Technology for underwriters

19 Steel plants

Part 1: Steel production

M Münchener RückMunich Re Group

An overview of the processes.

1 The reduction of iron ore1.1 The blast furnace process1.2 Direct reduction1.3 Smelting reduction

2 Steelmaking2.1 Oxygen converters2.2 Electric-arc furnaces

3 Casting the steel3.1 Continuous casting3.2 Near net-shape casting

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1 Steel production.

1 Coal2 Fluxing agents3 Iron ore4 Coking plant 5 Blast furnace6 Direct reduction plant7 Alloying addition8 Oxygen9 Fluxing agents

10 Scrap11 Converter 12 Ladle furnace13 Mould 14 Continuous casting plant

A distinction is made between

– integrated steel plants and – mini steel plants.

Integrated steel plants are large factories with a complex structure and abroad range of products. They comprise blast furnaces, basic oxygensteel plants, and continuous casting plants, with downstream plantssuch as hot and cold rolling mills and surface-coating plants. They aredesigned for high levels of output.

Mini steel plants are less complex in structure and their range of prod-ucts is usually limited. Scrap steel, sponge iron from direct reductionplants, or pig iron from smelting reduction plants is processed in anelectric-arc furnace. The steel is cast in a continuous casting plant.Downstream plants include relatively simple rolling mills. Throughputlevels are comparatively low.

1 The reduction of iron ore

The starting material for the production of steel is iron ore. First the oremust be prepared mechanically in various processes known collectivelyas “dressing”. In the comminution process the size of the ore is reducedin crushers and grinding mills. The opposite process of agglomerationinvolves sintering and pelletizing. In the sintering process fine ore is fedinto a furnace, where it fuses together to form largish lumps called sin-ter. In the pelletizing process extra fine ore is converted into pellets,which are then baked. In these dressing processes the iron ore attainsthe size that is needed for further processing.

After mechanical dressing, oxygen is separated from the iron in a chem-ical process called reduction. This requires a suitable reducing gas. Thereaction takes place in a blast furnace, direct reduction plant, or smelt-ing reduction plant.

The blast furnace process is the most significant in terms of output. Inthe past 20 years or so, direct reduction has experienced an upswing.Smelting reduction plants still bear many features of prototypes andhave little significance in terms of output.

1.1 The production of pig iron in the blast furnace

The charge for the production of pig iron in the blast furnace is mainlydressed iron ore, limestone, and coke.

Coke is manufactured by degasifying coal at a temperature of about 950°C in a coking plant, which comprises a large number of heatedcoke ovens. The gas released in the coke ovens is collected, purified,and fed into the steel plant’s gas network.

The blast furnace is a continuously operating shaft furnace with a thickrefractory lining, which is kept cool by large amounts of cooling water.The water is passed through cooling elements installed between thefurnace shell and the refractory lining. The reducing gas is producedby burning coke in the lower section of the blast furnace.

2 Blast furnace.

(Height: 50–70 m; max. diameter: approx. 15 m;

useful volume: up to about 5,000 m3)

1 Blast furnace gas2 Charging plant3 Throat (approx. 200°C, 2–3 bars)4 Homogenized ore burden5 Coke6 Coke, pellets, fluxing agents, etc.7 Bosh (1,600–1,800°C) 8 Hot wind (approx. 1,300°C) 9 Slag

10 Pig iron 11 Hot-blast stove

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The charge is fed into the upper section of the blast furnace – called thethroat – using conveyor belts or skips. It is preheated and dried and thenin countercurrent to the reducing gas gradually descends into the hottersections of the furnace, where the latent heat of fusion for the pig ironand the reducing gas are generated in the coke-burning process. Thehighest temperatures of 1,600 to 1,800°C are reached in the bosh, wherecombustion air from a bustle pipe surrounding the furnace is blown inby tuyeres. The pig iron is melted down in the bosh and in its liquidform makes direct contact with the refractory lining. The resulting wearand tear is considerable, which is why blast furnaces must be shutdown every four to six years and relined.

The combustion air is sucked in from the atmosphere by fans andheated to a temperature of about 1,300°C in hot-blast stoves. These hot-blast stoves, of which there are usually three, are fired by gas fromthe gas network.

Once the dust in the blast furnace gas drawn off at the throat has beenremoved by such installations as scrubbers, cyclone dust separators, orelectric filters, the gas is fed into the steel plant’s gas network by com-pressors.

