total) followed by Brazil (928kt, 16%); and Chile (793kt, 14%).

Over the same period, the Latin American nations that most increased imports of Chinese finished steel were Argentina (up

373%); Dominican Republic (up 173%); Cuba (up 97%); and Mexico (up 60%).

Exports of Chinese finished steel products to Brazil decreased by 32%. In Peru they were down 17% and in Columbia and Chile they decreased by 12% and 3% respectively. These countries represented 16%, 9%, 8% and 14% respectively of imports from China.

Flat products exports from China accounted for 2.9Mt and long steel exports totalled 1.8Mt of which bars accounted for 793kt and wire rod 741kt.

For a full country-by-country listing visit: www.worldsteel.org/statistics/crude-steel-production.html

Global demand down 1.7% Global steel demand will decrease by 1.7% to 1.5Mt in 2015 following growth of 0.7% the previous year, and is forecast to show growth of 0.7% in 2016, reaching 1.5Mt, according to the World Steel Association’s (worldsteel) short range outlook.

Hans Jürgen Kerkhoff, chair of the worldsteel economics committee, said at the 49th World Steel Association conference in Chicago that the steel industry had reached the end of a major growth cycle based on rapid economic development in China. He said that China’s economic slowdown meant that the industry faced low investment, financial market turbulence and geopolitical conflicts in many developing regions of the world.

“The steel industry is now experiencing low growth, which will last for the time it takes for other developing regions of sufficient size and strength to produce another major growth cycle,” said Kerkhoff.

He added that the current headwinds will calm down in 2016 based on the belief that the Chinese economy will stabilise. “Of particular concern is the vulnerability of the emerging economies to external shocks,” he said, adding that India was expected to show resilience to the global slowdown.

“On a positive note, the recovery of steel demand in the developed economies, even though the momentum has weakened a little,

remains on track,” said Kerkhoff.

The deceleration of the Chinese economy following rebalancing measures on the investment and real estate sectors, has turned out to be more severe than expected.

Chinese steel demand is expected to decrease by 3.5% this year and by 2.0% in 2016 following peak demand in 2013.

According to worldsteel, ‘there is an increasing risk associated with this economic slowdown and the consequent financial market volatility, which has become a global concern.’

The performance of key emerging and developing economies started to deteriorate in 2012 due to internal structural issues, lower commodity prices associated with China’s slowdown and escalating political instability in some cases.

Russia and Brazil experienced severe contractions in steel demand and there were geopolitical tensions in the Middle East, Africa and Ukraine, which are continuing to have a negative effect.

Steel demand in India and Mexico, however, and other countries in the ASEAN and MENA regions, is expected to maintain growth momentum despite an adverse external environment due to positive domestic demand and progress in reform.

With the exception of China, steel demand in emerging and developing economies will grow by 1.7% this year and by 3.8% in 2016, despite major slowdowns in

some countries.

Strong momentum experienced in developed economies last year ‘weakened considerably’ in 2015 and while US economic fundamentals remain solid, US steel demand is expected to show negative growth this year due to currency appreciation and a slowing energy sector.

Hans Jürgen Kerkhoff

Lower oil prices have led to a broadening of the recovery momentum in the European Union (EU) and this has been helped by low interest rates and a weak Euro.

Japan and Korea are expected to show negative growth due to adverse structural forces weighing on their economy.

According to worldsteel, developed economies’ steel demand will contract by 2.1%, but positive growth of 1.8% is expected next year. Excluding China, world steel demand will grow by 0.2% in 2015 and by 2.9% in 2016. www.steeltimesint.com

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10

CHINA UPDATE

Little to smile about in China Steel prices in China are expected to fluctuate at the bottom due to sluggish demand and a supply glut, according to a recent report by China Metals.

THERE had been a marginal rebound in August in the lead-up to China’s V-Day parade, when the Chinese Government demanded that steelmakers cut production to reduce pollution levels.

The China Iron and Steel Association’s (CISA’s) Complex Steel Price Index (CSPI) recorded 63.36 at the end of August, up 1% from a month earlier, but the index was still down by just over 30% when compared to one year ago.

The price index for long steel – which is used primarily in the construction industry – rose nearly 3% at the end of August when compared to July 2015, but the price index for sheet steel declined 0.82% compared with a 7.82% drop the previous month.

Taking a longer-term view, the long steel price index dropped 28.38% year-on-year, while sheet steel fell 32.72%.

Meanwhile, the global average steel price has dropped for 12 straight months, indicating weak demand on the international market.

The Chinese government’s policies targeted at maintaining growth have benefitted domestic steel demand to a certain extent as infrastructure investment grew 19.4%, up 4.8 percentage points on July’s figure. Electricity consumption rose 1.9% and was up 1.8 percentage points when compared with the previous month’s figures.

Fixed asset investment grew 10.9% yearon-year between January and August, 0.3 percentage points slower than from January to July. Infrastructure investment increased 18.4%, up 0.2 percentage points over the first eight months of 2015 when compared to the first seven months.

Investments Planned investments for new projects grew 2.7%, up 0.3 percentage points from January-July, accelerating growth for four straight months. Furthermore, planned investments of all projects under construction grew 5.1%, up 0.9 percentage points when compared to the January-July period. Property development investment grew 3.5%, up 0.8 percentage points on the previous seven-month period.

October 2015

CHINA UPDATE.indd 1

China produced 57.61Mt of pig iron in August, down 5.1% year-on-year. It produced 66.94Mt of crude steel, down 3.5% on the year, and 94.49Mt of steel, up 0.4% on the year.

The daily average crude steel output in August 2015 was 2.15Mt, up 1.68% from the previous month.

China exported 9.73Mt of steel and imported 1.02Mt with net steel exports equivalent to 9.04Mt of crude steel.

Apparent consumption of crude steel totalled 57.9Mt, down 7.4% on the year, but up 1.9% when compared with July 2015. There was a 3.5% decline in crude steel output.

Domestic consumption China’s domestic consumption of steel shrinks quicker than the production of steel, meaning the supply glut remains despite lower production. Between January and August 2015 China produced 543Mt of crude steel, down 2% on the year and its net steel export was the equivalent of 65.54Mt of crude steel. As a result, domestic crude steel apparent consumption was 477Mt over the period, down 5.5% on the year but 3.5 percentage points higher than the production decline.

Chinese social steel inventories had dropped for five straight months by August, demonstrating weak market expectations, according to China Metals, and by the end of August social steel inventories in major Chinese cities dropped to 10.59Mt, down 9.29% from a month earlier (July) and down 14.12% on a year-on-year basis. CISA says that social inventories of steel continued to fall through September.

Monitoring by CISA of the combined steel inventories of five major steel categories stood at 8.9Mt by mid-September, down 2.44% over the previous month.

CISA figures show that only hotrolled coil experienced growth, albeit just 1.3% to 1.7Mt by mid-September.

Rebar inventories recorded 3.4Mt, down roughly 8% month-on-month, and a bigger decline than other major steel categories, including cold-rolled coil, thick and medium plate and wire rod.

Raw materials Imported iron ore prices dropped 4.82% in August, according to CISA, following two straight months of rebound.

Home-grown iron ore concentrate powder rose by 0.79% on July figures while steel scrap was up 4.16%. Coking coal remained flat and metallurgical coke fell 3.8%.

Narrower movements in raw material costs lent support to steel prices, analysts claimed.

Company news Wuhan Iron and Steel (WISCO) has taken sole charge of the Fangchenggang steel project following the termination of a joint venture with Guangxi Liuzhou Iron and Steel.

Guangxi Iron and Steel was established in order to develop the Fanchenggang project in the eponymous coastal city.

The project received state approval back in May 2012 and is permitted to have an annual production capacity of 8.5Mt of iron, 9.2Mt of crude steel and 8.6Mt of steel products.

The two companies were supposed to jointly develop the plant in the coastal city of Fangchenggang.

WISCO, incidentally, recorded a deficit in June and July this year and is now focused on cutting costs and reducing losses. The company made a net profit of 522 million yuan in H1 2015, down nearly 10% from the previous year. By withdrawing outsourcing businesses during H1 2015, WISCO cut costs by 90 million yuan ($14 million).

Meanwhile, Chongqing Iron and Steel Company plans to raise 4.96 billion yuan ($780 million) to repay bank loans and invest in a POSCO cold-rolled sheet and a zinc-coated steel sheet project, both of which aim to increase the proportion of automotive steel on the company’s production line. A total investment of 6.2 billion yuan ($975 million) is required and annual production capacity is expected to reach 2.4Mt once the projects are running.

Source: China Metals www.steeltimesint.com

11/3/15 12:32 PM

12

USA UPDATE

Rising Chinese exports a global issue Those who thought that the USA was the only market flooded by cheap Chinese steel should think again. China’s steel exports are cause for concern throughout the global steel industry, argues Manik Mehta* JUST look at South Africa where ArcelorMittal is closing two steel plants.

China’s cheap steel supplies have added to the problems at ArcelorMittal’s South African operations, hit by falling demand.

US analysts, familiar with South Africa’s steel industry, say that Chinese steel export prices are at least 25% lower than local South African production prices, making locally produced steel unprofitable.

Consequently, ArcelorMittal has been urging the South African government to raise import duties on Chinese steel. The scene in South Africa seems all too familiar for those in North America where the steel industry has aggressively lobbied to get anti-dumping duties levied on Chinese steel imports.

China’s steel overcapacity has resulted, mainly, from that country’s economic slowdown. China’s 2014 steel production, according to the World Steel Association and other sources, was about 825Mt, with production exceeding demand of nearly 715Mt. With domestic demand further weakening, China has had “no choice” but to increase the export of its overcapacity; its January-July 2015 figures showed a 27% jump in China’s steel exports to nearly 68Mt. A strong dollar While the US steel industry has a point in saying that China’s overcapacity has hit the industry, an unemotional analysis would show that other factors have also helped swell imports into the US. An undervalued Chinese currency and a strong US dollar have attracted steel imports from China. There is a lack of consensus among analysts as to whether trade cases initiated by US steel companies will deter China’s exports to the US. Steel imports from China rose from 29.2Mt in 2013 to 40.2Mt in 2014. Data released by

Mario Longhi, US Steel’s CEO, described the strong dollar as the “icing on the cake”

the US Department of Commerce suggest that total steel imports stood at 19.7Mt during the first half of 2015.

Vietnam and India According to the American Iron and Steel Institute (AISI), capacity is likely to grow further, considering that Vietnam and India have capacity expansion plans and have the potential each to add some 38Mt and 190Mt respectively by 2025.

While many critics describe US antidumping and countervailing duties as a protectionist trend, others defend the right to curb unfair Chinese trading using currency manipulation, subsidies and other incentives as a ‘lesser evil’. Ironically, imports do not appear to be declining despite trade lawsuits. Steel analysts attribute the high level of imports to the fact that importers are not averse to taking risks and placing orders.

As a result, countries facing cases of unfair trading practices continue to ship products to the US. Foreign suppliers’ defiance of trade cases also stems from their belief that they can successfully defend themselves against such cases.

Richard Chriss, executive director and international trade counsel for the American Institute for International Steel (AIIS), speaking at the Steel Market

Update summit in Atlanta last month, recalled the remarks made by former WTO director-general Pascal Lamy to the effect that protectionism does not protect, nor does it strengthen economies or save jobs. Governments can protect people by promoting domestic economic growth and social protection, not by resorting to short-term policies that may benefit the few at the expense of the many. Chriss remarked that the US steel industry is one of the most protected sectors of the economy. “Currency manipulation is an important issue to take to the table with China and others,” said Chriss, “but let’s not forget what we have been doing: quantitative easing, pumping more money into the economy to strengthen the dollar.

Do we really want to go down that road?”

Steel imports, he reminded delegates, are important to consumers because the US is consumer-led and price competition matters.

Others argued that trade laws and cases served corporations but did not take into account the domino effect when imports declined and jobs were lost.

A strong US dollar and a slowing Chinese economy have opened the floodgates for a huge surge of cheap, foreign steel into the USA. With the recent devaluation of the Chinese yuan, expect more Chinese steel to enter the US market.

US Steel, the country’s second largest producer after Nucor, had two disappointing quarters of the year, resulting in 1,700 workers losing their jobs and reducing the company’s workforce to 34,000.

Mario Longhi, US Steel’s CEO, described the strong dollar as the “icing on the cake”, and blamed foreign producers for unfairly dumping steel in the US for several years, calling for revamped trade laws to deal with the problem.

* USA correspondent October 2015

USA.indd 1

www.steeltimesint.com

11/3/15 4:37 PM

USA UPDATE

13

W E

C O N V E Y

Q U A L I T Y

Conveying and Cooling for the Iron and Steel Industry Hot-rolled steel The US Department of Commerce (DOC) initiated an investigation early last month into the alleged illegal dumping of certain hotrolled steel flat products by seven countries. Hot-rolled steel is used in appliances, automotive products, heavy machinery, machine parts, commercial construction and transportation equipment.

The DOC started its anti-dumping and countervailing duty probes into imports of hot-rolled steel flat products from Brazil, South Korea and Turkey and anti-dumping duty investigations into imports of these products from Australia, Japan, the Netherlands and the UK. The biggest steel producers in the USA – Nucor, US Steel, AK Steel, Steel Dynamics and ArcelorMittal USA – had complained that a flood of heavily subsidised imports of hot-rolled steel flat products from these nations were causing significant injury to the US steel industry.

