july/august 2014 vol.38 no.5 –

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July/August 2014 – Vol.38 No.5 – www.steeltimesint.com

OXYGEN STEELMAKING STEEL PROCESSING PERSPECTIVES

EUROCOKE 2014PROFILE: CD WÄLZHOLZ

www.steeltimesint.com July/August 2014

1CONTENTS JULY/AUGUST 2014

ISSN 0143-7798

EDITORIAL

Editor

Matthew MoggridgeTel: +44 (0) 1737 [email protected]

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Dr. Tim Smith PhD, CEng, MIM

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Front cover image courtesy of Tenova.

4

News

44

History

Widmanstätten and alloy steels

2

Leader

15

Steel processing

11

USA update

No country for oil country tubular goods

12

Latin America update

Investment is crucial

US GOES steel production

30

Company profile: CD Wälzholz

A global presence in many markets

35

Conference report

EuroCoke 2014

40

Technology

A review of the latest new products

39

Process control

Automated chips collection system

Oxygen steelmaking

21

Basic oxygen steelmaking

25

Jet process technology from Siemens

42

PerspectivesMagnetic Analysis Corporation

13

India update

Resistance to Tata’s mining plan

42

15

25

42

30

35

July/August 2014 – Vol.38 No.5 – www.steeltimesint.com

OXYGEN STEELMAKING STEEL PROCESSING PERSPECTIVES

EUROCOKE 2014PROFILE: CD WALZHOLZ

39

2

July/August 2014 www.steeltimesint.com

They say all is fair in love and war, but is it really? “England is out of the World Cup.” Sevenwords that I’ve grown accustomed tohearing every four years. In short, weinvented football, but we’re no good at it,apart from a brief moment in 1966 whentelevision was monochrome, the Beatles’Rubber Soul album was at number onefor six weeks and John Lennon said thathe and his fellow band members werebigger than Jesus.

Many disappointing World Cups later,nothing has changed. The Beatles havegone; John Lennon is dead and showingno signs of resurrection (clearly not biggerthan Jesus) and, unlike American andEuropean steelmakers, Rooney and com-pany can’t really moan about the need fora level playing field. Why? Because foot-ball pitches ARE level unless it’s ‘jumpersfor goalposts’ and oranges at half time,which is just about England’s level.

It’s hard to ignore the phrase ‘level play-ing field’ if you’re involved in the steelindustry, as there are so many examples ofhow things are closer to ‘jumpers for goalposts’ than state-of-the-art pitches.

Uncompetitive energy costs were onefactor behind Tata Steel’s recent

announcement concerning potentialredundancies at Port Talbot, along withUK business rates being higher than inother EU countries.

US Steel is blaming unfairly tradedtubular products imported into the USAas a chief reason behind idling two of itstubular manufacturing plants.

The American Iron & Steel Institute saysUS imports of oil country tubular goodswere up 55% in May when compared toApril – bad news for US steelmakers andslightly unnerving when you read thatMario Longhi, president and CEO of USSteel, believes that American steel compa-nies are being ‘targetted for elimination’.

Some would argue that it’s the globalnature of business and that, ultimately,there will never be a truly level playingfield. Why should there be? If majorclothes retailers can rely upon Asiansweatshops where workers are paidpeanuts and nobody cares about theirwelfare – as long as cheap labour can beexploited and huge profits made backhome – then surely the Chinese and SouthKoreans selling cheap OCTGs is just par forthe course and only to be expected.

Matthew MoggridgeEditor

[email protected]

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4 INDUSTRY NEWSNEWS IN BRIEF

US Steel is blaming unfairly tradedtubular products imported into theUSA as a chief reason behind thecompany's decision to indefinitelyidle two of its tubularmanufacturing facilities inMcKeesport, PA, and Bellville inTexas.

The move, which will take placein early August, will directly impactupon 260 US Steel employees andwill reduce the number of US Steel'stubular facilities from 10 to 8. Itwill, however, enable the companyto operate more profitably. US Steelwill continue to produce and finishtubular products at its facilities in

Alabama, Arkansas, Ohio and Texaswhere it employs approximately2,900 employees.

According to a press releaseissued by the company,“approximately 45 professional andmanagement employees and 215represented employees wereadvised today of the upcomingidling and resulting job reductionsand are being issued notices underthe Worker Adjustment andRetraining Notification (WARN)Act.”

Mario Longhi, US Steel’s CEO,said that the company remainedfully committed to the tubular

products business and to servingits tubular customers. “While theseare difficult decisions, they arenecessary in order to return ourcompany to sustainableprofitability and position us forfuture growth,” he said, addingthat the company would continueto fight unfair trade by foreigncompetitors.

US Steel – along with otherdomestic producers – has filed ananti-dumping action with the USDepartment of Commerce to haltthe unfair trading and dumping offoreign Oil Country Tubular Goods(OCTG) into the American market.

Chinese automotive plant openValin ArcelorMittal AutomotiveSteel Co’s US$852 millionadvanced automotive steel plant inChina opened for business on 15June.

The joint venture betweenArcelorMittal – the world’s largeststeel company – and Hunan ValinIron & Steel Co, will produce high-strength automotive steels, thatare currently imported, for theChinese market.

The new facility is located in theeconomic zone of Loudi, HunanProvince, and was built on agreenfield site. It is a majorinvestment project jointly approvedby China’s National Developmentand Reform Commission and theMinistry of Commerce.

It took over two years toconstruct the plant, which willinitially create more than 600highly-skilled jobs.

China recorded a 16% increasein car sales to 18 million units lastyear, and is expected to account for35% of worldwide automotivegrowth between now and 2020.

VAMA’s production output willmeet rapid growth in demand foradvanced automotive steels inChina.

The annual production capacitywill be 1.5Mt, including 800kt ofcold rolled coil, 200kt ofaluminium-coated coils and 500ktof hot-dip galvanised coil. VAMAcovers a large range of automotivesteel products, including those forvisible structural parts, chassis andwheels.

VAMA aims to supplyinternational carmakers and Tier 1suppliers as well as promote high-end solutions to domestic carmanufacturers and their suppliernetworks, including ArcelorMittal’s

major customers in China, such asVolkswagen, GM, Ford, PSA,Daimler-Benz, BMW, Toyota,Honda, Renault, Fiat and Nissan. Itwill also service leading domesticmanufacturers such as Geely,Chery, Dongfeng, GuangzhouAuto, Shanghai Auto andChangan.

Lakshmi Mittal, chairman andCEO of ArcelorMittal, said at theopening ceremony that thecompletion of the plant onschedule and within budget was a“remarkable achievement.”


US Steel idles OCTG plants

Second DRI plant for Nucor?A report by American MetalMarket, sponsor of the New YorkSteel Success Strategies XXIX,organised by World SteelDynamics, claims that Americansteelmaker Nucor Corporation isseriously considering a new Direct-Reduced Iron (DRI) plant inLouisiana, USA, as well as a newheat-treat line at its Tuscaloosa,Alabama, plate mill.

John Ferriola, Nucor’s presidentand CEO, told delegates in a Q&Asession that a DRI plant would‘cost less money [than a new steel

mill] and it would be quicker to puta second DRI facility in Louisiana’.He also said that a second unitwould cost between $100 and$150 million less than the first unitand would take between 18 and24 months to complete.

According to Ferriola, thenecessary infrastructure wasalready in place at the company'sSt. James Parish facility and itwouldn't be as expensive asstarting from scratch.

The St. James Parrish DRI facilityin Louisiana cost $750 million to

develop and shipped its firstshipment of DRI (2.5Mt) towardsthe end of 2013.

It is possible that Nucor mightcontract Midrex Technologies forits second facility despite havingopted for Tenova HYL for its firstinstallation.

Plans to construct a blastfurnace in Louisiana have been puton hold, but Ferriola hinted it wasa case of ‘never say never’. He saidthe company had the technology,the expertise, the drawings and thepeople in place to build one.

Tangshan cuts steel production capacity by 22MtIron and steel production in theNorthern Chinese city of Tangshanhas been reduced by 22Mmt in aneffort to control air pollution andphase out obselete capacity.

Tangshan, in Hebei Province,accounts for half of all iron and steelproduced in the province. The planis to cut iron making and crude steelproduction capacity by 28Mt and40Mt respectively.

Hebei Province's annual steel pro-duction output makes up onefourth of the nation's total and theprovince is heavily reliant upon theiron and steel industry.Source: China Metals.

New CEO for Siemens UKJuergen Maier has been appointedas the new UK chief executive ofSiemens, effective from 1st July.

Mr Maier replaces Roland Aurich,the current chief executive, who willbe retiring from Siemens after morethan 28 years with the company.

He has been a member of theSiemens UK executive managementboard and managing director of theSiemens UK and Ireland IndustrySector since 2008.

“I look forward to shaping ourbusiness to meet new domestic andglobal economic challenges,” MrMaier said.

Gas leak claims six livesTwo deputy managers were amongthe casualties of a gas leak at SteelAuthority of India Ltd's (SAIL) Bhilaisteel plant on Thursday 12 June. Sixpeople were killed and 30 hospi-talised.The cause of the leak was a ruptureto the main header of Pump House2, which supplies water to the gascleaning plants (GCPs) of the blastfurnaces, according to SAIL. Therewas a sudden loss of water pressureto the GCPs which resulted in blastfurnace gas from the scrubbersentering the water pipeline.

ArcelorMittal awardThe award was presented at theEdison Ballroom in New York atAmerican Metal Markets’ fifthannual Awards for Steel Excellenceand recognised the steelmaker’slaser ablation process and its role inintroducing the industry’s first sin-gle-piece, hot-stamped, laser-weld-ed door ring found in the 2014Acura MDX.

Laser ablation is a patentedprocess applied to ArcelorMittal’sUsibor steel.

5NEWS IN BRIEFINDUSTRY NEWS

For expansion of these stories and other news visit

www.steeltimesint.com

Tata Steel wins green awardGlobal steelmaker Tata Steel wasrecently awarded the prestigiousJharkhand State Pollution ControlBoard (JSPCB) award for its environ-mental protection work.

AK Mishra, chairman of theJharkhand State Pollution ControlBoard, presented the award toSatish Singh, chief resident execu-tive, Ranchi, and ShubhanandMukesh, Environment, Jamshedpur,of Tata Steel at an awards ceremonyon World Environment Day (5thJune).

Acroni’s heat treatment lineSlovenian steelmaker Acroni hascontracted SMS Siemag to supply aheat treatment line and revamp astainless steel annealing and pick-ling line. Commissioning is plannedfor 2016 at the company’s Jesenicaplant.

SMS Siemag will install its newlydeveloped MultiFlex Quench sys-tem, which is claimed to offer ‘anoutstandingly high degree of flexi-bility’ and high cooling efficienciesduring the heat treatment of heavyplate.

Gerdau blast victim diesLarry Releford, who was injured inan incident at Gerdau's steel mill inKnoxville, Tennessee, USA, on May15th, has died.

Mr Releford suffered burns overmore than 50% of his body. Fiveother Gerdau employees wereinjured in a blast at the plant. Thefive injured people were treated andreleased from hospital.

Gerdau has been working with'the proper authorities' to determinethe cause of the incident. A finalreport will be issued by theTennessee Occupational Safety andHealth Administration (OSHA) with-in the next two months.

Hyundai plant hits 100Mt Hyundai Steel’s EAF-based steel pro-duction facility at Incheon, SouthKorea, has achieved a cumulativesteel output of 100Mt.

The plant, completed in 1953,was South Korea’s first steel milland is now the first of the nation’ssteel plants to reach the 100Mtmark.In 1956, the Incheon plant pro-duced just 118 tonnes of molteniron in its first year.


Magnitorgorsk Iron and SteelWorks (MMK), a leading Russianmetals company and one of theworld's largest steel producers, hasreleased its Q1 2014 financialresults.

The company has announcedrevenues totalling US$1.8 billion,up 5% quarter-on-quarter, andclaims that growth was mainly dueto increased sales volumes duringthe period.

Cost of sales was down 0.5% toUS$1.5 billion and EBITDA wasdown 6% quarter-on-quarter.

MMK was able to decrease the

cash cost of slab by more than 5%(US$337/tonne) due to a decline inkey raw materials prices andannounced an operating profit ofUS$78 million.

Total revenue from thecompany’s steel segment amountedto US$1.7 billion, up 2.5% quarter-on-quarter and due to increasedsales volumes by OJSC MMK (up8.6%) and MMK-Metiz (up 2.6%).

MMK's Turkish steel operationsrecorded revenues of US$134million, which was down US$34million quarter-on-quarter andprimarily due to declining sales

volumes.MMK’s Turkish operation, MMK

Metalurj, recorded EBITDA ofUS$13 million, down US$1 millionquarter-on-quarter, and with amargin of 9.7%.

MMK Metalurji’s capacityutilisation rate is expected to'remain at near-maximum capacity'in 2014.

Looking ahead to Q2, MMKexpects increased production andsales volumes and believes thatdeclining global iron ore prices willbe good news for the company’sQ2 2014 results.

MMK boosts revenue by 5%

Steel is just as capable of deliveringthe required weight savings tosupport new fuel efficiencylegislation as other materials and ismore cost effective andenvironmentally friendly, saidLakshmi Mittal, CEO ofArcelorMittal.

Speaking at the Steel SuccessStrategies conference in New York,Mr Mittal said: “Steel can provideall the weight reduction that autoproducers require to satisfy thenew fuel efficiency standards.”

“Essentially we need to deliver a25% reduction in the weight ofstructural components and

closures, in other words the body-in-white. Steel can already do this;and we can do it in a more cost-effective and environmentallyfriendly manner than any othermaterial,” Mittal argued.

ArcelorMittal claims that itsadvanced and ultra advanced highstrength steels developed in recentyears are up to the job.

“Steel’s strength has multiplied10 times over the past 20 yearsfrom 170 to 1700 megapascals.These are phenomenal changes.And we don’t know where thelimit is in terms of productdevelopment. Every day we open

up new frontiers and do thingsthat yesterday didn’t seempossible. We understand there is achallenge from other materials, butnobody should doubt that steelremains the material of choice.

“The auto sector operates globalplatforms,” Mr Mittal said. “Thismeans they will increasingly makecars exactly the same way in Chinaas they do in the United States.Being able to work with the samesupplier in different markets is,therefore, clearly an advantage asthey are guaranteed exactly thesame product, produced to exactlythe same quality standards.”

Steel the best option for automotive

Hot testing of a new turbinegenerator has begun at NLMK’sLipetsk production site in Russia.The new equipment will replacethe previous outdated generatorand will enable the steelmaker toincrease electricity generation by11%, or over 370 million kWh. Itwill also reduce electricity expensesby 2.1%.

Once up and running, the newgenerator will increase the Lipetsksite’s energy self-sufficiency from52% to 58%. The installed capacityof the facility’s power station willincrease by 50MW to 482MW.

NLMK, Russia’s leadingmanufacturer of steel and HVA

rolled products, has investedapproximately US$29.3 million inconstructing the new turbinegenerator, which wasmanufactured at the KalugaTurbine Works in Russia.

Alexander Starchenko, NLMK’svice president for energy, said thatthe Russian steelmaker was notonly reducing the company’senvironmental impact, but alsoincreasing its production efficiencyin line with the company’s keyStrategy 2017 objective.

NLMK has implemented a rangeof major investment projects aimedat improving energy efficiencyduring production and increasing

the proportion of electricityproduced from secondaryresources. A new 150 MW-capacity recovery co-generationplant has been constructed at theLipetsk site, as well as cutting-edgeair separation equipment providing34,000 cubic metres of oxygen perhour. An air separation unit hasalso been launched at VIZ-Steel(Yekaterinburg), providing 8,000cubic metres of nitrogen per hour.

The implementation of theseand other projects has resulted inenergy savings of US$24.9 millionin 2013. Specific energy intensityover this period decreased by1.2%, reaching 5.67 Gcal/t.

NLMK increases efficiency

6 INDUSTRY NEWS

Chinese crude steel output rose2.4% during Q1 of 2014,according to figures released bythe National Bureau of Statistics.The crude steel output of China’smajor steelmakers rose 3.5% year-on-year, according to the ChinaIron and Steel Association (CISA).

However, the operationalrevenue of China’s 35 listedsteelmakers dropped 2.56% year-on-year due to sliding steel prices.Hot rolled coil and rebar, dropped150 to 200 yuan/tonne from thebeginning of the year.

Operational costs dropped by

4.5% year-on-year due to priceslumps in raw materials such ascoke and iron ore. Metallurgicalcoke prices dropped 100yuan/tonne and homegrown ironore dipped 200 yuan/tonne sincethe beginning of 2014. Importediron ore dropped US$30/tonne.

China’s 35 listed steelmakersturned a profit of 7.3 billion yuanin 2013, but witnessed a profitsslide of 1.1 billion yuan during Q1of 2014. Fifteen of the 35 were inthe red while 19 saw net profitsdecline.

