Newsletter 3

The Russula Newsletter No. 3 - Copyright © by RUSSULA S.A.

March 2011

RUSSULA NEWSLETTER Introducing Russula´s Mathematical Model for Reheating Furnaces INSIDE THIS ISSUE: SPOTLIGHT Russula Engineering India NEWS Russula runs SAP ILAFA awards Russula for best exhibition stand Steve Pegg promoted to Russula Corporation GM MAINTENANCE TIPS AC drives preventative maintenance RECENT PROJECTS Russula implements projects at Gerdau Ameristeel sites Manitoba, Cartersville, Cambridge, Charlotte and Knoxville STEEL MARKET Robust steel demand predicted for India How to sell more steel QUALITY The history of quality management

BHUBANESWAR, Orissa State, India

Asia Russula Engineering India

Bubaneswar Orissa, India

Spotlight on Russula Engineering India - Bubaneswar, Orissa State, India Russula, a pioneer in the field of automation and engineering for long product rolling mill and re-circulating water treatment plants established an office in India in May, 2008 to cater to the Asian market.

India is very well positioned geographically for delivering projects to the Asian market with easy availability of skilled engineers and experts in the steel sector. This makes India a logical place to have an office to service the Asian market.

The average 8% year on year increase for India´s GDP is continually increasing the demand for steel, especially in infrastructure projects. The Steel Policy of India envisages reaching 175 MT by 2020.

With the vast experience, knowledge and support of Russula offices worldwide, Russula Automation and Engineering Solutions India Private Limited is prepared to provide proven and innovative solutions to the steel industry in the field of automation and control system for long products and re-circulating water treatment plants.

Russula Newsletter No. 3 March 2011 - Copyright Š by RUSSULA S.A.

2

UPCOMING EVENTS

Steel Fairs 2011 March

June

AISTech Training Seminars – Rod and Bar Rolling February 28-March 3, 2011 Charlotte, NC, USA www.aist.org/aistech/www.aist.org/calendar

METEC June 28 – July 2, 2011 Dusseldorf, Germany www.metec-tradefair.com Come visit Russula´s Stand at Hall/Stand No. 5E22

Russula Corporation´s General Manager, Steve Pegg, will give a presentation on ´Speeds and Drives´. The rolling of the rod and bar mill sections requires a good understanding of product and roll speeds. Modern drives employ input data from roll cutting to mill setup to best eliminate tension within the rolling process. This presentation will include low tension and loop regulation, within the drive configuration.

April Arab Steel Summit April 4-6, 2011 Doha, Qatar www.arabsteel.info/total/defaulte.asp Russula will display its newest developments in water treatment plant technology. Come check it out!

May AISTech 2011 May 2-5, 2011 Indianapolis, IN, USA www.aist.org/aistech/ Russula do Brasil´s Sales Director, Alex Schultz, and Russula´s Technical Expert Daniel Sánchez will copresent ´The Implementation of Votorantim Metais´s New Integrated Steel Mill Producing 1 MT in Billets and 0.5 MT Hot Rolled Products.´ IRD, Institute of Roll Design May 11-14, 2011 Pittsboro, IN USA www.instituterolldesign.com/ird/ SEAISI May 23-25, 2011 Singapore www.seaisi.org/htm/

3

Russula Newsletter No. 3 March 2011 - Copyright © by RUSSULA S.A.

Asian Metallurgy 2011 June 9-11, 2011 Bombay Exhibition Center, Goregaon (E) Mumbai, India www.foundry-planet.com/fileadmin/redakteur/ pdf-dateien/trade-fairs/asian-metallurgy-Brochure.pdf

September AIKW, Association of International Roll Pass Designers and Rolling Mill Engineers September 29 -30, 2011 Udine, Italy www.aikw.org Russula will be presenting ´Celsa Atlantic´s Greenfield 1 MT/yr Bar and Wire Rod Mills´. The conceptual design of the two rolling mills, accomplished two objectives; first to reduce the assembly and construction time and second to create technically advanced rolling mills that minimize maintenance and the required human resources. The bar mill has a 4 slitting process and the high speed wire rod mill sustains 90 t/hr. Come find out more!

October ABM - 48º Seminário de Laminação October 24-27, 2011 Sao Paolo, Brazil www.abmbrasil.com.br/seminarios/laminacao/2011 Come visit Russula´s Stand at ABM!

November ILAFA-52 November 13-16, 2011 Rio de Janeiro, Brazil www.ilafa.org Come visit Russula´s Stand at ILAFA!

NEWS FROM RUSSULA

Thorstenson presents Drive Selection for Rolling Mills at AISTech Russula Corporation´s Sales and Engineering Applications Director, Eric Thorstenson gave a presentation on Drive Selection for Rolling Mills, in the Long Product Projects Session at the annual Iron & Steel Technology Conference and Exposition (AISTech).

The conference was held in Pittsburgh, PA, USA this year from May 3-6 with an abundant turnout of over 6000 attendees.

The Russula paper concentrated on the selection of low voltage, less than 1000 V, variable speed motor drives for long product rolling mill applications. Among the selected principles discussed were: • Long product rolling process • Drive selection criteria

• • • • • • •

AC vs. DC drives Braking Rectifier section types Common DC Bus AC drives Maintenance considerations Installation considerations Rebuilds vs. buying new

´DC and AC drive technology are at an interesting crossroads with implications in rolling mill technology of great importance. With properly selected drive systems, product dimensional control is very precise.´ stated Eric Thorstenson.

The presentation was received well and started a lively discussion.

If you would like to obtain a copy of the presentation and paper ´Drive Selection for Rolling Mills´, please send your request to: info@russulacorp.com

Russula Runs SAP At its headquarters in A Coruña Spain, Russula implemented SAP® software solutions for financials, sales, project management and produce services, including SAP Customer Relationship Management (SAP CRM) applications.

With major offices in Brazil, Argentina, India and the USA, Russula choose SAP business solutions to unify core processes globally and better meet customer needs all over the world. To ensure business continuity, the company is taking a regional rollout strategy of the SAP business suite.