The petitions, which were submitted in response to surging volumes of cheap imports of hot-rolled steel flat products from the seven countries since 2012, also charge that producers in Brazil, South Korea, and Turkey benefit from a number of countervailing subsidies provided by their respective governments. The petitions identified 33 different subsidy programs in Brazil, 41 in South Korea and 17 in Turkey. Imports of hot-rolled steel flat products from these countries have risen about 73% between 2012 and 2014.

The import surge rush continued this year, rising by a further 54% year-over-year during Jan-May 2015. According to the DOC, imports of certain hot-rolled steel flat products from these seven countries in 2014 were valued at roughly $2 billion. The six complainants argue that foreign steel suppliers dump these products in the American market at unfairly low prices that significantly undercut the prices of US steel makers. Imports of subsidised steel continue to be of major concern to the US steel industry that directly or indirectly supports over a million jobs. The US International Trade Commission found “reasonable indications” that a barrage of subsidised imports of certain corrosion-resistant steel products from China, India, Italy, Korea, and Taiwan caused material injury to the US steel industry.

Essar Steel Meanwhile, news about India’s Essar Steel showing an interest in buying US Steel’s Canadian plants in Hamilton and Nanticoke is creating a buzz in US steel circles.

The report first appeared in the Hamilton Spectator. Essar, which had purchased Algoma Steel in 2007, had not, at the time of filing this update, made a formal bid. But local representatives, waiting for the takeover, say it would be a “dream come true for the city” which goes through anxious moments whenever a company fails or is unable to survive. Essar has so far refrained from making public comments.

US Steel has been working with Range Resources to develop special steel pipes for oil and gas wells.

Previously, oil and gas companies relied on foreign manufacturers for this equipment, but now US Steel offers a local option.

A report by the Department of Environmental Protection suggests that only half of all oil and gas wells in Pennsylvania, for example, utilise all-American made pipes.

The new option will now enable US Steel to compete against cheap steel imports and lower demands. t

www.steeltimesint.com

USA.indd 2

October 2015

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15

IRON ORE

Alderon/Hebei alliance ready to roll Canada’s Newfoundland and Labrador Province hosts the Kami Iron Ore Project, which is now set for construction by its majority owner, Alderon Iron Ore Corp. By Michael Schwartz* OF crucial importance is the strategic partner and customer which has agreed to take 60% of Kami’s production, Hebei Iron & Steel Group, China’s largest steel producer. In fact, all of Alderon’s production is spoken for, as Glencore has agreed to take the remaining 40%.

Kami lies next to two mining towns in Western Labrador – Wabush and Labrador City – and is surrounded by three operating mines. In addition, there are transportation links that will carry ore to and from a year-round deep-sea port.

The resource Kami includes 305 claims totalling 7,625 ha. It currently contains an NI 43-101 resource estimate of 1.1 Bnt of measured and indicated at 29.6% iron and another 447.8 Mt inferred at 29.5% iron. Within Kami is the key Rose deposit hosting 668.5 Mt proven and probable reserves at 29.5% iron.

Alderon’s ambition is an initial commercial production of 8Mt/yr at a grade of 65.5% iron with a 30-year mine life.

BBA Inc of Montreal, Stantec Consulting of St John’s and Watts, Griffis and McOuat Limited of Toronto undertook project feasibility studies and the results were made public in January 2013. They showed pre-tax NPV8 of US$3.24 billion, pre-tax IRR of 29.3%, payback within 3.8 years, capital costs of US$1.27 billion excluding sustainable capital, and operating costs of US$42.17/t concentrate.

Alderon carried out a total of 62,247m of drilling on the Kami Property in 2010, 2011 and 2012. For example, in 2012 the percentage of iron found in the ore ranged from 26.3% to 34.7%. Geologically speaking, the iron-ore bearing formation in the Wabush lake area is the Sokoman Fm, also known as the Wabush Iron Fm. This formation overlies the Wishart Fm quartzite where it is present, but also shares its basal contact with the Denault Fm. dolomite. It is sub-divided into Lower, Middle and Upper Members. The Middle Member forms the principal iron ore unit, comprising a 45m – 110m thick sequence of quartz-magnetite combined with varying presences of quartz-specularitemagnetite, quartz-specularite-magnetitecarbonate, and quartz-specularite-

magnetite anthophyllite gneiss and schist units.

Ownership Alderon first acquired a 100% interest in the Kami Project from Altius Minerals Corporation in December 2009. Altius retains a 3% gross royalty on the project.

In order to develop Kami into an operating mine, Alderon established a strategic partnership with Hebei Iron & Steel in March 2013 and Hebei paid C$119.9 million for a 25% interest in the Kami project. The remaining 75% is whollyowned by Alderon.

Tayfun Eldem, Alderon’s president and CEO, summed up the link with Hebei as follows: “Hebei’s importance to Alderon is three-fold. Initially, Hebei invested $182 million in both Alderon and the project itself. Next, being China’s largest steel-maker, Hebei helps validate our project and gives it viability. Thirdly, 60% of production goes to Hebei, named for the province that immediately surrounds Beijing (the remaining 40% of the ore will go to Glencore).”

Storage and transportation Kami is within 2.5km of a road, 15km from a common carrier (open access) railway with lots of excess capacity,

and 15.5km from the high-voltage grid serving the region. The multi-user railway will transport the material to a deep-sea port, which will provide year-round access to the global market. The terminal will be located at Point-Noire within Sept-Iles Port, Québec North Shore, along the Gulf of St Lawrence.

The new multi-user port facility has been built with $55 million from the Federal Government, $55 million from the Port of Sept-Iles, an arms-length federal entity, and another $110 million from five mining companies including Alderon. The port construction is almost complete and commissioning is expected soon.

Some 3.5km of new rail track will be built to join the existing Arnaud Company Railway (Chemin de fer Arnaud – CFA) several hundred metres southwest of the terminal. The line will be designed to accommodate a minimum of 120 cars full of iron ore concentrate and will be used exclusively for unloading Alderon iron ore concentrate.

Also intended is a 54,400m2 storage yard. The substrate of this yard will be lined so as to ensure that run-off water from rain and snow is collected and treated to avoid the iron oxide and hydroxide particles arising from red water.

Tayfun Eldem outlines the route for the iron ore: “The common carrier railway conveys the iron ore from the mine; the railway’s core capacity is 80Mt/yr, with less than 30Mt/yr currently being used.

The port from which the mineral will be transported is Sept-Iles, a multi-user facility, where construction is almost complete. Once extracted, the normal sea route for the iron ore is down the Atlantic, around the Cape of Africa and through the Indian Ocean to whichever port Hebei nominates, including Qingtao and Dalian.”

The last words are also Eldem’s: “Kami Project is really our bread-and-butter. It is fully permitted and ready to go into construction once our final funding is in place – this is taking longer than originally anticipated due to the fall in commodity pricing. Our management team is in place and we have access to critical infrastructure of rail, port and power supply with contracts for power and port already signed.” t

* Mining correspondent www.steeltimesint.com

iron ore.indd 1

October 2015

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WORLD STEEL ASSOCIATION CONFERENCE

To infinity… and beyond!

17

Futurist Vivek Wadhwa explains his brave new world to delegates

The 49th World Steel Association Annual Conference, held in Chicago, star-gazed into the future and found a world of disruptive technologies and smart manufacturing that is set to revolutionise heavy industry and change the way we think about steel making. Matthew Moggridge* boldly goes where no man has gone before ADDRESSING delegates at the start of the 49th World Steel Association annual Conference in Chicago, Dr. Edwin Basson, director-general of the World Steel Association (worldsteel), told delegates that while the current climate was not the easiest of times for the steel industry, it was cyclical. “Don’t be too depressed,” he added, handing over to Wolfgang Eder, chairman of the management board and CEO at voestalpine AG. Eder briefly discussed climate change and said that it must be addressed locally and globally, flagging up what was going to be discussed during the first session of the conference, namely the future role and development of the manufacturing industry. But first he handed to over to Charles Schmitt, president of SSAB Americas and chairman of the American Iron and Steel Institute (AISI) who reminded delegates that steel was an integral part of the USA and that Chicago, the host city for this year’s conference, has a rich architectural history built on steel.

Later, some delegates would take an architectural boat trip along the Chicago River to see at first hand the role of steel in the development of the so-called Windy City.

Schmitt name-checked the Wallis Tower – a 1,454-foot structure built on columns of steel – and Marina Tower, adding that with steel ‘we can build virtually anything we can imagine.’ He said that we must continually remind ourselves of the power of steel.

The big subject for the first day of the conference was innovation and to kick off we heard from Vivek Wadhwa, who was described on the programme as a futurist and a fellow of the Singularity University and Stanford Law School as well as a director of research at Duke University. What Wadhwa didn’t know about technology was probably not worth knowing and from the beginning he had delegates enthralled – or maybe baffled.

For the next two hours delegates were bombarded – or rather blinded – with science. In short they had embarked upon a tour of the future. “You have to start thinking differently,” Wadhwa advised, explaining how the guidance computer on the Apollo spaceship that put Neil Armstrong and Buzz Aldrin (I almost wrote ‘Lightyear’) on the moon was nothing compared to the processing power found in an average smartphone.

The pace of change The thrust of Wadhwa’s presentation was the frightening speed of technological change and advancement and how important it was not be left behind. He mentioned how digital cameras have improved over a billion times from when they were first introduced in the midseventies.

Industrial robots, said Wadhwa, make it cheaper to manufacture goods in the USA than in China and while once complex technologies, such as voice, face and speech recognition software, might have required the computing power of a mainframe computer in the past, today the same power can be found in mobile technologies, such as the smartphone and tablet.

“Children, not just Google, are building robots,” Wadhwa told his audience, because, these days, robots are inexpensive to build. And talking of Google, he said that within the next three years, cars would drive themselves virtually everywhere. “Complexity is free,” he told delegates, moving on to discuss another ‘disruptive technology’, that of 3D printing, which is currently in its infancy

* Editor, Steel Times International www.steeltimesint.com

CONFERENCE REPORT world steel.indd 1

October 2015

11/3/15 11:00 AM

WORLD STEEL ASSOCIATION CONFERENCE

19

“Global population growth means that there are now three billion more people with purchasing power on the planet than in 1960 and they are all consumers

”

with money to spend on goods and services.

Dr. Jaana Remes but will mature over the coming years – don’t blink or you might miss it.

Wadhwa moved on to another mind-bending area of technological development, that of nanomaterials. A nano, he said, represented one billionth of a metre. Now that’s small, but according to Wadhwa, the smaller you can make a material, the more powerful it is. Nano materials, he explained, were spreading like wildfire. The most flexible material on the planet – Graphene – is arguably the

medical researcher. With medicine going digital too, Wadhwa admitted that he’d trust his smartphone more than his doctor because the latter is only in business because we humans have a tendency to fall ill, whereas the smart phone is there to prevent illness. “We have become data and doctors have become software,” he said, reminding your correspondent of Philip K Dick’s Dr. Smile, the suitcase psychiatrist in The Three Stigmata of Palmer Eldritch – a book you might care to read if you’ve

and tablets, and electric cars will be joined by drones capable of delivering pizza.

“There are a trillion opportunities happening at the intersection of exponential technologies,” said Wadhwa – now there’s a tee shirt slogan, I thought.

“Disruption is happening everywhere,” he added – and there’s another one – but I wonder how many delegates were left wondering, “How the hell does this relate to the fire and brimstone of steel production?”

made it this far in the article.

That humans have become data might have something to do with genomics where breakthroughs, claimed Wadhwa, occur weekly. He introduced the notion of printed organs and bionic enhancements.

The Six Million Dollar Man, delegates were told, is now a reality, but it’s now the $6,000 dollar man in line with the downward cost curve of technological development.

According to Wadhwa, 100% of our energy needs will be met by solar power within 14 years and the price of electric car batteries will plummet as costs are falling fast.

In Wadhwa’s brave new world there will be ‘reverse urbanisation’ where distance is no barrier, speed limits are a thing of the past and the land currently taken up to accommodate parked cars will be recovered for other uses. We will all live in 3D printed houses, AT&T will be at a loose end as smartphones begin to leapfrog PCs

Knowledge transfer Dr. Jaana Remes, of McKinsey Global Institute, along with Michael Tomera, partner and US Metals Leader at PricewaterhouseCoopers (PwC), discussed the next era of growth in manufacturing, followed by Caralynn Nowinski Collens of UI Labs who discussed the transfer of knowledge from academia to industry.

According to Remes, global trends are dramatically changing the manufacturing landscape. She argued that companies, policy makers and universities must work together to build the capabilities needed to compete in the new technology age.

Remes argued that manufacturing contributed disproportionately to exports, innovation and productivity growth.

Between 1995 and 2005, for example, the manufacturing sector contributed to 37% of productivity growth compared with all other sectors. In 2006 its share of employment was just 14% and it made a negative contribution (-24%) to employment growth between 1996 and 2006.

On the positive side, its share of exports was 71% of the total market and its share of private sector research and development was 81%.

Remes highlighted five ‘disruptive’ trends, the first being demand. She claimed that global population growth means that there are now 3 billion more people with purchasing power on the planet than in 1960 and they are all consumers with money to spend on goods and services. Under ‘factor inputs’ she argued that global costs are decreasing while talent, resources and capital are becoming increasingly scarce. Value chains and processes are changing with the introduction of new technologies – such as smart manufacturing, nanotechnology,

“Are we changing fast enough?” Michael Tomera

best conductor of electricity and heat and will eventually replace silicon in transistors, he said.