Statistics released by CISA show

that large and mid-sizedsteelmakers achieved total salesrevenues of 868.8 billion yuanduring Q1 2014 and net losses of2.3 billion yuan. During the sameperiod in 2013 net profits were 7.9billion yuan.

During Q1 2014, the cash flowof China’s 35 listed steelmakersdropped to its lowest level sinceQ4 2011.

Profitability is expected toremain weak throughout Q2 2014as a declining Chinese housingmarket weakens steel demand.Source: China Metals.

Modernisation of Steel Authority ofIndia Ltd's (SAIL) Rourkela SteelPlant (RSP) has boosted capacity to4.5Mt/yr hot metal and 4.3Mt/yrcrude steel.

The plant boasts a 150 tonneBOF and a 1Mt/yr plate mill. In fact,the entire modernisation plan forthe RSP, which includes a new orebedding and blending plant, a 360sq metre sinter plant, 7 metre cokeoven battery, 4060 cubic metreblast furnace, 150 tonne BOF,2,500mm slab caster and a newplate mill is completed andoperational.

CS Verma, SAIL's chairman, andother senior officials from thecompany, were present for whatSAIL called the 'operationalisation'of the new BOF converter in theplant's Steel Melting Shop ll and therolling facilities of the new platemill.

Verma said, "The commencementof operation of these two majorunits at RSP is a shot in the arm ofthe company towards completionof its ongoing modernisation andexpansion plan."

Chinese crude output up 2.4%

Russian steelmaker Severstal hasre-engaged with globalconsultancy McKinsey to work onefficiency plans for its CherepovetsSteel Mill.

CEO Sergey Toropov said, "Oursteelmaking business is where weachieved the greater cost efficiencyprogress in 2013," and explainedthat the company was able to save

2 billion rubles in 2013.The new plan will involve

making a comparative analysis ofCherMK's current basic oxygensteel production performanceindicators against industry bestpractices. It is hoped that theresults will highlight areas forimprovement and the companywill then 'identify key initiatives to

enhance its processes'.McKinsey has worked closely

with Severstal for 15 years and wasinvolved in the development of itsprocurement optimisationprogramme. In 1999, following asurvey project and a cost reductionprogramme jointly developed bythe two companies, the steelmakersaved 70.1 million rubles.

Severstal improves efficiency

Rourkelaboosts capacity


Recycling – steel’s on topThe Association of EuropeanProducers of Steel for Packaging(APEAL) claims that 2.7Mt of steelwas recycled in 2012. The figurecorresponds to the averageEuropean recycling rate of 74%.

According to APEAL, steel is themost recycled packaging materialin Europe when compared withplastic (35%); beverage cartons(39%); aluminium (68%) and glass(70%).

Thomas J Gibson, president andCEO of the American Iron & SteelInstitute, said that the steelindustry’s internationallyrecognised energy efficiency,coupled with its recycling rate, isproof of the steel industry’scommitment to sustainability andresource conservation.

The Steel Recycling Institute inthe USA claims that the overallrecycling rate for steel in 2012 was88% and that nearly 84Mt of steelwas recycled, including 1.3Mt oftin plate steel (the equivalent of 21billion steel cans). Tin plate steelachieved a recycling rate of 71% –

the highest among packagingmaterials.

Where recycling is concerned,steel’s magnetic qualities mean it iseasy to separate from wastestreams, enabling high recoveryrates. It is also 100% recyclableand can be infinitely recycledwithout loss of strength and otherkey properties.

Comparing recovery rates acrossa number of key industry sectors,APEAL found that the machinerymarket achieved 90% in 2007 andis projected to achieve 95% by2050. Construction and

automotive both achieved an 85%recovery rate in 2007 and are eachprojected to reach 90% by 2050.Similarly the electrical anddomestic appliances market isestimated to reach 90% by 2050albeit from a lower 2007 base ofjust 50%.

While steel is the most recycledindustrial material in the world –500Mt are recycled annually – inEurope the 2020 goal of 80%means there is still plenty of workto be done, according to AlexanderMohr, APEAL’s secretary-general.

In 2013, the world’s directreduction iron (DRI) industry setanother new record havingproduced 75.2Mt, according todata compiled by MidrexTechnologies Inc. and audited byWorld Steel Dynamics.

The 2013 figure was an increaseof 2.8% (or 2Mt) over 2012,which is regarded as 'quiteremarkable' by Midrex consideringthe economic forces that affectedthe industry.

Where technology wasconcerned, MIDREX DRI plants ledthe way, taking a 63% share of themarket, followed by rotary kilns(largely in India) at 21% andEnergiron plants (15%).

The DRI industry has grown ineight of the past 10 years. Outputin 2013 was more than 85%greater than in 2001.

Factors that have placed a dragon growth in the preceding yearshave continued, but wereovershadowed by the demand fordirect reduced iron.

DRI sets newrecord

• Over 22 billion tonnes ofsteel have been recycledglobally since 1900.


DIARY OF EVENTS

For more information onsteel industry events, visitwww.steeltimesint.com

August29-31 7th China InternationalMetal Recycling ConferenceBeijing, ChinaOrganised by CISA and MC-CCPITwww.mcchina.org.cn

September4-7 10th Minerals, Metals,Metallurgy and Materials2014New Delhi, IndiaOrganised by International Tradeand Exhibitions Indiawww.iter.in

10-12 12th ChinaInternational CokingTechnology and Coke MarketCongressOrganised by CISA and MC-CCPITwww.mcchina.org.cn

10-12 The Coal Associationof Canada Conference andTrade ShowVancouver, BC.Organised by the CoalAssociation of Canada.www.coal.ca

15-17 European SteelEnvironment & EnergyConferenceTeesside University, UK.Organised by the Institute ofMaterials, Minerals & Miningwww.iom3.org

15-17 Korea Metal WeekOrganised by Korea Trade Fairs.Advanced metal technologiesevent.www.kintex.com

24-26 China InternationalSteel and Raw MaterialsConferenceShangri-La Hotel, Dalian, China.Organised by the China Iron &Steel Association.www.ironoreconference.com

24-25 World Stainless SteelDuplex Seminar & SummitPalazzo Dei Congresso, Stresa(VB) Italy. Organised by KCIPublishing BVwww.stainless-steel-world.net/duplex2014

8 INDUSTRY NEWS

US steel imports up, says AISIThe USA imported 4Mt (net tons)of steel in May, including 2.9Mt offinished steel – up 7.4% and 6.4%respectively when compared withApril.

Year-to-date total and finishedsteel imports were 17.4Mt and12.8Mt (net tons) respectively – up32% and 23% respectively on2013 figures.

The annualised total andfinished steel imports in 2014would be 42Mt and 30.8Mt (nettons), which is up 31% and 24%respectively when compared withthe previous year.

Imports of oil country tubulargoods (OCTG) were up 55% inMay, when compared to April.

Heavy structural shapes were up44%, tin plate 39%, standard pipe22% and line pipe also 22%. Hotrolled sheets (and sheets) andgalvanised strip were up 21% and21% respectively.

Major products with significantyear-to-date import increasesversus the same period last yearinclude wire rods (96%), plates incoils (76%), cold-rolled sheets(56%), sheets and strip all othermetallic coatings (47%), sheets andstrip galvanised hot dipped (40%),hot rolled sheets (39%),mechanical tubing (35%), oilcountry goods (26%), rebar (24%),cut length plates (up 24%) andheavy structural shapes (20%).

South Korea exported 584Kt (nettons) to the USA, up 45%compared with April 2014, closelyfollowed by China who exported303Kt (net tons), down 27%.Turkey exported 149kt, up 5% andJapan exported 145Kt, down 31%.Lastly, Taiwan exported 106kt, up42%.

For the five months from Januaryto May 2014, South Korea was thelargest offshore supplier of steel tothe USA, supplying 2.1Mt (nettons), up 42%. China was insecond place with 1.2Mt, up 73%and Japan and Turkey followedwith 852kt, up 3%, and 760kt, up19% respectively. Russia exported501Mt, up a staggering 324%.

World crude steel production forMay 2014 was up 2.2% whencompared with figures from May2013.

China's crude steel productionfor May 2014 was up 2.6% to70.4Mt and elsewhere in AsiaJapan produced 9.6Mt (down0.3%) and South Koreanproduction was up 11.4% to6.2Mt.

Within the European Union,Germany produced 3.9Mt, up7.3% and Italy produced 2.3Mt,

down 0.8% when compared withMay 2013 figures.

Crude steel production in Francewas down 4% at 1.4Mt and Spainproduced 1.3Mt, down 2.9%.

In Turkey, crude steel productionwas 3Mt, down 0.7%.

Russian crude steel productionof 6.1Mt was an increase on May2013 of 0.6% and in the Ukraine,crude steel production was 2.8Mt,up 2.2%.

Crude steel production in theUSA was up 1.4% on May 2013

with American steelmakersaccounting for 7.5Mt of globalproduction.

In South America, Brazilproduced 2.9Mt of crude steel,down 4.3% on May 2013 figures.

The crude steel capacityutilisation ratio for the 65 countriesreporting to worldsteel was 78.5%for May 2014, 0.7 percentagepoints lower when compared tothe April 2014 figure and 0.7percentage points lower than inMay 2013.

World crude steel up 2.2%

The Latin American and Caribbeansteel market increased by 1%during Q1 2014 when comparedto the same period last year,according to the Latin AmericanSteel Association.

Apparent steel use betweenJanuary and April 2014 was22.2Mt, up by 221kt on 2013figures, and the countries thatcontributed most were Columbia,Mexico and Argentina. Strongdrops were recorded by Venezuela,Ecuador and Chile.

The Q1 2014 deficit in theregional trade of finished steelreached -4.1Mt, an increase of 7%on Q1 2013. Mexico continuallypresents 'the most marked

unbalance' of -1Mt, followed byColumbia (-772kt), Chile (-506kt)and Peru (-502kt).

Argentina and Brazil presenteddeficits of -100kt and -78kt.

Regional production of crudesteel reached 21.5Mt, 1% morethan in 2013. Brazil was the mainproducer (11.1Mt) representing52% of regional output. Crudesteel production in Argentina,Mexico and Peru was up 13%, 6%and 4% respectively but was downin Venezuela, Chile and Columbiaby -32%, -13% and -2%respectively.

Q1 2014 finished steelproduction was 18.4Mt. Brazilproduced 8.5Mt and had a 46%

share of regional output. Mexicoproduced 5.5Mt and took a 30%share. Mexico's production was up5% year-on-year.

Other countries that increasedtheir production during the Q12014 period were Columbia(+19%); Peru (+3%); Ecuador(+3%); and Argentina (+1%).Venezuela and Chile dropped by -31% and -27% respectively.

Between January and May, LatinAmerica and the Caribbeanproduced 27Mt of crude steel,which was in line with the sameperiod of 2013. Finished steelproduction for the first five monthsof 2014 reached 23Mt, down 1%year-on-year.

Finished steel use grows 1%

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

11


USA UPDATE

* American correspondent

ACCORDING to the American Iron andSteel Institute (AISI), the USA imported atotal of 4.0Mt (net tons) of steel in May,including 2.9Mt of finished steel (+7.4%and +6.4% respectively over April). Theyear-to-date total and finished steel importsamounted to 17.4Mt and 12.8Mt (nettons) respectively, posting a 32% and 23%growth respectively over the previous year.

Even before the numbers were officiallyreleased, alarm bells had started to ring,with the steel industry’s Cassandras wailingabout the flood of cheap steel importsarriving in the United States.

The largest volumes of finished steelimports in May were from South Korea(584kt, + 45% over April), China (303kt, -27%), Turkey (149kt, + 5%), Japan (145kt,- 31%), and Taiwan (106kt, +19%).However, during the first five months ofthe year, the largest foreign suppliers wereSouth Korea (2.1Mt, +42%), China(1.2Mt, +73%), Japan (852kt, +3%),Turkey (760kt, +19%) and Russia (501kt,+ 324%).

Russia, with an incredible 324% increasein exports in the first five months of 2014,faced the ire of the US steel industrywhich, as of writing this update, wasconsidering contesting the tradeagreement with Russia on imports of hot-rolled steel.

The 1999 “suspension agreement” withRussia, as it is called, was ironed out afterthe Cold War to protect Russian hot-rolledcoil (HRC) suppliers against high anti-dumping duties, and setting a minimumprice which many US steel companies havecriticised as very low despite an upwardrevision in 2012. Steel industryrepresentatives are now urgingWashington to impose restrictions orcompletely rescind those exemptionsgranted under the agreement. A dramaticrise in Russian imports has added toresentment in the US against Russiansuppliers.

The call to impose restrictions on Russiansteel imports comes at a time whenbilateral relations, particularly after Russia’sforcible Crimea takeover from Ukraine, arestrained. The excessive foreign steel tubessupplied to the oil and gas industry ishurting the US steelmakers supplying this

sector. A cancellation or even amodification of the agreement may benefitUS companies, but it would hurt Russiansteelmaker Severstal, which could faceanti-dumping duties of some 73.59%while other Russian steelmakers, such asNovolipetsk Steel and Magnitogorsk Ironand Steel, would face duties as high as184.56%.

The challenge of global overcapacity wasalso raised by Mario Longhi, thepresident/CEO of United States Steel Corp.in his June 25 testimony before a SenateCommittee on Finance Testimony. Foreignsuppliers were “gaming the system anddistorting the markets with productsdumped with the sole purpose ofundercutting and harming the industry ingeneral, and my company specifically,” hesaid.

Indeed, Longhi alleged that Americansteel companies are being “targeted forelimination”. As the company’s CEO, hehad spent a great deal of his time workingto provide good paying, middle-class jobsin America.

Touching a nerveJobs are the Achilles’ heel of any Americanpolitician who faces considerable heat intimes of high unemployment. Apparently,Longhi was trying to touch a sensitivepolitical nerve when he addressed thecommittee, urging it to empower theCustoms and Border Protection Agency totake swift action when dumping orcountervailing duty orders are evadedthrough transshipment, misclassification,misreporting or outright falsification ofimport documents.

“A year ago, US Steel and other domesticOil Country Tubular Goods (OCTG)producers filed a trade case against ninecountries based on the enormous 113%increase of imported OCTG products intothis market between 2010-2012. SouthKorean companies are the main violators,but companies from India, Vietnam, Turkeyand several others also dump verysignificant volumes,” Longhi said.

“China tried to do the same thing in2008. We fought and won an OCTGdumping case in 2009, but not beforemany facilities were idled, thousands of

steelworkers lost their jobs, and ourcommunities and our families sustainedsignificant and long-lasting injury,” he said.

US steel circles are closely monitoringArcelorMittal’s agreeing to pay $90 millionto settle a class-action lawsuit alleging USsteelmakers conspired to fix prices between2005 and 2007.

The lawsuit filed in the US District Courtfor the Northern District of Illinois allegedthat ArcelorMittal, US Steel and severalother steelmakers conspired to raise pricesby slashing output between 2005 and2007. AK Steel, Gerdau Ameristeel Corpand Commercial Metals Co previouslysettled for a total of $15.9 million. Servicecentres, fabricators or other businessesthat bought steel at inflated prices in thatperiod, could claim part of the settlement.

The industry had undertaken a dramaticrestructuring then, leading toconsolidation and resulting in a number ofbankruptcies, mergers and buyouts thatleft ArcelorMittal, US Steel and Nucor asthe biggest US steel players.

The lawsuit alleged that steel executivesmet at different industry conferences anddiscussed the need for greater pricingdiscipline, resorting to reduction ofproduction at marginal facilities wheneverdemand softened.

Mittal Steel USA, a predecessor toArcelorMittal, had reduced output to 55%of capacity in July 2005, the lawsuitcontends. US Steel went from running itsmills at 90% capacity at the beginning ofthat year to a much lower 75% in the thirdquarter.

Meanwhile, ArcelorMittal, the world’slargest steelmaker, recently welcomed apotential removal of a near 10-year ban onforeign takeovers of Chinese steelcompanies.

The steel company is one of the fewforeign steelmakers to invest in China, theworld’s biggest steel consumer, since theban was imposed in 2005.

Lakshmi Mittal, ArcelorMittal’s CEO, whoattended the Steel Success Strategiesconference in New York in June, describedthe piece of information as “good news”and a sign that the Chinese Governmentwas moving forward on reforms andliberalisation on foreign investment. �

No country for oil country tubular goodsFigures from the American Iron & Steel Institute (AISI) show that steel imports into the USA are growingsteadily and creating a growing sense of unease in the process. By Manik Mehta*

AS it can be observed in Fig 1, the totalcapital expenditure (capex) of steelenterprises has enlarged from $39bn in2006 to $67bn in 2008. During the period2009-2012, it was around $61bn and thiscan be interpreted as an unexpectedoutcome, considering the massive impactof the global financial crisis on steelcompany profit margins. Only in 2013 wasa sharper drop in world steel investmentrecorded, when it was 17% down on thepeak year of 2008.