Russula presents at AISTech 2011 New Integrated Steel Mill at Votorantim Metais May 2, 2011 / 4:30 PM/ Rod & Bar Rolling Technologies

Russula Newsletter No. 3 March 2011 - Copyright © by RUSSULA S.A.

4

NEWS FROM RUSSULA

Russula exhibits at AIKW in Lincoln, UK The Association International of Roll Pass Designers and Rolling Mill Engineers, AIKW, held its 80th annual conference in Lincoln, England. Russula was one of the key exhibitors of the conference, which took place from September 30 to October 1, 2010. Russula exhibited a new rolling mill simulator station.

The mechanical equipment supplier, Siderimpes presented ´The designing, manufacturing and commissioning of a special steel rolling mill for the production of high quality steels for Store Steel in Slovenia´. Russula supplied the electrical equipment, automation system and complete

electrical start-up support in collaboration with Siderimpes, from Italy.

AIKW is a registered professional organization for roll pass designers and rolling mill engineers with a main emphasis in the field of hot rolled long products. The objectives of the AIKW is to inform it´s members of the latest developments in rolling technology and corresponding plant equipment as well as the promotion of networking between members.

Regular scientific conferences with lectures on current special-ized topics and visits to rolling mills are an important contribution to these objectives.

AIKW 2011 / Udine Italy / www.aikw.org

5

Russula Newsletter No. 3 March 2011 - Copyright © by RUSSULA S.A.

NEWS FROM RUSSULA

Russula - 2010 Winner!

ILAFA awards Russula for best exhibition stand Russula was honored to accept the Latin American Iron & Steel Institute (ILAFA) award in recognition for the best exhibition stand for Category A in the 51st ILAFA Congress, from October 24- 26 2010, in Buenos Aires, Argentina. Mr. Oscar Machado Koeneke, President of SIVENSA, Venezuela and Director of ILAFA Venezuela and ILAFA Honorary Member

and Member of ILAFA Executive Committee presented the award to Russula.

There were a total of 24 companies with trade stands representing 11 countries. The Congress had a record turnout of 1,268 delegates; more than 60% were foreign attendees.

Russula Newsletter No. 3 March 2011 - Copyright Š by RUSSULA S.A.

6

NEWS FROM RUSSULA

A Russula first – ANKIROS exhibition in Istanbul, Turkey The 10th biannual ANKIROS International Iron-Steel & Foundry Technology, Machinery and Products Trade Fair, was held in Istanbul, Turkey in the Tuyap Fair & Congress Center from 11 to November 14, 2010. The ANKIROS fair ran concurrently along with two other fairs, the ANNOFER for non-ferrous metals technology and the TURKAST for Foundry products. This was the first time Russula exhibited in this modern technology fair, with the participation of 800 companies from 37 different countries covering a total of 30,000 square meters.

The ANKIROS / ANNOFER / TURKCAST 2010 fairs were visited by 13,429 sector professionals, 81 % of which were nationals and 19% internationals. Despite the economic challenges facing the iron-steel, non-ferrous and foundry sectors, the number of international national visitors increased from 2008 by 7.3% and reached 72 countries.

Collectively the three biennial events comprise Eurasia's biggest trade fair and the third largest professional metallurgy fair in the world.

Steve Pegg promoted to Russula Corporation GM Russula is pleased to announce that Steve Pegg has been appointed as the new General Manager for Russula Corporation in North America. Steve has been working with Russula for the past seven year and brings a wealth of steel market knowledge based on his 25+ years experience in the steel sector. As part of his new role, Steve will be responsible for sales in Canada, United States, Mexico and Central America.

As such the company is relocating its Sales,Technical Support and Administration from Atlanta, Georgia to Columbus, Ohio. In a statement by Steve Pegg ¨The relocation of the Russula office is a critical step in our goal to become closer to our North American Customers and provide the best quality service and support.¨ Russula North America´s General Manager Steve Pegg

7

Russula Newsletter No. 3 March 2011 - Copyright © by RUSSULA S.A.

RECENT PROJECTS - RUSSULA CORPORATION

Russula improves troubleshooting and preventative maintenance at Nucor Steel Seattle (June 1, 2010) Russula is pleased to announce that it has commissioned a high speed data acquisition system for Nucor Steel Seattle, in Seattle, WA. The goal of the project was to enhance the troubleshooting and preventative maintenance resources in the rolling mill.

Russula supplied the system, using iba hardware and software, and the engineering and hardware necessary to integrate the system with the existing ABB Advant AC450 automation system. Russula was also responsible for instal-lation supervision, commissioning and training. While onsite, Russula process experts also provided automation

training and the programming necessary to replace the mill’s obsolete loop scanners with a readily available modern alternative.

This project represents the fourth modernization project for Russula at Nucor Steel Seattle since 2004. In previous projects, Russula has upgraded an AC drive system, the principal DC mill drives and the shear positioning control.

This project represents the 10th high speed data acquisition system from Russula implemented in a rolling mill in North America.

Gerdau Ameristeel Manitoba awards Russula second upgrade project

Gerdau Ameristeel Cartersville to Modernize Straightener

(June 11, 2010) Russula is pleased to announce that it has received a contract to modernize the Cooling Bed Rake for Gerdau Ameristeel Manitoba in Selkirk, Manitoba, Canada.

Russula will supply a new motor, a modern ABB ACS800 AC drive, positioning control using Allen Bradley’s Contrologix and integrate them with the rake’s existing automation.

Russula is also responsible for installation supervision, commissioning and training.

(August 28, 2010) Russula is pleased to announce that it has received a contract to modernize the Straightener at Gerdau Ameristeel Cartersville.

This project represents the second modernization project for Russula at Gerdau Ameristeel Manitoba. Russula is also currently modernizing the straightener at the same location.

This project represents the second straightener modernization project for Russula with Gerdau Ameristeel this year. Russula is also currently modernizing the straightener at Gerdau Ameristeel Manitoba.

Russula will supply new motors, modern ABB DCS800 DC drives, and integrate them with the straightener’s existing automation. Russula is also responsible for installation, commissioning and training.

Russula Newsletter No. 3 March 2011 - Copyright © by RUSSULA S.A.