3 Direct reduction using the HyL-III process.

1 Reformer2 Reducing gas preheater3 Reactor4 Cellular wheel sluice5 Natural gas, reducing gas6 Reducing gas circuit7 Fuel gas 8 Cooling gas circuit9 Delivery of iron ore pellets

10 Dispatch of sponge iron

1.2 The production of sponge iron by direct reduction

There are various methods of producing sponge iron, also known asdirect-reduced iron (DRI). The most common methods are the Midrexand HyL-III processes. The reduction process takes place in a shaft fur-nace, the reducing gas being natural gas which has been converted bycatalytic cracking. Some other processes use rotary kilns, in which coalis used to produce the reducing gas. Fluidized-bed plants have alsobeen built for the reduction of fine ores. They use reducing gases thatare rich in hydrogen.

In the HyL-III process, natural gas is converted into reducing gas in areformer furnace with a catalyst at a temperature of 800–900°C. Thereduction of the iron ore takes place in a shaft furnace. Iron pellets arereduced in the upper section of the furnace in countercurrent with thereducing gas to form sponge iron. In the lower section the sponge ironis cooled to about 50°C by a cooling gas and drawn off by a cellularwheel sluice. The sponge iron is usually processed further in an electric-arc furnace.

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1.3 The production of pig iron by smelting reduction

In the smelting reduction process, liquid pig iron is produced as in ablast furnace, but the reducing gas is produced by means of coal gasifi-cation using oxygen as the agent. The production of coke in cost-inten-sive coking plants is not necessary. There are several smelting reductionprocesses, some of which are still at the development or testing stage.

One process already being used in large-scale industrial production isthe COREX process. Its advantage lies in the short start-up and shut-down times of just a few hours. Throughput can be adjusted flexibly.

The COREX process is a two-stage process with two reactors positionedone above the other. In the upper reactor, a shaft furnace, iron pelletsare pre-reduced to sponge iron at a temperature of about 800–850°C.The sponge iron is then conveyed by a feed screw into the lower, refrac-tory-lined reactor (melter-gasifier) where coal gasification, final reduc-tion, and the melting-down of sponge iron to pig iron takes place. Thecoal is inserted by a feed screw at the head of the melter-gasifier. Theoxygen for coal gasification is blown in through a cooled tuyere bottom.The reducing gas produced in the gasification process is purified in ahot cyclone and fed into the shaft reactor.

4 Smelting reduction using the COREX method.

1 Melter-gasifier2 Reduction shaft3 Coal feed bin4 Hot cyclone5 Coal6 Lump ore, pellets,

sinter, additives7 Top gas 8 Reducing gas9 Raw gas

10 Dust11 Oxygen 12 Pig iron, slag

5 Basic oxygen steelmaking.

1 Pig iron2 Scrap3 Oxygen4 Lime5 Oxygen lance 6 Steel 7 Slag 8 Argon

2 Steelmaking

The products at the end of the first processing stage are liquid pig ironand solid sponge iron. Both contain large amounts of accompanyingelements or impurities and these are removed in the next stage, whichis refining. This requires large amounts of pure oxygen, which is pro-duced at the steel plant in air separation plants. Of the many types ofchemical reaction, decarbonization is the most important. The product atthe end of the second processing stage is liquid steel.

The refining process takes place either in a converter working on theprinciple of basic oxygen steelmaking or in an electric-arc furnace. Interms of production volume, basic oxygen steelmaking is the predom-inant type of process. Besides pig iron and sponge iron, other materialssuch as fluxing agents, alloying additions, and scrap are needed ascharges. Smelting time at modern refining plants is below one hour.

2.1 Oxygen converters

The converter is pear-shaped and can be tilted for the various stages ofoperation. The steel shell is protected by a thick refractory lining, whichis subject to such wear and tear that it must be replaced every fewweeks. For this reason, there are always several converters on handwith a capacity of up to 400 tonnes of steel each.

The refining process usually entails oxygen being blown onto the liquidsteel bath by water-cooled lances (top-blowing method), with tempera-tures of 2,500 to 3,000°C being reached. The hot off-gases from the con-verter must be cooled in an off-gas boiler before they can be fed intothe gas purification plant.