Accenture’s information is based on 74major steel producers, distributors andscrap processors. Regional segmentation isbased on headquarter location. Theconsulting firm stressed that steel capexwas lower in 2013 when compared to2008, for most regions. Indeed, it wasreduced by 71% in the CIS, 39% in Europe,19% in China, 8% in South America and4% in the NAFTA countries. The onlyexception was other Asian countries(excluding China), which increased theirinvestments by 23%.

According to Accenture, steel capex inSouth America totalled roughly $3bn in2013, which is equivalent to some 5.5% ofglobal figures. However, as Mexico isconsidered part of NAFTA and individualdata by country is not available, it wasimpossible to estimate the value for theLatin American region as a whole.

Latin American figuresAlacero has collected and published theinvestment carried out by the LatinAmerican steel industry in its StatisticalYearbook. Despite the substantial effortmade, however, there is missing data. Inthe case of Venezuela, for example, for theyears 2000, 2002, 2003, 2010 and 2012,and for Chile, there is a lack of informationfrom 2010 onwards. Sadly, it is believedthat Alacero’s information is the mostcomprehensive data available concerningLatin America steel’s investments.

Fig 2 shows that regional investmentwas maintained in the $1.4bn plateauduring the 2000-2003 period, but thenclimbed to achieve $6.1bn in 2009 beforedeclining partially to an average of $5.4bnbetween 2010 and 2012. A weaker-than-

expected retraction was observed in thepost-crisis period.

There have been substantial changesregarding the participation of nations inLatin American steel investment (Fig 3).Brazil was responsible for 72.9% of thetotal between 2000 and 2003, but thisdecreased to 66.1% (2004-2009) and evento 62.4% (2010-2012). The Mexican slicediminished from 15.7% to 14.0%, butthen doubled to 28.4%. The participation,therefore, of Brazil and Mexico varied from88.6% (2000-2003) to 80.1% (2004-2009) and 90.8% (from 2010 onwards).

Unfortunately, data on Venezuela isincomplete, but it is worth mentioningthat its participation reached 24.8% in2005, dropped to 2.7% in 2009 and then2% in 2011. This is a strong indication of

the under-investment that hascharacterised the Venezuelan steel sectorsince the re-nationalisation of Sidor.Argentina reduced its share from 7%(2000-2003) to 6.5% (2004-2009) and to5.6% (2010-2012), while the Colombianvalue amplified from just 0.3% to 1.7%and then down to 1.5%.

It is also important to investigate wherethe money has been employed. In Mexicobetween 2006 and 2011, Fig 4 shows thatthe rolling mill has received a considerableamount of resources. In 2010, forexample, it was equivalent to 48% ofsectorial investment, but on average, itsratio was 31%. Next was the steel shopand caster (15%), raw material treatment(9%) and reduction (7%). Other activitiesreceived 39% of total investments. �

12


* Latin America correspondent, professor in economics, Federal University of Uberlândia, Brazil. E-mail: [email protected]

LATIN AMERICA UPDATE

Investment is crucialExcessive installed capacity is one of the most important hurdles that the global steel industry mustjump, but while investment is also crucial it can also amplify the problem. In contrast to its relevance, itcan be argued that data on steel investment is rare regarding both global and regional industries – anexception being recent figures released by AccentureBy Germano Mendes de Paula*

70 765

4321

0

605040302010

02006 200007 08 09 10 11 12 13 02 03 05 07 09 11

Fig 1 Global steel capital expenditure, 2006-2013 ($bn).Source Accenture

Fig 4 Mexican steel investment, by area, 2006-2011 (%).Source Cancero

Fig 2 Latin American steel investment, 2000-2012 ($bn). Source Alacero

Fig 3 Latin American steel investment by country 2000-2012 (%). Source Alacero

100

80

60

40

20

02000Rolling millReduction Others

Steel shop andcaster Raw material treatment

01 02 03 04 05

100

80

60

40

20

02000

Brazil Mexico Argentina Colombia Venezuela Others

03 05 07 09 11 13

This article focused on global and Latin American investments.Next month, we will focus upon the Brazilian steel industry.

13


STIFF resistance from other industry playershas put Tata Steel’s renewal of 85Mt ofchromite mineral deposits in the Jajpurdistrict of Odisha (known as the Sukindamine) in the doldrums. The mineralexploration lease expired in April 2014.Since the Supreme Court order for closureof all mining exploration activities inOdisha over three months ago, extractionof chrome ore came to a standstill.

The issueIndustry players, including Indian Mineraland Ferro Alloys (IMFA), Ferro AlloysCorporation (Facor), Jindal Strips and IspatAlloys, have been very aggressive due tothe vast mineral deposits (85Mt) at theSukinda mine in Odisha. These ferrochrome users and exporters have madepresentations to the state governmentwith a view to distributing some ofSukinda’s mineral deposits to end users.

Tata Steel’s chromite mines in Sukindaare spread over 406 hectares and includea contentious 106 acres of forestland. A20-year renewal lease expired on 11January 2013, having been extended forthree months last year. Tata was latergranted a temporary working permit,which expired on 12 April 2014.

Tata Steel has applied for anotherrenewal lease for mineral exploration andclearances have been granted for variousstages in the process. “We have received arenewal request from Tata Steel, but it is along-drawn process. The final clearance isgranted by the Committee set up in thisregard by the state government. Beforethat, however, a number of approvalsfrom local authorities are requiredincluding that from the District Magistrate,the Ministry of Environment and Forestand other committees and state bodies.We are studying that,” said S K Popli,Special Secretary (Steel and Mines),Government of Odisha.

But other ferro alloy producers havenow stepped into the picture citing thereserves as being far in excess of TataSteel’s requirement for captiveconsumption. In 1993, Tata Steel’srequirement was assessed at 16Mt whenthe Supreme Court adopted the Sharma

Resistance to Tata’s mining plan Tata Steel wants to renew its mineral exploration lease at the Sukinda mine in Odisha state, where 98%of India’s chrome ore deposits can be found. There has been stiff resistance to Tata’s plans from otherplayers in the market based on fears that full allocation to one company will raise raw material pricesunnecessarily. By Dilip Kumar Jha*

Category Total Description Quantity (+10% Cr2O3)

Reserves Proved 7.331 Open cast 7.331

Underground 0

Probable (identified) 0.174 Open cast 0

Underground 0.174

Probable (incremental estimated) 14.267 Open cast 3.769

Underground 10.498

Remaining resources Feasibility resources 1.914 Open cast 1.914

Pre-feasibility resources 9.160 Underground 9.160

Pre-feasibility resources (incremental) 35.075 Open cast + underground 35.075

Measured resources --

Indicated resources --

Inferred resources 16.396 Underground 16.396

Total resources 84.317 84.317

Measurement of chrome ore Tata Steel IMFA/ICCL Facor Ispat Jindal

Annual chrome ore requirement 0.69 0.527 0.295 0.250 0.225

as submitted by the parties

Considering 20 years period – 16.27

total requirement will be

Considering 20 years period – total requirement will be

For first 20 years 14.11 6.40 6.70 6.03

For remaining 30 years 31.14 14.13 14.78 13.30

Total 16.27 45.25 20.53 21.48 19.33

Source : Sharma Committee Report

INDIA UPDATE

*India correspondent in Kolkata

Chrome ore resources (million tons)

Requirement of chrome ore (million tons)

Committee Report and redistributed partof the then 1261 hectares of mineraldeposits held by the company to actualusers. A legal judgment in 1999distributed the entire 1261 hectares heldby Tata Steel on the recommendation ofthe Sharma committee report.

Resistance from actual usersFinal approval has been met with stiffresistance from the actual users. In fact,IMFA has filed a writ petition in the OdishaHigh Court protesting against thegovernment’s plan to allocate full access tothe Sukinda mine to Tata Steel. IMFA toldthe court that actual users, including IMFA,should be allowed to extract chrome orefor processing. On 11 June a two-judgebench of the Odisha High Court,comprising justice B K Nayak and justice AK Rath, ordered the Odisha governmentnot to take any final decision on allocationof access to Tata Steel until the courtpasses an order on the matter. Tata Steel's

chrome ore requirement for captiveconsumption will be just 16Mt, far lessthan the 85Mt envisaged in the company’s2013 mining plan. Some observers feelthat the government should examine thesituation from the perspective of mineraldevelopment so that all interests can beserved. The State Government shouldassess afresh the requirement of all largeproducers in line with the notificationdated 3 October 2012, which givesprimacy to captive consumption.

ConclusionIt is feared that full allocation of theSukinda chrome ore mine to Tata Steel willraise raw material prices. The last auctionconducted in May by Odisha MiningCorporation (OMC) saw a 22% increase inchrome ore prices due to limited supply.Even distribution of mineral reservesamong diversified industry players willencourage all industry stakeholders andoffer equal opportunities to them all. �

HAVE AK Steel and ATI Metals, the twoAmerican manufacturers of grain orientedelectrical steel (GOES) gone too far withtheir current actions against foreignmanufacturers? Will this eventually costAmerican jobs in the power anddistribution transformer industry? Andwill the USA end up with twomanufacturers of GOES that are inferiorto the rest of the world?

On September 18 2013 AK Steel and ATIMetals filed anti-dumping (AD) andCountervailing Duty (CVD) petitions withthe US Department of Commerce and theInternational Trade Commission (ITC). Thesepetitions requested action be taken againstall sources of imported grain orientedelectrical steel (GOES). On September 302013 AK Steel filed a second petitionregarding the importation of non-grainoriented silicon electrical steel (NGO).

Neither company expected UStransformer builders and foreign mills toreact the way they did.

History of GOESThe development of GOES was originallyan American concept. As Edison, Tesla, andWestinghouse created a demand and amethod to generate and distributeelectricity, Armco Steel developed theorigins of what we now call GOES in an

effort to increase the efficiency of electricitydistribution.

As the availability of electricity spread,these same companies also shared theknowledge of the materials that form theheart of the transformer. Over the years aselect group of steel companies joined thisspecial processing society includingThyssenKrupp, VIS-Stal, Nippon Steel andJFE, as major players in the manufactureand continued development of GOES.

During the first half of the 20th Century,demand for power and distributiontransformers far out-paced the supply ofGOES. As a result close relationships wereformed between steel mills andtransformer manufacturers. This allowedfor the maximum spread of electricity while

allowing the mills to recoup massive costsinvolved in the manufacture of these ultra-thin sheets of high silicon steel, which arethen coated to insulate each and cut tomake transformer laminations.

The demand for transformers continuedto grow and the price of GOES remainedrelatively constant. For the mills, it was thehighest margin product that they had intheir portfolio.

Efficiency standards had still to bedetermined so the need to invest in majorR&D projects was unwarranted.

By the mid-twentieth century the natureof the electrical steel and transformermarket was beginning to change. Secondand third world nations were now able toafford upgrades to their infrastructure, in

The announcement of newstandards for transformerefficiency in the USA and thewestern world is leading tocustomers previously loyal to thetwo US producers of grain-oriented silicon electrical steel(GOES) having to look abroadfor better grade steel, whichcannot be made in sufficientquality or at a competitive priceto foreign mills. Importrestrictions on GOES demandedby US producers are likely todrive manufacture oftransformer core assemblies off-shore resulting in job losses inthe USA. By Ben Ehmcke*

The demise of US GOES steel production


15STEEL PROCESSING

*President – Ehmcke Consulting LLC

“With a second efficiency standard revision in four years, the US mills saw their customer base was looking to use

the best materials available in the global market.”

STEEL PROCESSING


particular, electricity generation anddistribution.

The basic design of transformers had notchanged and more companies buildingtransformers had entered the market suchas General Electric, Siemens and Hitachi.Many mills that had wanted to enter theGOES market, but couldn’t justify the initialcosts, now saw an opportunity. Theseincluded POSCO, Stalprodukt SA, Inox,WISCO (Wuhan Iron & Steel) and CogentPower. Many of these companies werealready manufacturing non-grain orientedsilicon steel used in motors.

Into the early 90s world demandcontinued to exceed supply by as much as200kt/y. AK Steel continued to be lookedupon as the leader in the manufacture ofhigh quality electrical steel. However, theJapanese had been working on new gradesand investing to keep their mills state-of-the-art.

The 1990s saw the growing, globalimportance of the environment. In theUSA, Europe, and parts of Asia the needfor increased efficiency standards directedat the generation and distribution ofelectricity became paramount. Emphasiswas put on reducing pollution generatedby coal-fired power plants and the need toincrease the efficiency of power anddistribution transformers to meet increaseddemand for power without the need toconstruct additional plants.

This resulted in US transformermanufacturers testing newer materialsfrom foreign mills, in particular fromJapan. By 1994, foreign mills were makingmajor in-roads in both quality andavailability of materials. Continued R&Defforts enabled foreign mills to produceimproved grades at prices lower than inthe United States.

Trade disputeTo counter foreign imports, AK Steel andATI Metals asked the Department ofCommerce and the International TradeCommission to implement anti-dumpingand countervailing duties against Japanesemills. At that point a 10-year 37% dutywas levied against Japanese mills, allowing

AK Steel and ATI Metals to continue theirdomination of the US market.

Worldwide, production of electrical steelhad, by then, reached a total of 15 mills.Materials with the lowest electrical losseswere available from only US and Japanesemills with the Germans, Koreans, Russians,and Chinese investing heavily to catch up.Meanwhile in the US, the mills were doinglittle, in comparison, to develop thematerials that would be required in thenot-too-distant future.

In the 90s the predominant grades ofelectrical steel were, in decreasingefficiency, M2, M3, M4, M5, and M6 withM4 to M6 being the stables of demand.

By 1997 the US Department of Energystarted to formulate new efficiencystandards for liquid immersed and dry typedistribution transformers. At the same time,Japan and Europe implemented standardsthat pushed the limits of the existing gradesof GOES. Demand still outstripped supplyand a change in the typical mix of productshad started. Foreign mills were beginningto see a surge in demand for GOES whichcould provide lower energy losses, at leastas low as those provided by AK’s M2product. Outside the Western Hemisphere,distribution transformers do not requireannealing, so foreign mills were able tomeet growing demand by adding laserscribing to the product. However,transformer manufacturers in the Westernhemisphere – but outside the US – wereasking foreign mills for better materialswhich could still provide low energy lossesafter annealing. Despite anti-dumpingduties, many American transformermanufacturers were co-operating with theJapanese and Koreans to test newproducts.

By the late 90s the manufacturingcapacity for power and distributiontransformers was far greater than demand.In a good year, manufacturers wereoperating at 60% to 70% of capacity. Inthe US it was a buyers’ market. Inconjunction with this, the price of themajor materials that make up atransformer had not fluctuated in the pastdecade.

2003 through 2006 saw a rash ofhurricanes strike the USA resulting indemand for replacement power anddistribution transformers, which reachedthe highest level in 40 years. Demand forGOES in the US was at such a point thatAK Steel and ATI Metals reduced theirexports and were looking at restrictingallocations to domestic customers.

Smaller transformer manufacturers wereforced to look at foreign sources for M4through M6 GOES, available from sourcesin Germany, Russia, and Korea – none ofwhich were impacted by the anti-dumpingduties.

This gave US mills the opportunity toincrease prices. Transformer manufacturerspushed back because at that time therewas no mechanism to pass these coststhrough to the utilities. To counter this, in2004, the two US mills implemented scrapand fuel surcharges on all grades of GOES.Since surcharges were posted as publicrecord, while the base price was coveredunder confidentiality agreements that areparts of the contracts, transformer builderscould justify this additional cost to theutilities.

Transformer efficiency standardsthroughout the world were advancingfaster than in the US. More foreign millssaw the opportunity to enter the highermargin GOES market. POSCO looked tobuilding a new mill in India, NLMKcombined with VIZ-Stal in Russia andBaosteel started building in China. None ofthese mills were affected by the anti-dumping duties against the mills in Japan,which came to an end in late 2003.

With the ending of anti-dumping dutiesagainst the Japanese mills, the US millswere able to convince the Department ofCommerce to maintain imported grainoriented electrical steel on the FederalWatch List until December 31, 2013. Thisdate played a role in decisions thatfollowed.

By 2007, the Department of Energy hadcome to a consensus as to the content ofwhat would become the 2010 distributiontransformer efficiency standard. With themandated changes the less efficient

“The US mills had notinvested in sufficient R&D

efforts as their foreigncompetitors.

16

18 STEEL PROCESSING


grades, M6, M5, and M4, would no longerbe sufficient to meet the revised standardand control both the size and cost of thedistribution transformer.