8

RECENT PROJECTS - RUSSULA CORPORATION

Russula Chosen for Rolling Mill Control at Gerdau Ameristeel Cambridge (September 28, 2010) Russula is proud to announce it has been awarded a contract for engineering, design and first phase equipment for the new rolling mill controls at Gerdau Ameristeel Cambridge.

Russula will supply a new rolling mill control system to replace the obsolete ABB Masterpiece 200. The new system will use modern PLC technology, open protocol communications and consists entirely of “off the shelf” equipment.

chain transfer

The hardware platform will utilize ABB AC800M controllers with Wonderware HMI, integrated to work with the existing systems. Russula will supply all engineering for the project and phase one equipment, commissioning, installation advisement and training.

This project represents the seventh Gerdau Ameristeel mill to have a rolling mill control system by Russula.

mill lights

Gerdau Ameristeel Knoxville Upgrades Russula Mill Control Tools

New Finishing End Drives at Gerdau Ameristeel Charlotte

(November 11, 2010) Russula has received an order to upgrade the PLC programming tools at Gerdau Ameristeel Knoxville. The Knoxville plant implemented a Russula Mill Control system in 2002 and a Russula Finishing End Control system in 2007. Both systems will be upgraded to the latest programming platform allowing for enhanced troble-shooting and more advanced OPC communications.

Russula is responsible for supplying the new programming tool, updating the mill software, comprehensive testing and commissioning of the upgrade.

(November 17, 2010) Gerdau Ameristeel Charlotte and Russula have reached an agreement for the modernization of the rolling mill’s finishing end drives. Obsolete DC drives will be replaced with ABB DCS800 or ACS800 drives allowing for enhanced functionality, easier maintenance and more readily available spare parts. Russula is responsible for the supply, panel fabrication, installation and startup of the various drives systems to be installed in March 2011.

9

Russula Newsletter No. 3 March 2011 - Copyright © by RUSSULA S.A.

Russula has various AC and DC drive systems in operation at eleven (11) Gerdau Ameristeel rolling mills. This project represents the twenty-second (22nd) project involving electric motor drives for Russula and Gerdau Ameristeel.

MAINTENANCE TIPS

Rotate Your Caps!

- AC Drive Preventative Maintenance By: Eric Thorstenson, Russula Sales Applications All modern variable speed AC motor drives consist of three main sections: 1. Mains frequency AC to DC section called a rectifier (or active front end) 2. Capacitor energy storage/filter section 3. DC to variable frequency AC section called an inverter.

Aluminum electrolytic type capacitors are used for the energy storage / filter section. Aluminum electrolytic capacitors are constructed from two conducting aluminum foils, one of which is coated with an insulating oxide layer, and a paper spacer soaked in an electrolyte fluid. This combiAluminum nation of aluminum foils Electrolytic Capacitor and paper is rolled up and contained in sealed aluminum cans. Typically about the size of a soda can each.

failure of the spares when put into service.

As an alternative to rotating the spares, capacitors in storage for over a year can often be "reformed" by connecting them to a voltage source through a resistor and allowing the resulting current to slowly restore the oxide layer. The drive module manufacturers, such as ABB or Siemens, publish “reform” procedures which involve an external power supply which gradually steps up the voltage over a few days’ time. For spares without voltage for over two years, this external method of reform is recommended.

The annual rotating procedure is simpler, and provides the added benefit of practice in replacing the components.

Older AC drives using GTO switching devices required very large capacitor banks which were typically mounted in a distinct section. Modern IBGT based drives require less capacitance, and generally include the capacitors in the individual inverter section(s).

These type of capacitors have an inherit storage problem.

The oxide insulating layer will tend to deteriorate in the absence of a sufficient rejuvenating voltage, and eventually the capacitor will lose its ability to withstand voltage, if voltage is not applied.

Individual capacitors, as well as those in inverter modules or even complete drives purchased as spares are subject to this deterioration. For this reason Russula recommends rotating these spare components, from spares storage to a working drive once per year. Failure to perform this preventative maintenance may result in shortened life or even immediate

Easy to Remove ACS800 Multidrive R8i16

Russula Newsletter No. 3 March 2011 - Copyright © by RUSSULA S.A.

10

RECENT PROJECTS - RUSSULA ARGENTINA

Panoramic view of Acindar SBQ 500kt/y bar and wire rod mill

Revisiting the Acindar SBQ bar and wire rod mill project In the celebration of ILAFA in Buenos Aires, Argentina last October, it brought Russula to reflect upon an important milestone in 2007; the Acindar SBQ project followed by the subsequent opening of a Russula technical office in San Nicolás, Argentina.

The new high-efficiency mill is designed to roll special bar quality (SBQ) products for high-end industrial applications, including the automobile industry. Products range in size from 5.0 to 88.9mm round bars, as well as squares, hexagonal, flats and rebar.

In 2007, Russula supplied the complete water treatment plant and electrical equipment and installation for Acindar´s (ArcelorMittal) new 500 kt/y combination bar and wire rod mill, located in Villa Constitución, Argentina.

Acindar (ArcelorMittal) Argentina Rolling Mill Plant Data

Billet size:

160x160mm 12.5m 180x180mm 12.5m

Guaranteed production speed - roll exit 110m/s for 5.5mm & 7mm diam Design speed - roll exit

120m/s for 5.5mm & 7mm diam

Guaranteed production speed - bar exit 18.5m/s

11

Russula Newsletter No. 3 March 2011 - Copyright © by RUSSULA S.A.

Production Capacities - Break Down Mill (BDM) 350t/h - Rolling mill - Reheat furnace Product sizes - Rounds - Hexagonal bars - Squares - Plate

185t/h 120t/h

15.9 to 88.9mm 19.05 to 76.2mm 25.4 to 76.2mm 50 x 7mm to 101.6 x 12.7mm

RECENT PROJECTS - RUSSULA ARGENTINA

3D CAD drawing of the Russula water treatment plant

A Compact Water Treatment Plant The new water treatment plant, supplied on a turnkey basis, features Russula´s unique technology combination of twin decanting basins, mechanical ring filters and modular cooling towers. This was the first water treatment plant of its kind, implemented in Argentina and designed specifically for steel production. Due to the Acindar site limitations for the water treatment installation, Russula designed a very compact water treatment plant occupying a total area of 3550m2.

