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STEEL TIMES IN

TERN

ATIO

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L – March

2014 – Vol.38 No.2

March 2014 – Vol.38 No.2 – www.steeltimesint.com

NEWS CONTINUOUS CASTING FURNACES INTERNATIONAL BUSINESS

UNFAIR TRADE PRACTICES STEEL SUCCESS STRATEGIES �

STI cover_Layout 1 3/7/14 10:08 AM

www.steeltimesint.com March 2014

1CONTENTS MARCH 2014

ISSN 0143-7798

EDITORIAL

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

Consultant EditorDr. Tim Smith PhD, CEng, MIM

Production EditorAnnie Baker

SALESInternational Sales ManagerPaul [email protected]: +44 (0) 1737 855116

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Sales DirectorKen [email protected]: +44 (0) 1737 855117

Marketing ExecutiveAnnie O’[email protected]: +44 (0) 1737 855012

Advertisement ProductionMartin [email protected]

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Steel Times International is published eight times a year and is available on

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4

News

56

History – Tyrolian cultural heritage

2

Leader

19

Conference report

10

USA update

Negative vibes for US steelmakers?

14

Latin America update

Lond steel demand in Latin America

17

China update

The low profit era

Testing times for steel

24

Furnaces

Hydraulic distribution systems

29

Exclusive interview: worldsteel pt.2

Challenges and opportunities

39Process technology

32

Continuous casting

Concast surface quality

43

48

International business

Timken’s ADAPT bearing

Unfair trade practices

52

Perspectives: MTAG

Efficiencies drive demand

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March 2014 – Vol.38 No.2 – www.steeltimesint.com

NEWS CONTINUOUS CASTING FURNACES INTERNATIONAL BUSINESS

UNFAIR TRADE PRACTICES STEEL SUCCESS STRATEGIES �

Front cover image courtesy ofMidrex.LION HBI, located in Banting,Selangor, Malaysia – A1.54Mt/yr combo MIDREX®

plant producing both hot briquetted iron (HBI) formerchant sale and hot direct

reduced iron (HDRI) for on-site consumption via hot transportto Lion’s three electric arc furnaces at the adjacentMegasteel.

CONTENTS STI_30_AIT_0110 3/7/14 10:11 AM Page 1

2

March 2014 www.steeltimesint.com

Battle Metallica as steelmakers ride the lightningPeter Marcus, managing partner of WorldSteel Dynamics (WSD) has the hair andthe attitude of an ageing rock star; andwhen it comes to heavy metal, hecertainly knows his hot-rolled band fromhis rebar as delegates at Metal Bulletin’sSteel Success Strategies conference inIstanbul discovered to their delight.

Marcus was easily the event’s ‘man ofthe match’, the metal guru, and his solidgrasp of the challenges facing globalsteel makers – plus his overall conference‘presence’ – made him the Jimmy Pageof this gathering of steelfolk.

Marcus opened his set with the iconic‘The Chinese Economy is likely to Crashinto the Great Wall’, the opening trackfrom WSD’s latest album, BattleMetallica, in which Marcus sets thescene and tone of this much awaitedheavy metal get-together. He launchedenthusiastically into Metallics Glut andclosed with Can the Chinese beStopped?

WSD’s red amp lights glowedthroughout the two-day event – anddelegates were reassured by Marcus’constant presence as MC as a successionof quality acts took to the stage. From

worldsteel, Nae Hee Han’s mesmerisingballad, Do We Have Another GrowthEngine to Replace China? got theaudience tapping its feet and wasfollowed by her upbeat ContinuedVolatility from the Eurozone, arguablythe most downloaded track of recentyears.

India’s Ministry of Steel pulled a houseclassic out of the bag with LowInvestment Opportunities and the bluesyChina Slowing, a theme ceased upon byGorkem Bolaca’s Galex SteelInternational with the country classicSteel Not a Priority, and the moredownbeat Local Government Debt.

On day two, delegates were given arare treat: a duet between WSD’sfrontman Peter Marcus and SteelHome’s Wu Wenzhang who launchedinto Export Competitiveness Will Declineand Steel Production is Below Demandfrom their collaborative album Who’sDriving the Bus Besides the Chinese?

Outside, Steely Dan’s Pretzel Logic wasevoked by men balancing baskets ofpretzels on their heads while stray catslaid back and thought of England.

For in-depth coverage, see page 19.

Matthew MoggridgeEditor

[email protected]

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4 INDUSTRY NEWSNEWS IN BRIEF

Rising energy costs are chiefconcerns The economic climate is the mainchallenge facing European andRussian steelmakers, according to apan-European survey commissionedby ExxonMobil.

According to the survey, one infive operators consider globalcompetition to be the principalbarrier they need to overcome,with over one in 10 showing realconcern over rising energy costs.

Baosteel hailed ‘ExcellentSupplier’ for the 14th time Chinese steelmaker Baosteel hasannounced that it has been award-ed the title of Excellent Supplier forthe 14th time.

The title was bestowed on thesteel company by DongfengLiuzhou Motor Co.

Turkey’s HRC exports rise 99% November 2013’s hot rolled coilexports from Turkey, worth $55.38million, decreased by 0.63% year-on-year to 96kt, but that representsan increase of 68% over October2013. While the export value wasdown 3.61%, it was up 66% onOctober 2013.

Turkey’s HRC export volumefrom January to November 2013rose by 99% to 1.21Mt.

ThyssenKrupp consolidatesplant tech businesses German steel giant ThyssenKrupphas grouped all of its plant technol-ogy businesses under the umbrellaof ThyssenKrupp Industrial Solutionsin an effort to ‘better exploit globalmarket opportunities’.

The two companies that nowbecome part of ThyssenKruppIndustrial Solutions areThyssenKrupp Polysius andThyssenKrupp Fordertechnik.

Power failure won’t affectsuppliesA report on the website of NipponSteel & Sumitomo MetalCorporation has announced apower failure at the company’sNagoya Works in Japan.

The power failure occurred at1150hrs on Friday 17 January andrequired the coke oven gas to beburnt off and released.

Power was restored to thecompany’s manufacturing facilitieson the following Saturdaymorning (January 18th) but theproblem re-occurred on Monday20 January at around 0910hrs.

POSCO’s undersea tunnel project South Korean steelmaker POSCOhas revealed details of an underseatunnel project designed to link theGwangyang Steelworks with theYeosu Industrial Complex with thesole purpose of exchanging by-product gas.

A memorandum ofunderstanding (MOU) has beensigned by POSCO along with fourpetrochemical companies basedwithin the Yeosu IndustrialComplex and including Air Liquide

Korea.The ultimate aim of the project is

to exchange by-product gasesproduced at Gwangyang andYeosu.

“By-product gases like carbonmonoxide and hydrogen monoxideare produced at GwangyangSteelworks, while nitric acid andcaustic soda are produced as by-products at the Yeosu IndustrialComplex. Currently, by-productgases can be used as materials for

petrochemical companies, buttransportation is difficult and,therefore, mostly consumed withinGwangyang Steelworks, whilecompanies within the YeosuIndustrial Complex use expensivepetroleum-based materials,” claimsPOSCO.

The planned undersea tunnelwill enable by-product gases to besupplied from one company to theother and reduce production costsin the process.

China top of agenda in Istanbul Metal Bulletin’s 11th Steel SuccessStrategies conference in Istanbullast month attracted some of thesteel industry’s leading opinionformers from around the globeand focused strongly on Chinathroughout.

World Steel Dynamics’managing partner, Peter F Marcus,the event’s ‘man of the match’,told delegates that the Chineseeconomy was likely to crash intothe Great Wall in 2014 and thatcapital spending in China wasfalling, adding that the longer theChinese economic modelcontinues, the worst off the steelindustry will be.

China was, understandably, a

chief theme and the picturepainted was fairly.

Baosteel’s chief market analyst,Jiang Li, said that steel capacitywould slow down in future, butthat 30Mt of new capacity wouldbe added in 2014 as most Chinesesteel companies report a deficitand the debt ratio reaches an all-time high.

Li said that 80Mt of steelcapacity would be phased out overthe next few years. She said thatsteel companies have reducedinventory levels to alleviatedeteriorating cash flow and avoidprice risks.

Steel Home’s Wu Wenzhangsaid that Chinese steel production

in 2013 was up 7% to 728Mt andthat reported product deliverieswere up 11% to 1.02 billiontonnes with long products leadingthe field at 505Mt followed by flatsteel at 450Mt. He said that EastAsia accounted for 56% of Chinesesteel exports and that the price ofsteel products in China would goup by 8%.

Antonio Marcegaglia, CEO ofItalian steel processor Marcegaglia,said that the Chinese government’s12th Five Year Plan showed awillingness to promote greaterconsolidation and capacity cuts.

For further coverage of MetalBulletin’s Steel Success Strategies,go to page 19 of this issue.

A study by the Institute of Public &Environmental Affairs (IPEA), basedin Beijing, China, has found thatsteel factories in the Shandong andHebei provinces exceed nationalstandards where nitrogen oxideemissions are concerned.

IPEA says the companiesconcerned were in ‘serious breach’of discharge standards.

Air pollution is a big issue inChina at present with smogoutbreaks early last year affectingmore than 600 million people

across a number of provinces.The problem is serious enough

for the Chinese government tooutline plans to cut coalconsumption, close steel plantsand reduce the number of cars onthe roads – even if it means slowereconomic growth.

IPEA identified 4,000 companiesthat it claims contribute 65% ofindustrial emissions in China.