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2.2 Electric-arc furnaces

In electric-arc furnaces, the charge is scrap steel and/or sponge iron. Theheat required to melt the charge is produced by an electric arc, withtemperatures of up to 3,500°C being reached. The electric-arc furnacecan use either direct current or three-phase alternating current.

In many cases only the body of the furnace is lined, whereas the swivel-ling roof is cooled by water. The electrode arms are exposed to extremeheat and must also be cooled with water. Electric-arc furnaces can holdup to 300 tonnes of steel. The lining undergoes extreme wear and tearand must be replaced regularly. The hot off-gases must be cooled inspecial off-gas boilers or scrap pre-heating plants.

A reliable supply of power is essential for electric-arc furnace oper-ations. In the first stage, the mains voltage is reduced by outdoor trans-formers. Downstream furnace transformers then produce the operatingvoltage of several hundred volts at up to 60,000 amps. The electricalenergy is transmitted to the furnace by cooled cables. In the case of DCelectric-arc furnaces, alternating current is first converted into direct cur-rent by rectifiers, which work mainly with thyristors.

Electric-arc furnaces are very suited for the production of alloyed steels,which only melt at high temperatures. After leaving the electric-arc fur-nace, the liquid steel is often subject to secondary metallurgical treat-ment.

3 Casting the steel

In the third manufacturing stage, the liquid steel is cast to make semi-finished products with various profiles. This is usually done in continu-ous casting plants, although ingot pouring is also common.

The products of casting are not yet ready for selling to the consumer.Typical examples are slabs (with a rectangular cross-section), billets(with a square cross-section), and round steel. These semi-finishedproducts need to be further processed in elaborate and costly plants likehot and cold rolling mills.

6 Electric-arc furnace.

3.1 Continuous casting

The liquid steel arrives in lined containers called ladles, which are theninserted in a turntable. While the liquid steel in one ladle is being emp-tied into an intermediate buffer container called the tundish, the nextladle goes into a waiting position and is ready for emptying. As soon asthe first ladle has been emptied, the turntable revolves. This only takes ashort time and does not interrupt the casting process because thetundish has sufficient volume to act as a buffer.

The liquid steel flows from the tundish into a water-cooled mould andfreezes superficially. The strand is then drawn out of the mould. This is avery delicate operation as the strand at the mould exit is not yet frozenon the inside. It must continue to be cooled intensively and as a result itgradually freezes over its entire cross section. The strand is then finallycut to length using an oxyacetylene torch.

Several parallel strands are normally cast simultaneously because cast-ing – unlike milling – is a very slow process.

7 Continuous casting plant.

1 Ladle2 Ladle turntable3 Tundish4 Mould

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3.2 Near net-shape casting

In order to keep the cost of further processing in the rolling mill to aminimum, one of the aims in casting is to come as close as possible tothe final dimensions of the product.

New types of plant in which steel strips can be cast with a thickness ofonly a few millimetres rather than relatively thick slabs have beendesigned in a number of countries. Most of them have not yet passedbeyond the development or prototype stage.

4 Risks and loss prevention

In the majority of steelmaking plants there is an increased risk of fireand explosion.

– The liquid pig iron in blast furnaces and smelting reduction plantsreaches temperatures of about 1,600 to 1,650°C. Furnaces containingliquid metal must be monitored for “hot spots”. A furnace break-through or a spill of fluid pig iron during transportation can cause amajor conflagration. Contact with water can trigger massive explo-sions. The intense heat radiated by steel spillages can also causedamage. All the structural elements of the building and all installa-tions should be fire-proofed up to a height of 0.5 m.

Some of the fire-proof bricks used in refractory linings like dolomiteare very delicate. If they are stored improperly, they may absorbmoisture from the atmosphere and disintegrate in a matter of days.Particular attention must therefore be given to protecting them duringstorage. Long periods of storage on construction sites should beavoided. Fire clay bricks are less of a problem. Refractory liningsmust be dried carefully in accordance with a set schedule.

Some types of smelting reduction plant have not yet progressedbeyond the prototype stage.

– There is a danger of explosion in the reformer furnaces of directreduction plants.

Sponge iron reoxidizes at temperatures of between 150 and 230°Cand on contact with water. Heat is released and there is an increasedrisk of fire. Sponge iron must therefore be given special protection bybeing roofed over during storage and transportation.

Some types of direct reduction plant are still in the prototype stage,too.