Disruptive technologies The new buzz phrase is ‘disruptive technologies’. Wadhwa argues that disruption equates to opportunity, although I’m sure Kodak would beg to differ – or perhaps just beg. In 1996 the company had a market capitalisation of $28 billion, but by 2012 it had gone bankrupt thanks to the advent of digital technology – a disruptive technology for Kodak’s traditional celluloid film business.

I’m sure that the company’s bosses were using stronger words than ‘opportunity’ when they checked their bank statements.

Delegates would have been forgiven for wondering if they had fallen into a Philip K Dick novel by mistake, especially when Wadhwa proffered the notion of mobile phones as medical devices offering instant cardiology tests and taking on the role of www.steeltimesint.com

CONFERENCE REPORT world steel.indd 2

October 2015

11/3/15 11:01 AM

20

WORLD STEEL ASSOCIATION CONFERENCE

exponentially and computing costs were going down. That said, industry is illprepared to capitalise on these trends and that is because there is a need to close the ‘university-industry’ innovation gap, she argued.

“Technology is advancing at an incredible pace. Big data is getting bigger, computing power is growing exponentially and computing costs

”

are going down.

Nowinski Collens

robotics and the circular economy – and, where policy and regulation are concerned, there has been a shift towards ‘re-regulation’. While pro-growth policies have been introduced there are still unclear rules for innovations.

Stability, argues Remes, brings with it great uncertainty and she suggests that the best way to react is to join forces. “Companies, policy makers and universities must work together to build the capabilities needed to compete in the new environment,” she argued.

For sustainable growth in manufacturing to be achieved, Remes calls for greater investment in advanced manufacturing technologies, the development of critical supply networks, advanced manufacturing skills and an alignment of national and local government policies, incentives and actions.

The changing workplace PwC’s Michael Tomera carried on the hitech theme and asked ‘are we changing fast enough?’

Innovation, he argued, is changing the workplace and the worker, highlighting what he called the ‘next manufacturing toolbox’ in which can be found artificial intelligence, ‘big data’ and analytics, autonomous drones and robotics, 3D printing, the ‘internet of things’ and virtual and augmented reality.

In a survey published last year on disruptive manufacturing innovations, PwC asked what will be the biggest impact of robotics on the USA’s manufacturing workforce. 35.2% of respondents said new job opportunities to engineer advanced robots and robotic operating systems, while 27.6% believed it would mean the replacement of workers and 25.7% said it would mean more demand for talent to manage the robotic workforce. Only 9.5% believed it would create more jobs as a result of increased manufacturing.

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CONFERENCE REPORT world steel.indd 3

Tomera argued that 3D printing (a disruptive technology) means quicker product launches – months, not years – as there would be just one step between having the idea and producing the end product.

Nearly 30% of respondents to PwC’s aforementioned survey said that the most disruptive effect of 3D printing on US manufacturing would be the restructuring of supply chains and the threat to intellectual property (almost 28%). 13.8% of survey respondents pointed to changed customer relationships while just over 10% said it would weaken the economic viability of traditional high volume production.

Increased competition for talent and a reduced need for transportation and logistics both received a 9.3% response.

‘Pervasive connectivity’ Tomera argued that the ‘internet of things’ had ushered in an era of ‘pervasive connectivity’ characterised by deepening data connectivity, more data-driven products and strategies and a ‘dataenabled’ workforce. He said that the Internet of things was characterised by monitoring, control, optimisation and autonomy, with sensors monitoring product condition, embedded software controlling product function and optimised product usage through greater monitoring and control. Putting it all together leads to autonomy and interconnectivity with others systems.

Tomera touched briefly on cyber security, saying that there were more global security incidents this year than there were mobile phone users, according to another PwC survey, with the number of organisations adopting an information security strategy jumping from 77% in 2013 to 81% today.

UI Labs’ Caralynn Nowinski Collens said that technology was advancing at an incredible pace. Big data was getting bigger, computing power was growing

Academia and commerce There is a strong need, she said, to bring academia and commerce together to enable a technology transfer from university to the private sector and thereby transform industries through collaboration. With this in mind, Nowinski Collens said that UI Labs offered a new model for innovation that can transform entire industries through collaboration.

UI Labs, she said, was a neutral convenor, a deal maker, an incubator and a returns-driven manager rolled into one.

According to Chicago-based UI Labs’ website, the mission of the company is to solve large-scale societal challenges by forming industry-driven consortia to close the gap between innovation and commercialisation.

It is currently developing a portfolio of applied research and commercialisation labs that it believes will lead to a return on investment for its partners as well as improve local, regional and national competitiveness to transform entire industries.

Collens discussed the US Department of Commerce’s initiative known as the National Network for Manufacturing Innovation, which aims to bring together US industry and academia to solve industry-relevant problems. So far, seven NNMI institutes have been established, including the Digital Manufacturing and Design Innovation Institute based in Chicago and founded in February 2014.

Smart manufacturing The DMDII is managed by UI Labs and, said Collens, aims to transform American manufacturing through the adoption of digital manufacturing technologies, such as intelligent machining, advanced analysis and cyber physical security.

Smart manufacturing has been on the steel industry’s radar for some time. Some experts in the field argue that all the bricks are in place, but there is currently a lack of ‘connectivity’.

In the Q&A session that followed the above presentations, Steel Times International asked PwC’s Michael Tomera, “What is your view on ‘Industry 4.0’ – or ‘smart manufacturing’ – and heavy industrial processes such as steel production? It has been said that the steel industry has all the bricks of smart manufacturing, but not the connectivity.”

In response, Tomera said: “The steel industry has been slower to adopt smart manufacturing, but it’s happening.” t www.steeltimesint.com

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THE modern iron-making industry is constantly being challenged to generate higher productivity while satisfying the challenges posed by ever tightening operating margins and stricter environmental controls. Primetals Technologies Ltd, formerly known as Siemens VAI MT, and Wooding’s Industrial Corporation, have a long history in the iron and steel industry supplying control and automated packaged plant as part of state-of-the-art furnace equipment.

As part of their longstanding relationship Primetals and Wooding’s are jointly developing an equipment portfolio of hydraulic material distribution systems designed to help their customers meet these challenges head on.

Since the introduction of no-bell or bell-less tops in the 1970s it has become an accepted principle that bell-less or chute-based charging techniques provide the best method of promoting stable, fuel-efficient operation in large diameter furnaces. As a result, all new furnaces built in recent years, or even modernised existing furnaces, have resulted in the installation of chute-fed top equipment as part of the burden charging/distribution equipment. However, most of the older furnaces in the USA and elsewhere in the world continue to rely upon a two-bell system for charging materials into the furnace. Because of the smaller throat diameter typically seen in these furnaces, the advantages of chute charging are not as clear-cut.

Impact assessment In order to consider the potential advantages of new charging systems we need to examine the impact on two areas of the operation. First, improvements to operating efficiency and second, potential improvements and benefits to the furnace maintenance programme. It is often difficult to clearly identify and separate these advantages, as good maintenance practice will maximise furnace utilisation which, by its very nature, promotes stabilised blast furnace operation.

Operational efficiencies The introduction of bell-less tops in the 1970s, the operational advantages of furnace charging equipment incorporating controlled distribution and a pressurised

Innovations in blast furnace charging

The modern iron-making industry is constantly being challenged to generate higher productivity while satisfying the challenges posed by ever-tightening operating margins and stricter environmental controls. The provision of a robust yet simple charging system that harnesses reliable process control, linked to optimisation and expert packages, can form the backbone of modern blast furnace operation. But what are the expected advantages of replacing a two-bell furnace charging system with an innovative range of options utilising hydraulically-driven chute-based charging equipment?

By Peter C Whitfield1, Joseph Saxinger2 and Al Colucci3 hopper system is well-proven on blast furnaces worldwide.

The principle efficiencies experienced by end-users in comparison to bell-fed furnace operations are: • Stabilised blast furnace operation, optimised in terms of fuel rate.

• Higher furnace top pressure operation.

• Increased fuel injection rates leading to improved productivity.

• Improved material distribution control.

• Furnace wall temperature control reducing heat loads and extending furnace life.

In most modern-era large furnaces the

*1Peter C Whitfield, 2Joseph Saxinger, 3Al Colucci. 1Primetals Technologies Ltd 7 Fudan Way, Thornaby, Stockton-on-Tees, TS17 6ER, United Kingdom Phone: +44 (0) 1642 662261 Email: Whitfield.peter@primetals.com.

2Wooding’s Industrial Corporation 100 Precision Drive, Harmony, PA 16037, USA Phone: +1 7244 526065 Email: jsaxinger@woodings.com.

3Wooding’s Industrial Corporation,100 Precision Drive, Harmony, PA 16037, USA Phone: +1 7246 256735 Email: acolucci@woodings.com www.steeltimesint.com

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IRONMAKING

Height (m) 14.5 Height (m)

13.5 12.5

7.5

Cohesive zone

Coke Sinter + pellets Sinter

11.5 7.0

Start of so

6.5

ftenin g

g

eltin

eltin

of m

6.0

g

6.5

of m

7.5

En d

8.5

Start

10.5 9.5

1.6

5.5 4.5

Fig 1. Burden distribution control

throat area is divided into a minimum of 11 equal circumferential areas generally referred to as rings. As the burden material is discharged into the furnace from pressurised top hoppers, a continually rotating distribution chute lays coke- and iron-bearing materials in evenly distributed layers from the outer rings to the inner rings via a pre-determined charging matrix.

The weight, thickness and angle of the various layers from the furnace wall to the centre – as well as the placement of these materials – can be accurately controlled via this charging matrix. Controlling layer angle allows the operator to determine the amount of roll-down and mixing that will occur between individual layers while distributing material. Distribution of the burden material can be accurately controlled irrespective of the stockline level and indicated by the stockline recorder, ensuring that each layer is deposited into the furnace in a similar manner to the previous one, regardless of the burden elevation.

In smaller blast furnaces the challenge is somewhat different as the impact zone from the distribution chute on the burden surface is independent of furnace size.

On larger furnaces, where a typical throat diameter is 10 metres, the traditional 11 rings work well and offer greater distribution strategy flexibility. Smaller furnaces, however, may only have a throat diameter of five metres and this would limit charging flexibility to, potentially, five or six rings, thus limiting the ability of the operator to implement more flexible burden distribution strategies. Generating fuel rate improvements would also be more challenging than on a large furnace.

Despite these limitations resulting from furnace size, operating improvements can still be expected in the following areas that we shall now discuss in greater depth.

Burden layering When considering a furnace operating with a two-bell charging system, burden October 2015

IRONMAKING primetals.indd 2

2.4 2.8 3.2

3.6

Radium (m)

3.5 2.5 0

2.0

1

2

3 4

5

6 Radius (m)

Gas velocity at the entrance of the cohesive zone

Fig 2. Gas flow and cohesive zone in the blast furnace

materials are typically discharged from the large bell and leave the entire bell circumference simultaneously.

The entire discharge is typically completed in approximately six seconds. Due to the nature of the discharge material and its momentum, material previously deposited at the furnace wall is pushed to the centre of the furnace. This push effect results in a general wash-down and mixing of materials from the furnace wall to the centre. While this is widely recognised, there is no attempt to layer coke and ore materials prior to loading the large bell. Historically, sophisticated two-bell tops, such as Davy Universal, McKee and Yawata, have attempted to overcome this phenomenon. In such furnaces, therefore, the only place where true coke and ore layers exist is at the furnace wall where control is at best minimal. Hence, due to the aforementioned push effect, when the distribution includes a bell-dump between coke and ore charges, the impact of material discharge mixes the layers in the centre of the furnace.

Primetals Technologies and Wooding’s Industrial Corporation have produced new blast furnace distribution systems that provide an automated, computercontrolled pressurised system designed to: • Receive charges of ore, coke and miscellaneous materials in the holding hopper, independently of the distribution system below.

• Release and control those discharges, over a determined time period, to a dynamic distribution chute located below the holding hopper.

• Distribute material in prescribed patterns to the furnace stock line in accordance with a pre-determined charging matrix.

A proprietary control and feedback system controls the distribution chute and is fully integrated into the overall furnace top-charging software. The system provides a high level of accuracy, control

and positioning of the distribution chute so that layers can be maintained across the furnace surface with ore-to-coke ratios being established and controlled according to operator requirements.

The designs available allow the control system to be programmed to provide the operator with any desired charging pattern required, such as ring, centre, spot, segment or sector charging, and including Primetals’ unique spiral charging techniques, providing complete control of material charging into the furnace.

The operator can, therefore, control and predict how the reducing gas meets the ore layers and promote higher furnace efficiency.

In the large mixed layers of the bellcharged system, gas and burden contact is uncontrolled, resulting in a variable reduction environment that generates reduced burden permeability. While the efficiency improvements of implementing a pressurised distribution system on a small furnace may not be as great as on a large one, operating furnaces making this change in charging have still seen fuel rate reductions.

Coke chimney The ability to distribute coke in a controlled manner to the centre of the furnace provides the opportunity to create a “coke chimney” which is useful when adopting the use of coal injection on the furnace. The creation of a “coke chimney” removes one of the major constraints on maximising coal injection, the other being oxygen enrichment. In reality the cost advantage of removing this constraint can only be fully determined by the availability of coal, the types and quality of coke, the availability of oxygen, and the coal processing/injection equipment, but it will contribute significantly to reducing total fuel costs.