In Shandong province, 61% ofthe 1,009 companies thatpublished their nitrogen oxide

emissions data exceeded thecurrent national standard,according to the IPEA study. Newand more stringent standards arebeing introduced in July and it isthought that some companies area long way from compliance.

As China opens up aboutindustrial emissions, it is beingreported that air qualitymonitoring data in Beijing,Dongguan, Nanjing and Suzhou is‘close to international levels’.Source: Bloomberg

Emissions exceed national standards


All eyes on Asia

STI news march to use_03-20_AIT_0110 3/7/14 8:28 AM Page 1

5NEWS IN BRIEFINDUSTRY NEWS

Constantine’s ‘eighth won-der’ uses ArcelorMittal steelConstantine in North EasternAlgeria is often referred to as the‘city of bridges’. Soon it will havea viaduct too and ArcelorMittalwill be providing 18kt of rebar tobuild the foundations.

The viaduct, known as theTrans-Rhumel, will use steelproduced at ArcelorMittal’sAnnaba facility in Algeria.

So far, around 14.8kt has beendelivered and the viaduct is duefor completion in March byAndrade Gutierrez, a Brazilianconstruction and engineeringcompany.

AIIS and Eurometal sign co-operation deal MOUThe American Institute forInternational Steel, Inc. (AIIS), andthe Eurometal Steel Trade StudyGroup (STSG), have signed aMemorandum of Understanding(MOU) under which they willwork together to advance globalfree trade in steel.

The purpose of the MOU is toprovide a framework for co-operation and to facilitatecollaboration, particularly inadvancing free and responsibletrade in steel within internationalforums (such as the World TradeOrganisation and the Paris-basedOrganisation for Economic Co-operation and Development) andin the context of tradenegotiations.

ISRA Vision wins POSCOinspection system contractISRA Vision Parsytec, a provider ofsurface inspection systems for themetal industry, has been awardeda contract for the installation of asurface inspection system forPOSCO Assan TST Turkey, asubsidiary of Korean steelmakerPOSCO (Pohang Iron and SteelCompany) and the fourth largeststeelmaker in the world.

Russian steelmaker passescertification auditsNLMK, a leading manufacturer ofsteel and HVA rolled products, haspassed certification auditsconfirming that its production ofspecial-size slabs from high-strength and corrosion-resistantsteel grades are compliant withthe requirements of certifyingagencies Det Norske Veritas(Norway), Lloyd’s Register (GreatBritain), and the Russian MaritimeRegister of Shipping.


Merger gets US antitrust clearance

China produced 779Mt of crudesteel in 2013, up 7.5% accordingto the National Bureau of Statistics(NBS). The average daily crudesteel output figure for December2013 was 2Mt, which was down0.89% from November and thelowest for the year.

Crude steel output in December2013 was 63Mt, up 6.5% year-on-year. Pig iron output for the yearwas up 6.2% year-on-year at709Mt.

Steel circulation within Chinawas down in December whencompared with November figures.The Purchasing Managers’ Indexfor steel circulation stood at 47.5in December, which was 0.2 downfrom the previous month. As aresult, social stockpiles of steelincreased in December as a resultof few orders from end users.

Where China’s majorsteelmakers were concerned,average daily steel output stood at

1.7Mt between 11 to 20 January2014, up 1.63% when comparedwith the previous 10 days,according to figures issued by theChina Iron and Steel Association(CISA).

The daily crude steel output ofChina’s smaller producers isestimated to be 305kt between11-20 January, accounting for15.2% of total output, but down0.9% when compared to theprevious 10 days.

China’s Steel Price Index (CSPI)was at its lowest since 2006 anddown 8.6% over 2012, averaging102.76. By end-December 2013 itwas 99.14, down 0.19% whencompared with November 2013.According to CISA, the index hasstayed below 100 for threeconsecutive months.

While steel demand hasremained sluggish, CISA expectssteel prices to stabilise as theChinese government’s measures to

cut surplus capacity kick in.The 2013 price index for long

steel was down 9.7% at 105.01;sheet steel fell 7.06% year-on-yearto 102.36. By the end ofDecember, the price index of longsteel edged down 0.07% fromNovember to 102.34 and sheetsteel was down 0.09% to 97.86.

China’s steel consumingindustries – general equipmentmanufacturing, railways,shipbuilding, aerospace andelectrical machinery – were alldown in December. Onlyautomotive showed growth at 0.3percentage points higher than inNovember.

Despite all the doom andgloom, China’s economy isexpected to grow 7.5% in 2014and steel demand will be boostedby accelerated urbanisation,infrastructure and householdconstruction.Source: China Metals.

The acquisition of ThyssenKruppSteel USA by ArcelorMittal andNippon Steel & Sumitomo MetalCorporation has been given USantitrust clearance.

According to a pressannouncement by ArcelorMittal,‘the waiting period under the Hart-Scott-Rodino AntitrustImprovements Act (HSR)terminated on January 29 withrespect to its acquisition’.

The HSR Act requires thatcompanies engaged in certainmergers or acquisitions or thetransfers of securities or assets,including grants of executivecompensation, cannot be

completed until a detailed filinghas been made to the US FederalTrade Commission and Department

of Justice. Once these two bodieshave determined that thetransaction in question will notadversely affect US commerce

under the antitrust laws, themerger/acquistion can go ahead.

According to ArcelorMittal, “thetermination of the HSR waitingperiod satisfies one of theconditions to the closing of theacquisition. Subject to thesatisfaction of other customaryconditions (including the receipt ofadditional regulatory approvals),the acquisition is expected to closelater in the first quarter of 2014 orin the second quarter of 2014.”

ArcelorMittal claims to be theworld's leading steel and miningcompany, with a presence in morethan 60 countries and an industrialfootprint in over 20 countries.

Good news and bad for China

In line with one of its key objectives– helping steel and non-ferrousmanufacturers enhance theirperformance and competitiveness– Fives Stein, a leading Frenchdesigner and supplier of thermalsolutions for steel, has beenawarded a furnace contract byIndian-based Jindal Steel & Power(JSPL).

According to Fives Stein, thereheat furnace will be uniqueinasmuch as it will burn blast

furnace gas as fuel through asystem of regenerative burners.Furthermore, it will be equippedwith a back-up system forcombustion firing fuel oil to runthe furnace when blast furnace gasis not available.

JSPL, headed by Naveen Jindal, isone of India's major steelproducers and has significantpresence in mining, powergeneration and infrastructure.According to Fives, JSPL "produces

economical and efficient steel andpower through backward andforward integration" and offers arange of products from wide flat-rolled steel to a variety of longproducts.

The furnace will becommissioned in June 2015 and,claims Fives Stein, will enable JSPLto better address its market withlow NOx emissions, reducedoperational expenses and "thehighest possible quality of steel."

Fives wins Jindal Steel contract


6 INDUSTRY NEWS


For expansion of these stories and other news visit

www.steeltimesint.com

ArcelorMittal’s long productfinishing facility at Harriman,Tennessee, USA, is to re-open andwill be operational by April.

The news means 61 new jobsover two years at the plant 40miles west of Knoxville.

PS Venkataramanan, CEO ofArcelorMittal Long Carbon NorthAmerica, described the re-opening of the plant as an‘exciting development’ for thecompany and the Harrimanregion. It serves, as ‘anotherindication of the strength andresilience of Americanmanufacturing and the UnitedStates steel industry,’ he said.

The plant closed in 2011 due topoor market conditions. It used toreceive billets from ArcelorMittalin Louisiana and re-heated androlled them into light structuralshapes and merchant bars.

When the plant re-opens, it willoffer an enhanced long productportfolio of one-to-three-inchangles and one-to-four-inch flats.

ArcelorMittalre-opensfinishing facility

Broner winsTISCO contract

Strong domestic demand for steelin Japan has prompted NipponSteel & Sumitomo MetalCorporation (NSSMC) – the world’ssecond largest steelmaker – to raiseits annual net profit forecast.

NSSMC estimates its full-yearcrude steel production output willbe 45.8Mt, a six-year high for thecompany, but warns that a salestax increase planned for April willreduce consumer spending andhave a negative knock-on effect ondemand for cars and housing. Thetax is likely to reduce domestic steeldemand by 1Mt and exports by0.5Mt

The Japanese steel giant recently

posted Q3 recurring profit of108.58 billion yen (US$1.06billion), a huge increase on lastyear’s figure of 12.51 billion yen.

NSSMC’s Q3 net income rose to77.2 billion yen and the companyforecasts full-year profits to end-March 2014 to be 340 billion yen.

The Japanese steel giant’sfigures buck the current Asiantrend – that of a prolonged slumpdue to overcapacity in the Chineseindustry. The company attributesits success to stock market andconsumer spending recoveries aswell as a weaker Yen, which hassupported the company’s exportbusiness.

There has been greater spendingon infrastructure and, claimsNippon, steel demand has beenboosted by so-called ‘Abenomics’.

The term ‘Abenomics’ refers tothe effect of stimulus policiesadvocated by Shinzo Abe, thecurrent Prime Minister of Japan.

Positive news for NSSMC isaccompanied by the appointmentof Kosei Shindo as president,replacing Hiroshi Tomono. Shindowas formerly vice president.

Under Shindo’s command, thecompany hopes to promote itsoverseas operations. NSSMCexports around 46% of itsproduction output.

NSSMC bucks Asian slump trend

Steel keeps resort afloat

China flouts WTO rules, says USImport duties charged by theChinese on American hi-tech steelexports have been costing USproducers more than $250 million,according to a report by the BBC.