Water treatment thickner tank, decanting basins and cooling towers installation, including the embedded rebar and conduits.

Russula also provided extensive installation advisement; commissioning and training.

The water treatment plant is rated for 3,000m3/h and provides the mill with clean cooled process water. The sludge from the decanting basins passes through a thickener tank before being formed into bricks by a press pack filter. An oil skimmer removes any oil and grease. The ring filters are self-cleaning.

Russula was responsible for the complete mechanical and electrical supply and provided detailed civil designs for the

Water Treatment Plant Data

Non-contact water - Capacity - Supply pressure

1,400m3/h 4.5 bar

Contact water - Capacity - Supply pressure

3,000m3/h 6.5bar

Arial view of compact water treatment plant that occupies 3550m2 Russula Newsletter No. 3 March 2011 - Copyright Š by RUSSULA S.A.

12

RECENT PROJECTS - RUSSULA ARGENTINA

Acindar Maintains 118m/s with Russula Rolling Mill Automation Russula supplied the complete rolling mill automation, all the electrical and control equipment, and level 2, AC and DC drives and an IBA data acquisition system. The combination mill features controlled temperature rolling, which permits Acindar to produce thermo-mechanically rolled rod and bar product. Acindar´s production speed reached 118m/s, well above the Morgan guarantee of 110m/s due in part to the consistent and reliable automation system provided by Russula. The project scope consisted of consulting, engineering, installation, and start-up and training.

In order to have a successful start-up and reach 118m/s rolling speeds with excellent product quality, there were three principal challenges that Russula had to overcome, states José Luís Casanova, the Russula Project Manager.

To begin with the system integration was complex, the mechanical supplier Morgan supplied a different electrical system, which must be integrated with Acindar´s existing plant management systems and the new control system for the Greenfield SBQ mill.

Bar to wire rod division on time and managed well according to Casanova. Russula follows a standard project management process for purchasing, assembly, delivery, installation and start-up.

¨

During the performance test for the mill, we were able to sustain a consistent production rate of 118m/s for many hours, much higher than the rolling mill guarantee. On the control side, this can be attributed to an optimized control configuration and final drive adjustments. ¨ - José Luis Casanova, Russula Project Manager

And lastly the most important project challenge was for the SBQ mill to achieve optimum functionality at 110m/s. ¨ During the performance test for the mill, we were able to sustain a consistent production rate of 118m/s for many hours, much higher than the rolling mill guarantee. On the control side, this can be attributed to an optimized control configuration and final drive adjustments.¨ affirms Casanova Electrical equipment room ¨Russula tackled this problem by first doing a study of all the different existing solutions available on the market. Then we evaluated and selected the best solution based on our know-how from implementing similar projects.¨ says José Luís Casanova Second a challenge to all project managers is to complete the project deadlines; in the case of Acindar the delivery time spanned approximately 1.5 years. This project was executed

13

Russula Newsletter No. 3 March 2011 - Copyright © by RUSSULA S.A.

Acindar and Russula have had a successful partnership dating back to 1995, when Russula upgraded the control system for their other two strand wire rod mill in Villa Constitución. Since 2002, Russula has completed numerous electrical projects for Acindar in San Nicolás and Navarro.

This Greenfield SBQ mill marks the 5th and largest project for Russula with Acindar.

TECHNOLOGY

Introducing Russula´s Mathematical Model for Reheating Furnaces By: José Luis Casanova, Project Manager

The complete set of Russula reheating furnace control programs result in effective furnace control, improving heating effectiveness and heating gas consumptions. Short pay-back times are obtained due to the effectiveness of furnace gas consumption reduction; especially at installations without any previously existing optimization control program.

Russula has developed and implemented a Mathematical Model for the reheating furnace. This Mathematical Model is currently in operation at two furnaces after undergoing a testing and validation process. Russula sponsored a chair and jointly developed the Mathematical Model with the Vigo University Applied Research Department (Universidade de Vigo).

The Mathematical Model complements the existing Russula reheating control modules including level one control for combustion and logic; level two for heating strategies and delay multipliers and a pyrometer feedback module.

are also included at this program level.

Furnace logic is the program that controls all charging, discharging, hydraulics and walking beam functions.

The Level two functions generate automatic heating set-points based on strategy tables and delay multiplier tables. A material tracking program is used at this control level (alternatively upon customer request the tracking program could be included as an option for level one function). The tracking program keeps track of all the material (billets, blooms and slabs) inside the furnace; it detects where different quality material is located, and decides, which heating strategy should be applied to a particular furnace control zone.

This decision is based on material data information received from the operator or plant management software. Information regarding which strategy should be applied, and data regarding material speed inside the furnace are used to automatically

generate set-points for zone temperature control automatic operation.

Furnace stops are controlled by delay multiplier tables, which generate the appropriate lower setpoints in the case a furnace stop is twice the average time between two furnace discharges.

The Pyrometer feedback module corrects automatic temperature setpoints for the heating and preheating furnace zones. This correction is based on pyrometer temperature feedback from the material after leaving the furnace, while it is rolling.

The reheating furnace Mathematical Model is a program intended to detect material temperature deviations inside the furnace against an ideal curve that could be supplied by furnace constructor or optimized by a rolling company based on their experience and knowhow. The Mathematical Model program estimates material temperature for each product inside the furnace based on material speed inside the

The Level one program is the basic furnace control and includes two functions; combustion control and furnace logic. Combustion control is responsible to control common regulation functions such as combustion air pressure control, furnace pressure control, gas pressure control and recuperator protection functions; furnace zone temperature control functions and cooling supervision functions

Russula Newsletter No. 3 March 2011 - Copyright © by RUSSULA S.A.

14

TECHNOLOGY furnace, burners’ power and furnace temperatures. The estimated temperatures obtained are compared against an ideal curve and the deviation is used to calculate a correction for the furnace automatic temperature set-point generation system. The Main objective for the Mathematical Model program is to detect material heating deviations due to a lack of cadence in material discharging that cannot be corrected by the delay multipliers control program and could lead to a material overheating or under heating.

The Russula approach to develop the reheating furnace Mathematical Model begins with a static analysis on normal/ standard operating conditions. The static analysis simulates the material heating inside a furnace full of material under fixed power and material speed conditions.