Improved material distribution, which allows control of the ore-tocoke ratio across the entire furnace, www.steeltimesint.com

11/3/15 2:13 PM

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Fig 3. The hydraulic distributor (HD)

has a subsequent impact on gas flow patterns. This permits the operator to monitor the condition of the lining and adjust the gas and temperature profile by changing distribution programmes.

Ultimately, greater control of furnace wall temperature and heat load reduction, when compared to a two-bell system, will undoubtedly lead to a significant extension of furnace life. A further positive effect on operating costs will result by minimising the number of outages necessary for grout or gunning practices at the end of a furnace campaign.

Contemporary charging With modern stockhouses characterised by the efficient screening of most burden materials, the furnace distribution system must be capable of handling and feeding numerous raw materials and significant quantities of secondary materials. Demands within the market may also result in the presentation of charge materials to the furnace with variable quality and differing chemical and physical characteristics. A source of cheap iron or carbon units can be found in some miscellaneous materials and usually these are of incompatible size or contain substantial fine materials, such as sized scrap, BOF slag, BF slag, briquettes, sized ore or nut coke, to mention just a few. The use of such materials would be detrimental to blast furnace operation if charged using the bell system, but in some cases they can be advantageous if placed properly with a distribution chute.

Current operating trends, where coal injection rates of 100kg to 250 kg/Thm are achieved, result in lower coke charges and, therefore, a higher percentage of ferrous materials seen in the charge.

As a result the burden can often have a reduced permeability leading to uneven or ineffective gas distribution. Greater knowledge of using variable materials to optimum effect, means that the operator can focus on correctly feeding these miscellaneous raw materials into the furnace. Market demands force operators to maximise production, often surpassing www.steeltimesint.com

IRONMAKING primetals.indd 3

the furnace’s rated capacity and operating above design production levels. It is essential for modern plants to have charging equipment that incorporates inherent flexibility in raw materials handling.

The cost advantages can only be determined by materials availability and the blend of the total burden, but material selection flexibility should contribute to significant operational cost improvements.

There are other opportunities to reduce operating costs, but the examples quoted are thought to be the most significant. (i) Maintenance efficiencies To this point the concentration has been on the potential savings through operational efficiencies, but in the case of a small blast furnace the most significant gains are in the cost and control of maintenance activities and their impact on furnace operation.

Bell changing One of the most significant costs associated with operating a bell furnace result from the inevitable replacement of both large and small bells, hoppers and receiving hoppers on the furnace top. Although it is clear that the frequency of bell replacement is directly proportional to the material passing over them, a frequency of five years would not be unusual with a minimum furnace outage period of at least 12 days expected to facilitate this change. Each time the furnace is blown down for this type of outage, the ability to return it to full operation is challenging and this can lead to considerable delay and further loss of furnace production.

The cost of this outage is significant and the impact in terms of the loss of metal production can have a negative effect on the plant as well as blow-down and blow-in expenses. The additional coke requirement alone could be in excess of $1m. Also, during each outage of the furnace, it will inevitably approach the critical stage where heat losses may cause the salamander to harden. Restarting the furnace under such conditions induces stress to the hearth lining, which could lead to early hearth failure in the longer term. The installation of hydraulically driven chute-based charging equipment eliminates this routine maintenance regime completely.

While the chute will need to be changed more often than the bells, the cost of the change and associated routine maintenance is far less than a bell change, or even seat replacement, and would typically fall within the normal maintenance budget. Any necessary outage for a chute change, or in the worst case scenario, a distributor, can be planned within the normal maintenance

27

Fig 4. The Gimbal distributor

schedule. This is also true of the routine maintenance of hoppers, valves and gates where replacement of wearing items, such as seals and wear tiles, can also be affected within the normal maintenance schedule.

The total impact of such a change on furnace utilisation can be huge, increasing the quantity, quality, and predictability of furnace production.

Emission control There is an inevitable temptation for every furnace manager operating a bell furnace to delay the replacement of the small or large bell for the reasons discussed above.

It is generally accepted that at the midway point of the large bell’s life it will no longer be able to sustain pressure, resulting in the release of fines and/or unburnt coal to the atmosphere. On-site repairs, such as cladding of the bells or weld repairs, can only be considered as short-term or interim and can never be achieved to a level where long-term service is involved.

As this situation deteriorates, the operator must inevitably decide to reduce the wind, pressure or fuel injection rate, all of which have a negative impact on furnace production. This very negative impact on furnace cost performance is mainly due to the dramatic increase in fuel mix costs while furnace productivity reduces. These conditions worsen as the bell surfaces wear until the furnace is finally taken down for bell changes with none of these solutions offering predictable furnace operation or cost control.

Hydraulic distribution solutions In addition to the benefits achieved from the operational efficiencies previously discussed, from the outset the aims of any new design, when compared to the traditional bell-less top solutions, need to provide: • A distributor interchangeable with existing bell-less top solutions as an upgrade or retro-fit • A simpler design eliminating the complex planetary and vulnerable tilting gearboxes of traditional designs • Hydraulic drive actuation providing October 2015

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IRONMAKING

Diagnosis Therapy Explanation

Coke rate Burden basicity Oil injection Steam addition Fine tuning of burden distribution

Fig 5. Blast furnace automation and optimisation

emergency atomised nitrogen cooling system with a proven operating record of reliability under extreme blast furnace top conditions. As with the HD distributor the unit is designed to be interchangeable with existing bell-less top gearboxes and an upgrade or retrofit.

Maintenance and replacement of the Gimbal distributor unit follows a modular approach. The distributor assembly (including gas-tight housing, operating shafts and cylinders, inlet chutes, tilting chute, and all wear liners), is removed and replaced as a complete unit.

Benefits of technology

repeatability and accuracy over life cycle • Extended time period between required chute replacement periods • Reduced CAPEX and integration expenditure • Reduced OPEX by minimising unplanned furnace downtime and reducing equipment lifecycle costs To meet these aims Primetals Technologies and Wooding’s Industrial Corporation having worked together since 1998 providing ‘state-of-the-art’ blast furnace technology to the United States ironmaking community and are developing a portfolio of hydraulic material distribution systems suitable for small, medium and large blast furnaces worldwide.

The technology portfolio comprising the Wooding’s Hydraulic Charging Unit (HD) and SIMETAL Gimbal Top incorporates a full complementary range of furnace top distribution equipment including distribution rocker, upper seal valves, hoppers, lower seal valves, material flow gates and Google valve assemblies all discharging through hydraulically driven distribution chutes.

The product range already proven in current installations will further improve charging flexibility and process control, enhance blast furnace performance and reduce downtime for scheduled maintenance to help customers meet the challenges of ironmaking head on. After all, for every day’s downtime saving that can be realised in an operational year, for larger furnaces an additional production of up to 10,000Thm could be achieved.

Wooding’s Hydraulic Distributor The Wooding’s Hydraulic Charging Unit (HD) replaces the tradition mechanical function by using two types of motion to control the distribution chute, tilt and rotation. The tilt motion is achieved by utilising hydraulic cylinders to precisely locate and hold the chute position.

The cylinders are mounted on top and October 2015

IRONMAKING primetals.indd 4

outside of the distributor casing for easy access and maintenance. Chute rotation is accomplished with a simple gearbox and electric motor, eliminating the complex planetary gearbox of traditional designs.

The new design meets redundancy requirements by designing repetition into both tilt and rotation motions ensuring that the distribution chute tilt will operate even if one hydraulic cylinder fails.

The nature of rotation and tilt equipment dictates that the distribution chute is more robust, further extending the period of time that can be established between chute changes. The unique chute mounting allows replacement to be done without entering the furnace or gearbox and reduces the required outage by approximately 50%.

The distributor design includes a shower water cooling system with a proven operating record of reliability under extreme blast furnace top conditions. The unit is designed to be interchangeable with existing bell-less top gearboxes and an upgrade or retrofit.

SIMETAL Gimbal Top Primetals Technologies’ Gimbal Top Distributor incorporates a conical distribution chute, supported by rings in a gimbal arrangement, producing independent and combined tilting of the chute axis. Hydraulic cylinders provide motion, each operating through a shaft, connecting rod and universal joint in order to drive the gimbal rings. Lubrication of the connecting rod and universal joint components is facilitated by a forced grease system based on straightforward principles.

The suspension and drive system of the tilting chute results in a circular path by superposition of both tilting motions and not in a rotation of the tilting chute.

Independent or combined cylinder operation allows the chute axis to be directed to any angle or along any path.

The distributor design includes a gas-tight housing incorporating an

Automated solutions The aim of any charging technology portfolio is to offer customers the potential of a fully-integrated charging solution, generating significant improvements in blast furnace operation by reducing fuel rates and providing stable operating and maintenance costs. In the case of Primetals and Wooding’s, these new designs allow for infinite charging possibilities and are designed to complement Primetals Technologies’ unique range of automation solutions, from process automation to sophisticated VAiron optimisation and expert systems. VAiron, developed in close co-operation with Voestalpine Stahl, functions on the basis of advanced process models, artificial intelligence, enhanced software applications, graphical user interfaces and operational know-how and would form the backbone of modern blast furnace operation.

This blast furnace automation and optimisation package with a tool box of proven process models used by the Closed-Loop Expert System offers: • Combined technological, operational and automation expertise.

• Fully automatic blast furnace operation.

• Closed-loop burden distribution control.

• Comprehensive metallurgical insight into the process.

• Easy system integration into existing automation environment.

Operationally, the improvements obtained by the implementation of such a system, when compared to bell charging, is well-proven.

End-users will have a furnace optimised in terms of fuel rate with the potential to decrease coke usage by up to 20 kg/ thm. Considering coke costs, the annual savings range from $4.3 million to $7.2 million. The resulting improvement in gas utilisation and permeability allows potential for increased fuel injection and a subsequent increase in blast temperature and oxygen enrichment generating further www.steeltimesint.com

11/3/15 2:13 PM

IRONMAKING

productivity increases in the region of 10%.

The provision of such technology provides the end-user with a highperformance blast furnace operation and the potential for additional coke savings in the region of 5kg/thm.

Lifecycle support Experience makes a difference When implementing a change to a new high performance top charging system, it is essential that an experienced technology provider is chosen who can supply a full spectrum of services to ensure a smooth operational transition. A dedicated team of furnace and equipment specialists are required to advise, evaluate and solve

operational or maintenance matters.

When both local and worldwide blast furnace specialists are available, any issues raised can be solved quickly and economically.

Installing a chute-based charging system will generate significant improvements in blast furnace operation and maintenance costs resulting in annual savings of several million dollars. These new designs aim to provide customers with the opportunity of such savings using a proven alternative to traditional chute-based charging technology at reduced investment cost.

Ultimately, selecting an appropriate charging technology as an alternative to the two-bell method should not be too taxing when the benefits are taken into consideration. The choice of technology is determined by need and either solution can be installed on new blast furnaces or retro-fitted to existing installations with minimal impact on equipment.

Acknowledgements The authors wish to acknowledge the help and support of colleagues at Woodings Industrial Corporation and Primetals Technologies in the preparation of this paper.

S th pec en e g ial gi lo ise ne ba d er l s tag in te s g el an in , m d du e la st tal be ry s ls an f d or

Capital and operating expenditure When considering the required CAPEX to implement and integrate this technology into an existing furnace infrastructure, it is necessary to compare costs with those routinely incurred by the repair or changing of bells, hoppers and supporting operating mechanisms required for two-bell charging equipment. While this comparison is directly related to the equipment being replaced and must be considered on a case-by-case basis, the implementation cost would not be significantly higher.

The capital cost and scope associated with the installation of this new technology is well known and can be easily estimated on a case-by-case basis. These costs can vary widely depending on existing equipment, furnace geography and the required charging equipment.

With the correct pre-planning and preparation, it could be expected that such a change could affect the outage period

required to complete a routine bell change.

It goes without saying that the task could be more comfortably achieved during a planned major reline or rebuild outage.

The simplicity of either technical solution when compared to traditional designs leads to a significant improvement in maintenance performance and associated costs. Due to the designs, the required maintenance programme can be undertaken during routine furnace outage periods without the need for additional stoppages. Additionally, the unique features of the HD and Gimbal distribution chutes promote an extended period of operation prior to replacement and a reduced outage period to affect chute change.

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IRONMAKING

33

Stockhouse-based de-icing, drying and pre-heating Stable operation of a blast furnace requires careful consideration of many inputs and factors. Heat and mass balance at the top of the furnace are both crucial in this respect. High temperatures at the top mean extra heat loss, process inefficiency, high dust emissions and unnecessary pressure on charging equipment and other process elements. Temperatures below a certain threshold allow moisture to enter the furnace with the raw materials and will not be evaporated. Process water rising from the lower furnace will be condensed and the top part of the burden will accumulate water.

By Roman Vaynshteyn*, Peter Verbraak* WATER accumulation at the top of the blast furnace reduces “process height” and restricts both the physical and chemical reactions of the process. Furnace operators, therefore, need to balance the process conditions at the top to achieve an acceptable operating regime.

The balance is disturbed, however, in case of high moisture input from the raw materials, or when the burden temperature is too low or even frozen.

Most blast furnaces are exposed to this challenge, to a greater or lesser extent.