With the move to grades of electricalsteel offering lower losses being widelyaccepted as a result of the new USstandard, one of the two US mills wasexploring ways to increase its GOEScapacity. Perversely, they converted aportion of their non-grain orientedelectrical steel facility to the production ofless efficient M5 and M6 GOES, despitecustomer warnings that this was thewrong course of action. Instead theyneeded to concentrate on increasing M2and M3 production.

The line conversion was completed inearly 2008. During this time the other USmanufacturer was investing in themaintenance of its process lines.

From 2004 through 2008 the price ofelectrical steel, excluding surcharges, hadincreased by 350% in the USA. Althoughprices in the rest of the world had notincreased to the same extent, foreign millswere unwilling to import large quantitiesof material into the US for fear of tradereprisals. The volumes that were importedwere priced at what was considered USprices. No one wanted to antagonise eitherAK Steel or ATI Metals.

By mid-2008 the global recession hadstarted. 2009 saw the demand fortransformers at a near all-time low not onlyin the USA but also in most of thedeveloped nations. What for severaldecades had been a deficit in supply ofGOES became a surplus, and soon a glut,with the massive increases in capacity atBaosteel and the addition of new mills atTinagain and Anshan in China. Pricescontinued to fall for the next three years.

New US transformer standards2009 saw the announcement by the USDepartment of Energy of the efficiencyguidelines that would become effectiveJanuary 1, 2010. The impact of both the2010 and 2016 Efficiency Standards arereviewed in The Impact of the RevisedEfficiency Standards for both LiquidImmersed and Dry Type DistributionTransformers, available atwww.theimpactpaper.com.

To summarise the report, the 2010standard saw the demand for grades M4,M5, and M6 from the US mills reduced tobeing primarily an export product. Otherthan the Chinese mills, which weresubsidised, mills making electrical steelwere operating at anywhere between 75%and 80% of capacity. M2 was becomingthe material of choice by many transformermanufacturers.

Trade disputes growPrices for GOES were higher in the US thanthe rest of the world. Foreign mills werewilling to work with various US servicecentres to import and process grades ofelectrical steel that were not available fromUS mills. To enable the two US mills tocontinue exporting, pricing for exportedmaterial was adjusted to meet globallevels.

In 2011, China implemented anti-dumping duties against imported GOESfrom AK Steel. AK took their case to theWorld Trade Organisation (WTO). In 2013the WTO ruled that anti-dumping dutiesagainst American GOES imported intoChina should be lifted. To date that has nothappened.

Also in 2011, anti-dumping duties wereinvoked against imported powertransformers. As a consequence,companies that had previously exported

transformers to the USA, such as Efacec,Hyundai Heavy Industries and Mitsubishi,started constructing manufacturing plantsin the US. This was followed by foreignproducers of GOES, such as POSCO-AAPC,starting production in the USA to supplythese new plants with the types ofmaterials familiar to power transformercompanies.

By 2013 the Chinese, Koreans, Japaneseand Russians had slowly increased theirpresence in the United States. Most hadestablished relationships with value addedservice centres in the US to process mastercoil for the end user.

In spring 2013 the US Department ofEnergy published their Final Rule Makingfor a new efficiency standard for LiquidImmersed and Dry Type DistributionTransformers to become effective January1, 2016. Again, details of the impact ofthis standard can be reviewed in the reportavailable at www.theimpactpaper.com. Ingeneral the new standard uses M3 GOESas the basis for Liquid Immerseddistribution transformers and moved ThreePhase Dry Type transformers away fromnon-grain oriented electrical steel to M6and M3 GOES depending on the voltagesinvolved.

With this second efficiency standardrevision in four years, the US mills saw thattheir customer base was looking to use thebest materials available in the globalmarket. While American materials arenoted for consistent quality, it was nolonger the most efficient material available.The US mills had not invested in sufficientR&D efforts as their foreign competitors.

Less loyal customersHistory has shown that no matter whatactions the two US mills took – higherprices, surcharges, actions against foreigncompetition – US transformermanufacturers had stayed loyal to the twoUS mills. This has been the result of severalfactors. In the past the domestic mills hadenough capacity for the grades required tosatisfy demand. At least one US mill isknown for its consistent quality and highcustomer service. And finally the foreignmills have not been willing to makecommitments to significant tonnages infear of retaliation from the US mills.

The 2016 Efficiency Standard haschanged this historic picture. Now it hasbecome evident that with a recoveringworld economy and a hunger for electricityfrom India and Africa, the US mills do nothave either the capacity or the advancedgrades of GOES that are now demanded.

By 2013 most domestic transformermanufacturers were either using ornegotiating with foreign mills for volumesof these lower loss materials to bedelivered starting in the second half of2013.


With the Department of CommerceWatch List expiring on December 31, 2013the Department of Commerce needed toconduct a review to determine if the watchshould be continued.

It may be coincidental that in mid-September 2013, AK Steel and ATI Metalsfiled petitions with the Department ofCommerce and the International TradeCommission asking for anti-dumping andcountervailing duties against the majorityof foreign mills producing GOES. They alsofiled against the trading companies theyuse and the service centres they areaffiliated with. Two weeks later, AK Steelfiled a petition against six foreign mills foranti-dumping and countervailing dutiesagainst non-grain oriented electrical steel.The timeline for both of these petitionsand determination of any penalty was mid-March 2014 with implementation ofduties and tariffs to start October 2014.

Avoiding trade restrictionsAlthough on the surface it appears thatforeign mills are closing ranks to fightthese petitions, this may only be adiversion to cover what is going on behindthe scenes.

Unlike in the past, the reaction by themills, the service centres, and thetransformer manufacturers has been vastlydifferent.

Major transformer manufacturers havemade the decision that they are not goingto back away from making long-termcommitments to using the better grades ofGOES even if this means that they changetactics and purchase the transformer coreor produce cores at their foreign plants.

The value-added service centres areinvestigating what it will take to open orenlarge facilities in Mexico and Canada.The emphasis of the expansions is to addthe capability to make both wound andstacked cores, and the ability to annealwound cores.

How would this decision affect the USmills and transformer manufacturers?

The US mills stated that they started thispetition process to protect themselvesfrom low-cost electrical steel beingdumped in the domestic market. This is thesame argument that was used back in1994. There is little evidence to show thatvolumes being imported had any realeffect. Foreign mills have been careful notto sell in the US at prices below the USmills’ base price.

US lacks R&D investmentA closer look at the wording of thepetitions shows that the real intent is toprotect them from any future impact fromforeign mills. It was assumed that theintent was protection from low-costimports of equal or lower quality thatcould be sold at premium. Not completely

true as the impact that they are concernedabout is that neither AK Steel nor ATIMetals has invested in the electrical steelsections of their business. As a result, theyhave been unable to keep up with thetechnical advances being made elsewhere.The imported materials represent gradesnot available from either US mill withoutmajor investments by them in both R&Dand processing improvements.

The assumption has been that with the2016 efficiency standards being writtenaround the use of M3, this would result intransformer manufacturers committing toAK Steel and ATI Metals and as a result ofthe duties and tariffs both companieswould be able to slowly increase domesticprices and continue to maintain them athigher than global levels.

Unfortunately, today’s major transformermanufacturers – ABB, Cooper, Siemens,GE, and others – all operate globally andare no longer dependent on purchasingfrom domestic sources.

Companies can and will make the moveto foreign core manufacturing, either attheir own facilities or at foreign value-added service centres in order to get theirpreferred materials and avoid expectedprice increases from US mills. It is unlikelythat transformer cores meeting the 2016standard will be made with material fromeither AK Steel or ATI Metals.

With reduced demand from the domesticmarket, the mills will have a greaterdependence on exports – a market wherethey are not competitive today. With onlytheir current portfolio products, they findthemselves with a shrinking customer baseno matter what the selling price.

Moving operations off-shoreThe core winding and annealing functionsof a typical transformer manufacturerrepresent the largest expenditure of energywithin the plant, and the coil winding areais one of the most manpower-intensivedepartments.

Eliminating core winding and annealingoperations in the USA will result in a costsaving within the plant of both fixed costsand labour costs. Whether the transformermanufacturer absorbs the employees intoother areas of the company is yet to bedetermined.

The management of one mill hasindicated that if transformer companiesdecided to purchase foreign-made core,even if the cores came from a NAFTAnation, they would look at taking a similaraction against imported cores, that theyhad against imported GOES.

If this is the tactic that mills are willing totake, then the logical next step will be forthe transformer manufacturers to movecoil winding operations off-shore andimport a completed core/coil assembly.

What was started as a process to protecttwo American companies from foreigncompetition may drive many of theirdomestic customers to foreign markets. Inorder to control costs and provide thehighest efficiency transformers, theseinternational companies will move coreproduction – and potentially core/coilassembly – to other NAFTA nations.

Thus, the US loses manufacturing jobsand the US mills seeking protection willcontinue to lose global market share to thepoint where they cannot produce GOES atbreak-even costs. �

“…..major transformermanufacturers all operate at

a global level.”

19

Basic oxygen steelmaking is themost prevalent process formaking steel in the world. In thisarticle, the process is describedin moderate technical depth forthose interested in knowingmore. By Keith Walker*

A LITTLE history is worthwhile at theoutset, since basic oxygen steelmaking(BOS) is a development of a processinvented by Bessemer in the 19th century.People had been extracting iron from itsores for hundreds of years prior to thisinvention, but the iron produced had avery high carbon content that rendered itquite brittle and, therefore, of little use inmany engineering applications. Althoughit was already possible to produce steelwith much reduced carbon content, it wasonly possible in small batches and took along time, making it very expensive.Bessemer realised that if air were blownthrough liquid iron, the oxygen wouldburn away the carbon, and so his“converter” consisted of a refractory-linedpot which featured ports in the base(tuyeres) through which air could beblown. This made production of steel inlarger batches possible and the processwas quick, making steel a much moreaffordable material.

In the 1950s, processes for making pureoxygen in large amounts were invented,and it was immediately apparent thatusing this, rather than air, should make theprocess even quicker, and so started thedevelopment of the basic oxygen process.It is worth noting here that “basic” meansthe alternative to acid, rather thanimplying lack of complexity – it refers tothe chemical nature of the slag andrefractories used in the process.

So the purpose of the process is largelyto remove carbon from the iron producedby blast furnaces, which unavoidablycontains around 4.5% carbon. It alsoreduces harmful phosphorus to acceptablelevels and there is some removal ofunwanted sulphur, but since this is moredifficult, most steel plants have processesfor removing sulphur from the liquid ironbefore it goes into the BOS converter, oftencalled a basic oxygen furnace (BOF) orsimply ‘vessel’. There are many variants ofthe process, but the most common will bedescribed here.

Charging ferrous metalsThe process starts with the charging offerrous materials to the converter, which

has a volume far greater than that requiredto hold the amount of steel to beproduced. The vessel is a steel container,rather like a belly pot, which is lined withrefractory bricks, about which an entirearticle could be written. It is mounted suchthat it can be rotated backwards andforwards, and it has a tap hole in one side,above the level of the liquid steel when thevessel is vertical, which allows controlledpouring of the liquid steel at the end of theprocess (“tapping”). Many converters havetuyeres in the base that allow stirring gas,such as argon, to be blown through theliquid steel. This is a process called “bathagitation” and its purpose is to achievegreater homogeneity within the vessel. Atthe start of the process, the vessel is tilteddown to around 45 degrees to allow liquidiron and heavy scrap to be charged. It isimportant to note that the iron is liquid(around 135°C) when it arrives from theblast furnaces, and the scrap content willbe routinely up to 20% of the total chargeweight. The liquid iron is charged using aladle and the scrap is charged using whatis called a scrap pan, an open container,and both are picked up and poured intothe vessel using a heavy crane. The totalcharge weight varies between plants, butis generally 250 to 350 tonnes.

At the outset, there is an aimtemperature to be achieved for the liquidsteel at the end of the process, and also anaim chemical composition, bothdepending on what grade of steel is to beproduced. It also depends on what

temperature is required for casting thesteel later on. Therefore, it is necessary toachieve both a heat and also mass balance,taking account of all the materials whichare added to the vessel. For many years,this has been done in real time usingcomputerised mathematical models of theprocess, such that advice can be given tooperators. The composition of the liquidiron and its temperature are measuredprior to charging and of course both theiron and scrap are weighed.

Once charging is complete, the vessel isrotated into the vertical position. If thevessel has bath agitation, this will alreadybe blowing. As quickly as possible, awater-cooled steel lance is lowered intothe vessel, through which pure oxygen isalready being blown at around1000m3/minute at a velocity around mach2. This starts the process. The lance isnever submerged in the liquid but remainsat least 1m above it during the wholeblow, such that the oxygen is blown ontothe liquid.

An exothermic reactionSince the scrap is usually steel, with amelting point higher than the temperatureof the iron, it doesn't start to meltimmediately but remains solid at the startof the process. The oxygen being blownstarts to remove silicon contained in theiron first, since it has a stronger affinity foroxygen than does carbon (Fig 1).

It is an exothermic reaction whichproduces a lot of heat, and so the


21OXYGEN STEELMAKING

*Steel consultant. Email [email protected]

Basic oxygen steelmaking

22 OXYGEN STEELMAKING


temperature of the iron increases quickly asthe silicon is turned into silicon oxide(silica) and floats on the metal as slag.Since silica is an acidic mineral, it willattack the basic refractory lining, so at thispoint lime (and/or dolomitic lime) is addedto the vessel, from weigh hoppers andchutes that dispense the material duringthe blow. This neutralises the slag, andimportantly also produces a slag which iscapable of retaining phosphorous oxide.

Clearly, the mass and heat capacity ofthe lime additions are taken into accountin the heat and mass balance calculationsat the outset. Before moving on, it is worthnoting that removal of the phosphorus,oxidised out of the iron, is never complete.It “partitions” between the liquid steel andthe slag, achieving a chemical balance.

Its removal to low levels is exponentiallyexpensive and relies on a highly basic slagand lower temperature. It also relies onwhat is called a “soft” blow of the oxygen,which means that the lance is kept higherabove the bath. This slows down theprocess and produces a higher FeOcontent in the slag, beneficial forphosphorus removal but also reducingyield and, therefore, adding cost. Note alsothat the amount of slag is important – thisdepends on the amount of silicon in theliquid iron – since a larger amount willretain more of the phosphorus for a givenslag composition, such that thephosphorus in the liquid steel will be lower.However, this also adds cost to theprocess, both at the blast furnace and alsoconverting. Production of very low levels ofphosphorus in the final steel (say 0.008%)is only carried out for grades withdemanding applications.

During blowing, the slag tends to foam,producing a lot more volume, dependingon the height of the lance above the bath.It can slop over the mouth of the converter,which is undesirable for a number ofreasons. Most plants measure the level ofslag either using an audiometer that listensto the noise produced, or by monitoringlance vibration. Corrective action can thenbe taken.

Reducing carbon contentReturning to the blow, in which practicallyall of the silicon in the iron has beenremoved, the oxygen begins to burn thecarbon, phosphorus and manganese (alsocontained in the iron). The carbon contentis reduced from 4.5% in the iron (there isusually only a small level in the scrap) toaround 0.05% at the end of the process,so it can be seen that a great quantity isburned off. This is also very exothermic andthe temperature increases greatly, melting

the scrap. Note that there is no heatapplied in the process – all of the necessaryheat comes from burning off the elementsin the iron. Unlike the other elements thatare removed, which are trapped in the slagas liquids, carbon is removed as a mixtureof gases, mainly carbon monoxide, butwith some carbon dioxide within it.

This gas is a valuable fuel and manyplants collect it for firing the re-heatingfurnaces in the rolling mills downstream.To achieve this, the converter is fitted withoff-gas collection. A close-fitting (but not

sealed) hood is lowered to the mouth ofthe vessel, from which ducting takes awaythe gas using powerful fans. Since it isessential that no air is sucked into thehood, which would cause the gas to burn,and the amount of gas being producedvaries greatly during the blow, pressureand flow sensors in the ducting control avariable venturi that maintains the pressureto just above atmospheric. This prevents airfrom being sucked in, and produces acharacteristic puffing in and out of the gasand dust between the mouth of the vesseland the collection hood during the blow.

Complex engineeringClearly, the engineering is complex, sincethe lance must come through the ductingand so must the dispensers for the limeand other additions. However, the gas isvaluable and justifies the complication.

The blow generally takes around 20minutes to complete. Fig 1 shows how themain elements are removed from the iron,with an, at first, puzzling rise inmanganese which is produced when thescrap melts (manganese is a very commonalloy element in steel). The temperaturewill be between 165°C and 170°Cdepending on the plant and details offurther processing. When around 90% ofthe total oxygen to be blown is complete,the sub-lance is used to check thetemperature and carbon content of theliquid steel. The invention of the sub-lancewas a major innovation and benefit, beinga lance alongside the oxygen lance whichis lowered into the liquid steel during theblow. It contains a thermocouple tomeasure the temperature and cell whichdetermines the carbon content by actuallymeasuring the solidification temperatureof the steel. This is directly related tocarbon content. From thesemeasurements, the amount of oxygen thatis still required to be blown can be moreprecisely adjusted to achieve the desiredend point.