In general, the material temperature will be affected by initial conditions in addition to heating conditions. Heating conditions are determined by convection heat exchange between the material and the gases inside the furnace and the heat exchange with burner flames, furnace walls and other pieces of material through radiation. In the case of a walking hearth furnace, conduction heating between the furnace and the material pieces will have influence, too. In general, heating conditions will be affected by: -

product position inside furnace flame temperature gas temperature inside the furnace furnace wall temperatures material temperature temperatures of other material pieces

The Static analysis is a mathematically detailed simulation of furnace material heating under standard and stable

15

heating conditions. All mentioned heating conditions are analysed to generate furnace and material heating data.

Main output data from this analysis are shown in these three graphs: - fume temperature graphs - radiation temperature - material piece temperature (one graph per each piece) Figure 1 “Fumes Temperature Graph” shows the result of a static analysis inside the furnace with a fume temperature representation. In the above example one can see how the higher temperature fumes are generated by the heating central burners. Also a fume flow analysis inside the furnace was conducted and shows how the fumes flow from the burners to the fume exit. As well, different gas tempera-tures close to the material pieces at the bottom and upper sides are shown in the graph. Please note that the temperature is expressed in Kelvin degrees.

Figure 1 - Fumes Temperature Graph

Figure 2 - Radiation Temperature

Figure 2, “Radiation Temperature”, shows data related with the burner’s temperature, furnace wall temperatures and material pieces temperatures.

Once again data values are in Kevin degrees. Note that the furnace wall temperatures can also be observed on this graph.

Wall temperatures are the detected value of furnace thermocouples when properly Figure 3 - Material Piece Temperature installed on the furnace roof or walls. Furnace fume temperathe roof or walls, as can be seen in tures or burner temperatures are analyzing figures 1 and 2 together. higher than the temperatures observed by furnace thermocouples on

Russula Newsletter No. 3 March 2011 - Copyright © by RUSSULA S.A.

TECHNOLOGY The Figure 3, “Material Piece Temperature”, plots detailed data of one billet temperature obtained from furnace static analysis. The static analysis gives all the data for each furnace billet; analyzing each billet material temperature in the nucleus and outside the nucleus, and the differences between material corners and other points.

The static analysis is an intermediate step to construct the Mathematical Model; all obtained data must be analyzed and checked to ensure that critical information regarding the furnace (geometrical data, burner power, walls, materials, ect.) is correct.

Static data can be also being confirmed with a material thermocouple test along the furnace.

The thermocouple test is a data recording operation where a data acquisition system collects all furnace parameters (temperatures, powers, set-points, fume temperature) and the data from several thermocouples installed on a test piece that goes through the furnace in a normal heating process. Continuous furnace operation is required to validate the data obtained from this test in order to be able to check the data with the static analysis output data.

The static analysis is a complex mathematical process that requires hours of computer calculations.

Russula has developed a simple modelling system based on the data obtained from the static analysis to furnace material temperature on-line independent of furnace speed and other heating parameters. This development based on the modelling techniques is the furnace Mathematical Model.

The furnace Mathematical Model predicts on-line, each minute, material temperature for all material pieces

Thermocouple test

Figure 4 - Complete Thermocouple Test

Thermocouple test

Figure 5 - Different Billet Comparative inside the furnace. This data is compared with the ideal heating data and used to correct the automatic furnace set point generation program.

The most important factor for validating a model is its repeatability, the same answer against the same heating conditions.

Once again, the thermocouple test is a useful tool to check on-line material heating prediction. Figure 4 “Thermocouple Test Complete” shows the different values obtained during a real test. Three thermocouples were installed on a billet; thermocouples 1

and 3 located close to the billet ends and thermocouple 2 installed in the middle of the billet. Mathematical Model predictions show the billet at each position in the furnace.

The Mathematical Model program must have a high repeatability; this means that results obtained under similar heating conditions must have similar temperature values. It is impossible to repeat the same heating and material speed conditions from one production day to the next on a real installation, but under similar conditions results obtained must be similar.

Russula Newsletter No. 3 March 2011 - Copyright © by RUSSULA S.A.

16

TECHNOLOGY This is the repeatability concept for the Mathematical Model program.

Billet temperature differences between model estimation and thermocouple test values could be adjusted by offset adjustments, but it is absolutely necessary to get similar results against similar input conditions that lead to do an accurate automatic set point correction.

Figure 5 “Different Billet Comparative” shows Mathematical Model data obtained by two different billets at different times under similar production conditions. The same production speed, same final heating temperature target and same steel degree are the conditions for this test.

Graph 5 “Different Billet Comparative” shows estimated temperature differen-

ces under similar production condition are lower than 10 ºC in various positions inside the furnace.

The furnace Mathematical Model gives a good estimation of material heating inside the furnace and is used to adjust heating requirements to optimize furnace combustion. This adjustment will finally result in improving of the heating process and will result in a positive economic impact by reducing the gas consumption in the furnace, reducing the cost per produced ton; and result in an environmental impact by reducing atmospheric emissions.

The complete set of Russula reheating furnace control programs result in effective furnace control, improving heating effectiveness and heating gas consumptions. Short pay-back times are obtained due to the effectiveness of

21 reheating furnace projects implemented worldwide for the leading steel producers Celsa Gerdau Isdemir Celsa UK Celsa Huta ArcelorMittal M/S Welspun Celsa Atlantic Sandvik Steel Fagersta Stainless Gerdau Ameristeel 17

Russula Newsletter No. 3 March 2011 - Copyright © by RUSSULA S.A.

furnace gas consumption reduction; especially at those installations without any previously existing optimization control program.

Contact: Russula Calle Pasteur 30, 1º A Coruña Spain 15008 Tel: +34 981 160 344 info@russula.com

STEEL MARKET

Robust Steel Demand Predicted for India By: Abanis Nayak, Russula Engineering India General Manager Steel has been an interesting subject for the last two decades and it continues to keep the adrenalin high till date. Crude steel production in 2009 was 1227 Million Metric Tonnes. In 2010 production reached 1413 Million Metric Tonnes. China steel leads in terms of crude steel production and the year on year growth is nearly the same.