In India, a heavy rainy season leads to stockyard materials reaching almost

Units

saturation point. This continues for 2–3 months each year. Furnaces in Brazil are reportedly charged with coke moistures of between 12% to14% preventing them from achieving their desired productivity.

European furnaces suffer the least, but the moisture levels of stockpiled coke can easily reach 8% and pellets 4%–5%. In Russia and Ukraine, winter conditions are tough, but most of the furnaces are run with high rates of sinter that is charged directly into the furnace without having been stored. And still, once in a while, open fires can be seen under stock house silos to get rid of frozen chunks that block All coke

Normal moisture

High moisture

vibrating feeders and disturb operations.

The most severe exposure to moisture issues of this kind can be found in North America, where a significant portion of blast furnace raw materials is delivered to iron making sites by boat over the Great Lakes. Since the Great Lakes freeze for several months each year, most of the operators accumulate significant amounts of materials in their stock yards. These materials are exposed to the rain and snow and as a consequence bring substantial additional water to the blast furnaces.

Furthermore, these materials enter the process cold and occasionally frozen.

Coal injection Natural gas injection

Normal moisture

High moisture Normal moisture High moisture

Coke consumption

kg/tHM

490

490

380

Coke moisture content

mass %

3%

9%

3% 9% 3%

Moisture input with coke

kg/tHM

15

44

11

34

11

Pellets consumption

kg/tHM

1,600

1,600

1,600

1,600

1,600

Pellets moisture content

mass %

1%

4%

1% 4%

1%

4%

Moisture input with pellets

kg/tHM

16

64

16

64

16

Steam addition to blast

g/Nm3

40

40

20

20 20

20

Hot blast consumption

Nm3/tHM

Steam addition to blast

1,600

380

380

380 9% 34

64

870

870

870

870 870

870

kg/tHM

35

35

17

17

17

17

“Process” moisture from kg/tHM

14

14

7

7

7

7

Pulverised coal injection rate

steam addition

kg/tHM

-

-

120

120

-

-

Pulverised coal volatiles

mass %

-

-

17%

17%

-

-

H2 input with coal

kg/tHM

-

-

5.1

5.1

-

-

“Process” moisture from PCI

kg/tHM

-

-

18

18

-

Natural gas injection rate

kg/tHM

-

-

-

-

100

100

-

-

-

22.5

-

H2 input with natural gas

kg/tHM

-

22.5

“Process” moisture from NG

kg/tHM

81

81

Total moisture at the top

kg/tHM

115

186

45

122

53

273%

124

234%

161%

Table 1. Moisture balance at furnace top for different operating conditions

* Danieli Corus BV Rooswijkweg 291, 1951 ME Velsen-Noord, The Netherlands. Phone: +31 6 46700957 Email: Roman.Vaynshteyn@danieli–corus. www.steeltimesint.com

ironmaking danieli.indd 1

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IRONMAKING

Change

Base

Coke moisture

O2 down till min RAFT

balanced LowTtop LowTtop Coke moisture Total iron burden moisture Daily production

CR up till Ttop=100

Production decreased

dP higher than base

balanced

%wt

5.0

13.0

13.0 13.0 13.0

%

1.5

1.5

1.5

1.5

1.5

ton/day

3592

3592

3592

3592

3344

Productivity (WV), delay free THM/m3/24h 2.3 2.3 2.3 2.3 2.1 2457 2457 2564 2664 2489 Nm3/min

Blast volume O2 enrichment (additional) Total blast moisture

%vol

7.0

7.0

5.8 5.8 5.8

g/Nm3 45 45 45 45 45

Blast temperature

°C

1000

1000

1000

1000

1000

Raceway flame temperature

°C

2157

2157

2102

2116

2113

kPa(g)

205

205

210

217

205

kPa

124

124

129

136

124

kPa(g)

81

81

81

81

81

°C

112

68

88

101

100

Nm3/min

3891

3891

4004

4176

3900

Blast pressure Burden pressure drop Top pressure Top gas temperature Top gas volume PCI rate (dry)

kg/THM

120

120

120

120

120

Coke rate

kg/THM

442

442

442

467

468

28

390

24

380

20

370

16

360

12

350

8

340

4

330

0 0

1

2

3

4

5

6

7

8

Pellets moisture, % Coke kg/tHM

9

6000

6

5000

5

4000

4

3000

3

2000

2

1000

1

0

Oxygen enrichment of blast, %

32

400

Production, tHM/day

410

Eta CO at FeO level, %

Coke rate, kg/tHM

Table 2. Typical operator’s response to increased moisture input

0 0

1

Eta CO at Fe Level %

2

3

4

5

Pellets moisture, % Production, tHM/day

6

7

8

9

Oxygen % volume

Fig 1. Impact of pellet moisture on a blast furnace operated with a 100% pellet-burden

Wet and cold burden causes disturbance to the blast furnace operation, making the process unstable. The heat coming from the lower furnace upwards is insufficient to maintain the required top temperatures and, therefore, the entire temperature profile inside the furnace changes compared to that of the summer time. This forces operators to run furnaces less efficiently, reducing productivity and increasing consumption of the expensive coke.

Defining the problem In general, blast furnaces operated with low productivity, somewhat higher total fuel rates and high rates of warm sinter are not likely to recognise the challenge of cold or wet burden. These furnaces have a healthy balance between the heat coming upwards, moisture input at the top and the temperature of the burden charged into the furnace. Furnaces that are likely to suffer the most are those with high productivity and high injection rates of natural gas or high-volatile pulverised coal. Natural gas brings substantial October 2015

ironmaking danieli.indd 2

amounts of hydrogen into the furnace, which is converted to water via reduction reactions in the furnace shaft. An example of a water balance at the top of a furnace is given for different injection materials in Table 1.

Blast furnace operators have a typical set of measures to respond to increased moisture input. One of the first actions is to reduce the oxygen enrichment of the hot blast. In essence, this increases the furnace’s nitrogen throughput, which is not part of the chemical reaction, but rather acts as a heat transport media bringing energy from the lower furnace to the upper burden layers. Sometimes, the above change is sufficient, but in more challenging situations, operators are forced to increase the coke rate. This leads to increased gas production at tuyere level and, as a consequence, a higher pressure drop over the furnace. Running the furnace with an increased pressure drop leads to unstable burden descent and forces operators to reduce productivity.

The steps described above are quantified in Table 2.

• The first column gives a case for a balanced furnace operation – in this way a furnace operation can be sustained.

• The second column (‘disturbance’) shows the impact of increased moisture in coke – the top temperature drops to 68 °C. Such operations cannot be sustained for a prolonged period.

• Column 3 – (‘Response step #1’) Reduced oxygen enrichment results in increased top temperature (88 °C), but the achieved level is insufficient for a stable operation.

• “Response step #2” is an additional 25kg of coke per tonne of hot metal that takes the top temperature to the required minimum, but reduces the pressure to unacceptable levels. The absolute level of pressure drop may not be extreme, but there are always good reasons why a specific furnace operates at a specific pressure drop.

• “Response step #3” brings the furnace back to the original pressure drop.

This last column represents a rebalanced operation that can be sustained. www.steeltimesint.com

11/3/15 2:19 PM

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IRONMAKING

Comparing the first and the last columns of Table 2, we find a production loss of 7% and an increased coke rate of 6%.

A similar example is illustrated by Fig 1, which shows the impact of increased pellet moisture for a furnace running with 100% pellets. Up to a certain level of pellet moisture, the coke rate can be maintained, but it sharply increases beyond that point.

In this example, maintaining furnace productivity is not possible. Obviously, the “manageable threshold” is unique and can be calculated for each furnace.

Combining the effect of moisture in pellets and in coke and adding the temperature at which these materials are charged into the furnace has a greater impact on operational results. The pellets have 6% moisture when they come in.

When you heat them to 35 °C, only 3% moisture remains, potentially increasing furnace production by over 20% and reducing the coke rate by 12%.

Engineering solution The operator actions described above are not the only possible response to this challenge. Every company carefully manages logistics of the burden materials, targeting to eliminate operations from stockpiles, minimising coke moisture with wet or dry quenching systems, considering a ‘warm’ sinter charge and so on. In addition to this, Danieli Corus has developed and patented a system to de–ice and pre-heat the burden materials within the blast furnace stockhouse. This system can be retrofitted in every stock house and offers a robust, reliable and energy-efficient solution to the challenge described in this article.

The basic principle of the system is as follows: a dry hot gas is supplied to a stockhouse silo to heat up the material and remove moisture. Cooled and saturated, this gas is then taken out from the silo in a controlled manner and passed through a gas cleaning installation. The stockhouse silos are not designed to withstand the pressure, so the entire system is carefully balanced to operate at slightly over and slightly under pressure in its different parts. The same pressure drop limitation determines that not all the materials can be treated this way, the system is limited to coke, nut coke and pellets.

The system is comprised of several fans, a hot gas generator, ducting, gas collector, de–dusting system and overall process control. See Fig 2 for an impression. As an alternative to the hot gas generator, a waste heat recovery system can be used.

The economic feasibility of a waste heat recovery solution is subject to specific site conditions – it is not expected to be attractive in North America, but may well be a feasible option for European blast furnaces. www.steeltimesint.com

ironmaking danieli.indd 3

37

The pre–heating system can be designed to make coke and pellets completely dry (0% moisture). This, however, may not be economical in all cases and an attractive solution for a specific furnace requires analysis of historical operational data.

In most cases, drying to 1-2% moisture is sufficient and enables the load to be limited on the de–dusting part of the new facility. The payback time for the new coke and pellet drying system is estimated to be in the range of 12 months, but is dependent upon the accessibility of the stock house for modification and the possibility of connecting the system within the minimum outage time of the blast furnace.

Fig 2. Impression of the stockhouse pre-heating system

Summary and conclusion Managing a blast furnace through a winter or a heavy rainy season is a big challenge. It requires operations to be adjusted to high moisture input and a cold burden. In most cases, the end result is reduced production and an increased coke rate that translates into a substantial increase in hot metal costs. In some cases, optimising material flow logistics can create cost-effective solutions.

Danieli Corus has developed a system that offers an engineering solution to the challenges presented by humid and frozen burden. The system can be built within the blast furnace stockhouse and offers operators a new tool to control the moisture and temperature of materials just before they are charged into a blast furnace.

The new system is characterised by a relatively quick payback of about 12 months and is designed to help blast furnace operators during cold and rainy seasons, but also throughout the year in terms of stabilising two of the most volatile parameters of the blast furnace process. t

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IRONMAKING

39

Role of Al2O3 and MgO on viscosity of blast furnace slag In selecting the most favourable blast furnace slag composition, the aim is not only to make a fluid slag for ease of tapping but also to generate a suitable bosh slag with optimum melting point and viscosity to reduce resistance to upward gas flow. The melting point is important for furnace operation, while viscosity affects sulphur removal and casthouse clean up. Also, the degree of vitrification should be >95% if the slag is to be sold for cement manufacture.

By R K Singh, R R Kumar, S Sudhir, V K Jha, B K Das & Ajay Arora

A high alumina (Al2O3) content in blast furnace (BF) slag creates problems with respect to drainage and wind passage in the blast furnace. SAIL’s blast furnaces are generally operated with alumina in the range of 19-23% at a slag basicity of around 1.00. Generally, high Al2O3 increases the viscosity of slag and this problem is usually tackled by maintaining a suitable proportion of magnesia (MgO) in the slag. A high Al2O3 slag requires high hearth temperatures and this results in high silicon in the hot metal, a high coke rate, low driving rate and correspondingly lower productivity. SAIL’s blast furnaces are operated with MgO in the range of 9-11%. However, a detailed study was required to determine the effect of MgO in high Al2O3 slag with respect to its viscosity and sulphur removal.

Over 95% of the blast furnace slags worldwide are quarternary slags containing CaO, MgO, Al2O3 and SiO2.

The lowest liquidus temperatures are obtained in the composition range Al2O3: 10-15% and SiO3: 35-40%. Such slags are most conducive for smooth blast furnace operation and are the most popular in world practice. Both high and low alumina slags are more viscous than those with intermediate alumina content (10-18%).

However, viscous slags can be thinned by adding MgO. Operating a blast furnace at optimum slag composition leads to maximum production of hot metal with a minimum level of sulphur, minimum slag

volume and minimum fuel consumption.

An efficient blast furnace runs with slag viscosity in the range of 300-700 centipoise.

Fig1. High temperature viscometer

A high Al2O3 slag is due to the inherent characteristics of the raw materials charged. The composition which gives the lowest melting point does not necessarily give the lowest viscosity. The melting point is important for furnace operation, while viscosity affects sulphur removal and cast-house clean up. These requirements are largely determined by the balance between four major constituents – lime (CaO), magnesia (MgO), silica (SiO2) and

Alumina (Al2O3) – which often account for more than 95% of the total slag composition.

Viscosity control Additions of MgO to calcium alumino silicate in most cases lowers the viscosity of slags. MgO melts are saturated with dicalcium silicate at a MgO content of 8% under conditions of high basicity and at temperatures of around 1600˚C. The viscosities of the slag depends more on the alumina content as the amount of solid phases present is greater by altering the alumina content than altering that of MgO. When MgO is added to CaOSiO2 slags, the viscosities decreases with increasing amount of MgO up to certain proportion, beyond which viscosity increases again. Magnesia acts as a network modifier and also the activation energy for viscous flow decreases with additions of MgO. But addition of MgO increases the slag melting temperature.

So, high MgO is recommended if high temperature slags are required.