While the Chinese claim thatthey have reduced import duties,the Americans say ‘not enough’.

The World Trade Organisation

(WTO), which has acted asmediator between the twonations, has now sided with theAmericans, claiming that China hasbeen ‘unfairly placing tariffs on USsteel products’.

The Chinese on the other hand,argue that the Americans havebeen selling their hi-tech steel

products at unfairly low prices andthat’s why the Chinese have leviedpunitive duties on the Americancompanies concerned.

The US wants immediate talkswith the Chinese and will refer thecase back to the WTO if it doesn’treceive a satisfactory response.Source: BBC

South Korean steelmaker POSCOhas been advised by the IndianGovernment to source iron ore onthe open market rather than waitfor its own captive mine for aproposed steelmaking facility inOrissa.

The long-awaited steel plant hasbeen a long time coming – POSCOsigned an MOU with the StateGovernment of Orissa in 2005 –but now work on the project,

worth an estimated $12 billion, islikely to commence in a matter ofweeks, following anannouncement by Indian PrimeMinister Manmohan Singh andprompted by a State visit fromSouth Korean President Geun-hyePark.

As for the proposed steelworks,it is estimated that it could take 18months to complete and while theIndians are advising the South

Koreans not to wait for a captivemine, POSCO executives areclaiming that a captive mine is acore element of the project andone of the main incentives fordeveloping the plant in Orissa.

The proposed Orissa plant willrely upon environmentally friendlyFinex technology, for which POSCOholds patents, and will create18,000 jobs plus a further 870,000in related industries.

Orissa steel plant near to completion?

UK-based process controlspecialist Broner Metals Solutionshas been selected by Chinesesteelmaker, Taiyuan Iron & Steel(TISCO) to supply a real-timecaster and steel plant schedulingsystem for new steelmakingequipment in plants 1 and 2 inTaiyuan City, Shanxi province.

TISCO manufactures stainlessand carbon steel and has a largeiron and steel complex whichintegrates mining, iron and steelproduction, processing, deliveryand trade. It claims to be thelargest producer of stainless steelin the world with an annualproduction capacity of 10Mt ofsteel, which includes 4Mt ofstainless.

Broner CEO David Mushin saidthat the project highlights hiscompany’s growing business inChina.

A giant, self-propelled floatingholiday resort measuring 74mlong, 47m wide and almost 37mhigh, will be travelling along thecoast of the Lebanon boasting afive-star hotel with 62 rooms andsuites and with 70 rooms offeringviews of the seabed. There will bea 300-seater roof top restaurantand plenty of other leisure facilitiesto keep the resort’s 1,200 guestshappy.

Steel giant ArcelorMittal will be

supplying 1,200 tonnes of steelplate produced at its Gijon facilityin Spain.

The steel in question will be usedto build the resort’s underwaterstructure (the bit that keeps itafloat).

The S355G8 grade steel will betransformed into tubes and conesto support the resort.

An additional 130 tonnes ofsteel have been ordered and will bedelivered early this year.


8 INDUSTRY NEWSDIARY OF EVENTS

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

March17-19 20th CRU World SteelConferenceRadisson Blu Alcron Hotel, Prague,Czech RepublicMajor global steel industryconference.www.crugroup.com

23-26 CONAC 2014 – SixthSteel Industry Conference &ExhibitionMonterrey, NL, MexicoContact:[email protected] [email protected]

April

7-8 The 1st European SteelTechnology & ApplicationDays (ESTAD) and the 31stJournées Sidérurgiques IntParis, FranceContact: [email protected]

7-10 MetalSteelSaudi 2014Riyadh, Saudi Arabiawww.metalsteelsaudi.com

7-11 Tube & Wire 2014Messe Dusseldorf, Germanywww.wire-tradefair.com

18-20 Steel Home AnnualConferenceInternational Convention Centre,Shanghai, Chinawww.steelhome.cn/en

28-30 Eurocoke SummitMansfield Traquair, Edinburgh,UKwww.eurocokesummit.com

May

05-07 AISTech 2014Indianapolis, USA. www.aist.org

15-17 Metal & SteelCairo, Egypt. Organised byArabian German Exhibitionswww.metalsteeleg.com

June

16-18 The 15th GuangzhouInternational Metal &Metallurgy ExhibitionGuangzhou, Chinawww.julang.com.cn

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

Crude steel production down

Locomotive operator ThomasDazey was killed in a tragicaccident at a steel plant inArkansas, owned by Americansteelmaker Nucor.

The company, which describesitself as 'the safest, highest quality,lowest cost, most productive andmost profitable' steel company inthe world, immediately suspendedmill operations and is working with

local and state agencies todetermine the exact cause of Mr.Dazey’s death.

Dazey suffered a fatal headinjury when the locomotive he wasriding derailed, leaving him caughtbetween his train and another. Theresulting head injury proved fatal,according to the MississippiCounty Sheriff's Department.

Dazey had been riding on the

front of one train, but this is apermitted practice under Nucorpolicy, claims one local newsreport.

When the Mississippi CountyCoroner arrived on the scene,Dazey was pronounced dead. Hehad been a Nucor employee for 18years and was 48 years old. Hisbody was discovered early in themorning by shift workers.

Nucor steelworker killed

ArcelorMittal’s Dbrowa Górniczalong rail installation in Poland –one of three in the world capableof producing 120-metre rails forthe railway industry – was officiallyopened on 24 February by Poland’sdeputy prime minister, JanuszPiechociski.

The opening of the newinstallation is timely asArcelorMittal Europe hasannounced its selection byDeutsche Bahn to supply 129kt ofrails to the German railwaycompany in 2014, together withArcelorMittal’s Gijón site in Spain.

Both parties also agreed anoption to deliver a further 129kt ofrails in 2015.

Manfred Van Vlierberghe, CEOof ArcelorMittal Poland, said thatthe production of long rails is aproject of significant strategicimportance for the company asmany rail operators are planningmajor investment in railinfrastructure. “We are pleasedthat the opening of the installationhas taken place just days before

the tenth anniversary of ourpresence in the Polish market. Inthe past decade, ArcelorMittal hasinvested more than US$1.6bn inthe modernisation of its plants inPoland,” he said.

Augustine Kochuparampil, CEOfor long products at ArcelorMittalEurope, said the company was verypleased to be working withDeutsche Bahn having justcompleted such a majorinvestment in rail productionfacilities in Poland (enabling the

company to produce 120-metrerails).

The rails will support DeutscheBahn’s network renewal andexpansion programmes.

Dr. Bernd Striegel, head ofprocurement and sites at DB NetzAG said: "Deutsche Bahn investsextensively in its railway networkevery year. In 2014, we aim torenew more than 3,000km of rails,2,350 track switches, more thantwo million railway sleepers andabout 4Mt of gravel."

Long rail facility opens in Poland

Figures from worldsteel show thatglobal crude steel production forJanuary 2014 was 130Mt, adecrease of -0.4% compared tothe same period last year.

These figures are compiled fromdata received from 65 countriesthat report to worldsteel, anorganisation representing 170steelmakers.

Crude steel production in Chinafor was down -3.2% to 61.6 Mt,Japan produced 9.4 Mt, an

increase of 6.1%, and South Koreawas up 1.9% at 6Mt.

In Europe, Germany produced3.7 Mt, an increase of 2.2%, Italy2.2 Mt, up by 27.8% and Spain1.1Mt, an increase of 11.1% onJanuary 2013. The UK was up by31.5% at 1.1Mt.

Turkey’s crude steel productionfor January 2014 was down -0.9%to 2.8 Mt.

Russia produced 5.9 Mt, anincrease of 4.1% but Ukraine’s

production was down -13.5% at2.5 Mt.

In the USA, January 2014 crudesteel production totalled 7.3Mt,down 0.5%, and in SouthAmerica, Brazil produced 2.7Mt,down by -1.4%.

The global crude steel capacityutilisation ratio for the month was74.4%, which was 2.5 percentagepoints lower than last year but 0.2percentage points higher thanDecember 2013.



10 USA UPDATE

Negative vibes for US steelmakers?With the aluminium industry pushing hard for a greater share of the US (and global) automotivemarket, the steel industry is concerned about losing market share, but is still flying high in other sectors,notably construction. Fears that steel imports are on the rise and that Turkey is reducing its imports ofsteel scrap from the US has prompted the stateside steel establishment to look long and hard at USSteel, which reported losses of $2.1 billion last year. By Manik Mehta*


MARIO Longhi’s name has cropped up onmany occasions within US steel circles thisyear, amidst growing uncertainty overPittsburgh-based US Steel Corp, whichreported losses of $2.1 billion in 2013.

Steel experts are following Longhi’severy move with a view to rescuing USSteel and modernising its old productionlines. According to Longhi, the companyplanned to apply for permits to replace theold blast furnace at its Fairfield, Alabama,plant with a modern electric arc furnace(EAF) expected to go into operation in2017.

US Steel Corp has produced steel formany decades using the blast furnacesystem. It is part of a process thatproduces batches of steel from rawmaterials, and usually yields a slightlyhigher quality and a more exact form ofsteel that is suitable for the automotiveindustry.

The EAF is used to make steel out ofscrap and can be started and stopped atwill without incurring excessive costsrelated to shutdown or start-up processes;also, it serves as a less expensive option,considering rising raw materials prices.

Longhi argued that EAF productionwould offer greater flexibility andefficiency and save money.However, the EAF productionsystem at the company’s

* USA correspondent

Alabama plant would, initially, have anannual capacity of 1.1Mt, compared with2.1Mt using a blast furnace.