– Basic oxygen steel plants are particularly exposed owing to the use ofpure oxygen. The oxygen system must therefore be very well main-tained. The water-cooled oxygen lances constitute a particular hazard.

The off-gases from the converters are very corrosive and have a highdust content. The intermitting operation of converters entails highlevels of mechanical and thermal stress for the downstream off-gasboilers and this can result in damage.

– In electric-arc furnaces the scrap, which has usually been stored inthe open, must be preheated properly to make sure that no watercomes in with it. The scrap should not contain any explosive objectslike gas bottles or shock absorbers either.

Outdoor transformers and furnace transformers must be monitoredand maintained with special care. Furnace transformers are situatedin the direct vicinity of the electric-arc furnace and must be protectedagainst the radiant heat by a concrete housing. Additional protectionby an automatic sprinkler system is also desirable.

– In continuous casting plants it is possible for the liquid steel to breakout while the still unfrozen strand is being withdrawn. Surroundingplants are then exposed to the hazard of fire and radiant heat.

5 Insurance aspects

5.1 Erection all risks insurance

The first thing is to determine whether the process is a conventional oneor whether it is still a form of prototype.

The erection of steel plants usually involves large-scale constructionsites with high sums insured. As with all long-term projects, a construc-tion time schedule should be obtained for the purpose of risk assess-ment.

It often happens that cover is requested for revamping and moderniza-tion work. Risk-commensurate premiums can only be calculated whenthe scope of cover is described in detail.

On account of the sheer physical weight of steel plants, attention mustbe paid to the quality of the subsoil and the type of foundations used. Asubsoil report should be obtained.

Steel plants require large amounts of cooling water and are thereforeusually located near rivers or the sea. Attention must be paid to the dan-ger of flooding. The windstorm risk is also high on account of the manylifting operations using heavy cranes.

For direct reduction plants with gas reformer furnaces, the “Special con-dition 1 for hydrocarbon-processing industries”, MR endorsement 204,should be applied.

5.2 Machinery insurance

Here too the first step is to find out whether the process is a convention-al one or a prototype.

Steel plants comprise a very large number of individual machines, sothat cataloguing them in detail is hardly practicable. A more general listof plants is more suitable. The deductible should not be too low in thiscase.

Refractory linings have a very limited service life and must be replacedregularly. An agreement must be made with regard to an adequateamount of depreciation being accounted for in the event of a claim.

The usual maintenance and depreciation endorsements for electricmotors, transformers, turbines, and generators are to be applied. Riskinspections are recommended.

5.3 Machinery loss of profits insurance

Owing to the type of processes involved, spare machines are often onstand-by and there is usually a generous stock of spare parts on handfor the same reason. It is common to have a relatively large mainten-ance department. In the event of a breakdown in operations, it is oftenpossible to purchase semi-finished products from other manufacturers.These factors are important in rating the risk.

Published to date

1 Paper manufacture2 Excavation pits below groundwater level3 Cement production4 Fire protection on construction sites5 Directional drilling 6 Diaphragm walls7 Laying of pipeline siphons8 Sugar production9 Immediate action after damage to

electronic equipment and installations 10 Monitoring glass panes for breakage,

part 111 Monitoring glass panes for breakage,

part 212 Caissons13 MRPC/MRPCMaps

Rating software for engineering insurances14 Combined cycle stations15 Pod propulsion

A new diesel-electric vessel propulsion system

16 Fluidized bed combustion systems inpower stations

17 Loss prevention by infrared thermography18 Transformers

19 Steel plants Part 1: Steel production

20 Steel plants Part 2: Steel processing

21 Hot work22 Locating leaks after water damage23 Earthmoving machines24 Desalination of sea water25 Aero engines26 Printing presses27 Crude oil refineries

Part 1: Basic principles28 Crude oil refineries

Part 2: Plant sections, insurance aspects

Picture credits– ABB Industrietechnik AG, Mannheim – Preussag Stahl AG, Salzgitter – VOEST ALPINE INDUSTRIEANLAGENBAU, Linz– Günther H. Eckert, Büro für Technische Grafik,

München – Verlag Stahl Eisen, Düsseldorf – SMS Schloemann-Siemag AG, Düsseldorf

© 2003Münchener Rückversicherungs-GesellschaftKöniginstrasse 10780802 MünchenGermanyTel.: +49 (0) 89/38 91-0Fax: +49 (0) 89/38 90 56http://www.munichre.com

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