Determining viscosity A high-temperature viscosity measurement apparatus (Fig.1) was installed and commissioned at RDCIS, SAIL. A Brookfield digital rotational rheometer (model LVDV III Ultra) controlled by a PC was used in the present study. A high temperature furnace with Molybdenum disilicide (MoSi2) heating elements (maximum temperature

The authors are with R & D Centre for Iron and Steel, Steel Authority of India Ltd, Ranchi-834002, India e-mail: rrkumar@sail-rdcis.com www.steeltimesint.com

IRONMAKING tim.indd 1

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IRONMAKING

October 2015

IRONMAKING tim.indd 2

Sample No

Al2O3 %

MgO %

Viscosity (cP) 1450oC 1470oC 1490oC 1510oC 1530oC

1.

19

8.4

578 419 376 396 298

2.

19

10

646 536 493 473 386

3.

19

11

842 681 573 495 438

4.

21

8.4

941 769 626 507 441

5.

21

10

899 723 622 527 551

6.

21

11

765 622 508 432 416

7.

23

8.4

904 750 624 523 485

8.

23

10

822 646 554 480 498

9.

23

11

712 576 487 416 581

10.

25

8.4

1117 834 676 571 476

11.

25

10

1171 808 665 540 456

12.

25

11

1294 1175 828 592

435

Table 1 Effect of Al2O3 & MgO on viscosity of slag at different temperature

900

Viscosity vs. MgO % for BF slag having Al2O3 - 19%

1000 900

700

1450C

600

1470C

500 400

1490C 1510C

300

1530C

200 7

8

9 10 MgO, %

11

1450C 1470C

700

1490C 1510C

500

1530C

400

1470C

600 500

1490C 1510C

400

1530C

300 8

9 10 MgO, %

11

12

Fig 3. Viscosity change with MgO in slag containing 21% Al2O3 at various temperatures Viscosity vs. MgO % for BF slag having Al2O3 - 25%

1300

1450C

1100

1470C

900

1490C 1510C

700

1530C

500

300 200

1450C

700

1500

900

600

800

7

Viscosity vs. MgO % for BF slag having Al2O3 - 23%

800

Viscosity vs. MgO % for BF slag having Al2O3 - 21%

200

12

Fig 2. Viscosity change with MgO in slag containing 19% Al2O3 at various temperatures

1000

Viscosity, CP

800

Viscosity, CP

Vitreous mass of BF slag The particle size of granulated slag at SAIL’s blast furnaces is in the range 0.25 to 3mm. Its bulk density is around 1200kg/m3. To determine the proportion of vitreous (glassy) phase in the slag, X-ray diffraction analysis was carried out on a diffractometer using a cobalt anode for x-ray excitation (Co Kal = 1.789Å). The scan was recorded between 10 and 70° at increments of 0.02° each for a count of 12 seconds. These angles were selected because characteristic reflections for most slag minerals and impurities lay in that region. The count time was selected at 12 seconds to enable the analysis to take place over a reasonable time. The vitreous areas of slag show in the X-ray diffraction pattern as one or more broad and diffuse halos. These halos are the images of local disorder which exists when in the liquid state and are retained during solidification. In addition to the vitreous fraction, the slag contains small quantities of crystallized minerals, probably calcite (CaCO3, inter planar spacing d = 3.035Å), metallic iron (Fe, d = 2.021Å), and traces of Gehlenite and/or Akermanite. The glass content of a slag is influenced by how rapidly it is cooled from the molten state.

Rapidly cooled, the slag solidifies as a super cooled liquid glass. This is required if the slag is to be used for the manufacture of cement which requires the granulated slag to contain at least 95% vitreous mass.

Viscosity, CP

1600°C) was employed. An alumina vessel (OD-35mm, H-65mm) and a B-type thermocouple (Pt-30%Rh, Pt-6%Rh) was used for sample containment and temperature measurement respectively.

The solidified slag sample collected from blast furnace cast-house was first premelted in the furnace held at 1400°C for one hour and then cooled. The purpose of pre-melting is to avoid the formation of foam during the test. The solidified sample was ground to below 65 mesh. After grinding, around 50 grams of sample was placed in the alumina crucible.

The heating rate was set as programed: Up to 1200°C: 12-15°C/min; 12001400°C: 6-8°C/min; 1400-1600°C: 4-5°C/min. The progress of melting was monitored by viewing through a blue glass filter. If the melt quantity was too low, more of the slag was added to the crucible. After reaching the maximum set temperature the spindle of the rheometer was slowly lowered into the sample such that the rotor penetrated deep into the molten mass inside the crucible. The speed of rotation of the spindle speed was adjusted to determine the shear rate of the molten slag and the corresponding shear stress displayed. By repeating at various temperatures, a graph was plotted of viscosity vs temperature.

Viscosity, CP

40

7

8

9 10 MgO, %

11

12

300

7

8

9 MgO, %

10

11

12

Fig 4. Viscosity change with MgO in slag containing 23% Al2O3 at various temperatures

Fig 5. Viscosity change with MgO in slag containing 25% Al2O3 at various temperatures

Using XRD, an approximate content of the glass phase can be assessed by subtracting the three main crystalline phase Calcite, Metallic iron and Gehlenite from the total ie 100%. The quantity of the vitreous phase in the SAIL blast furnace slag is approximately 96%.

(FT), symbolizing liquid mobility.

High temperature microscopy was used to determine these characteristics.

A Leitz hot stage microscope was used for this purpose. The powdered slag was prepared in the form of small cubes which were mounted in the heating chamber of the microscope. The sample was gradually heated and the progress of deformation of the sample viewed. The deformation defines the flow characteristics of the slag in the order IDT, ST, HT and FT. The difference between the flow temperature and softening temperature is termed as the ‘shortness’ of the slag. In a blast furnace operation, a short-slag is desirable as it trickles down the furnace as soon as it is formed thus exposing further reaction

Flow shortness The flow characteristics of the slag sample are described in terms of four characteristic temperatures: the initial deformation temperature (IDT), symbolizing the surface stickiness; the softening temperature (ST), symbolizing plastic distortion; the hemispherical temperature (HT), which is also the liquidus temperature, symbolizing sluggish flow; and the flow temperature

www.steeltimesint.com

11/3/15 11:27 AM

41

IRONMAKING

sites for better slag-metal reaction rates. Shortness of the slag has a direct impact over the furnace productivity as it controls slag-metal reaction rates. The softening temperature (ST) and flow temperature (FT) of SAIL blast furnace slags are approximately 1360˚C & 1400˚C respectively. The softening- melting range of these slags is about 40˚C. Result and discussion The viscosity data for BF slag containing various amounts of MgO (8.4%, 10% & 11%) and Al2O3 (19%, 21%, 23% & 25%) at constant basicity level of 1.03 were determined in RDCIS using the High Temperature Viscometer.

Table 1 shows viscosity data at five temperatures: 1450, 1470, 1490, 1510 &1530˚C. Figs 2-5 show the trend of viscosity vs MgO% for 19, 21, 23 & 25 % Al2O3 slag samples at temperatures of 1450, 1470,1490,1510 & 1530˚C. The slag sample with 19% Al2O3 shows an increasing trend of viscosity from 376 centipoise (8.4% MgO) to 573 centipoise (11% MgO) at 1490˚C, as shown in Fig 2. Similarly the above trend holds for viscosity measurements at temperatures of 1450, 1470, 1510 & 1530˚C. Fig 3 shows a decreasing trend of viscosity for 8.4 to 11% MgO content for a slag with 21% Al2O3. Slag viscosity decreases from 626 centipoise (at 8.4% MgO) to 508 centipoise (11% MgO) at a temperature of 1490˚C. Similarly, the trend holds for viscosity measurements at temperatures of 1450, 1470, 1510 & 1530˚C. Fig 4 shows the decreasing trend of viscosity from 8.4 to 11% MgO content for slags with an Al2O3 content of 23%. Slag viscosity decreases from 624 centipoise (8.4% MgO) to 487 centipoise (11% MgO) at a temperature of 1490˚C. This trend holds for viscosity measurements at temperatures of 1450, 1470, 1510 & 1530˚C. Fig 5 shows the increasing trend of viscosity from 8.4 to 11% MgO for slag with 25% Al2O3. Slag viscosity increases from 676 centipoise (8.4% MgO) to 828 centipoise (11% MgO) at 1490˚C. This trend holds for viscosity at 1450,1470,1510 & 1530˚C. Therefore, the viscosity data in Table 1 shows higher alumina (25%) slag is more viscous than lower alumina (19%) slag. Thus, to produce a more fluid slag, MgO in the slag should be maintained in the range of 8-9% for low alumina slag (<20%) and 10-11% for high alumina slag (>20%) to obtain a fluid slag and so smooth slag drainage.

SAIL blast furnaces, because of the high Al2O3 content of the ore, are more vulnerable to fluctuations in hearth heat. www.steeltimesint.com

IRONMAKING tim.indd 3

Even at this high Al2O3, it is possible to obtain reasonably fluid slags by optimizing the MgO content with concurrent alteration in the CaO/SiO2 ratio. In view of the critical nature of the quarternary composition range of SAIL BF slags, stable hearth heat condition is important.

For every 10 degree Celsius rise in temperature viscosity decrease by about 25-30 centipoises for lower Al2O3 (<20%) slag while for higher Al2O3 (>20%) slags viscosity decrease by about 40-45 centipoises.

Every 1% increase in MgO from (8 to 11%) increases viscosity by about 80-100 centipoises for lower Al2O3 (<20%) slag.

For lower Al2O3 (<20%) slag, a MgO level of around 8-9% will give better fluidity at 1.03 slag basicity .For higher Al2O3(>20%) slag, a MgO content of around 10-11% will give better fluidity at the same basicity.

Desulphurisation is strongly dependent on basicity. An increase in MgO increases desulphurisation. In principle, a lower CaO (ie lower basicity) can be compensated for by increasing MgO .It has been observed that with increased MgO in high Al2O3 slags (Al2O3>20%), the rate of increase in the slag liquidus temperature is around 15-20˚C for every 1% increase in MgO.

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Bibliography 1) A K Biswas: Principles of Blast Furnace Iron making: Theory and Practice, Cootha publishing house, Brisbane, (1981).

2) BISRA – Slag liquidus temperature and viscosity tables, Report No. IM/B/18/62 3) E F Osborn & A. Musan – Phase equilibrium among oxides in Steelmaking, Massachusetts, Addison Wesley, 1965, p.30.

4) E F Osborn et al., Optimum composition of blast furnace slag as deduced from liquidus data for the quarternary system CaO-MgO- Al2O3-SiO2, Journal of Metals, Tran AIME, January, 1954, p.

33-45 5) R B Snow, Melting temperature charts for the system CaO-MgO-Al2O3-SiO2 as related to the MgO and Al2O3 content of blast furnace slags, Proceedings of Blast Furnace, Coke Oven and Raw Materials Conference, AIME, 1962 6) R S McCaffery – Transactions of American Institute of Mining Metallurgical Engineers, 100, 1932, p.64 7) Completion report on, ‘Investigation on Physico-Chemical characteristics of very high alumina slag for blast furnace’, March 1992, Report No. R&D:13:02:1844:92 8) Jin-Kyung Chung & Sung-Man Kim, ‘Behaviour of high alumina BF slag at high PCR operation’, 6th IAS Ironmaking Conference 2007, Argentina, p 281-287p 9) Julin Liao, Seetharaman S et al., ‘Effect of Al2O3/SiO2 ratio on the viscosity and structure of slags’, ISIJ Intl, Vol. 52, 2012, No.5, p 753-758 10) Completion Report on ‘Optimization of slag chemistry in blast furnaces at BSL’, December 2010, RDCIS, SAIL, Report No R&D:82.02.3855.02.2010

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October 2015

POLAZ-14023_Anzeige_LSV_engl_MPT_5/2014_72x297mm.indd 1

30.09.14 17:09

11/3/15 11:27 AM

24TH

BLAST FURNACE IRONMAKING COURSE May 8 - 13, 2016 McMaster University, Hamilton, ON Canada It is an in-depth, week-long course held every second year. It covers every aspect of blast furnace ironmaking, making it invaluable for managers, operators, engineers, researchers and suppliers of equipment, refractories and raw materials.

It is officially recognized by the American

Iron and Steel Institute. The lecturers in the course are acknowledged experts in their fields and the delegates come from diversified industrial backgrounds. The week-long course consists of 25 lectures given by experts in the field, supplemented by a computer game, and plant tours.

2016 Lectures Principles, Design and Raw Materials: Historical Development and Principles of the Iron Blast Furnace Blast Furnace Reactions Environment Issues in Blast Furnace Ironmaking

Fundamental Principles Applied to Blast Furnace Safety Blast Furnace Energy Balance and Recovery: Rules of Thumb

Blast Furnace Design I Blast Furnace Design II Ironmaking Refractories Iron-Bearing Burden Materials

Blast Furnace Control - Measurement Data and Strategy Maintenance Reliability Strategies in an Ironmaking Facility

Burden Distribution and Aerodynamics Ironmaking/Steelmaking Interface Fuel Injection in the Blast Furnace Blast Furnace Slag

Casthouse Practice and Blast Furnace Casthouse Rebuild Ironmaking in Western Europe Chinese Blast Furnace Practice

Japanese Blast Furnace Practice Future Trends in Ironmaking Blast Furnace Modelling and Visualization

Operations: Coke Production for Blast Furnace Ironmaking Day-to-Day Blast Furnace Operation Challenging Blast Furnace Operations

Optional Lecture Introduction to Ironmaking (Optional), Sunday Evening

Contact Information Ken Coley Director, Steel Research Centre McMaster University cr_src@mcmaster.ca

1280 Main St. West Hamilton ON L8S 4L7 Phone: (905) 525-9140 x24984 Fax: (905) 526-8404

TRAINING.MCMASTER.CA

STEEL MARKETS

43

Demand weakens in US OCTG market While the overall US economy remains one of the strongest globally with second quarter GDP advancing by an annualised rate of 3.9%, the same can’t be said of the oil patch, which is seeing conditions on par with those of the Great Recession of 2008-09 and with those of the 1980s. This has already resulted in a 45-65% reduction in demand for oil country tubular goods (OCTG) with further declines possible.