US Steel Corp has not reported profits inrecent years and is planning to restrict theterms of its board members, bowing toshareholder pressure. They seek greateraccountability in view of a long slump inearnings and stock price.

The company recently announced that itwould ask shareholders at its April 29 AGMto vote on a plan for annual re-election ofboard members, thus pressurising them toincrease the value of the company or facebeing ousted after a year.

One conspicuous development is thepropensity of some automakers toincreasingly turn to aluminium, in lieu ofsteel, for automobile production. Ford, forinstance, is using aluminium inconstructing a lighter and more fuel-efficient F-150 truck. With a body madealmost entirely from aluminium, the F150enables the company to save nearly 700lbsfrom a 5000lb truck. Ford will continue touse steel for the F-150’s frame.

Market reaction unknownHow the market will react to Ford’s use ofaluminium in the F150 is unknown.Around 97% of the F-150 body will bebuilt from aluminium, which, experts say,is the maximum use of aluminium so far ina truck. Pricing is another issue. The useof aluminium – which is more expensivethan steel – could raise the price of thevehicle, but Ford says the F-series willremain within its price range.

Aluminium has been used in the past inthe manufacture of sporty, low-volumecars like the Tesla Model S electric sedanand the Land Rover Evoque, but the extentof the aluminium used in the F-150 mightunleash a trend against steel.

American aluminium giant Alcoa isinvesting heavily to meet increasingdemand for ‘the miracle metal’ fromautomakers. US Steel is allocatingresources for research and businesspartnerships to assert its position in theautomotive industry.

USA STI1_30_AIT_0110 3/7/14 10:23 AM Page 1

12 USA UPDATE


About 15% of steel produced by USSteel Corp is used by the transportationsector, which includes automobiles. Withrising automobile sales, Alcoa expects itsrolled aluminium business to increase from9% in 2013 to 16% in 2016.

Steelmakers are clearly shaken by thenation’s second-largest automakeradopting a strategy designed to replacetheir material on its highest-volumevehicles. Ronald Krupitzer, vice president(automotive market) at the Steel MarketDevelopment Institute, an industry tradebody, described the move as a “wake-upcall”.

Steel industry representatives appearedconfident at the recent Detroit automobileshow, claiming that they could offerautomakers a steady flow of new super-strong steel alloys that are easy to fabricateinto lightweight structures andcomponents and dramatically undercutaluminium in cost.

While the transportation sector isbecoming a battleground for dominancebetween steel and aluminium, steelcontinues to dominate the constructionsector. Indeed, steel consumption in theUSA is driven by the construction sector,with architects and construction engineers

preferring it for residential and commercialbuildings.

US steel imports have been rising inrecent months as buyers find it cheaper toimport steel from China than fromdomestic producers in the United States.The average price difference between USand Chinese steel has risen to $159 a ton.One year ago, US steel was $19 a toncheaper, according to CRU.

Take the case of Midland SteelWarehouse Corp, a Bronx, New York-basedcompany that buys more steel abroadbecause of the sharp rise in prices ofdomestic steel. Midland Steel, which buyscoil and cuts it into smaller piecesaccording to the specifications ofconstruction, lighting, office furniture andother market sectors, sourced its monthlysteel requirements from domesticsuppliers, but now some 30% of itspurchases come from China, India andBrazil. Including shipping charges,imported steel is still some 10% cheaperthan US steel.

Rising imports, invariably, exert pressureon prices and sales at some companies.Also, the US does not have adequate steelcapacity to meet rising demand, makingimported steel an attractive option. US

steel consumers have relied on imports fordecades. The country’s total annualconsumption is around 108-110Mt, ofwhich 75% comes from the US while therest is imported.

Experts predict that the US share ofimports could increase 30% in 2014 if theprice difference continues to grow, makingforeign steel cheaper.

Meanwhile, US scrap steel suppliers arefeeling the impact of Turkey’s economicslowdown. Turkey, the world’s largestscrap steel consumer, is the biggest buyerfrom the $20 billon strong US scrap steelindustry.

Following Turkey’s economic downturn,which has weakened its currency andmade scrap imports more expensive, thecountry imported some 18% less scrapfrom the US between January andNovember 2013. The excess scrap material,in effect, is lying in US scrapyards.

Turkey’s steel industry makes steel bymelting scrap. Roughly three-quarters ofTurkey's 35Mt of steel production comesfrom electric-arc furnaces.

Turkish steel production fell 3.8% in thesecond half of 2013 from a year earlier,according to the Turkish Steel ProducersAssociation. �

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The constructon industry is a big consumer of long steel products in Latin America. The only threat tolocal producers is the current global overcapacity situation and increasing imports from Turkey andChina. By Germano Mendes de Paula*

Long steel demand in Latin America

* Professor in economics, Federal University of Uberlândia, Brazil. E-mail: [email protected]

ACCORDING to Alacero (Latin AmericanSteel Association), the constructionindustry was the region’s biggest steelconsumer (47%) during 2013, followed bythe mechanical machinery industry (18%),automotive and metal products (15%each) and other sectors (5%). Consideringthe strong relationship betweenconstruction and the long steel market, itis wise to provide a panorama of thissegment in Latin America.

ProductionAlacero estimates that Latin Americancountries produced roughly 26.8Mt oflong steel products in 2013, which wasequivalent to 48.5% of the region’soutput. The share of flat steel andseamless tube was, respectively, 47.6%and 4.0%. However, the relevance of longsteel products varied significantly acrossthe region. Among the 15 Latin Americannations that fabricated such products,eight (Costa Rica, Cuba, Dominican

UruguayTrinidad

ParaguayEl

Ecuador

Ecuador

Others

DominicaCubaCostaPeru

Peru

Chile

Chile

Colombia

Colombia

Venezuela

Venezuela

MexicoBrazil

Argentina

Argentina

0 20 40 60 80 100 120

100100100100100100100100

9681

7550

4841

36

BrazilMexico

ArgentinaPeru

VenezuelaChile

ColombiaEcuador

Costa RicaTrinidad & Tobago

Trinidad & TobagoCubaEl Salvador

UruguayParaguay

Dominican Rep

Dominican Rep

40 3629

655

43

32

25

277

544

43

211

0000

0 05 5 10 15 20 25 30 35 4010 15 20 25 30 35 40 45

Brazil

Mexico

Republic, Ecuador, El Salvador, Paraguay,Trinidad & Tobago, and Uruguay)produced only this category of products(Fig 1). The participation of longs was over70% in Peru, Colombia and Chile,remembering that this ratio will increase inthe latter, because CAP interrupted its flatsteel production lines in mid-2013. Thelowest ratio was observed in the largestmarkets (Argentina, Brazil and Mexico).

Brazil had a 40% participation in theregion’s long steel production in 2013,

followed by Mexico (27%), Argentina(7%), Peru (5%), Venezuela, Chile andColombia (4% each). Thus, the top twowere equivalent to 67% of long steeloutput, and the top seven, 91% (Fig 2).

Installed capacityAugusto Espeschit de Almeida, CEO ofArcelorMittal Long Carbon and WiresBrazil, delivered an interesting presentationat the 47th worldsteel Conference, whichwas held in São Paulo in October 2013. He

Fig 1

Fig 2 Fig 3

14 LATIN AMERICA UPDATE


LA updapte 2_30_AIT_0110 3/6/14 4:36 PM Page 1

16 LATIN AMERICA UPDATE

said that the installed capacity of long steelproducts in Latin America reached 35Mt in2013, when the industry had a 23% idlecapacity.

The data employed to draw Fig 3, andthe following ones, was extracted from Mr.Espeschit’s presentation. Brazil retained a36% share in Latin American long steelcapacity in 2013, while the Mexican figurewas 29%. Argentina, Peru, Venezuela,Colombia and Chile, jointly, achieved 23%,meaning that the top two had a 65% slice,and the top seven, 89%.

Fig 4 shows the participation of installed

capacity by company. Gerdau, which hasoperations in many Latin Americancountries, had a 31% capacity share in2013, followed by one of its largestcompetitors, ArcelorMittal, with a 22%slice. The other key players are Deacero(headquartered in Mexico), Votorantim(Brazil), Simec (Mexico), Arequipa (Peru),Ternium (Luxembourg, but with its mostimportant long steel assets in Mexico),Sidor (Venezuela), AHMSA (Mexico), andCAP (Chile).

ConsumptionDemand for long steel products is quitegeographically concentrated. In 2013,Brazil had a 38% share of regionalconsumption and Mexico, 25% (Fig 5)together accounting for 63%, which wasfour percentage points lower than theproduction ratio. Meanwhile, the topseven nations accounted for 90%, a verysimilar figure for both production andcapacity. This can be explained by the factthat long steel is described as a ‘localbusiness’ in terms of production andconsumption, but not necessarilyregarding ownership, as many plantsbelong to foreigners.

Fig 6 pays attention to the compositionof the long steel market, by product ineach country. It can be seen that, in 2013,rebar was the equivalent of 86% of the

Bolivian market, but only 39% in Brazil.Wire rod (and its transformed products)varied its share significantly between 3% inBolivia and 32% in Brazil. Special-barquality was particularly important in Chile,and merchant-bar quality, in Paraguay. Thehighest participation of sections wasverified in Mexico and Argentina.

It is intuitive that rebar’s share in thelargest and more sophisticated markets,should be lower and this is confirmed bythe tendency line of Fig 7. Except for Chileand, to a lesser extent, Argentina, all theother countries are very close to the trendcurve. Obviously, the correlation betweenthe two variables is high (-0.65).