Steel industry reforms in 1991 and 1992 have led to strong and sustainable growth in India’s steel industry Since its independence, India has experienced steady growth in the steel industry, thanks in part to the successive governments that have supported the industry and pushed for its robust development and private investors who have taken advantage of the opportunity to help build the steel industry in India.

1991

A substantial number of economic reforms were introduced by the Indian government. These reforms boosted the development process of a number of industries, in particular the steel industry in India, which has subsequently developed quite rapidly.

The 1991 reforms allowed for no licenses to be required for capacity creation, except for some locations. Also, once India’s steel industry was moved from the listing of the industries that were reserved exclusively for the public sector, huge foreign investments were made in this industry.

19

1992 Yet another reform for India’s steel industry came in 1992, when every type of control over the pricing and distribution system was removed making the modern Indian Steel Industry extremely efficient as well as

Russula Newsletter No. 3 March 2011 - Copyright © by RUSSULA S.A.

competitive. In addition to this a number of other goverment measures have also stimulated the growth of the industry such as unrestricted external trade, low import duties and an easy tax structure.

STEEL MARKET

Current Indian Steel Sector Scenario The Indian Steel Industry has been moving from strength to strength and according to the Annual Report 2009-10 by the Ministry of Steel, India has emerged as the fifth largest producer of steel in the world and is likely to become the second largest producer of crude steel by 2015-16.

With a strong demand from autos and engineering services, the domestic steel demand in India remains robust, as per Moody's sectorial analysis on Asia's steel sector. According to the analysis, the outlook for the domestic operating environment is positive, driven by robust growth in infrastructure, autos and construction and constrains on additional supply by 2011.

Recently, Mr Virbhadra Singh, Minister for Steel, said that India will become the world's second-largest steel producer by 2012, with a capacity of 124 million tonnes (MT) as part of the push being given to assist overall infrastructure development.

Production India's steel production during 2009-10 was 64.88 million tonne (MT), up 11 % from a year ago, according to Mr A Sai Pratap, Minister of State for Steel.

During the end of the second quarter in September 2010, steel majors Tata Steel and Steel Authority of India Ltd (SAIL) reported a high growth in steel sales.

SAIL registered sales of 3.17 MT in the period under review, while Tata Steel's total sales for the quarter stood at 1.66 MT which is around 14 % higher than the corresponding quarter last year.

Meanwhile, JSW Steel's production during the quarter grew by 8 % to 3.14

MT on the back of a steady rise in demand.

Consumption The domestic steel consumption grew by 9.8 % to 29.82 MT during AprilSeptember 2010 over the year ago period, on the back of steady demand from sectors like automobile and consumer durables. As per the provisional data from the Ministry of Steel, consumption was at 27.15 MT in the same period a year ago. In September 2010, steel consumption rose 4.1 % to 4.72 MT, against 4.53 MT in the yearago period.

billion over the next 10 years to ramp up capacity from 7.8 million tonne per annum (MTPA) to 32 mtpa through greenfield and brownfield projects.

• Jindal Steel has completed the acquisition of Oman-based Shadeed Iron and Steel Co LLC for US$ 464 million.

• Japan's Nippon Steel will begin a manufacturing operation in India making steel pipes for use in auto mobiles and plans to invest US$ 37 million on production and sales operations.

Investments

Government Initiative

A host of steel companies have lined up major investment proposals.

Furthermore, with an expanding consumer market, the Indian steel industry is likely to receive huge domestic and foreign investments.

As per the Press Information Bureau (PIB), during 2009, the government took a number of fiscal and administrative steps to contain steel prices. Central value added tax (CENVAT) on steel items was reduced from 14 % to 10 % with effect from February 2009.

Moreover, in the Union Budget 2010-11, the government has allocated US$ 37.4 billion to the infrastructure sector and has increased the allocation for road transport by 13 % to US$ 4.3 billion which will further promote the steel industry.

The domestic steel sector has attracted a staggering investment of about US$ 238 billion, according to Mr A Sai Prathap, Minister of State for Steel. This consists of nearly 222 MoUs signed between the investors and various state governments mostly in the states of Orissa, Jharkhand, Chhattisgarh and West Bengal.

Conclusion

• Tata Steel plans to invest US$ The growth of the steel sector in India 226.17 million to commission its will be robust thanks to the domestic proposed ferroalloys plant and bar demand and Government Initiative. mill at its industrial park at Gopalpur and a greenfield steel plant at Kalinga Nagar.

• Essar Steel plans to expand its ex clusive steel showrooms, Hypermart and retail outlet, Expressmart in Madhya Pradesh.

• JSW Steel plans to invest US$ 17 Russula Newsletter No. 3 March 2011 - Copyright © by RUSSULA S.A.

20

STEEL MARKET

Interview with India´s Minister of Steel,Virbhadra Singh Reprinted from Dalal Street by web invitation: www.dsij.in/Research/Articles/articlesfull/tabid/768/ArticleID/1631/Default.aspx

(8/30/2010) Soon after taking charge of the Ministry of Steel, Virbhadra Singh, Minister of Steel, interacted with representatives from the steel industry and took steps to implement some of their demands. Singh set the steel industry on the growth path with significant growth in production.

At a time when the statistics show a much lower per capita steel consumption in the country, what is your assessment of the steel sector in India?

A low per capita consumption only indicates the future demand potential. As you know, steel demand in the country is pegged to the gross domestic product and its increase is also similarly linked to growth in GDP. What we are most interested is in improving the availability of steel in order to cater to the growing steel demand in the country. Per capita steel consumption will automatically improve as steel demand grows and also the supply is ensured to fulfill the demand.

We are also interested in improving the general steel consumption through innovative design, technological and product based solutions. There are a number of areas, where steel usage is cost economical and can provide a better solution. These areas range from architectural buildings, airports, railway station, flyovers, roads, etc. to rural housing and household applications. One of our objectives is to identify and promote innovative applications of steel in engineering, architecture, construction and household applications.

How do you look forward to sector’s growth in terms of demand and consumption over the next few years?