Myra Pinkham* reports “WE aren’t seeing any light at the end of the tunnel,” laments Kurt Minnich, president of Pipe Logix LLC, Tulsa, Oklahoma, who, like many other industry observers, fears that the industry will not turn around until well into 2016 and possibly not until 2017.

While the big hit is coming from the fact that US drilling activity was down 58% year-on-year at the beginning of October, at the same time OCTG inventories remain quite high, new domestic capacity continues to come on-stream and imports, while down from peak levels, continue to be quite high. This has created what some industry observers describe as “a perfect storm” not just at domestic OCTG mills, some of which are operating at 30% of rated capacity, but also US suppliers of hot rolled coil and seamless rounds and billets used by the industry.

Already, according to Paul Vivian, a partner at the Preston Pipe Report in Ballwin, Missouri, OCTG shipments, which began falling in January, have declined to a point where they are as weak as they had been in 2010 with a likelihood they will soon fall further to levels not seen since 2009 – at the depth of the economic downturn.

Christopher Plummer, managing director of Metal Strategies Inc, West Chester, Pennsylvania, says that year-todate through July US domestic OCTG shipments fell 52.2% to 1.09Mt compared with 2.28Mt during the first seven months of 2014. This is a much steeper rate of decline than that of US OCTG imports, which according to preliminary data from the US Census Bureau fell 28% to 1.93Mt this year through August versus 2.68Mt for the same period last year.

As a result, US OCTG prices are the lowest they have been in the past 10 years, observes Kimberly Leppold, senior metals analyst for Metal Bulletin Research, who says prices of electric resistance welded (ERW) OCTG pipe had fallen 26% to $1,125 per metric tonne in September

compared with $1,520 per tonne a year earlier at the same time as prices for seamless OCTG fell by a similar percentage to $1,185 per tonne compared with $1,600 per tonne in September 2014.

Clearly the biggest driver has been crude oil prices, which have not only tumbled, but remain volatile, at the same time as natural gas prices, which had already been quite low, are continuing to fall. As of the beginning of October the West Texas Intermediate (WTI) price for crude oil was trading at about $45 per barrel versus over $100 per barrel a year earlier while Henry Hub natural gas prices had fallen to $2.44 per MMBtu compared with $3.77 per MMBtu in October 2014.

While energy prices were falling gradually prior to that, Vivian says the real initial shockwave began last November with the announcement during the Organisation of Petroleum Exporting Countries (OPEC) meeting that Saudi Arabia, and other member countries, wouldn’t reduce their crude oil output despite global oversupply.

“As a result the downturn was quick and dramatic and it is taking companies throughout the supply chain (including exploration and production (E&P) companies as well as OCTG producers) a while to adjust,” Minnich says. He explains that the problem is that last year companies were expecting crude oil prices to remain at, if not $100 per barrel, at least $80, for some time.

The recent oil price roller coaster ride is definitely having a dampening effect upon demand. After the initial drop-off in January to about $45 per barrel, WTI crude oil prices edged up briefly to about $60 per barrel in May and June before plummeting to a low of $38.60 per barrel due to fears that China’s economy could be headed for a hard landing, uncertainty over whether the US Federal Reserve will inch up interest rates and what impact the Iranian nuclear treaty could have upon global supply. In mid-September, however, upon upwardly revised US crude oil

production numbers from the US Energy Information Administration (EIA) the WTI price bumped up slightly to $44-$46 per barrel, where, to date, it has remained.

However, Vivian says this hasn’t prompted E&P companies to increase their drilling plans upon fear that oil prices could fall again and will not likely do so until oil prices come up to at least $60-$70 per barrel, despite recent productivity and cost efficiency gains that allow companies to remain profitable at lower price levels than in the past.

With this, plus low natural gas prices, the number of drill rigs operating in the United States as of 2 October had fallen 57.9% to 809 rigs compared to the 1,922 rigs operating a year earlier. This includes a 61.4% decline in rigs drilling for oil and a 40.9% decline in those drilling for natural gas, bringing the percentage of those drilling for oil down to 75.9% compared with 82.8% a year earlier.

* USA correspondent www.steeltimesint.com

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STEEL MARKETS

Year-to-date through July 2015

US rotary rigs operating

2015 2014

Total Offshore Land

Oil

Gas Oil%

Sep-15 842

31

811

644

198 76.5%

Domestic 1,090

2,279

-52.2%

Aug-15 849

34

849

662

187 78.0%

Imports 1,818

2,351

-22.7%

Jul-15 866

31

835

649

217 74.9%

-37.2%

Jun-15 861

28

833

634

227 73.6%

Jan-15 1683

53

1629

1362

321 80.9%

14-Sep 1929

53

1866

1592

337 82.5%

Total 2,908 4,630

July 2015 vs. July 2014

2015 2014

Domestic 122

333

Sept 2014 was recent two-year peak -63.3%

Imports 96

389

-75.3%

Total 218

722

-69.8%

Comments: US OCTG market (000 tons)

Dramatic gains in drilling efficiency or productivity (barrels per day per rig) have been the main reason behind the resiliency of drilling companies since the oil price downturn started in earnest in mid-2014 (oil prices tracked in the $85 to $115/bbls range from Jan 2011 to mid-2014 before falling to current/recent levels below $50 and $40/bbl.

US average seamless OCTG price.

Average carbon, alloy, production tube, casing

$ per ton

Tube rounds

Spread

Bakken rate (bbls/day/rig) estimated at 694 in Sept 2015 from 486 in Sept 2014 and 241 two years earlier in Sept 2012 Eagle Ford rate (bbls/day/rig) estimated at 795 in Sept 2015 from 566 in Sept 2014 and 280 two years earlier in Sept 2013

However, these rates are now slowing dramatically and are expected to result in steeper than expected decline in US oil output which, despite the price declines, has continued to grow through April 2015 and at least sustain at high levels since then.

Four key reasons for surging oil drilling productivity gains in last several years, especially since mid-2014:

Jan-14 $1,806 $505 $1,301 Feb-14 $1,807 $515 $1,292 Mar-14 $1,812 $515 $1,297 Apr-14 $2,066 $500 $1,566 May-14 $1,825 $500 $1,325 Jun-14 $1,830 $490 $1,340 Jul-14

$1,833 $490 $1,343

Aug-14 $1,839 $485 $1,354 Sep-14 $2,083 $480 $1,603 Oct-14 $1,845 $480 $1,365 Nov-14 $1,839 $480 $1,359 Dec-14 $1,830 $480 $1,350 Jan-15 $1,817 $438 $1,379

1 2 3

4

Feb-15 $1,763 $425 $1,338 Mar-15 $1,693 $410 $1,283 Apr-15 $1,648 $410 $1,238 May-15 $1,619 $355 $1,264 Jun-15 $1,597 $348 $1,249 Jul-15

$1,591 $330 $1,261

Deeper wells and more fracing stages per well Faster drilling operations PAD drilling - now accounts for almosy two-thirds of all drilling activity; uses multiple wells per rig High grading (going after richest and most productive reserve areas)

Aug-15 $1,583 $320 $1,263

Comments on completed well data below: Drillers high-grading to deeper wells with more fracking stages per well # of wells drilled down 11.0% YTD H1-2015, but down 36.6% June 2015 vs June 2014 showing market situation worsening

US number of new wells completed by depth

YTD versus YTD

Year-to-date H1-2015

# of Wells

Total

Under 5,000

5,000 to <10,000

10,000 to <15,000

15,000 and <20,000

20,000 and Over

13,600

2,622

2,314

4,591

2,962

1,111

19%

17%

34%

22%

Share 100% % Change

-11.0%

-32.7%

-17.7%

-9.4%

8%

10.5%

33.2%

Year-to-date H1-2014

Total

Under 5,000

5,000 to <10,000

10,000 to <15,000

15,000 and <20,000

20,000 and Over

# of Wells

15,289

3,896

2,812

5,067

2,680

834

Share

100%

25%

18%

33%

18%

5%

US Number of New Wells Completed by Depth

Latest month versus year ago

June 2015

Total

Under 5,000

5,000 to <10,000

10,000 to <15,000

15,000 and <20,000

20,000 and Over

# of Wells

1,476

173

277

548

353

125

12%

19%

37%

24%

Share 100% % Change

-36.6%

-73.9%

-36.0%

-41.9%

8%

-25.5%

-39.9%

June 2014

Total

Under 5,000

5,000 to <10,000

10,000 to <15,000

15,000 and <20,000

20,000 and Over

# of Wells

2,327

664

433

944

474

208

29%

19%

41%

20%

9%

Share 100%

October 2015

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STEEL MARKETS

Even with the feet drilled per rig increasing recently with deeper wells being drilled and more use of PAD drilling techniques, Minnich says this still equates to at least a 45% decline in OCTG demand.

It is not known if that demand could fall further later this year or early next when E&P companies, many of which have hedged energy prices, renegotiate yearly contracts.

Also, a lot depends upon how much restraint the E&P companies exhibit in their drilling plans with their recent realisation that a resource they had previously thought of as being scarce is now plentiful, Vivian points out.

Certain other factors could also have an impact, including the rate that liquefied natural gas export terminals come online and whether the United States government lifts its crude oil export ban.

There are also several supply side issues that continue to have a dampening effect upon the domestic OCTG market, not least of which is the level of OCTG inventories in the marketplace. While, according to Plummer, pipe distributors have been working down inventories – which were accumulated last year when OCTG demand was expected to remain strong – at a rate of approximately 100kt per month and continue to be high compared with demand, especially as demand continues to decline.

MBR’s Leppold estimates that distributors are currently holding onto about 10 to 12 months of supply, with stocks of mid-range OCTG sizes in particular being more than ample.

At the same time new capacity additions, announced when the energy market was overheated, are continuing to come online. There has already been a doubling of OCTG production capacity coming online since 2010 with yet more capacity additions expected in the next year or so.

This, according to Minnich, is despite the fact that OCTG demand is expected to fall

to 4Mt this year compared with 7Mt last year and is likely to fall further in 2016.

“Anyone who could delay an expansion or building a new mill will do so,” he says, although those planned projects that are well under way are continuing to go ahead, albeit in some cases at a slower rate than was originally planned.

Leppold says several new seamless OCTG mills are currently under construction.

Austria’s Benteler Steel/Tube GmbH is ramping up production at its 300kt/yr mill in Caddo, Louisiana, that it began building two years ago.

TPCO America, a subsidiary of China’s Tianjin Pipe (Group) Corporation, while delayed several years, is also going ahead with its 550kt/year mill in Gregory, Texas.

While its finishing mill is already up and running, it has been buying green pipe elsewhere and will continue to do so until its rolling mill and melt shop are completed in 2017. The mill was originally expected to start up in 2011.

Tenaris SA’s 600kt/yr plant in Bay City, Texas, has also been somewhat delayed, although it is expected to start up either late this year or early next. It will probably be ramped up quite slowly, Leppold says.

She says that certain other announced projects, including Alamo Tube’s 250kt/ yr ERW mill in San Antonio, Texas; Alita USA’s 150kt/yr ERW mill in Buffalo, NY; Tejas Tubular’s 150kt/yr seamless mill in Norfolk, Nebraska; and PTC Seamless’ 100kt/yr seamless mill in Hopkinsville, Kentucky, are unlikely to see the light of day. In fact, PTC Seamless recently auctioned off its Kentucky assets.

Several existing OCTG mills have also been financially challenged. Leppold observes that Boomerang Tube LLC of Chesterfield, Missouri, filed for Chapter 11 bankruptcy protection this June; there has been a management shake-up at the still ramping-up Turkish-owned Borusan Mannesmann Pipe USA Inc, Baytown, Texas; Prolamsa has been concentrating

45

more on structural tubing than OCTG or line pipe at its US mill; California Steel Industries Inc, Fontana, California, has shifted its energy pipe production more toward line pipe; and several other producers, including Evraz North America and United States Steel Corporation, have been idling capacity.

US OCTG imports have also been declining in recent months because of weak market conditions and were nothing to do with recent trade action against South Korea, Turkey, India, Philippines, Saudi Arabia, Taiwan, Thailand, Ukraine and Vietnam. Domestic mills claimed that recent trade action resulted to too low anti-dumping and countervailing duties and these kept unfairly traded imports out of the USA. Plummer says that even with the decline, the volumes of imports coming on-shore continues to be devastating to domestic mills, who are seeing their shipments decline at more than double that rate.

Vivian says that imports are likely to continue to fall with distributors and E&P companies getting used to the market – and OCTG prices – being on the bottom and realising that this is the time to work down their inventories as opposed to buying more pipe.