A final remark refers to the evolution ofLatin American steel demand. According toArcelorMittal, long steel consumptionjumped from 21Mt to 27Mt during thepre-crisis period (2005-2008). Afterdropping to 22Mt in 2009, it recovered to29Mt in 2013 (Fig 8). For the comingyears, the forecast is that it will rise to36Mt by 2018, implying a compoundannual growth rate (CAGR) of 4.6%. Amoderate and steady improvement isexpected, underpinned by infrastructureinvestments and increased consumption.The biggest risks for local players arerelated to the impact of worldwideovercapacity and increasing imports fromTurkey and China. �

BrazilMexico

ArgentinaChile

ParaguayVenezuelaColombia

PeruEcuador

Central AmericaUruguay

Bolivia0 20 40 60 80 100 Brasil Mexico Chile Argentina Venezuela Colombia Peru Ecuador Uruguay BoliviaCentral

AmericaParaguay

Rebar

Reba

r’s

shar

e (%

)

Long steel consumption (Mt)

SBQ MBQ SectionsWire rod + Transformed

Rebar

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Sections

Wire rod +transformed

1009080

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00 2 4 6 8 10 12

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Pre-crisis Crisis & recovery Forecast

2009 2011 2013 2015 201708 10 12 14 16 18


PanamaEcuador

Others

Bolivia

Peru

Chile

Colombia

Venezuela

Argentina

31

229

7

64

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3825

66

55

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11

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50 05 10 15 20 25 30 35 10 15 20 25 30 35 40

BrazilMexico

Gerdau

ArcelorMittalDeacero

VotorantimSimec

ArequipaTernium

Sidor

AHMSACAP

Others

Fig 4 Fig 5

Fig 6

Fig 8

Fig 9

Fig 7

LA updapte 2_30_AIT_0110 3/6/14 4:37 PM Page 2

17


The low profit era

CHINA’Ssteel industryin 2013 closed ona sour note withminimal profits, highcosts and tight cashflow. Atthe beginning of 2014, themarket is still generally in chaosand steel prices have witnessedcontinuous slumps. The year aheadwill prove challenging for Chinesesteelmakers.

The strength of China’s steel mills willbe a deciding factor going forward. UnderChina’s system, state-owned, privately-owned and foreign-owned steel mills co-exist. Relatively speaking, state-ownedhave more capital strength than privately-owned companies. Therefore, state-owned facilities have more influence onthe price of plate, while privately-ownedproducers have more power inconstruction materials. Seeing that themarket is expected to be bearish over thecoming years, traders are expected to havea big influence over the whole market.

More competitiveStructural steel produced by private millsis more competitive and has greatermarket share, accounting for almost 50%of total steel products and this has led toprice volatility, thus attracting more tradersto get into the market. Some hot plateproducers have tried to get listed on theShanghai and Singapore stock exchanges,which might change the already largemarket share held by construction steel.

Construction steel – used extensively forreal estate and infrastructure – maintainedannual steady growth, despite the Chinesegovernment tightening up house prices(up by 19-20% on average in big cities).Solid fundamental demand from thepeople and growing urbanisation are keyfactors for China’s structural steel market.Steel plate, however, has witnesseduneven growth. High-end cold rolling steelfor automotive and domestic appliancesmaintained stable growth, but hot rollingand medium plate for manufacturing andshipbuilding appeared weak and it didn’t

* China correspondent

pick up until the second half of2013. Steel demand in 2014 isexpected to pick up.

The over-supply situationwill continue in the short-term and exports are notlooking promising.

The Chinese government’surbanisation policy will meandemand growth for steel.Crude steel output in 2014 isprojected to be 810Mt andapparent consumption750Mt, an increase of 3.1%

year-on-year; but with limitedsurplus production capacity, fixed

asset investment and downstreamconsumption slowed.

For the past two years, China’s steelexports have been unable to maintaingrowth of over 10% due to sluggishglobal economic recovery, internationaltrade protectionism issues and a slowingpace of development among emergingeconomies.

Operational difficulties plagued moststeel mills due to rising raw materialscosts, environmental and resourcesstumbling blocks. However, most steelmills have to quicken their pace ofdevelopment.

Low profitsChina’s steel industry has stepped intoslow and steady development and lots ofproblems have already cropped up – suchas surplus production capacity,homogeneous blind competition amongall market participants, a lack of iron orepricing power on the international market,rising technological development issuesand so on. In the long run, more seriouschallenges have been presented to thesteel industry in terms of greendevelopment, financing and risingproduction costs.

A more serious international tradingenvironment also made profitability verychallenging. After the financial crisis, mostdeveloped economies were under greatpressure to establish equilibrium and thismeant that China’s exports of traditional

commodities encountered a flat market.Competition among domestic steel mills inIndia and Southeast Asia is also prettyfierce. Furthermore, a change of businesspatterns brought about by globalcompetition and production relocationhas led to an increase in anti-dumpingcases for China’s steel industry.

The way aheadChinese steelmakers are trying to find asolution to the tough situation.

They will endeavour to lower stockpilesto foster market stability. Once there arepositive government policies to raise steelproduction, however, the stockpiles willrise accordingly and this will cripplemarket stability. Steel mills, therefore, aresupposed to make production plans basedon market demand and control output ina reasonable manner. Steel output controlwill stabilise prices and lower rawmaterials costs.

Second, steel producers will expandprofit margins by exerting more force onlowering raw materials costs. They willcontrol costs in raw materials purchasing,product sales, logistics, infrastructurewhile fostering capital management,lifting capital utilisation and reducing bankloans.

Third, steelmakers will explore higheradded value products to meet marketdemand. Because the price of Chineseexported steel is US$366 lower thanimported goods on average, China willadjust the structure of its products andpush forward higher added value exports.Consumption of raw materials and exportsof lower added value products shall bereduced.

Fourth, it is crucial that Chinese steelproducers are less reliant upon importediron ore and develop indigenous resourcesto guarantee raw material stability, loweroperational costs, and increasedcompetitiveness. Alternatively, they willstick with a development policy ofimporting iron ore from overseas. On theother hand, they will develop domesticmines and offer tax incentives to miningenterprises. �

These are challenging times for Chinese steelmakers as economicgrowth slows and the industry deals with environmental issues

surrounding air pollution, a decline in fixed asset investment and aslow down in capacity expansion. Shi Lili* looks ahead

CHINA UPDATE

CHINA STI_30_AIT_0110 3/6/14 4:47 PM Page 1

19


THE star of Metal Bulletin’s recent SteelSuccess Strategies, held at the RenaissanceIstanbul Bosphorous in Turkey (18-20February) was, without a doubt, WorldSteel Dynamics’ Peter Marcus. Here wassomebody who got straight to the point:developing countries are going to hit abrick wall and the Chinese economy willcrash into the Great Wall before too long.

Marcus argued that the global steelindustry in 2014 would witness little gainin terms of fixed asset investment activityexcept in China. Global output would beup 3.1% and the iron ore price delivered toChina is poised to collapse further,dragging down the export price of hotrolled band in the process.

The great obsession? China is the great obsession (Fig 1) formost metals conferences these days – forobvious reasons – and Steel SuccessStrategies didn’t disappoint. Marcus saidthat Chinese steel production stood at760Mt, but is starting to rebound. He saidChinese annual GDP growth between nowand 2025 would run between 3-6% andglobal steel capacity would barely changebetween now and 2017. He said that onein seven steel plants outside of China are

not viable in a low-profit environment andthat many plants are for sale at bargainprices.

According to Marcus there was littlechance of Chinese steelmakers mergingwith offshore competitors, but he hopedthe Chinese industry would consolidateand that high polluting plants will close.

Where electric steelmaking wasconcerned, Marcus believes a majordecline in the cost of scrap is needed. Hepointed to a ‘scrap overload’ and obsoletescrap demand standing at 63Mt in China.

The longer the Chinese economic modelcontinues, the worse off the steel industrywill be in 10 years, adding that there is nosimple solution to the problem. Steelmanagement has to be pro-active toenhance competitiveness. “In a world ofturmoil, there’s more opportunity to dothis,” he said.

Good management neededAnother speaker promoting goodmanagement was Ali Aydin Pandir,chairman and managing director of Turkishsteelmaker Erdemir, the conference’s leadsupporter. Pandir said that steelmakersmust respond to changing globalconditions and argued that good

management will play a key role.Where automotive is concerned, Pandir

said a lot depends on how muchconsumers are prepared to pay for theenvironment. While aluminium is gainingground in the USA – notably in the F150truck – steel will be key for at least another10 to 15 years.

Antonio Marcegaglia, chairman and CEOof Marcegaglia, an Italian steel processor,said that China’s growth rate stood at8.4% – lower than previous years, but stillhigh. He argued that rebalancing wasneeded and that, so far, the main drive hadcome from Asia and China, but that Indiaand the Middle East must not beoverlooked.

Transitional periodMarcegaglia said the steel industry wasgoing through ‘a transitional period’ witha strong demand outlook everywhere andlots of credit available (causing financialbubbles and aggressive steel price growth).He pointed to stagnating demand inEurope and Japan and loose monetarypolicy in the BRIC nations and said thatcapital optimisation and managementwere becoming increasingly important.