Prior to the invention of the sub-lance, itwas necessary to blow all the plannedoxygen and rotate the converter to take

5

4

SiliconManganeseCarbon

3

Wei

ght/%

in b

ath

2

1

10 Time in blow/minutes 20

Vessel horizontal - tapping

Slag

Steel

Bricks

Shell

Tap hole

Fig 1

Fig 2

23


the measurements manually through themouth, interrupting the blow andsometimes then requiring further blowing,especially because the sample had to besent for chemical analysis, causing a delay.This slows down the process and,therefore, reduces the production capacityof the plant.

When the blow is complete, the oxygenlance is removed, gas collection ended andthe sub-lance is lowered again with aslightly different probe. A thermocouple isused again to check the temperature, butat the very low carbon content in the steelright at the end of the blow, it is notpossible to use the solidificationtemperature to measure carbon content.Instead, a fuel cell measures the oxygenactivity in the steel, which can then berelated with carbon content. This is thefinal check, although it is worth notingthat samples are still sent for chemicalanalysis, which is a lot more precise.

Tapping commencesThe liquid steel can then be tapped, orpoured into a ladle for further processingand casting. The vessel is rotated so thatthe steel runs through the tap hold in itsside into a ladle below. It is essential for

quality and cost control downstream thatnone of the slag floating on the liquidcomes through, and a number of devicesare deployed to prevent it. The mostcommon is a slag dart (Fig 2). Whentapping commences, with the vesselrotated onto its side, a machine places thedart into the tap hole through the vesselmouth. The stem locates the dart in thecorrect position.

The clever part is that the head of thedart is produced with a density betweenthat of the slag and the steel, such that itfloats on the interface, submerged in theslag. Then, the head seals the tap holewhen all the steel has been tapped out,preventing any slag from coming throughafter it. Tapping generally takes around sixminutes, but it varies due to tap hole wear,

and for this reason a new tap hole can befitted quickly without re-lining the wholevessel.

This is not completely effective everytime, and many plants have equipmentthat detect slag by analysing the lightcoming from the tapping stream. Thevessel is rotated upwards very quickly whenit is detected, stopping the tap.

A 45-minute processFinally, the vessel is rotated upside downand the slag is poured from its mouth intoa slag ladle below it, which has replacedthe steel ladle. It is variable, but for ageneral impression around 10% of thetotal weight of material in the converter attapping is slag. It contains an amount ofentrapped steel, and is often processed torecover it for adding back into the process.

The total operation to produce a heat ofaround 300 tonnes takes around 45minutes (the so-called “tap to tap” time).This can be compared with around 24hours for the BOS process predecessor, theOpen Hearth Process, and resulted in arevolution in steel production, requiring farfewer steelmaking sites and a publicperception in many countries that steelproduction was in decline. �

OXYGEN STEELMAKING

Decreasing prices of scrap and Hot Briquetted direct reduced Iron (HBI) together with attempts bysteelmakers to further reduce the CO2 footprint of the steelmaking process heap pressure uponintegrated steelmakers to increase the scrap or HBI rate charged to the converter. Flexible solutions thatallow varying the scrap or HBI rate according to market conditions are required, as prices have becomeincreasingly volatile in recent years. By G Wimmer1, A Fleischander2, K Pastucha3 and J Spiess4*

Jet Process for highest converterinput flexibility

IN Fig 1 typical materials and processes forsteelmaking are shown, one of theseprocesses is the LD (BOF) process.

The energy available in a standard LDconverter depends upon the hot metalproperties and the process parameters,such as the blowing pattern and targettemperature. In average cases, enoughenergy is available for melting up to 20%of solid materials. For higher rates,additional energy for heating and meltingof the solid charges is required. Additionalenergy can be provided by electrical power,which is common in electric arc furnaces(EAFs) or direct use of the chemical energyof coal, silicon or others. For efficient directuse of this chemical energy without anyconversion losses for the generation ofelectrical power, the Jet Process wasdeveloped.

Principles of the Jet processThe Jet process comprises a bottom-blowing converter with coal and limeinjection combined with a hot blastlance[1]. The coal injected via the converterbottom is dissolved in the hot metal bathand together with the carbon of the hotmetal is combusted in two steps. Step oneis combustion to CO in the bath; step twois post-combustion to CO2 outside of thebath. A simplified picture of this process isgiven in Fig 2.

Two thirds of the chemical energy storedin the coal is released in the second step ofthe combustion process. In order to usethe coal efficiently it is essential that mostof the CO is combusted to CO2. The ratioof CO combusted is defined by the so-called Post Combustion Degree (PCD):

%CO refers to the percentage of volumeof CO from the total volume of gas leavingthe converter mouth. Besides high PCD, itis vitally important that the heat generatedin post combustion is transferred to theliquid bath, otherwise only the off-gaswould be heated up. The so-called HeatTransfer Efficiency (HTE) is used to describewhich ratio of the energy available frompost combustion is transferred to the liquidbath,

Where Hg and Hb are the energies of theentire off-gas volume flow m after postcombustion at off-gas temperature (Tg) orbath temperature (Tb) and HPCav is theenergy of post combustion available fortransfer to the hot bath. An HTE of 100%refers to a perfect heat transfer as the gasleaving the process has the sametemperature as the bath. An HTE of 0%refers to the worst case scenario: that all

energy was used to heat up the off-gasand no heat was transferred to the bath.Note that part of the heat from postcombustion is used to heat up the hotblast to bath temperature in a first stepand is not available for heating up thebath.

In order to ensure high PCD and HTE,efficient mixing is required. This is achievedby a hot blast blown with a lance from thetop onto the bath. The hot blast is air-enriched with oxygen to about 30% andheated up in a pebble heater to 1300°C.The velocity of the hot blast at lance exit isslightly below the velocity of sound, whichis around 700m/s at this temperature. Dueto the high speed and high volume of thehot blast, a jet with a very high penetrationlength is formed and a lot of surroundingmedia is sucked into the jet and this leadsto an excellent mixing inside the converter.CO coming from the bath is mixed withthe oxygen in the hot blast andcombustion to CO2 takes place. Due to thehigh mixing energy of the jet, dropletsfrom the slag and the steel path aregenerated. Because of the high surface-to-volume ratio the droplets are easily heatedup and make a significant contribution tothe heat transfer from the hot gas to theliquid bath. State-of-the-art simulationtools were used to optimise the lance tipand position as well as the PCD and HTE.Fig 3 illustrates the typical velocity of thegas flow in a converter, showing how theJet, with its long penetration length, ishitting the bath surface and intensivelymixing the entire volume above the bath.

Another result of the numericaloptimisation is shown in Fig 4. Gas flow isdeflected off the converter wall. Largeparticles hit the wall while small particlesfollow the gas flow and are sucked backinto the jet again. This leads to good mixing


25OXYGEN STEELMAKING

* Siemens VAI Metals Technologies GmbH, Turmstrasse 44, 4031 Linz, Austria1. G. Wimmer, Tel:+43-732-6592-5472, Email: [email protected]. 2. A. Fleischanderl, Tel:+43-732-6592-77125,

Email: [email protected]. 3. K. Pastucha, Tel:+43-732-6592-75319, Email: [email protected]. 4. J. Spiess, Tel:+43-732-6592-2998, Email: [email protected].

Fig 1. Typical material sources for steel making andcorresponding standard production processes

Hot metal

Scra

p

HBI

PCD = ◊%CO+%CO2+%H2+%H2O

%CO2+%H2O100.

HTE=1 ◊ ◊HpCav HpCav

Hg Hb m◊Cp◊(Tg Tb)100=1 100.

.

.



and heat transfer and keeps dust emissionsand iron losses via the off-gas low.

Intensive mixing with the hot blastensures PCD of up to 60% and HTE of upto 90%, leading to an average off-gastemperature at the converter mouth exit ofabout 150°C higher than in the steelbath.[1]. The total efficiency of coal used inthe Jet process for the melting of solidcharges is above 50% – much higher thanthat achieved if coal is used for electricpower generation and if melting takesplace in an EAF where losses occur duringelectrical power generation and transfer.

Operation of the Jet process is a two-step procedure. In step one, duringconverter tapping and charging of the nextheat, the pebble heater is re-heated withnatural gas for about 20 minutes. Theenergy is then stored in the pebble bedand used during the blowing period – thesecond step – to heat up the oxygen-enriched air for another 20 minutes.Consequently, for one converter only, onepebble heater is required. Oxygen in thehot blast is mainly for combustion of CO toCO2 and only a small part of it is used fordecarburisation of hot metal (HM). Oxygenfor decarburisation of HM is blown via

tuyeres in the converter bottom, which actlike flame cutters and can melt large piecesof scrap fast and efficiently. Bottomblowing leads to excellent mixing of thebath; hence all reactions are close to theequilibrium. This increases productivity andyield and, as less iron oxide is generated,the risk of slopping is low and the totalamount of slag, as well as the iron contentof the slag, is low.

The process is easily adapted to differentscrap or HBI rates charged to the converterby adjusting the amount of coal injected.Theoretically, rates from 0% to 100% canbe realised with the Jet process. Up to 30%of scrap means that no coal injection isrequired; the latent heat of the hot blastplus the post-combustion of CO comingfrom HM decarburisation provides enoughenergy. For scrap or HBI rates close to100%, step-wise or continuous chargingof cold additions and hot heel operationswhere parts of the steel remain in thevessel at tapping, is required. Such hot heeloperation, of course, reduces theproductivity for a given converter size butcan be an interesting option for periods ofblast furnace relining or in cases whereprices and availability of electrical power

for operation of an EAF are not in aneconomically attractive range. Comparinghe Jet process with the EAF shows that forstandard situations and average marketprices it will be economically moreattractive for HM rates above 50%. TheEAF will be the best solution for HM ratesbelow 50%.

The Jet process requires a bottom-blowing converter and a hot blast system.The bottom blowing converter itself is wellknown and several steel plants all over theworld are successfully operating them. Inthe photograph below, the under side of abottom-blowing converter (Fig 5) is showntogether with a picture from CAD. Thetuyeres have a pipe-in-pipe design and arecooled and protected with natural gas orother hydrocarbons. By regulating theamount of natural gas blown, the coolingeffect and the wear of the tuyeres can becontrolled. One of the most relevant pointsfor operation of such a converter isconverter lining wear, especially at theconverter bottom with its injection tuyeres.Nowadays wear rates of around 1mm perheat can be reached. In combination withhot bottom exchange, a vessel lininglifespan of between 2,500 and 3,500 heats

Fig 5. Converter bottom equipped for injection of coal and lime ready for operation. Picture from CAD model (left), photofrom installation (right)

Fig 2. The Jet process consists of a bottom-blowing converter and a hot blast lance.Intensive mixing allows for the efficient use of the coal injected

Fig 3. Typical flow inside the converter, bath surface represented by solid wall with COinlet

Fig 4. Particle flow inside the converter due to intensivemixing. Small particles are sucked back into the jet (left),large particles hit the wall (right)

Cold air + O21300°C

Hot blast

Energy in hot blast

Heat transfer to bath

C-H coolingO2, coal, lime

Carbon postcombustionCO + _ O2 _ CO2

Carbon combustionCO + _ O2 _ CO

high

low

2s

Small particle get trappedLarge particles

hit the wall

1μm 20μm

0s

Particle size

27


OXYGEN STEELMAKING

is achievable, depending on operationalpractice.

In Fig 6 the hot blast system and itscore component, the pebble heater, areshown. The pebble heater is a veryefficient, regenerative heat exchanger thatuses pebbles to store energy[2]. Thepebbles have a very high storage powerand are ideally suited for short-term heatstorage. This, in combination with theirhigh storage density, leads to verycompact design.

Modular design for highestflexibilityA modular design is used for all theequipment required for the Jet process.Most important are the converter bottomand the lance system with attached pipingand valve stands. These components aredesigned in such a way that, for theconverter bottom, a normal bottom withstirring elements can be installed. Thesame is done for the lance system whereinstead of a hot blast lance there is anormal oxygen blowing lance for the LDprocess. This allows switching back fromthe Jet process to normal LD operation ifrequired. Such a change can be doneduring relining, but also during regularconverter bottom exchange and takes nolonger than half a day. The automationsystem fully supports both operationalmodes. Modular design brings additionalflexibility and investment security as theentire process can be easily adapted to theactual market situation. If, for example,scrap and HBI is getting more expensive orenough HM is available for normal LDoperation, it is easy to switch to the mosteconomical mode of operation.

Converter steelmaking with JetprocessIn Fig 8 a typical pattern for the Jetprocess for a heat with a charge mix of50% HM and 50% scrap or HBI is shown.Values are calculated per ton of liquid steeltapped. Note that all oxygen fordecarburisation of the HM – andcombustion of the coal injected via theconverter bottom – has to be blown viathe bottom tuyeres. Oxygen in the hotblast is for post combustion only and willhardly react with the steel bath. Duringthe main blowing phase, oxygen is blownvia the converter bottom and hot blast isblown from top. The oxygen blowing ratevia the converter bottom is rather low inthis phase to ensure that velocities at theconverter mouth are not too high, givingenough time for post combustion andheat transfer. After coal injection and maindecarburisation, hot blast blowing isstopped and the oxygen-blowing rate viathe converter bottom is increased tostandard rates for normal bottom-blowingconverters.Fig 9. Media & Energy costs per ton of steel tapped for steelmaking with different processes

Fig 6. Main components of the hotblast system

Fig 7. Modular design allows installing a normal converterbottom with stirring elements and normal oxygen blowinglance, meaning that the converter can also be operated instandard LD mode

Fig 8. Typical process pattern for a charge mix of 50% hot metal and 50% scrap or HBI

Pebble heater

Hot blast duct

Hot blast lance

Main blower

Burner chamber

Burner blower

6,00 6,0 1800

1700

1600

1500

1400

1300

1200

5,0

4,0

3,0

2,0

1,0

0,00 5 10 15 20 25 30 35 40 45

processing time, minutes

5,00

4,00

3,00

2,00

1,00

0,00

Carb

on, %

C

Gas

flo

ws,

Nm

3 /m

in/t

Bath

tem

pera

ture

, °C

Oxygen

Hot air

Nitrogen

ArgonLNGCarbon content

Temperature

Scrap HM EoB Tapping DeslStirMain blowLime injection

Coal injection

Standard LD20% scrap

M&E costs 11$/ton*Low M&E costs due to simple

process and minimumconsumptions (oxygen, no coal)

M&E costs 24$/ton*Higher M&E costs due toadditional energy input

(coal, oxygen, natural gas)

M&E costs 35$/ton*Costs of electrical power and

other consumptions(electrodes, oxygen, coal)

Jet process50% scrap

EAF50% scrap



Two potential sources for nitrogen pick-up have to be considered: the nitrogenused as carrier gas for coal injection andthe nitrogen in the hot blast. The fact thatthe hot blast is not in intensive contactwith the steel bath means that thenitrogen pick-up from this source is ratherlow. The nitrogen used for coal injection ispartly removed by stirring with CO fromdecarburisation and coal combustion.

Final nitrogen content of 20 – 30ppmcan be achieved. The natural gas used forcooling of the tuyeres brings some

hydrogen to the bath. As soon as oxygenblowing through the converter bottom isstopped, cooling with natural gas is notnecessary anymore and simple coolingwith nitrogen or argon, if required, isenough. (See also process diagram Fig 8.The remaining hydrogen in the bath canbe reduced to values below 3ppm byintensive stirring).

The typical process time for the Jetprocess is shown together with values forthe standard LD process in Table 1. Thevalues show that with a converter size of

180 tonnes, up to 2Mt of crude steel canbe produced per year. Comparison showsthat the tap-to-tap time for the Jet processis about six minutes longer than for the LDprocess. This is mainly caused by the longerblowing time and increased average servicetime, which is required for bottom service(maintenance and hot bottom exchange).Due to the shorter lining lifetime for the Jetprocess, more re-linings per year arerequired compared with the LD process.Longer average tap-to-tap time and moretime for relining results in a 13% reductionof maximum productivity per year whencompared to LD process productivity. Notethat this number is based on theassumption that the productivity of the LDconverter was fully utilised.

Areas of applicationSeveral economically attractive marketopportunities for the Jet process exist;most important are the benefits fromcheap scrap or HBI, benefits from reducedinitial investment; and from the reductionof CO2 emissions.

Production cost per ton of steel tappedfrom converter or EAF are split in threeparts: costs for materials charged (scrap,HBI and HM); media and energy costs(M&E) for operation of the process – themost important being oxygen, coal,electrical energy, nitrogen, argon, lime,dolomite and refractory. Other importantcosts are personnel, financing, buildingsand infrastructure.