Over the last five years, between 2004-05 and 2008-09, steel consumption growth in the country has been 9.6 per cent per annum. Earlier, the National Steel Policy 2005 had estimated an average consumption growth of 6.9 per cent. Then in 2007-08, the steel consumption growth in the country has touched a figure of nearly 13 per cent. I believe that the average growth of steel consumption in the country, for the next

21

Russula Newsletter No. 3 March 2011 - Copyright © by RUSSULA

five years, can be estimated to be higher than 10 per cent per annum.

How do you think that the country’s annual steel production target of 124 million tones can be achieved by 2012?

We have realistically projected a steel capacity of nearly 120 million tones in country by December 2012. Nearly 36 million tons of brownfield capacity additional projects are going on as per schedule. Apart from this, a number of small and medium units in the secondary sector are also coming up fast. Except one or two Greenfield projects, we are expecting all other steel capacity projects, as envisaged, will be on stream by December 2012.

With the present production at 55-60 million tones, the Indian steel sector is the fifth largest in the world, much behind China’s 500 million ton sector. How do you see China’s role as the potential challenge to India?

The present steel capacity in the country is nearly 65 million tons. In terms of current rate of demand growth, the steel requirement in the country would double within five to six years. Therefore, we must double our capacity within two years to fulfill the domestic demand. Also, once our steel production capacity is at a comfortable level, we will certainly aim at quality and competitiveness of our steel products on a par with the best global standards. We are continuously watchful towards sustenance of our steel industry and take appropriate steps, whenever, required to maintain a healthy growth of the steel sector in India.

Now coming on China, we need to understand that every economy has its own requirements depending upon its supply, demand, capacity and most importantly the phase of economic cycle it is passing through. After China, our steel industry is the second fastest growing sector in the world in terms of demand and production. We have become the third largest steel producer in the year 2009, from being the seventh largest three to four years back. We have great potential for economic growth and currently our main concern is to synergise all available resources to facilitate the production and capacity building to meet the future steel requirement in the country.

STEEL MARKET What’s your opinion on export of iron ore to other country?

Don’t you think that an increase in export duty on iron ore will help the domestic sector to conserve it for long-term utilization?

We are of the view that the precious raw material like iron ore is non-renewable natural resource and should be conserved for long-term utilization of domestic steel industry.

We are regularly taking up the issue with Ministry of Finance for imposition of appropriate export duty on iron ore to discourage its export. As a result of our efforts, export duty on iron ore lumps has been increased recently from 10 per cent to 15 per cent ad valorem. We feel that to effectively discourage export of iron ore, we further need to increase export duty on iron ore to at least 20 per cent ad valorem on all varieties of iron ore.

In my opinion, I feel that the government should impose a ban on exports of iron ore. Others may differ on this issue, but we should see what United States and China are doing to conserve their resource of iron ore and oil in that order.

Several international companies like ArcelorMittal and Posco have delayed their projects due to some government’s regulatory hurdles. What’s your opinion on this and how do you plan to solve the issue?

Some of the greenfield projects have affected by the issue of land acquisition. We are hopeful that there will be a political consensus with regard to land acquisition and R&R policy. It is a key issue not only for steel industry and infrastructure development in general. We are hopeful of a solution.

There is no regulatory hurdle on Posco, ArcelorMittal or any other entrepreneur planning to set up steel plants in the

country. There are certain procedural formalities and critical requirements, especially for the greenfield projects. Since ArcelorMittal and Posco are high capacity steel proposals with a much larger level of integration, there are certain delays. But I am sure all the hurdles will be gradually overcome and these Greenfield will commence their executions soon.

At the ministry level, we have constituted an inter-ministerial group, headed by Secretary, Steel with representatives from the concerned central ministries / departments and state governments, where major steel projects are located. This group has been actively monitoring and coordinating on all impeding issues and the infrastructure requirements of the upcoming steel projects.

Rising prices have become a vital issue today, how do you plan to check steel prices from escalating?

I keep a very close watch on prices. The recent spurt in prices has not been a happy development. In my view that was not warranted. We organised a meeting with major steel producers of the country to see that there is no speculative increase in prices. The results are for everyone to see as steel prices have fallen by 5 to 10 per cent after the meeting. In a deregulated market, the prices are determined by the interplay of market forces. The current rise in price of steel is attributable to increase in price of steel making inputs one hand and strong domestic demand for steel on the other hand. Government through various policy measures tries to maintain stability in terms of price and availability. For instance, the import duty on steel has been reduced over the years and currently stands at the lowest slab of 5 per cent.

The import duty on melting scrap has been brought down to nil. Similarly, the general excise duty rate has been reduced to 10 per cent which will also help in checking the rise in price of steel.

Russula Newsletter No. 3 March 2011 - Copyright © by RUSSULA S.A.

22

STEEL MARKET

How to Sell More Steel By: Mary House, Marketing Department How is the market now in Turkey, two years after the crisis?

The market is recovering. We see that the customers are coming back with more inquiries. The quantities are not yet back to pre-crisis times, and we still think it will take another 1-2 years before we reach the pre-crisis trading levels. Customers tend to run with minimum stocks due to weaker demand and market volatility.

What are the criteria your customers use to purchase steel?

An interview with Ali Riza-Bekem and Levent Danisman from the trading company Linkas Steel in Istanbul, Turkey reveals the criteria one trading company uses to buy steel from steel manufacturers.

For the long products, it is a very competitive market where price and delivery time are the main determining factors. For a product like wire rod, which is usually further processed, quality becomes an important criteria in mill selection. For the flat steel products which are usually intended for manufacturing industries, quality has a higher importance. But still, price is the main factor when carbon steels are concerned in general.

You buy and resell steel, - who are your main customers?

In a market down cycle, does this criteria change?

Our main customers are central steel distributors in various countries, which mainly supply the steel to the construction companies and manufacturing industries. We trade all kinds of steel; flats such as HRC or CRC, or longs such as reinforcing bars and merchant bars. The long products consist of 7080% of our sales volume. A smaller amount of our business is for the steel producers themselves; selling billets and occasionally slabs for rolling into semi-finished and finished products.

In a downturn market, on-time delivery becomes very critical as the customers tend to prefer getting the material as soon as possible to sell it through their distribution channels before the price drops further.

Ali Riza-Bekem left, Levent Danisman right

How do you find new customers?