While the capacity situation globally is

Testing times for steel

As the global steel industry faces many challenges, speakers at MetalBulletin’s Steel Success Strategies conference in Istanbul set about

discussing some of the key issues facing modern steelmakers. By Matthew Moggridge*

CONFERENCE REPORT

*Editor, Steel Times International

30000

25000

20000

China

Developing world ex China

Advanced countries

15000

10000

5000

0

2012

2014

2016

2018

2020

2022

2024

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Fig 1 2013 demand and annual reservoir: 68 million tonnes and 57 million tonnes 2035 Chinese annual reservoir: 400 million tonnes

Global crude steel production (million tonnes)

Global crude steel production (million tonnes)

Crude steel capacity(million tonnes)

Growth rate in apparent steel consumption(%)

China Japan USA India

87.5 109.6 107.6 107.2

57

50.8 53.958.4

65.8 69.6 73.878.3

3.2

7.6 8.09.8

13.912.9

11.4

0.4

13.311.9

6.9

3.3

0.4

6066

75 7889

97

86.4 88.680.569 73.6 76.7

58.2

2009 2010 2011 2012 06-07

01-02 03

-04

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(April-N

ov)

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07-08

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08-09

09-10

09-10

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63.5

Fig 2 Indian steel industry

SSS_30_AIT_0110 3/7/14 11:56 AM Page 2

20 CONFERENCE REPORT


worsening, Marcegaglia believes it willsoon be balanced in terms of utilisationrates, where it is currently poor, particularlyin integrated mills. Asset optimisation isunderway, he said, and consolidation inChina is the next big thing.

He said that the Chinese Government’s12th Five Year Plan showed a willingness topromote greater consolidation as well as60Mt of capacity cuts.

Marcegaglia said that the EU’s CO2ambitions were unrealistic and would incurEUR40/tonne in extra costs, adding thatEurope’s environmental policy was crazy.“We try to be the hero of the world,” heproclaimed, adding that unless othernations adopted a similar policy, the EU’sactions would severely penalise theEuropean steel industry.

Emerging economiesNae Hee Han, worldsteel’s chief economistresponsible for China, said that emergingeconomies will continue to drive steeldemand and will grow faster thandeveloped economies – but not fastenough to replace China. She pointed toan uneven recovery led by the emergingeconomies and highlighted continuedvolatility from the afterburn of theEurozone crisis and recent volatility fromemerging economies. World capacityutilisation was well below pre-crisis levelsand moving downward, she said.

According to Han, China is entering anew phase of development with less steel-intensive growth in future and more focuson capacity closures, environmentalprotection and product upgrading. WithChina’s fast growth period coming to anend, the global industry may lack a stronggrowth engine in the short-term, but thatlonger term, the fundamentals for steeldemand growth remain robust.

Stagnating steel demand The Indian Ministry of Steel’s chiefeconomist, Ahmed Firoz, said that if theworld economy was not doing well, steeldemand would stagnate (Fig 2). He saidthat the average rate of growth to 2025was just 1.5% and that if financial failurescontinued, the industry would lose theheart of the banks who are faced withrising, non-performing ‘toxic assets’. A lotof the banks’ resources will evaporate inrestructuring deals, he said.

Firoz said that the Indian manufacturingsector in steel-intensive areas (automotiveand capital goods) was stagnant and thatinfrastructure spending was depressed.The Indian railways have little money toinvest and housing growth is belowexpectation. He said that steel-intenseinvestment projects were not taking offdue to high costs, a shortage ofinvestment funds and regulatory issues.Major steelmakers have delayed

commissioning projects in India fearingweak demand.

The main challenges facing the Indiansteel industry are land acquisition (for newplants), uncertainty surrounding iron oresupply, dependence upon imported cokingcoal, high capital costs (increasing financialstress for some major producers), andstrong competition in the home market.

OvercapacityPrashant Jain, head of corporate strategyat JSW India, said that the problems of theglobal steel industry – overcapacity, thedominance of raw materials suppliers,negative cash flow and a lack ofbargaining power (despite increasingconsolidation) – could be solved byproduction relocation. Shifting steelproduction to regions with an indigenousraw materials source and high steeldemand would counter the bargainingpower of the raw materials suppliers.

Jain said that shale gas would be a keydriver for the US steel industry over thenext decade and that new frontiers incoking coal will be industry ‘game-changers’. He highlighted Mozambique,Mongolia, the USA and Canada asemerging coal-producing countries (Fig 3).

Jain said India was a ‘geographicallyunique’ and compelling place for steelproducers as it offered low-cost iron ore(US$40-60/tonne compared with

SSS_30_AIT_0110 3/7/14 11:56 AM Page 3

21


US$125/tonne elsewhere). Low wages anda huge market make the country ideal forsteel production, he added.

Positive vibes from the GCC In the GCC, project investment has grownby nearly 25% over the past three years,said A N Venkat, Emirates Steel’s vicepresident for sales. Between 2010 and2013, building and infrastructure projectinvestment had a compound annualgrowth rate of 37% compared to 20.3%for oil and gas-related projects and -25%for power, water and waste.

Venkat said the UAE and Saudi Arabiawere roughly equal in terms of spend (39%and 38% respectively) with Qatar at 12%and the three countries combinedresponsible for 90% of spending in theregion. Building and infrastructure was thebiggest ‘area of spend’ in the region,followed by oil, gas, power, water andwaste.

According to Venkat, US$8 billion will beinvested in infrastructure directly related toExpo 2020. HSBC estimates that totalspending in the region will be US$18.3billion (including private sector projects).Deutsche Bank envisions $43 billion ininfrastructure projects in preparation forExpo 2020, which is being held in the UAE.

New long capacity is being added(mainly rebar) and will reach an excess of6Mt over demand by 2017, claims Venkat.

He said that long semis capacity was alsobeing added and that long demand willgrow, on average, by 5.3% until 2017.

The UAE has over 1Mt of rebar capacityand 300kt of idled capacity, which mightbe rekindled. Emirates Steel, the country’sonly billet producer, cannot meet theUAE’s total rebar demand.

Oman has six steelmakers and tworollers. Long demand does not exceed1Mt/yr, but billet and rolling capacity isbeing added, leading to Oman rollingthree times demand with the biggestimbalance surrounding rebar.

The GCC imports rebar from Turkey(representing 16% of consumption) withsections imports coming from SouthKorea, China and Turkey accounting for60% of consumption in 2013. Billets aremostly imported from Turkey, Russia andUkraine and accounted for 12% ofconsumption in 2013.

Venkat believes that the main challengesfacing the GCC are: to contain expansion;assess new capacity; and judge thesteelmaking value chain, ie marginpressure. The region may become a netexporter of medium and heavy sections in2015 and Emirates Steel is steadily gainingdomestic share in these markets.

Rising labour costs Igor Molibog, first vice president of OMZRussia, said that, historically, labour costs

in Russia were cheap – but not anymore(Fig 4). Russian steelmakers have lost a lotof their margin and the Russian rouble haslost up to 20% in value against the Euro.The end result is investment cuts.

Molibog said that high cost capacitiesshould be discontinued and that olderplants must be closed to increase the needfor efficient equipment and turnkeysolutions. He said that long-standingpractices and processes should be revisitedand that labour must be restructured.Supply contracts should be cancelled orreduced and prices need to be morecompetitive.

He highlighted actions being taken byOMZ including the development of newminimills through partnerships andmergers and acquisitions; shorteneddelivery times, cutting logistics costs,focusing on core business and developinga talent pool. The company’s Lean ModelFactory will be launched this year inconjunction with McKinsey and Ural StateUniversity. The aim is to train 1,000employees between 2014 and 2016.

Steel not a priority in China Gorkem Bolaca, managing director ofGalex Steel International, expects slightlybetter growth for the global steel industryin 2014. He said the USA was emergingfrom its economic crisis and will startexporting oil again, but warned delegates

CONFERENCE REPORT

SSS_30_AIT_0110 3/7/14 11:56 AM Page 4

22 CONFERENCE REPORT


not to expect too much from Europe forthe next two years. He said there were‘many limitations’ affecting the Indian steelindustry too and claimed that in China,steel is not a top priority, highlighting morepressing issues such as local governmentdebt and corruption.

In China, 771Mt of non-Chinese iron orecapacity would be added to the marketbetween 2013 and 2015, said Bolaca,adding that over the next decade,steelmaking capacity in southern andwestern China will increase. He said thatnorthern China has the largest capacity,but not much room for growth. Steel millswill be able to improve profitability byexpanding in the south and west. Hotrolled coil production in China stood at290Mt in 2013, up from 165Mt in 2008.

Bolaca said that fixed asset investmentwas roughly 50% of GDP and that 63% ofsteel production in China came fromrelatively small steel mills (only 37% camefrom the bigger facilities).

With state-owned steel mills findingcredit hard to find, Bolaca said that the topfive steelmakers accounted for just 20% oftotal production (Fig 5). He said that 76mills produced hot rolled coil and thatfierce competition meant that producerswere only marginally profitable.

Bolaca said that Turkish producers relied

upon raw material imports to maintainproduction. 46% of iron ore is locallyproduced as opposed to 54% imported;13% of coking coal is produced locally asopposed to 87% imported, and wherescrap is concerned, 70% is imported and30% locally produced.

Natural gas costs in Turkey are 25%higher than the EU and five times higherthan in Russia; electricity costs 14% morein Turkey than in the EU and is a staggering170% higher than in Russia (19% higherthan China). Lastly, scrap costs 30% morein Turkey than in Russia.

He went on to discuss the ‘forbiddenfruit’ that is Iran where demand for steelstands at 39% compared to Saudi Arabia(22%), the UAE (15%), Syria (6%) and Iraq(4%) (Fig 6).