The latter are almost identical for allprocesses discussed and are, therefore, notconsidered here. In Fig 9 M&E costs for thestandard LD process with 20% scrap, Jetprocess with 50% scrap and EAF with 50%scrap are shown.

Cost comparisons show that the LDprocess is cheapest as it is the simplestprocess and no additional energy isrequired to melt solid charges. The Jetprocess is more expensive as additionalenergy is required to melt the additional30% of scrap.

Costs are even higher if the same chargemix is melted in an EAF as the electricalenergy used is more expensive than thecoal used in the Jet process. From theperspective of pure operational costs, theJet process only makes sense if the scrap orHBI charged is cheaper than the HM.Considering average market prices, thecalculations show that at a price differencebetween scrap or HBI and HM of US$40the Jet process becomes beneficial.

Fig 10 is an example of what such amodification of the production process inan integrated steel plant would look like.In the original situation two 180tconverters are operated, 20% scrap ischarged and total production is 4.6Mt ofcrude steel per year. If HBI and scrapbecome considerably cheaper than HM,

Charge Mix 80% HM + 20% Scrap 50% HM + 50% Scrap

Scrap charging 2 min 3 min

Hot metal charging 5 min 4 min

Oxygen, hot blast blowing 18 min 22 min

Sampling, waiting for analysis 3 min 3 min

Tapping of steel 6 min 6 min

Slag off 2 min 2 min

Average service time 3 min 5 min

Average Tap to Tap time 39 min 45 min

Heats per day 37 31

Tapping weight 180t 180t

Lining life time 4’500 heats 3’000 heats

Relining's per year (5 days) 2,84 3,1

Heats per year 12’794 heats 11’112 heats

Annual production 2’300’000t 2’000’000t

100% 87%

LD Jet process

Table 1. Typical process times and productivity for standard LD (BOF) process and Jet Process

Fig 10. Modification of the process route for maximum HBI or scrap rate. Original process 20% scrap (top) and modifiedprocess with 50% scrap and HBI (below)

Coal Injection No No Yes Yes Yes

Scrap Rate 20% 32% 50% 50% 100%

PCD 12% 60% 60% not considered not considered

HTE not considered 90% 90% not considered not considered

Yield 92% 94% 94% 91% 91%

M&E costs 11$ 15$ 24$ 35$ 55$

CO2 emissions 1600kg CO2/t 1250kg CO2/t 1000kg CO2/t 900kg CO2/t 500kg CO2/t

LD Jet process Jet process EAF EAF

Table 2. Main data for Jet Process and comparison to LD process and EAF

Ore, Coke

Ore, Coke

HBI, scrap

HBI, scrap

3,7mt

2,3mt

0,9mt

3mt

4,6mt steel

4,6mt steel

29


OXYGEN STEELMAKING

one blast furnace could be switched off. Charging part of the HBIto the remaining blast furnace increases hot metal production byabout 25%. This hot metal is then converted to crude steel inthree converters using the Jet process, each charged with 50%HM and 50% scrap or HBI. Such changes in production wouldallow increasing the HBI or scrap rate considerably while keepingtotal output of the steel plant constant.

Equipment that must be modified includes the remaining blastfurnace, which has to be adapted for high HBI rates, the twoexisting converters, which have to be revamped for the Jetprocess, and one additional converter that has to be installedfrom scratch.

The second opportunity where the Jet process might bebeneficial are scenarios with an HM bottleneck – this could be aplanned increase of total production or the blow-down of a blastfurnace. In such cases the Jet process can be used to increasetotal converter output while keeping HM consumption to aminimum and avoiding costly investments for an increase of HMproduction capacity.

The only investment necessary is for the adaption of existingconverters to the Jet process, which is much cheaper thanbuilding additional HM production capacity including coke andsinter plants and a blast furnace. The same is true not only fornew capacities installed, but also for major revamps, such as anew de-dusting system or a blast furnace revamp.

The third opportunity for application of the Jet process is thereduction of CO2 emissions. The coal-based process for HMproduction in a typical integrated plant, generates 1600kg of CO2per ton of steel tapped. Scrap is a recycled material and doesn’tcarry the CO2 burden.

For this reason, replacing part of the HM with scrap reducesCO2 emissions per ton of steel tapped from the converter,although coal is used to melt the scrap in the Jet process. With acharge mix of 50% HM and 50% scrap, total CO2 emissions arereduced to 1000kg per ton. This allows plant operators to reduceemissions significantly or increase production while keepingemissions constant. A summary of the CO2 emissions of differentprocesses is given in Table 2.

Summary and conclusionIn Table 2 a summary of the facts and figures discussed above isgiven – for reference, the values for the standard LD process andfor EAF are presented. The comparison shows that the Jet processallows for a considerable increase of the scrap or HBI ratecharged. M&E costs increase due to the additional energyrequired for melting these solid materials.

Economically attractive opportunities for application of the Jetprocess are, therefore, cases where scrap or HBI prices are low.Benefits from savings on the initial investment are generated orsavings are achieved due to the reduction of the CO2 footprint.

In recent years Siemens Vai has acquired all the relevant patentsand knowledge for the Jet process and has developed andoptimised it for full industrial application.

With the Jet process, the company has completed its portfoliofor special converters with a process ideally suited to medium andhigh scrap or HBI rates. Due to the direct use of the coal insidethe converter, conversion losses for the generation of electricalpower are completely eliminated, making the process veryefficient and productive.�

References1. Brotzmann K. Gunther C. New applications of hot blast jets inmetallurgical processes, Stahl und Eisen, Germany, 2003, vol 123, pp 6-7.2. Stevanovi D. Brotzmann K. Pebble-Heater technology in metallurgy,Metalurgija, 2004, vol 10, pp 19-36.

PROVEN APPLICATIONS IN A 65 YEAR HISTORY

FOR THE IRON &STEEL INDUSTRY

30 STEEL PROCESSING: PROFILE


CD Wälzholz is a leading, family-owned steel processor with global reach.Headquartered in Germany it has a strong presence in Europe, North andSouth America and Asia and is a popular choice for major internationalautomotive OEMs sourcing special steel grades for car manufacturing. Thecompany’s strategy of serving multiple industrial sectors has paid dividendsand its customer-oriented philosophy has seen it ride out the recent global

downturn and looking ahead with confidence. Matthew Moggridge*

travelled to Hagen to meet managing director Dr. Matthias Gierse.

A global presence in many markets

FOR almost 200 years, Hagen-based C DWälzholz of Germany has been a leadingsupplier of cold-rolled steel products toglobal markets. Managing director Dr.Matthias Gierse attributes the company’slongevity to its customer-focused approachand its wide and varied product portfolio.He explained how the business has alwaysbeen on the cutting edge in terms ofproduction output and the processingtechnologies it employs.

“If we look at cold-rolled products, weare able to produce almost an extremelywide range of specialities everything in thisarea and this is an asset for our customers,even our big customers” Dr. Gierse toldSteel Times International.

C D Wälzholz sources its raw materialfrom around the world. Most of the steelit processes in Europe comes fromEuropean producers. The company boastsstrong links with the world’s leading

steelmakers and regularly sources materialfrom China, the United States and SouthAmerica.

“We try to source material locally,” saidDr. Gierse, adding that certain productsrequire a specific type of steel – such asmedium strip – which C D Wälzholzsources 10km from its headquarters inHagen from Hoesch Hohenlimburg. “It isthe only medium strip mill in the worldthat could reach our required quality level,so there are some products that have touse this material, even in Brazil, the USAand China,” he added.

Where sophisticated applications needinnovative solutions , C D Wälzholz has leftno stone unturned.

“We think we are unique because all ofour competitors more or less focus oncertain areas of cold-rolled products. Weare also specialised, technological leadingespecially in the various types of high-

strength material, but the scope of ourcapabilities is much wider than that of ournext biggest competitor,” Dr.Gierseexplained.

Processed steel from C D Wälzholz canbe found in many different products. Inaddition to automotive, they are used asblades for garden shears and can be foundin vacuum cleaners, lawn mowers, thepower springs of seat belts , pull-out railsfor drawers, steel caps for safety shoesand many other day-to-day products.

Having fingers in so many pies has beena long-term and successful strategy for C DWälzholz. The company had a good yearin 2013 and, looking ahead, Dr. Gierseexpects 2014 and 2015 to be fruitful too.

“We feel quite sure that the market willdevelop well. Our success is very muchlinked to light vehicle production, which islooking good over the coming years,” hesaid.

* Editor, Steel Times International

CDW and is also the first company in China capable of producing high-performance,

cold-rolled steel. “For the next three to five years, we will be the first and the only,”

said Dr. Gierse,

The production of cold-rolled carbonsteel strip takes place at the company’sHagen-Fley plant, which comprises FleyNorth and Fley South.

In Fley North a push-pull pickling linehandles wide and medium-width hot-rolled strip, which is cut on a hot-rolledsteel slitting line and rolled by thecompany’s four-high tandem rolling mill.Heat treatment follows using HICONbatch-type annealing furnaces.

The production process continues at FleySouth where there are two four-high skinpass mills for final rolling followed byslitting and packaging lines and notforgetting an automated finished goodswarehouse with an automated high-shelfsystem.

Fley South also houses a continuousannealing furnace with a 450 mprocessing section where electrical steel

is annealed and coated on one or twosides, at individually adjusted speeds,to optimise electromagnetic propertiessuch as magnetic polarisation, coreloss or permeability.

In Plettenburg the companymanufactures Sorbitex®, used in theproduction of springs, and PT band,which allows specific forming despitehigh tensile strength.

Sorbitex is a specially heat-treatedproduct. “It’s also a highly temperedmaterial and is processed by specialisedrolling facilities,” Dr. Gierse said,explaining how the automotive industry isa big user of the product.

PT band and Sorbitex are manufacturedusing continuous annealing furnaces and20-roll mills to achieve a very high tensilestrength.

RAWAEL presents another member ofthe high-strength materials of C D

Wälzholz.

32 STEEL PROCESSING: PROFILE


In recent years, C D Wälzholz hasinvested heavily in developing productionfacilities in China. In April the companyopened a new cold rolling mill in Taicang,near Shanghai. The new mill representsone of the largest investments thecompany has made and is designed tomeet estimated future annual salesvolumes in the Asian market of up to 80ktof cold rolled steel strip.

Since laying the foundation stone inDecember 2011, the Chinese plant hasexpanded by 10,000 square metres and isgoing to employ 200 people. It boasts afour-high rolling stand and several highconvection batch-annealing units inaddition to its existing slitting and cut-to-length lines. What was once a servicecentre focused on warehousing, slittingand the supply of steel strip from Europehas been transformed into a completecold rolling mill, primarily servicing theautomotive sector but also the electronicsand cutting tools industries.

When C D Wälzholz first ventured intothe Chinese market in 2007 with asubsidiary company, its Asian businessrepresented only 2% of sales. By 2011,when the decision to reconstruct itsTaicang plant was taken, sales hadincreased to 6% of total sales and thisfigure is expected to reach 10% in the not-too-distant future.

The Taicang mill is the first of its kind inChina’s Jiangsu province.

Other recent investments have includedthe modernisation of the company’scentral rolling mill in Hagen-Fley.According to Dr. Gierse, C D Wälzholz isconstantly looking at potentialmodernisations and new materialprocessing tools.

On average, 50% of C DWälzholz’s capitalexpenditure is spent

on further equipment development andupgrading. The remainder is spent onbuying new equipment.

In addition to the new Taicang coldrolling mill, C D Wälzholz has four long-established sites in Germany – at Hagen,Plettenberg, Oberkochen and Iserlohn.

Martensitic hardening and temperingtakes place at the company’s Hagen-Hohenlimburg facility. It is here that basicmaterial testing and process developmenttake place in addition to the manufactureof ski edges – a process finished at thecompany’s Gotzis plant in Austria wherestamped and folded steel parts made fromsteel strip and profiles (or hardened andtempered steel strip and profiles) areproduced.

“We try to source material locally,” said

Dr. Gierse, adding that certain products

require a specific type of steel – such as

medium strip – which CDW produces

10km from its headquarters in Hagen.


Because RAWAEL offers ‘enormousstiffness’ combined with high workabilityand thus allows weight savings by usingthin thicknesses, it is an ideal product forthe automotive industry, claims CDW, butoutside of car manufacturing, cold-rolledhigh carbon steel has wide applications inother industry sectors.

Plettenberg also produces cold-rolledmedium and high-carbon steel strip,specially annealed and rerolled, which areappropriate for fine blanking operations.Individual profiles up to a rolling width of150mm can be produced using the plant’sprofile rolling mills.

Phosphated steel strip is produced atCDW’s Oberkochen facility. Otherwiseknown as bonderised steel strip, it isperforming well for the company and isused in the production of very complexparts, used mainly by the automotiveindustry. According to Gierse, theproduct’s growth rate is comparable withthat of the global light vehicle market.Strip thicknesses range from between 0.2to 4.5mm with widths of up to 410mm.

C D Wälzholzs Iserlohn service centre –close to Hagen –is specialised in smallbatches and short delivery times. Thecompany’s service centres – there are twomore in Cleveland, Ohio, USA, and inThiers, France – can slit and store products.“We normally produce and deliver mothercoils to service centres,” Dr. Gierse said.

In South America, Brasmetal WaelzholzSA annually produces 100kt of cold rolled,hardend and tempered and also surfacerefined high and low-carbon strip.

Established in 1974 Brasmetal followedVolkswagen and Bosch into Brazil, first aspart of a joint venture, but now as a fullyowned subsidiary.

CDW exports more than 50% of itsproduction output. Europe is thecompany’s biggest market followed by theUSA where demand hovers between550Mt to 600Mt of cold-rolled productsper annum. The German domestic marketaccounts for 1Mt. The Chinese market forhigh quality steel strip is largely covered byJapan, South Korea and Europe becausethere is no company in China that wouldreceive the necessary approval rating fromOEMs like BMW, Audi or Daimler.

“All our shipments to Asia andeverywhere are containerised,” said Gierse.“And that is comparable with our servicecentre businesses in the USA and Iserlohn.Until we started production of our newrolling and annealing facilities in Taicang,China, this spring, we only shipped mothercoils to Asia and only the slitting andlogistical activity was handled byWaelzholz New Material (Taicang) Co Ltd,one of two subsidiary companies nearShanghai,” he added.

While the global primary steel industryviews the Chinese with concern – thanks

largely to overcapacity issues – in cold-rolled steel and precision strip there is noover-production. “No cold roll in Chinacould be approved so all the material thatcould be used in high performance cars isimported from Korea, Japan and Europe,”Dr. Gierse said.

C D Wälzholz was the first cold rollingcompany to receive approvals from bigautomotive part suppliers. C D Wälzholz isalso the first company in China capable ofproducing high-performance, cold-rolledsteel. “For the next three to five years, wewill be the first and the only,” said Dr.Gierse, mindful that there is no room forcomplacency.

A big worry for Gierse is the likely costeffect of EU climate policy on steelproduction in Europe. “We are buying –more or less – only speciality steels andcompanies like Thyssen Krupp Steel Europeor ArcelorMittal Europe [and other leadingEuropean steelmakers] can produce a hugevariety of these products,” he said.

Getting the right products fromelsewhere in the world – including fromsteelmakers in the USA – has provedproblematic for C D Wälzholz, highlightingthe importance of a strong andfunctioning steel industry in Europe, fromwhere the company sources most of itsraw materials.

Dr. Gierse is also concerned aboutChinese overcapacity and the big dangersurrounding the possible export of excesssteel to European markets – another majorthreat to the profitability of the Europeanindustry. “If the European steel industrydies, we will suffer,” he said.

Looking ahead, Dr. Gierse believes therewill be a spate of mergers and acquisitionswithin the European steel industry, drivenby Asian steelmakers looking for aEuropean footprint. “In my opinion thesteel industry in Europe will survive, butmaybe the names will change,” he said.

That said, he is optimistic for the nextdecade, bearing in mind the global growthpotential of the light vehicle industry andC D Wälzholz’s close association with theautomotive sector worldwide.

He believes in the importance ofdeveloping a global sourcing base toovercome the potential pitfalls that mightbe encountered by the European steelindustry, but is equally aware of thedangers surrounding knowledge sharing interms of the production technologiesassociated with special steel grades.

“On the other hand, you need localproduction to be competitive in themarket,” he said, adding that C DWälzholz is a global player and willcontinue to grow internationally. �

C D WÄLZHOLZ – PRODUCTS

C D Wälzholz claims market leadership in cold-rolled and tempered steelstrip. Its products can be found in many end-user markets, but mainly theautomotive sector.

The company produces seven different lines:• Cold-rolled high carbon steel strip.• Hardened and tempered steel strip.• Electrical steel strip.• Cold-rolled low carbon steel strip.• Bonderised steel strip.• Narrow steel strip.• Profiles.