We participate in a lot of trade fairs and conferences like IREPAS/Steel Orbis/SBB/Metalexpert conferences and events.

We follow and pick certain markets where there is import potential, and we visit those markets to develop relationships with local players. Sometimes, we work through agents who have a good local understanding and who are well connected with the potential customers. Of course, we also use the internet for locating new customers.

23

Russula Newsletter No. 3 March 2011 - Copyright Š by RUSSULA S.A.

What do you see are the biggest challenges steel manufacturers face today?

In the first place, due to the low demand, most mills are operating at reduced capacities. The margins have decreased considerably, and mill efficiency has become more important than before. As most distributors keep lower stocks, the order sizes have decreased. Steel manufacturers are forced to do more size changes, which add more manufacturing costs and lower their plant efficiency.

Raw material supply is becoming a very critical issue, too.

There were a lot of new investments prior to the crisis which have increased the requirement for scrap. The scrap shortage is a challenge for mini-mills.

STEEL MARKET Logistics is becoming very important as well, because previously overseas shipments used to go in bulk, and now there is a tendency towards container shipments, which require more material handling.

How do you select which steel mill to fill a particular customer request?

Well not all steel plants make the same products. Most important is if the steel manufacturer makes the exact product requested at a certain, price, quality and can meet the delivery time. If all of these fall into place, the relationship we have with the supplier in general becomes the determining factor as to the final mill selection.

Our job is to keep in close contact with all the steel mills at all times so we know which mill is the best for a certain grade and quality at the best price and delivery time. So depending on the customer´s priorities - price, delivery time, quality, we know which will be the best mill to cover the customers’ needs.

You may have contact with many steel manufacturers, which supply exactly the same product. In the moment you have an order to fill, how do you decide whom to call?

We will try to select a mill which is easier to work with in terms of operations. We tend to go with the mills who are

faster problem solvers – in case there are any issues with the deal they will help to solve the problems. Resolving problems such as operational issues, size changes, production and operational flexibility are important. Long term co-operation is also important.

Think of one of your best steel suppliers, why do you call him more than other suppliers?

It is important in our business to have a quick reply. When we send an inquiry we want an immediate reply. Response time is vital in a changing market. In fluctuating markets it has become more common that steel mills do not respect the agreements as much and naturally we want to work with mills who respect the agreements.

How can steel producers be more competitive?

Before the crisis it was all about cutting on already high margins. But today the margins are tight and competitiveness will highly depend on having good technology. The speculative aspect of the business in terms of raw material sourcing and end product sales strategies requires the mill to be very fast decision makers and to follow the world markets and trends, in order take the right positions. It is not enough to be just a good steel producer today – a mill needs to be able to read the market well, too.

¨ It is not enough to be just a good steel producer today – a mill needs to be able to read the market well, too. ¨ - Linkas Steel

Russula Newsletter No. 3 March 2011 - Copyright © by RUSSULA S.A.

24

QUALITY

The History of Quality Management By: Elvira Martínez Fernández, Quality and Environmental Director, Russula S.A. Since 1980, some of the U.S. states, created new organizations dedicated to promoting quality such as the Nation Advisor Council for Quality (NACQ). In April 1990, 21 of the largest American companies, such as IBM, AT&T, joined the GEMI (Global Environmental Management Initiative) to begin the quality control process including environmental criteria (TQEM: Total Quality Environmental Management). This association was created in response to the first legal measures related to the impact of industry on health and the environment.

The standards have been progressively integrated to meet the demands of civil society: global risks, climate change, etc.

In RUSSULA, the challenges of sustainable development have been translated into concepts of social responsibility, health and education.

Some milestones: The history of quality management is part of the history of management itself. Initially, civilizations relied on arts and crafts to improve the quality of the products distributed within society.

The Industrial Revolution and the rise of mass consumption led to emerging issues in management and specifically in quality management. In 1924 W. A. Shewhart, a physicist at Bell Laboratories of AT&T, developed a method for production quality control applying statistical techniques taken from engineering and manufacturing. Then during World War II, W. E. Deming used these methods in the manufacture of munition and other products of strategic importance.

In the mid-50s, Japan decided to make quality improvement a national imperative in the reconstruction of its economy based on the theories of W.A. Shewhart, W.E. Deming and J. Juran. The Japanese worked with quality tools designed by Deming such as control charts and continuous improvement.

It was at this time that the idea of opening a continuous learning service came to fruition. One of its theories came from Taiichi Ono Toyota's production manager. From the 70´s this initiative became a success mainly in the automotive industry.

25

Russula Newsletter No. 3 March 2011 - Copyright © by RUSSULA S.A.

- 1970 (USA.): First quality assurance law passed for nuclear power plant construction - 1991 (USA.): First environmental standard (EQS) on the quality of soil - 1993 (USA): First environmental quality standards for health

w

w

w

.

r

u

s

s

u

l

a

.

c

o

m

EUROPE

HEADQUARTERS - A Coruña, Spain C/Pasteur No. 30 - 1º 15008, A Coruña, Spain T: +34 981 160 344 F: +34 981 276 186 E: info@russula.com WORKSHOP - Bergondo, Spain Russula Industrial Polígono Bergondo C/Parroquia Rois D-7 15165, A Coruña, Spain T: +34 981 783 464 F: +34 981 783 465

NORTH AMERICA SALES & TECHNICAL - Columbus, USA Russula Corporation Columbus, OH, USA T: +1 614 403 5658 E: info@russulacorp.com

SOUTH AMERICA SALES & TECHNICAL - Sao Paulo, Brazil Russula do Brasil Av. Ibirapuera, 2907 Torre C, Cj : 620 Indianópolis, Sao Paulo 04029-200 Brazil T: +55 11 5044 8847 F: +55 11 5044 9883 E: info@russula.com.br TECHNICAL - San Nicolás, Argentina De La Nación No. 47 Piso No. 6 San Nicolás, Argentina T: +54 3461 453013

ASIA SALES & TECHNICAL - Orissa, India Russula Engineering - Sales & Technical First Floor Plot No. 150, Jayadev Vihar, Nayapalli VIP Area, Unit - 16 Bhubaneswar , INDIA T: +91 9938115906