While OCTG prices edge downwards, and prices of steel and steelmaking raw materials also fall, the rate of decline has levelled off, according to Minnich.

There is some hope that the OCTG market could bottom out as early as H2 2016, but only if everything comes together right, Plummer says, which is far from being a certainty, especially given the negative impact the weakness in the Chinese economy is having upon all commodities, including oil. “It is likely that it will be a challenging business environment with OCTG remaining in shake-out mode until oil returns to $70$80 per barrel on a sustained basis, which could take another several years. t

US Monthly field production of crude oil - 000 barrels Year

January

February

March

April

May

June

July

August

September

October

November December

2000

179,316 169,703 183,464 175,625 181,242 174,686 177,920 179,451 172,731 180,080 174,980 181,508

2001

179,767 161,843 182,290 175,879 180,712 172,974 178,208 177,488 171,270 178,129 176,441 182,511

2002

182,076 164,666 182,460 175,333 183,057 176,532 178,275 179,670 162,336 166,105 168,706 177,372

2003

178,412 161,920 179,907 171,774 175,568 169,772 170,452 172,787 168,270 174,020 166,397 172,715

2004

173,132 161,583 174,115 166,810 172,235 162,208 170,011 165,072 152,444 160,270 162,699 170,815

2005

168,831 154,038 173,626 166,885 173,491 163,263 162,854 161,153 126,417 141,200 145,708 154,630

2006

156,509 140,936 155,860 152,492 159,674 154,914 157,947 156,261 150,908 158,372 151,952 160,783

2007

158,253 143,313 158,705 155,531 161,354 152,178 156,143 154,533 147,065 156,681 151,094 158,393

2008

158,538 149,288 160,980 154,704 159,555 154,100 160,541 155,263 119,409 146,931 152,609 158,497

2009

159,420 146,868 161,738 158,585 166,899 158,224 167,402 166,585 166,852 171,040 161,596 169,032

2010

167,127 155,266 170,589 161,460 167,050 161,366 164,200 168,623 168,240 174,179 166,949 173,534

2011

170,060 150,919 173,630 166,350 173,746 167,071 167,997 174,683 166,849 181,493 179,099 185,712

2012

190,358 180,969 192,929 187,342 195,341 187,783 198,955 194,902 196,683 214,883 210,526 219,442

2013

219,414 198,664 221,986 221,260 226,334 217,908 231,055 232,576 231,823 238,768 236,918 244,074

2014

248,959 228,054 256,459 256,527 267,149 260,295 271,224 273,939 268,813 282,989 276,090 292,086

2015

287,374

261,828

296,586

288,373

291,395

278,894

269,993

258,892 estimated July and Aug

Comment: US monthly field production of crude oil reached a record peak of 296.6 million bbls in March 2015, but has since eroded 6% through June and by an estimated 13% through August

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46

PERSPECTIVES: THERMO FISHER SCIENTIFIC

Overcapacity creates opportunities Thermo Fisher Scientific’s Kevin Quinn* argues that some of the headwinds currently affecting the global steel industry have created opportunites for the company to partner with steel customers on equipment servicing and maintenance.

1. How are things going at Thermo Fisher Scientific? Is the steel industry keeping you busy?

Great! Thank you. We are an optimistic company, and while there are some headwinds in the global steel industry right now, this has created opportunities for Thermo Fisher Scientific to partner with steel customers on the service and maintenance aspects associated with our equipment. We are also engaged in the adoption of new technologies such as PGNAA for sinter analysis in iron and steel making. This allows customers to focus on optimising their raw materials, energy efficiency and production processes. We expect our steel customers to keep us busy.

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

Overcapacity has created an environment that can be perceived as quite negative.

These conditions have created opportunities for efficient steel producers to excel, and prudent manufacturers to invest in technology that improve their quality and prepare for the future needs of steel consumers.

3. In which sector of the steel industry does Thermo Fisher Scientific conduct most business?

Our solutions rely on technologies that apply across the entire steel production process. From belt scales and cross belt analysers in iron ore mines, radiation detectors in scrap yards, elemental analysers in melt shops, simultaneous profile gauges in hot mills to thickness and coating gauges in rolling mills and on process lines.

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

Our large installed base keeps us busy around the world. Our aftermarket support team is available around the clock to provide the parts and services required for

our customers that produce steel around the clock. Our customers in the Americas have been busier than previous years. The overall economy in that region is healthier, but the US government changes to fuel economy standards is driving innovation.

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

We have recently received a major order for multiple Thermo Scientific™ SIPRO simultaneous profile gauges for a North American steel producer. We have also been successful in getting significant contracts and upgrades from major steel producers in Europe, Asia and North America for our laboratory analysers.

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

Both steel and aluminium have applications where they are clearly the better material, they also have markets where they overlap. For those automotive applications that overlap, the competition has intensified the creativity of the metallurgists and engineers on both sides.

7. “While there will be increased aluminium penetration, vehicles

will continue to be predominantly steel,” said Ducker Worldwide’s Dick Schultz. Is he right or wrong?

The cost benefits of steel make it highly attractive for many applications, automotive among them. When one evaluates the individual engineering requirements of the thousands of parts that make up an automobile, the performance versus cost analysis will point to aluminium in some cases, but provided steel producers continue research into the next generations of AHSS, steel components will be the majority. With AHSS providing the same performance, but with lighter weight, the overall mass of steel in the car will decrease.

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 Jay Baron, president of the Centre for Automotive Research. Who is closer to the truth – Dick or Jay? Dick may be closer to the truth, but that is because Jay may have his timing off.

The advancements being made in steel research labs are impressive and within 10 years we will see the amount of traditional low carbon steel drop off, while the thinner, lighter components made of AHSS will take their place.

9. It is always claimed that aluminium is the ‘greener’ metal when compared to steel. What’s your view?

Steel has over a century of perception working against it. The images of a blast furnace consuming coal, coke and iron ore are ingrained in the minds of the public. The carbon footprint is directly visible and directly associated with the sight of liquid steel. The energy that goes into making aluminium arrives at the mill through power cables so the lack of smoke and flames leads to the impression that

* Kevin Quinn is responsible for product marketing, R&D, operations and quality for Thermo Scientific measurement and control equipment.

October 2015

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PERSPECTIVES: THERMO FISHER SCIENTIFIC

aluminium is cleaner, where the reality is the smoke and flames may be remote at a fossil fuel-based power plant. Modern energy-efficient steel making processes that are a dramatic improvement on the processes years ago exist. Electrical power, for example, is being generated from waste heat in many steel processes.

Scrubbers clean gas exhaust before it is released, and closed loop systems capture and treat process water.

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

Do you sympathise with his view?

It is the mission of Thermo Fisher Scientific to ‘enable our customers to make the world healthier, cleaner and safer.’ It guides our product design process and daily decision making. Steel producers appreciate this mission and see us as a partner when we provide examples of how our instruments can save raw materials and energy and improve quality and yield.

technology portfolio that serve the steel industry across many areas and materials involved. We help the steel industry to adopt new on-line technologies for faster and more efficient control of the critical steps and have the widest range of flat sheet gauging for thickness and coating weight application; including the fastest and highest resolution simultaneous hot strip profile gauge in the world.

15.

How do you view the development of Thermo Fisher Scientific?

Thermo Fisher Scientific spends over $700 million on product development. There are cross-divisional research and development teams that evaluate each instrument´s potential in different markets.

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18. Where do you see most production technology innovation?

The most innovative production technologies are being developed at the enterprise wide level. Modern data archiving allows for the monitoring of all production data for a product from the cast through to the final product.

Process engineers use this data to minimise delivery times and convert raw material into highly profitable products as efficiently as possible.

19.

How optimistic are you for the global steel industry?

The short-to-medium term challenges related to overcapacity are painful, but the long-term future for steel is optimistic.

11. How is the steel industry performing in respect of emissions control?

There are some new production processes available that have recently enjoyed major advances. One is direct casting of molten steel into thin strips using the Castrip™ process, which bypasses the traditional hot strip mill, thereby reducing the energy required to make flat strip steel.

12. Are steel producers looking to companies like Thermo Fisher Scientific to offer them solutions in terms of energy efficiency?

The biggest contribution we can make is by helping the customer get it right the first time.

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

The steel industry has made some tremendous strides in reducing its carbon footprint. There are still plants in certain parts of the world that are far from optimised, but each day, innovative ideas are put into action.

14. Where does Thermo Fisher Scientific lead the field in terms of steel production technology?

We are a market leader in many different areas and are continuously enhancing our broadest range of products and www.steeltimesint.com

PERSPECTIVES thermo.indd 2

Our Thermo ScientificTM PROSIS infraredbased sensor, which was developed for polymer applications, is excellent at measuring a wide variety of non-metallic coatings on steel.

16. How should the industry react to Chinese overcapacity? This situation did not occur overnight, the growth trends in the Chinese steel industry pointed to this eventuality. The industry has adapted to this new reality and while some countries are battling in the trade arena, others are working to improve their quality, efficiency and environmental impact.

17. What is Thermo Fisher Scientific’s experience with the Chinese steel industry?

We have a large number of Chinese customers and find that they are looking for the best technology to drive quality and efficiency.

20.

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

I have two teenage daughters, so you can imagine what keeps me awake at night. On the business side, we are always energised by the possibilities for our instruments in the steel mills of the future.

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

Perhaps it may be that we already have the superpowers we need to pull the steel industry to the next level. Our x-ray-based instruments already have the ‘x-ray vision’ to determine the chemical compositions of AHSS products in development, our high speed profile gauge collects profile data in a “flash” and our portable analysers remind me of some of the awesome gadgets on a superhero’s utility belt. t

October 2015

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HISTORY

Cornwall’s industrial heritage Great Britain’s southernmost county of Cornwall has been a popular holiday resort for centuries, but 200 years ago it was a front-runner in the Industrial Revolution says Harry Hodson* EVIDENCE of Cornwall’s industrial past can be found in the many engine houses dotted around the county. Most are derelict, but a few were restored to their former glory days.

Good deposits of tin and copper along with China clay and other minerals were much sought after to feed the region’s burgeoning industry. Tin and copper needed to be extracted from great depths and were dogged with flooding problems. Attempts to deal with this had been practiced as far back as the 1690s by Newcomen and Savary using atmospheric engines powered by low pressure steam.

By 1765 experiments were being made in the use of high pressure steam, which eventually led to a partnership between Matthew Boulton and James Watt whose Soho works was in Birmingham, which was considered the heart of the Industrial Revolution. Cornwall had created its own Industrial Revolution with 60 iron foundries supplying castings and machinery for its mines and quarries. The largest were Harvey’s of Hayle, and Holman Bros of Cambourne. Harvey’s was established in 1779 and soon expanded and relocated to Hayle. The company modernised and extended the shipping quays used by the mining industry at Hayle to include their own export facilities. Steam engines, valves, pumps, cylinders, hydraulic presses, iron and steel fabrications, were all made

by Harvey’s for global customers.

One such product was a 144-inch

cylinder, cast in 1843 to help drain a lake in Holland. A cylinder of this size presented huge technical difficulties, stretching the Harvey’s works to the limit. Richard Trevithick (1771-1833) is considered the true pioneer of high pressure steam locomotives. His relation by marriage to the Harvey family enabled him to practice his skills in their workshops.

Holman Bros.

Established in Cambourne in 1801, Holman Bros grew into a large iron and brass founders, forge masters, engineers and millwrights. Its main business was supplying mining equipment to local tin mines, but this led to orders from abroad.

Holman Bros was capable of building the large steam engines in use at that time.

By 1880 it began to supply compressed air equipment for the mining industry and was world-renowned for its rock drills and compressors. By the early 20th century there were quite a few early beam engines used in Cornish mines. Their main component was a heavy iron beam which operated the pumping mechanism by a steam-powered rocking movement. Cast iron beams had been known to snap.

A broken beam fell down the shaft of a Durham coal mine in the 1860s causing death and destruction. In 1906 Holman received an order to replace a broken beam for the Grenville mine near the works. The broken beam weighed 25-30 and was replaced with one of 38 tons. The beam

The moulding shop at the turn of the century, a scene that hardly changed until the advent of modern techniques in the 1960s

was cast at the Holman foundry and was a remarkable feat to say the least. More than 40 tons of iron was smelted to reach every part of the mould at a reasonable temperature. This was done in two or three coke-fired cupola furnaces of the type in use since 1794. They are usually blown in and out within the same day, maximum efficiency being reached on the fourth or fifth tapping.

An average foundry cupola yields one ton per tap reaching 4 tons/hr at maximum output. If three cupolas were used to cast the beam, the required 43 tons of metal would have been raised in four hours, allowing for a safety margin of five tons.

The main problem during this time would be heat retention, which means the metal having to be kept hot enough in every part of the mould. This would be done by ladle pre-heating. Each tapping would be covered by dry foundry sand or coal-dust, creating an insulating skin over the molten metal and the process repeated after each tapping. Nevertheless, there would have been a temperature loss of more than 100 degrees. The beam eventually cast at around 1340°C. The casting of the Grenville beam by Holman, and Harvey’s 144-inch cylinder, underpinned the capacity and reputation of both companies. Holman’s ceased production in 2001, but every effort is being made to preserve parts of the works as evidence of Cornwall’s industrial past. t

The 38 ton beam (bob) hangs from the crane. Inset: Being raised by the Grenville miners

* The author is a former employee of John Grundy Ltd October 2015

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11/3/15 11:34 AM

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