33STEEL PROCESSING: PROFILE

GLOBAL crude steel production has levelledoff, according to Becky Hites of US-basedSteel Insights. She highlighted historicalcyclical growth patterns involving growthspurts followed by periods of consolidationand then more growth spurts and arguedthat the developing world continues togrow while the developed world contracts.

The developing world is no longerdependent upon the developed world,Hites argued, and the old colonial modelof supply no longer holds water as half ofglobal crude steel production takes placein developing world countries.

The global steel industry has doubled insize, explained Hites, and the top 20steelmakers hold a 30% to 40% share ofproduction. China accounts for aroundhalf of world crude steel production, but isnot over-exporting relative to its size. Chinahas nine of the top 20 steelmakers withinits borders, but is not as consolidated asthe rest of the world.

Hites highlighted five EU countries thatdominate crude steel production: Germany(27%); Italy (15%); France (10%); Spain(9%) and the United Kingdom (7%). These

countries account for over 5% of totalproduction, although there are sevennations dominating if Poland and Austria,both accounting for 5% of production, areincluded.

High labour and energy costsHigh labour and energy costs and the factthat there is no internal raw materialsource in the region are major challengesfor European steelmakers. Committing tothe environment will result in highproduction costs, but massive closures arenot likely as there’s still nationalistic pridein possessing a steel manufacturing base,Hites believes.

The operating environment for EUsteelmakers will remain challenging ‘forthe foreseeable future’ and producers willneed to evaluate markets and products todetermine if past strategies still work.

“There will always be a low-wage, high-growth country somewhere in the world,”said Hites. “And economic activity willalways migrate there.”

She said that business will move out ofChina and into places like Mexico, Peru,Latin America and the entire Indian seabasin.

Met coke – price deteriorationCRU’s Anna Fleming discussed the pricedeterioration of metallurgical coke over thepast four years and wondered howproducers can survive under suchcircumstances. She argued that prices hadfallen below 2009 lows of around$200/tonne and had declined sharply sincethe beginning of 2014 when the priceplummeted from roughly $260/tonne toaround $190/tonne.

On China’s situation, Fleming said exportprices had been sensitive to the domesticmarket since the removal of China’s exporttax. Market oversupply had led to a drop inprice. With India’s import growthstagnating, the Chinese have lookedtoward Japan as an export market.

Fleming said that coking coal prices havebeen declining for months. Since April2009, when the spot price (FOB Australia)was roughly $120/tonne, the price rose to$350/tonne and then fell to just over$100/tonne in April 2014. Once again,oversupply has kept producers in businessand they have shipped excess tonnage toChina, which has led to a worryinginventory build-up. Loss making has beenminimised by strong cost reductions,which have maintained positive marginsfor coal producers.

The premium for coke over coal hasbeen narrowing, claimed Fleming. Spotprices for hard coking coal in April 2014were roughly $110/tonne (FOB Australia)compared to $200/tonne for merchantcoke (FOB China). In mid-2008 thedifference was staggering: $700/tonne for

According to CRU’s Anna Fleming, integrated steelmakers are the most cost efficient because they usemetallurgical coke produced ‘in-house’. However, as coke prices fall, many Japanese steelmakers havefound that they are producing coke at costs above the Chinese FOB price and could, therefore, replacein-house production with cheaper imported coke from China. This is just one of many viewpointsexpressed at EuroCoke 2014 in Edinburgh recently. By Matthew Moggridge*

Insightful presentations at EuroCoke 2014


35EUROCOKE 2014

* Editor, Steel Times International

Dr. Neil Bristow of H&WWorldwide Consulting

Gujarat NRE Coke’sArun Kumar Jagatramka

36 EUROCOKE 2014


merchant coke compared to $400/tonnefor hard coking coal.

Integrated steelmakers are the most costefficient because they use metallurgicalcoke produced ‘in-house’. However, ascoke prices fall, many Japanese steelmakershave found that they are producing cokeat costs above the Chinese FOB price andcould, therefore, replace in-houseproduction with cheaper imported cokefrom China.

At present, global coke production costsare fairly close-knit with product from theUSA and Ukraine coming in at under$200/tonne and Polish, Columbian,Japanese and Chinese coke roughly$250/tonne. The price of Chinesemetallurgical coke is most likely toexperience the greatest cost rise and thiswill weaken its competitive position.Chinese labour costs are also expected toincrease two-fold by 2018, although Chinawill remain dominant in the market. Whilethere is international pressure for China toreinstate its export tax, it is unlikely tomake a return. Between 2013 and 2018there will be a steady rise in coke exportsfrom China, due to a lack of new merchantinvestment.

Fleming said international coke prices areheavily influenced by the Chinese domesticprice, adding that any price trend in cokingcoal will be mirrored by metallurgical coke.

While China’s competitive edge will beblunted over the next five years, itspenetration of the global market willstrengthen and monthly spot prices willcontinue to be set by the Chinese.

Metallurgical coal marketsJim Truman of Wood Mackenzie said thatChina’s average GDP growth would average7.5% and would remain true to 2020, whileIndia’s will rise to 6.6% by 2015 andmaintain an average of 6.5% per annum to2032.

Truman said that global hot metalproduction will grow at 1.4% per annum to2025 and then decline to 43Mt by 2035 asproduction shifts to electric steelmaking.Steel production growth will average 1.9%to 2025 and then slow to 0.6% as Chinesesteel intensity falls.

By 2035, total demand for seabornemetallurgical coal will reach 380Mt fromcurrent levels of 300Mt. Asia accounts for70% of growth (69Mt) while Europe, theMiddle East, Russia and the Caspian Searegion (EMEARC) will make up 20% ofgrowth, the Americas 10% and Brazil 7%.

China produced 775Mt of crude steel in2013. In 2014 output will continue at anannualised rate of 4.4% over last year’sfigure and was strong in January, butdeclined in February. Based on the first twomonths of 2014, output will achieve an

annualised rate of 809Mt. Curtailments toaddress air pollution will impact Chineseoutput, Truman said.

With China’s export tax lifted, Chinesecoke exports increased considerablythroughout 2013 with Japan, India andBrazil accounting for 70% of purchases.Chinese total exports by December 2013were going at the annualised rate of 9Mtand January 2014 levels remain high.

Truman said Australia would play a keyrole in seaborne supply growth and meetthe highest proportion of new demand.Other countries – namely Mozambique,Indonesia and Columbia – were poised forsignificant growth, but will experiencechallenging development and infrastructuralissues.

Chinese domestic production wasrelatively flat and declining slightly, Trumansaid, adding that coal quality will deteriorateand less hard coking coal will be produced.The volume of semi-soft and PCI (pulverisedcoal injection) will increase, creating a heavyreliance upon the seaborne market.

While exports from Queensland,Australia, reached a new peak of 13Mt inDecember 2013, adverse weatherconditions in early 2014 stalled exports.

Australian producers are showing a focusto gain market share to Europe. Australiaexported nearly 25Mt in 2008 andexperienced a big drop in 2009. The

1,600

1,400

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urt

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37


EUROCOKE 2014

following year it recovered to 20Mt and iscurrently exporting 17.5Mt less than in2008.

US exports remain strongDespite falling prices, US exports haveremained strong, according to Truman,while Asian purchases fell during 2013.European shipments remained steady. Hesaid there had been steady export growthsince mid-2013 and that February 2014exports – annualised – would total 60Mt,although he expects a decline as the yearprogresses.

In 2011, US exports to Asia grew to18Mt following floods in Queensland. In2012, Asian sales grew to 20Mt in the faceof an Australian recovery, but the US lost4Mt as Australian mines continued toincrease output.

Last year Canadian exports averaged2.8Mt/month, but fell to 1.7Mt due toadverse weather conditions. In February,purchases increased in China, South Korea,Japan and the Netherlands.

DRI provides good ROIIan Cameron, senior director (iron andsteel) for Hatch, said that investment in DRIplants in North American integrated steelworks can provide a good return oninvestment when internal iron oreresources are used. He said there waspotential to reduce purchased scrap costsat fixed steel output or increase steelproduction by charging DRI to the blastfurnace.

Cameron said that Tenova’s Energironsystem can process significant amounts ofcoke oven gas (COG) to reduce the cost ofnatural gas and that Midrex and Praxairwere developing a Thermal Reactor Systemto process greater amounts of COG.

DRI plants are unlikely to replacetraditional BOF steelmaking, said Cameron.

AnthraciteGreg Driscoll, president and CEO of theUSA-based Blaschak Coal Corporation,discussed the environmental advantages of

anthracite, highlighting global availabilityand claiming that the best quality can befound in Siberia where both Ultra HighGrade and High Grade varieties are mined.

Driscoll said that 125Mt of anthracite ismined in Asia followed by Russia and theUkraine (23Mt); Europe (11.5Mt); sub-Saharan Africa (3.5Mt); and North America(3Mt).

Power generation was the biggestmarket for anthracite (55%), mainly in theFar East, followed by metallurgicalprocessing (20%); residential/indus-trial/commercial space heating (10%) anda similar percentage for water filtrationand then lime kilns (5%).

Anthracite, said Driscoll, offered apremium source of carbon for multiplehigh value applications and significantenvironmental benefits in terms of productquality, carbon stewardship, beneficial usesand the restoration of surface and waterresources.

Anthracite from Pennsylvania, saidDriscoll, is an emerging source of carbonsupply with significant growth potential.Mining in the region is ‘daylighting’ oldworkings (previously deep-minedproperties) producing ultra high-gradeproduct and restoring exploited mines topristine condition.

Anthracite ‘measures’ in Pennsylvaniacover 300,000 acres in eight counties and22% of existing measures are permitted,with only 12% actively worked.

With $300 million of new investment inPennsylvania’s anthracite industry since

2009, Driscoll argued that it is ‘re-emerging as a structured, professionallymanaged, well-financed, high-performingindustry’ based around multiple producersalongside 30 smaller family-ownedbusinesses.

Mining – an ever-changing worldDr. Neil J Bristow of H&W WorldwideConsulting told delegates that mining in2050 would be unrecognisable from whatit is today. He highlightedenvironmentalism as a key driver goingforward and argued that issuessurrounding sustainability, recycling andre-use will be crucial in the years ahead.

Dr. Bristow argued that easily developedresources had already been found and thatrising government rules and regulations, aswell as rising resistance from localpopulations, will make life morechallenging for tomorrow’s miningindustry. He said that access to resourceswould be more difficult for the abovereasons, but also because of increasedenvironmental restraints and the need tofind reserves in difficult or remote terrain.

Bristow said that the mining industrymust improve its public relations skills andshould promote the benefits of mining tolocal communities and become ‘goodenvironmental citizens’ by developinggreen, low-energy mines using state-of-the-art technology.

Dr. Bristow went on to look atMozambique, Mongolia, Indonesia andRussia. He said that Mozambique offered

Total demand will rise from the current level of ~300Mt to 380Mt

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38 EUROCOKE 2014


large reserves in the Tete province, buthighlighted infrastructure issues, arguingthat an expanded port at Nacala or a newdeepwater port was essential. An existingport at Biera was limited to 10Mt/yr andcould only take handy-sized vessels.

Exports from Mozambique could rise tojust under 20Mt/yr by 2016 if Nacala isexpanded, but could rise to over 90Mt by2050 with further new ports development.

Extensive reserves of coking coalIndonesia is a mineral-rich nation, said Dr.Bristow, but coal is found in theKalimantan region where exports will risesteadily to 2025. By 2016, over 400Mt ofthermal coal and 10Mt of coking coal willbe exported, rising to 500Mt thermal and19Mt coking coal by 2025, dropping backto 400Mt of thermal coal in 2050 butrising to 38Mt of coking coal.

Dr. Bristow said Russia has extensivereserves of coking coal, but most of it isunderground and a long way from thecoast. The reserves are mainly owned bythe steel industry. While many new projectsare underway, some are restricted by theweather (they can’t ship during the wintermonths) and others suffer from a lack ofinfrastructure.

Russian seaborne coking coal exportshave risen steadily since 2012 (10Mt) andare expected to be roughly 45Mt by 2050.The current figure, claims Bristow, isroughly 15Mt.

While political factors have delayed and,in some cases, stopped many coal projectsin Mongolia, the country has many morein the pipeline and extensive reserves of awide range of coking coals, according toDr. Bristow.

Between now and 2016, coking coalexport volumes are roughly in the region of12Mt to 18Mt with seaborne exports of1Mt/yr in 2020 and 2025 and possibly2Mt/yr in 2050. Reaching tidal waters iscrucial for Mongolia.

Strictly for the Chinese marketAccording to Dr. Bristow, Mongolia is likelyto be restricted to China, which willindirectly affect the seaborne market.However, Mongolia, Indonesia andMozambique all have potential forsignificant volume increases, but only ifprices justify investment. Mozambique, hesaid, was ideal for India’s growing coal andcoke market and that, in all the above-mentioned regions, port and railinfrastructure will play an important role.

An Indian summer Gujarat NRE Coke’s chairman andmanaging director Arun KumarJagatramka, said that the Indian economywas expected to improve late in 2014 withIMF GDP growth of 5.4% this year and6.4% in 2015.

He said the fundamentals of theeconomy were strong and that a risingIndian middle class will mean an increasein steel consumption.

Infrastructure is the largest consumer ofsteel in India and is set to raise demand by40Mt/yr to 2017. Infrastructure represents63% of consumption, engineering andfabrication 22% and automotive 10%. Theremaining 5% is taken by packaging (3%)and transportation (2%).

Additional capacityJagatramka said that an additional 36Mtof capacity will be added over the next fiveyears and that all current capacityadditions are on track. “Stagnation has notdented the confidence of existing steelproducers,” he said.

According to Jagatramka, India will havean additional metallurgical coke demandof between 20-25Mt, primarily from thesteel industry, over the next five years. �

Combilift Ltd Gallinagh Co. Monaghan Ireland Tel: +353 47 80500 UK: 07870 976 758 E-mail: [email protected]

www.combilift.com


ACCORDING to Panalytical, the systemmills and collects chips from within thelaboratory automation unit and therebyeliminates manual handling and the risk ofcontamination which, it claims, isassociated with other automated chipsample collection systems.

The company’s automation productsfocus on provision of customer-specifiedautomated metrology laboratories for thecement and steel industries. Wheresteelmaking is concerned, it offersautomation solutions for X-rayfluorescence (XRF), X-ray diffraction (XRD),optical emission spectrometry (OES),gamma or beta radiation measurementsand gas combustion analysis.

The company claims it has succeeded inintegrating a neat and simple chipcollection system at the heart of anautomation unit to address contamination

Netherlands-based PanalyticalBV has developed a chipscollection system to automatethe process of sample collectionfor gas combustion analysis.

Typical chips sample forgas combustion analysis

The inside of the automation unit showing the robot,milling heads, a sample in the clamp and the collectioncup held in the sample holder ready to catch chips

Close-up of the inside of the automation unit showing themilling heads, a sample in the clamp and the collectioncup held in the sample holder ready to catch chips

issues associated with sample handling forgas combustion analysis.

The metal chips used for gascombustion analysis are often created bydrilling a hole in a representative steelsample block. Traditionally the chips testsample is collected manually from the labsample by drilling a hole in the steel blockand then collecting the chips. Automatedsystems mostly use vacuum methodswithin CNC milling machines. However,those methods suffer from potential

contamination from chips getting stuck inthe vacuum pipes.

Panalytical has developed equipmentand a different method to collect chips byexploiting a milling machine that is alreadyintegrated within the laboratoryautomation unit. The primary purpose ofthe milling machine is to prepare the testsample for XRF and OES analysis byremoving the oxide layer from the surfaceof the test sample. In the new system, thesample enters the automation unit, ispicked up by a robot and undergoes thefirst milling procedure as usual. A drymilling principle is used in order to avoidcontamination of the sample withlubricants. Then the robot places astandard cup in a specially designed cupholder. The milling machine executes asecond milling cycle, again withoutaddition of any coolant or lubricant. Thepurpose of this cycle is to create gascombustion chips, which are free of anyoxide layer contamination. In this millingcycle the mill launches the chips into thecup. The robot picks up the cup from themilling machine and transports it out ofthe automated system were the laboperator can put the chips in the gascombustion analyser. The remainingsample is milled again, so that its freshlymilled surface can be used for analysis.The sample is automatically transportedfor XRF and OES analysis. Meanwhile, thechip collection cup is cleaned ready for re-use. In this way the chips for gascombustion analysis are collected withoutany contamination. �

Automated chips collection system39PROCESS CONTROL

40 TECHNOLOGY

An automatic positioning system with materialweb tracking for inline slitting has been developedby the German company Dienes.