Bolaca said that Turkey’s steel mills areaggressive in terms of pricing and offereasy access to the Middle East, the EU andNorthern African markets. Short-termdeliveries mean that customers are willingto pay a premium.

Turkish mills are not, however, asefficient as those in the EU, there is overcapacity in long and flat products, lowerprofits and higher input costs.

Wu Wenzhang, CEO of Steel HomeInformation Technology told delegates thatsteel production in China was up 7% to

728Mt and that reported deliveries wereup 11% to 1.02 billion tonnes. Deliveries oflong products totalled 505Mt, flatproducts 450Mt, pipe 80Mt and others30Mt.

He said that the price of steel productswill go up by 8% from where they aretoday and that the export competitivenessof Chinese steelmakers will decline.Production by China’s top four iron oreproducers, on a gross basis, will be up by100Mt.

New Chinese capacityJiang Li, Baosteel’s chief market analyst,said that steel capacity expansion will slowdown due to declining fixed assetinvestment. This year there will be 30Mt ofnew capacity and most Chinese steelmakers are in deficit this year. The debtratio has reached a record high, she said.

Chinese steel companies have reducedinvestment levels to avoid price risks andthe overcapacity situation will be alleviatedbecause of deteriorating cashflow.

Economic growth will slow down andoutput growth of flat products will surpasslong products in future.

Li estimated that 80Mt of steel capacityshould be phased out over the next fewyears and that incremental steel capacitywill decrease in coming years. �

Fig 3: Scrap, shale gas and new frontiers in coking coal – a game changer for steel industry? Fig 4: Russian steel market trends: some observations

Increasing scrapgeneration inChina

Availability ofshale gas - driverfor USA steelindustry in nextdecade

More DRIproduction dueto shale gas

Mozambique, Mongolia, USA,Canada to increase their share

Cost pressure

Estimation of labour costs, man-hours/ton

Tariffs of natural monopolies and steel prices (2007=100)Challenged productivity

Pressure from price and tariffs

EBITDA of Russia top-5 steel producers

EBITDA down to ~14% from 2007 and one can expectto remain it at that level mid term

What are the priority actions:major projects? performance? technology?

Economics and challenges

40%3

2,52

1,5

1

0,50

300

250

200

150

100

50

261234

175

107

2007 2008 2009 2010 2011 20132012

GasElectricityRail transportationFurniture in Central Russia

0,98

2,6

1

1,7

2,7

11,41,4

0,8

31%

14%

30%

20%

10%

0%2007 2009 2011 2013n 2016n

Shanghai Baosteel 6%

Others 63%

Anben Steel 5%Jiangsu Shagang 5%

Tangshan Steel 5%

Wuhan Steel 4%

MaanshanSteel 3%

Shougang Group 3%

Jinan Steel 2%

Laiwu Steel 2%

Valin Steel 2%

Fig 5: The share of giant Chinese mills in total steel production Fig 6 Iran: forbidden fruit. Middle East steel demand by country (approximately 32Mt.

Iran 39%

Saudi 22%

UAE 15%

Syria 6%Iraq 4%

SSS_30_AIT_0110 3/7/14 11:56 AM Page 5

What are the expected advantages of replacing a two-bell furnace charging system with a hydraulicdistribution (HD) system? Article submitted by Joseph Saxinger*

Hydraulic distribution systems

IT has become an accepted principle thatthe no-bell or chute-fed chargingtechnique is the best method of promotingstable, fuel-efficient operation in largediameter furnaces. As a result, all newfurnaces built in recent years, or evenmodernisation of existing furnaces, haveresulted in the installation of chute-fed topequipment as part of the burdencharging/distribution equipment. However,most of the older furnaces in the UnitedStates and elsewhere rely upon the two-bell system for charging materials into thefurnace. Because of the smaller throatdiameter of these furnaces, the advantagesof chute charging are not as clear. Thepurpose of this article is to determine theexpected advantages of replacing a two-bell charging system with a hydraulicdistributor (HD) with a chute-fed burdencharging/distribution system.

Impact assessmentTo determine what the advantages mightbe we need to examine the impact on twoareas of the operation. These are: (1)improvements to operating efficiency and(2) improvements to the furnacemaintenance programme. These twoadvantages are frequently hard to separatesince a good maintenance programmemaximises furnace utilisation, which in turnpromotes furnace stability and efficiency,but for the purposes of this article, the twowill be separated.

Operational impactsThe adoption of the chute-fed topprinciple to large furnace operation has

primarily been driven by improvements inoperating efficiency including large fuelrate improvements that can be seen incomparison to bell-fed furnace operations.Most large furnaces have the furnacethroat area divided into 11 equalcircumferential areas called rings. As thematerial is discharged into the furnace, thechute is moved from the outer rings to theinner rings, evenly distributing material tothe furnace top in a controlled,programmed manner. Coke and ironbearing materials are discharged intolayers. The programme for burdendistribution will control the weight andthickness of the various layers from thewall to the centre as well as placingmiscellaneous materials where they canhave the most positive or least negativeimpact on furnace performance. The angleof the layers into the furnace can also becontrolled, which controls the amount ofroll-down and mixing that occurs betweenthe layers. The distribution can be furthercontrolled so that each layer beingdeposited into the furnace can be placedin a similar manner to the previous layerregardless of the burden elevation asindicated by the gauge rods.

Smaller blast furnaces offer differentchallenges. As the chute dischargesmaterial, the impact zone on the burdensurface is about the same as a largefurnace – approximately a 1m radius. Witha furnace throat having a radius of 10m,the traditional 11 rings work well, andoffer a lot of flexibility to the distributionstrategy. However, the smaller furnace mayhave a throat radius of only 5m. This

means that the flexibility of the system islimited to five or six rings.

The ability of the operator to designburden distribution strategies is, therefore,limited. As a result, the ability to generatefuel rate improvements is more challengingthan on a large furnace. Nevertheless,operating improvements can be expectedfrom the following sources:

1) Burden layering – materialsdischarged from the big bell leave theentire bell circumference simultaneously.As they leave the bell, with the entiredischarge taking approximately sixseconds, the momentum of this largemovement causes a great deal of push,moving materials previously depositedfrom the wall to the centre, as well as ageneral wash-down and mixing ofmaterials from the wall to the centre.While this is generally recognised, there isoften no attempt made to layer materialswith coke and ore, both being charged tothe big bell before the bell is dumped. Thisensures that the only place where coke/orelayers exist is at the furnace wall wherecontrol is minimal at best. Even when thedistribution includes a bell-dump betweenthe coke and ore charges, the impact ofmaterial discharge from the bell causes agreat deal of push, mixing the layers to thecentre of the furnace.

The advantage of the HD system is thatthe programme controls discharge time.Layers can be maintained across thefurnace surface with ore-to-coke ratiosbeing established and controlled accordingto operator requirements. The operator


* Engineering Manager, Woodings Industrial

For promoting stable, fuel-efficient operation of large diameter furnaces, chute-fed top equipment has been installed on all new fur-naces built in recent years as part of the burden charging/distribution system

24 FURNACES

furnaces march_30_AIT_0110 3/7/14 8:34 AM Page 1

26 FURNACES


can control and predict how the reducinggas meets the ore layers and promotehigher furnace efficiency. With the largemixed layers in the bell-charged system,gas/burden contact is uncontrolled,causing a variable reduction environmentand reduced burden permeability. Whilethe efficiency improvements may not be asgreat on a small furnace as on a large one,operating furnaces making the changebetween the distribution systems haveseen a 15–25 lb/NTHM or greaterreduction in fuel rates. Considering cokecosts, the annual coke savings can rangefrom $4.3 m to $7.2m.

2) Coke chimney - the ability to controlthe distribution and the ore-to-coke layersmeans that the coke can be distributed ina controlled manner to the centre of thefurnace, providing the opportunity tocreate a coke “chimney” – a commontechnique to allow for the greater use ofcoal injection on the furnace. This removesone of the constraints on maximising coalinjection (the other being oxygenenrichment). The cost advantage of thiswill be determined by the availability ofcoal, types and quality of coke, availabilityof oxygen, and coal processing andinjection equipment, but should be able tocontribute significantly to the bottom lineby reducing the total fuel cost.

A further advantage of being able tocontrol ore-to-coke ratios across the entirefurnace radius and the impact this controlcan have on gas flow patterns is that gasflow and temperatures at the wall can becontrolled much more precisely than witha two-bell system. This enables theoperator to monitor the condition of thelining and adjust the gas and temperatureprofile by changing distributionprogrammes to maximise the wear thatcan be expected in the stack lining. This inturn will create a positive effect on thebottom line by minimising the number ofoutages that might be necessary at the endof a furnace campaign for grout orgunning practices.

3) Miscellaneous materials – a sourceof cheap iron or carbon units can be foundin some miscellaneous materials. Usuallythese materials are of incompatible sizes orcontain substantial fine materials,examples of which could be sized scrap,BOF slag, BF slag, briquettes, sized ore ornut coke, to mention just a few. The useof all materials is detrimental to a blastfurnace operation using the bell system,but they can be used better and, in somecases, to an advantage by being properlyplaced with a distribution chute. The costadvantage of this will be determined bythe availability of materials and the blendof the total burden, but flexibility ofmaterial selection should be able to

contribute to a significant costimprovement for the operation.

There are likely other sources ofopportunity in the operation, but the onesmentioned are the most significant.

Maintenance impactsFor a small blast furnace the mostsignificant gains are in the cost and controlof maintenance activities and the impact ofthose activities on furnace operation.