The system is based on a modified version of itsSIMU-FLASH slitting system, which allows for asimultaneous and fast slit width change. In

essence, the knife holder positioning systemenables the knife holders and the bottom-mounted knives to follow the decreasing size ofthe material web.

If cuts have to follow a print, coating or thematerial edge for foil, paper, label or non-wovenmaterial, then this system is claimed to be ideal,according to Dienes. The system was recentlysupplied with a minimum slit width of 30mm with40 cuts.

For further information, log on to:www.dienes.de

Siemens’ LiquiRob for ArcelorMittal Gent

Posco pleased with SMS

ArcelorMittal Gent has ordered a LiquiRob castingplatform robot from Siemens Metals Technologies.It will be installed on the company’s continuousslab caster CC2 and will perform a number ofpotentially dangerous tasks automatically,including taking samples, measuring temperaturesand hydrogen levels at the distributor and ladlelancing. Looking ahead, the Belgian steelmakerplans to manipulate the ladle shroud with the aidof the LiquiRob system.

The system will go on stream by September thisyear and, claims SMT, will ‘improve workingconditions’ at the CC2’.

ArcelorMittal’s Gent facility is an integratedproduction plant and part of the Flat CarbonEurope Division of the world’s biggest steelmaker.It produces 5Mmt of flat steel annually for usemainly in the automotive and domestic applianceindustries.

Steel is produced in LD converters with a tapweight of 300 metric tonnes and is cast by twocontinuous slab casters. The CC2 casting plantproduces 3Mmt of steel slabs with a thickness of220mm in widths ranging from 950 to 2,000mm.

The tasks that will be handled by the LiquiRobsystem were previously performed by plantpersonnel, meaning that safety at work shouldimprove.

Siemens has engaged with ArcelorMittal Gentbefore. Last year the company modernised theplant’s slag stopper system on two of thesteelmaker’s LD converters. It also modernised thedrive technology of the finishing train of the hotrolling mill.

For further information, log on to:www.siemens.com/metals

PT Krakatau-Posco Company of Indonesia, inconjunction with SMS Siemag, has installed aconverter vessel changing system involving a 300-tonne change vessel, changing car andenvironmental technology for the converter shopat a new integrated steel plant in Cilegon, WestJava.

SMS Siemag developed the concept for theconverter vessel changing technology anddelivered the tilting gear unit for the converter, thechanging car (which has a working load of 1,200tonnes) and the X-Pact electrical and automationsystem.

According to SMS, the new plant at PTKP uses‘the latest generation of SMS Siemag’s dry typeconverter-gas dedusting technology’, which isbeing used for the first time. It includes a gasconditioning tower and a dry-type electrostaticprecipitator.

PTKP seems happy enough. The company’s LeeJung Bee is reported as saying that the decision togo with SMS was ‘the right choice’ and that thesystem installed was ‘the most economicalsolution’.

PTKP is a joint venture between Pohang Iron &Steel Company (Posco) of South Korea and PTKrakatau of Indonesia.

Earplugs featuring a softer, more comfortable fitand enhanced noise protection compared to othercylinder-shaped earplugs have been introduced byHoneywell.

The Howard Leight firm earplugs, claimsHoneywell, have been newly engineered toenhance the wearing experience for those whoprefer a firmer fit in order to feel their earplugs intheir ears.

Honeywell claims that lab tests by Michael &Associates show that its new Firm Fit earplugsoffer better noise protection and are 40% softerthan most cylinder shape earplugs on the market.

The new earplugs are available now throughleading industrial safety distributors.

For further information, log on to:www.honeywellsafety.com

UK-based Flexicon has developed a heavy-duty bulkbag filling system for mining applications.

The system, which comprises a swing-downbulk bag filler and a Flexicon pallet dispenser andpowered chain conveyor is claimed to enable ‘safe,high-capacity filling of bulk bags of all popularsizes’ including bags with wide-diameter spoutsfor handling irregular materials.

According to Flexicon, the system can handlefilter cake, aggregates, abrasive minerals, drychemical additives and other ‘difficult-to-handle’products.

When a filling cycle is initiated by push-buttonor contact closure, a pallet dispenser mechanism

lowers a stack of pallets onto a chain conveyor,releases the bottom pallet, and raises theremaining pallets, allowing the conveyor, which isequipped with photoelectric eyes, to movedispensed pallets into position below the fillingstation.

The bag connection frame of the swing-downbulk bag filler lowers and then pivots to a verticalposition, allowing a floor level operator to attachbag straps to automated latches, slide the bagspout over a wide-diameter inflatable spout seal,and press a spout seal inflation button.

The system automatically pivots the bagconnection frame back to horizontal, raises the fillhead, inflates the bag to remove creases, fills thebag, finishes filling accurately at a trickle-feed rate,deflates the spout seal, releases the bag loops,raises the fill head to disengage the spout, rolls thebag out of the filling area, and rolls a new palletinto place to begin another cycle.

An annular gap inside the fill head spout directsair displaced during the filling operation to a singlevent for applications requiring connection to a dustcollector.

For further information, log on to:www.flexicon.co.uk

Automatic positioning system for inline slitting

Heavy-duty bulk bagfilling system

Converter vessel-changing carfrom SMS Siemag has a workingload of 1,200 tonnes.


Enhanced noise protection

42 PERSPECTIVES: MAGNETIC ANALYSIS CORPORATION

The playing field leveller

If Joseph Vitulli, CEO of USA-based Magnetic Analysis Corporation (MAC), possessed asuperpower, he would use it to try and level the playing field so that innovation, more than inexpensivelabour, would determine the winners and losers.


1. How are things going atMagnetic Analysis Corporation? Isthe steel industry keeping you busy?Since MAC is in the business of providingtest solutions to the steel industry, ourbusiness is one step removed from theactual industry trends.

Use of our equipment will increase whenproduction demands increase, however,new business is generally related toexpansion.

Within the US this has been fairly steadyas suppliers upgrade their quality andinvest in some expansion. Outside the USit varies significantly by geographic region.In general we have seen positive growth.

2. What is your view on the currentstate of the global steel industry?Overall, the majority of the focus has beenin the OCTG area as manufacturerscompete for the new oil and gas pipelinesbeing built overseas, and in the US wherethe ongoing interest in fracking is drivinggreater demand for tube and pipe as well.However, there has also been an increaseddemand for higher testing specifications inthe bar industry, especially for product tobe used in the automotive industry. This isbecoming particularly more obvious withinthe USA.

3. In which sector of the steelindustry does Magnetic AnalysisCorporation mostly conduct itsbusiness?Currently, testing stainless steel tubing isusually our largest market. This has variedfrom year-to-year as manufacturers haveexpanded into OCTG, power generation,and lighter weight-higher qualityautomotive parts.

4. Where in the world are youbusiest at present?MAC has an international presence ofsubsidiaries, representatives, and mostimportantly, field engineers to providesuperior service and support to all of ourcustomers. So, with that said, we like tothink we keep ourselves busy worldwide.

5. Can you discuss any major steelcontracts you are currently workingon?I can say that there is significant activity inKorea for tubing with steady interest in theUS as customers upgrade their systems,and an increasing amount of activity in theUS for bar.

6. “…any hint of doubt when itcomes to predictions of climatedoom is evidence of greed, stupidity,moral turpitude or psychologicalderangement.” This is a quote fromBret Stephens writing in The WallStreet Journal. Do you sympathisewith his view?I believe his intent is to raise awareness.From that perspective, I agree that we havean obligation to try and be more “green”.I suspect that “climate doom” is too stronga conclusion to be reached.

7. In fact, talking of ‘green issues’and emissions control, how is thesteel industry performing in thisrespect?I do not believe that a general conclusioncan be made. Certain countries havesignificant controls in place, while othersdo not. Each steel plant may be more orless “green” depending upon its age. The

conclusion must be that, on a world-widebasis, we should be thinking about ourfuture.

8. In your dealings with steelproducers, are you finding that theyare looking to companies likeMagnetic Analysis Corporation tooffer them solutions in terms ofenergy efficiency and sustainability?If so, what can you offer them?Since MAC is a provider of test equipment,not manufacturing equipment, we arerarely involved directly in the energyefficiency issue. Our customers are certainlyconcerned, but since our equipment ismostly electronics, that is not usually theirprimary focus.

However, our systems are designed torun efficiently and at very high speedsdepending on the type and condition ofthe material being tested. In one instance,for example, an out-dated straightenertook 24 hours to straighten enoughmaterial to feed our NDT system for eighthours of operation.

9. How quickly has the steelindustry responded to ‘greenpolitics’ in terms of making theproduction process moreenvironmentally friendly and arethey succeeding or fighting a losingbattle?Battles are won, but do not determine theoutcome of the war. Within the US wehave different standards than the EU orChina. It is probably safe to say that therequirements in the EU are stricter thanthose in China. Yet the crude steel outputof China is 48.5% of the world’s supplywhile the EU is 10.3%. These would be thetop two in the world.

10. Where does Magnetic AnalysisCorporation lead the field in terms ofsteel production technology?We are a total supplier of test equipmentwith the capability of testing from theinitial billet to the final tube, pipe, rod, bar,wire, and parts. MAC has ultrasonic, eddycurrent and flux leakage as our core

43PERSPECTIVES: MAGNETIC ANALYSIS CORPORATION


technologies. Together with a world-widefield staff for servicing and installation, wehave a significant competitive advantage.

11. How do you view MagneticAnalysis Corporation’s developmentover the short-to-medium term inrelation to the global steel industry?MAC develops solutions, and operatesindependently of highs and lows in theindustry. Our R&D staff is alwayscontinuing to improve our products. Whatwill vary is our production of equipment,but our leased equipment base helpssmooth out those variations.

As demand for higher quality steelincreases, producers will look to NDTsuppliers that are capable of meeting thesehigher standards. MAC is a uniquecompany in the sense that every systemordered is customised in one way oranother to meet those demands. No onesystem is the same and not many otherNDT suppliers can say the same.

12. In a similar fashion to thealuminium industry, Chinadominates global crude steelproduction and is accountable foralmost half of total production. Howshould the industry react to thissituation?China is the world’s leader inmanufacturing and consumption. As longas this balance exists, other manufacturerswill need to be aware, but not panic.

They need to constantly focus onimproving their margins and reducingcosts, as everyone else in business does. Aninvestment in an NDT system that can

reduce scrap material and increase qualityis one step in that direction.

13. The Chinese still rely heavilyupon Western steel productiontechnology. What is MagneticAnalysis Corporation’s experience ofthe Chinese steel industry?The products that we supply to China arethe same as we supply throughout theworld. At this time, Chinese quality can beas good as anyone else’s in the world.

14. Where do you see mostinnovation in terms of productiontechnologies – primary, secondary ormore downstream?In general, testing and finishing tends to

be the bottleneck in most operations.Therefore, in line with what we see, thepressure is on companies like MAC tospeed up testing, even while testing tohigher standards, and to minimisedowntime. This is where a lot of theinnovation will be occurring.

15. How optimistic are you for theglobal steel industry going forwardand what challenges face globalproducers in the short-to-mediumterm?The global economy means that we are allconnected. Thus political unrest has far-reaching effects. I am optimistic that therewill be continued growth, but it will varygeographically based upon local events.

16. What exhibitions andconferences will Magnetic AnalysisCorporation be attending in 2014?

MAC will be presenting a paper onMagnetic Flux Leakage testing at “Pipe &Tube Houston” as well as holding a table-top at the event.

We are also, for the first time, hostingour own seminar in Shanghai, China. Bothevents are this coming September.

The seminar is by invitation only and willhave several presentations as well as ademonstration of our latest mechanicaldesign for inspecting spinning tube andtube ends using ultrasonic methods.

The seminar will also have ourRotomac® eddy current rotary and coilinspection methods on display. It shouldbe an interesting day full of food,beverages, and hands-on presentations.

17. Magnetic Analysis Corporation isbased in the USA, but what’shappening steel-wise in the country?In the US we are seeing small areas ofexpansion, across a variety of products,including a sizeable amount forautomotive end users.

18. Apart from strong coffee, whatkeeps you awake at night?The uncertainty of countries co-operatingwith each other for the common good. Forexample the current situation with Russiaand the Ukraine.

19. If you possessed a superpower,how would you use it to improve theglobal steel industry?I would try to level the playing field so thatinnovation, more than inexpensive labour,determined who were the winners andlosers. �

THE deliberate addition of certainelements to steel to obtain enhancedproperties began in 1819 when MichaelFaraday (1791-1867) (Fig 1) investigatedthe properties of alloys of iron with a largenumber of other elements includingnickel. He was inspired by the fact thatmeteorites, which do not rust, containedabout 8% Ni. He did not, however, pursuethe matter, being occupied by his researchinto electromagnetic induction. He leftrecords of his work and a large number ofspecimens, which were analysed in 1931by the metallurgist Robert Hadfield (1858-1940), who pointed out that had Faradaycontinued his investigation, the Alloy SteelAge would probably have started 50 yearsearlier.

The work of Aloys von Widmanstätten(1754-1849) was the basis of diffusion ofknowledge about meteorites. He was theson of a printer, studied natural science atthe University of Graz, and in 1806 he soldhis inherited printing business and movedto Vienna where he was appointeddirector of the newly founded ImperialTechnical Museum, which is now one ofthe best in Europe.

In 1808 Emperor Franz (1768-1835)sent him the meteorite that fell in Agram(the present Zagreb in former Yugoslavia;at that time it was part of the AustrianEmpire) in 1751 for study. Widmanstättenpolished, etched, inked the surface, andmade a print on paper (Fig 2). When henoted the characteristic pattern, he thenstudied other meteorite samples in thecollection. In 1810, he examined aspecimen from Siberia and one fromMexico that had been sent to the Emperorfrom Berlin by German chemist MartinKlaproth (1743-1817). In 1812, heexamined a large meteorite from Elbogenin Bohemia, and finally in 1815 heexamined a piece of a Carpathianmeteorite.

The discovery of this structure is a resultof innovation in typography, i.e. the directprinting on paper using printer’s ink andthe meteorite itself. This unique patternproved to be of utmost importance in theunderstanding of the origin of meteorites.A background to this innovation is the factthat Aloys' family owned a printing shop,and, therefore, the printer's ink wasknown to him for experimenting. In thedays before photography, the invention ofa method of copying metal structures by

44

Widmanstätten and alloy steels


HISTORY

Aloys von Widmanstätten was widely recognised by his contemporaries as the discoverer of the etchpattern of iron meteorites. By Fathi Habashi*

*Department of Mining, Metallurgical, and Materials Engineering, Laval University, Quebec City, Canada. Email: [email protected]

printing was itself a great advance.Widmanstätten never published his

work but he was recognised by hiscontemporaries, as the discoverer of theetch pattern of iron meteorites. That iswhy his name does not appear in scientificjournals. German physicist Ernst Chladni(1756-1827) (Fig 3) wrote a book in 1794on meteorites, expressing the opinion thatthese are small bodies circulating throughspace, becoming visible throughincandescence on entering the Earth’satmosphere. Chladni’s work pioneered thestudy of meteorites. He visited Vienna inthe spring of 1812 and witnessed theprinting of the meteoritic patterns. Heincluded in his book Feuer Meteorepublished in 1819 in Vienna, a number oflithographed illustrations of whole andsectioned meteorites made directly fromthe etched surface. The front page of thebook included Carl von Schreibers’ nameas director of the Imperial Museum inVienna and the contributor of Ten Platesof Mineral Sections and Their Explanation.Schreiber was co-worker and successor ofWidmanstätten.

The Widmanstätten pattern wasexplained later by the mineralogist GustavTschermak von Seysenegg (1836-1927) inVienna. It was these mysterious prints thataroused the interest of researchers inmany branches of the physical sciencesand prompted them to study meteorites,throwing some light on these spaceprobes and carriers of information fromthe far cosmological past of our solarsystem. At the same time, the study ofmeteorites introduced the Age of Alloys.

Iron meteorites are pieces of oncemolten metallic cores in asteroids thatwere subsequently eroded andfragmented by impacts after slow cooling.Their nickel content is about 8% and arecharacterised by the Widmanstättenstructure. The remarkable mesh-likearrangement revealed by a polished andetched surface of a meteorite was also thebeginning of the new science ofmetallography, which deals with the studyof the structure and constitution of metalsand alloys and their relation to the physicaland mechanical properties. �

ReferencesF. Habashi, Meteorites. History, Mineralogy, andMetallurgy, Interdisciplinary Science Review 23(1), 71-81 (1998).

Fig 1: Michael Faraday (1791-1867)

Fig 2: Widmanstätten pattern. Reproduction of directtypographical imprint from the etched surface of theElbogen iron meteorite (Schreibers, 1819)

Fig 3: Ernst Chladni’s second book published in 1819contains the first imprints made by Aloys vonWidmanstätten and collected by Carl von Schreibers asa supplement to the book

july/august 2014 vol.38 no.5 –

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