1) Bell changes – one of the biggestmaintenance costs for a bell furnace isreplacement of bells, hoppers andreceiving hoppers on the furnace top. It isclear that the seating surfaces between thebells and hoppers, both large and small,wear with the amount and type of materialthat run over them. Typically, the large bellwill have to be changed, roughly every fiveyears. In doing this, the furnace has to betaken out of service for 12 days or moredepending on how much other work isinvolved. The cost of this outage isenormous and the impact in terms of theloss of metal production for such a lengthyperiod can have a negative effect on theplant as well as blow-down and blow-inexpenses. The additional cokerequirements alone could be in excess of$1m. Furthermore, each time the furnaceis taken down for this type of outage, theability to return it to full operation is achallenge that can lead to considerabledelay and loss of furnace production. Theduration of the outage is close to thecritical stage where heat loss to the furnacemay cause the salamander to harden.Restarting the furnace under suchconditions creates stress to the hearthlining, which can lead to potential earlyhearth failure. Quality control of hot metal

is also always a challenge to thisprocedure.

The installation of an HD eliminates thisroutine maintenance completely. While thechute will need to be changed more oftenthan the bells, the cost of a chute changeis far less than a bell change, or even seatreplacement, and is within the normalmaintenance budget. A chute changeoutage can be planned within the normalmaintenance schedule. The total impact onfurnace utilisation can be huge, increasingthe quantity, quality, and predictability offurnace production. The replacement orrebuilding of receiving hoppers is alsoremoved from maintenance activities, sincecontrol of these surfaces is managed bythe replacement of wear plates, controlvalves, and seats, also part of the normalmaintenance schedule and completelyamenable to a planned maintenanceprogramme rather than relying on break-down maintenance for management.

The value of this to the bottom line isdetermined by the maintenance structureof the furnace and the impact on the steelshops. The total cost savings should beeasily estimated for each plant.

2) Emission control - one of the under-valued expenses of the bell system is thepractice, by every furnace operator, todelay the bell change as much as possible.Approximately half way through the life ofthe bell/hopper system, the large bell willbegin to no longer be able to hold thefurnace top pressure from leaking betweenthe bells. Furnace top gases containingcoke fines, unburned coal, and otherparticulate will begin to enter the large bellhopper. When the relief line opens to allowthe small bell to dump, a cloud of black‘smoke’ will be emitted. This becomeslarger as the bell wears further and forcesthe operator to make a decision amongseveral unpalatable operating choices. Thewind rate and furnace pressure can bereduced, minimising the emission butcausing a lengthy loss of production,which will exist until the furnace isrepaired. Occasionally, interim repairs aremade such as cladding the bell(s) orreplacing sections of the hopper seats, butthese usually only offset the inevitable fora short period of time, before additionaloperating changes are required. On-sitemachining of bell/hopper seating surfacescan never be achieved to the level wherelong-term life is possible. Another optionthat is often inevitable is to reduce fuelinjection/oxygen rates. This can have a verynegative impact on cost performancebecause it dramatically increases fuel mixcosts while reducing furnace productivity.These conditions continue to worsen asthe bell surfaces wear until the furnace isfinally taken down for bell changes. Noneof these solutions led to predictable

While the chute will need to be changedmore often than the bells, the cost of achute change is far less than a bell change


27


FURNACES

furnace operation or cost control.The advantages of the HD over the

conventional top on a smaller furnacedepend upon existing equipment andburden materials, but for each operationthis advantage can lead to sustained,predictable and improved long-termfurnace performance providing significantcost improvements.

Capital costsThe capital cost for this improvement isrelated to the existing equipment, but maynot be significantly more than the cost ofchanging existing bells, hoppers andsupporting operating systems required tooperate the bell charging equipment.

The furnace outage necessary to makethese changes may not be much longerthan that experienced during normal bellchange outage, although a furnace re-linewill offer a more controllable environmentfor making this upgrade.

Hydraulic Distributor (HD) impactThe HD top is capable of supplying all theflexibility of every other type of bell-lessdistribution system, with greaterimprovements in performance that fit thesmaller furnace cost profile. All of the

operational furnace performanceimprovements exist with enhancedmaintenance performance. Because of theway rotation and tilt equipment isstructured on the Hydraulic Distributor(HD), the chute can be made more robust.This extends the period of time that can beestablished between chute changes.

The method for hanging the chuteallows all the work to be done withoutentering the furnace or the gearbox andthis reduces the outage required to changethe chute by approximately 50%.

Parts and equipment likely to experiencemaintenance are located in such a waythat they can be made without openingthe gearbox, and are configured so thatemergency repairs can be avoided with themajority of repairs capable of being madeduring a scheduled or planned outage.

The two main motions of the HD –rotation and tilt – along with the coolingsystem, are completely redundant. Thisreduces any unplanned downtime relatedto the HD. The maintenance programmecan be planned, with an outage required.

Cost advantagesIt is difficult to make a precise estimate ofthe cost advantages of the HD system for

any furnace installation because theestimate is specifically related to theequipment and materials being used, butthe impact on each individual furnace canpredict a substantial cost improvement.

The capital cost of the installation can bereasonably estimated for each furnace, butcan vary widely depending on existingequipment, the geography of the furnaceand the charging equipment.

SavingsWith certainty, the operations,maintenance and environmental benefitsof the HD system installation will berecognised with an annual savings ofseveral million dollars.

The advantages the HD has overconventional bell-less systems are strongeron smaller furnaces than larger ones.Reduced capital costs, improvedmaintenance performance andpredictability lead to a decision to use thistechnology on smaller furnaces, whilemaintaining all the operational advantagesthe HD has over the two-bell system.

The decision to make the equipmentimprovement should not be difficult andonce agreed, the selection of the HD top isa no-brainer. �

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Challenges and opportunitiesComplex governmental structures, a lack of processing capacity, detrimental exchange rates, anabundance of shale gas, urbanisation and political instability – all factors that present challenges andopportunities for the global steel industry, says worldsteel’s director-general Dr. Edwin Basson.By Matthew Moggridge*

IN 2012, India produced 77.6Mt of steeland was ranked the world’s fourth largestproducer by worldsteel.

India is beginning to import on a regularbasis – “and that is because the Indianeconomy is still growing,” said Dr. EdwinBasson, director-general of worldsteel,adding that India is unlikely to be viewed as‘the new China’ in the short-to-mediumterm. This, he argued, is because India hasa much more diversified society and a morecomplex governmental structure thanChina.

“I don’t think we will get the combinedsingle-focus effort to develop the economythat we saw in China between 1978 and2000,” he said. “Be that as it may, India isthe world’s most populous nation withvery industrious people and a very cleversociety. They will find ways to overcometheir obstacles and continue to grow.”

Basson believes that, at present, India’s‘obstacles’ have been weighing on thecountry’s steel industry and delaying theconstruction of new steelmaking capacityand this has resulted in India importingsteel.

“You could say that economic growth inIndia is stunted by the fact that there is notenough steel available,” he said, but thiscould be a good thing inasmuch as itmops up excesses elsewhere in the world.

It is inevitable that India will developadditional steelmaking capacity in future andbecome a larger producer. “In the next threeto five years we’ll start seeing changingconditions in India that could have animpact on the Indian economy,” he said,stressing that a lack of steel won’t stunteconomic growth, but might slow it down.

BrazilBrazil produced 34.5Mt of steel in 2012and is ranked the ninth biggest producer inthe world.

Currently Brazil has an excess supply ofsteel, but lacks the capacity to process it.

“Part of their steelmaking capacity only

goes to the slab stage and it comes from apolicy about 10 years ago when a numberof global steelmakers decided to put thefront end of their operations – thesteelmaking bit – into resource-richcountries like Brazil and then export steelslabs to places like Europe for re-rollingprior to being sold in various markets,”explained Basson.

As a result, Brazil has an excess of slab-making capacity and just enough rollingcapacity to satisfy its own demand. “Thatin itself has not deterred economicgrowth,” said Basson. A detrimentalexchange rate has reduced Brazil’s exportattractiveness.

A lot depends upon how US monetarypolicy unravels and whether or not it willbring Brazil’s exchange rate down, therebyproviding growth impetus into theBrazilian economy, which in turn willabsorb more steel.

There was a time when exporting steelfrom Brazil was attractive, but with theexchange rate the way it is, importing hasbecome more attractive, bolstered byglobal excess capacity that has encouragedsteel products to flow towards Brazil.Basson believes this is a natural trend andnot a driving force for the under-performance of the Brazilian steel industry.

It all begs the question of whether theultimate goal of most developing nationsis to emulate China and become virtuallyself-sufficient in terms of steel production.Basson believes that it is not an explicitgoal, but argues that, since the globalcrash in 2008, the common wisdom hasbeen that countries with a strongerindustrial base have weathered the stormbetter than those with a weaker industrialbase. Basson believes that this has ledvarious governments to talk up ‘re-industrialisation’. India and Brazil – as wellas the USA – have been vocal in thisrespect and in Europe the EU hasstipulated that 20% of GDP has to comefrom an industrial base.

“Whether this will lead to a newapproach towards self-sufficiency I don’tknow – and I don’t believe it will at themoment – but certainly at present there isa great liking for the idea of industrialredevelopment, which may create somenotion that it is good to be self-sufficientin steel,” Basson said.

A key reason behind Brazil’s currentlystrong exchange rate – the Real is two orthree times stronger against the US dollar,claims Basson – is the nation’s success as araw material exporter. While it couldbecome self-sufficient in terms of its ownrolling capacity, it is currently a strongexport market for China, the CIS and Spain.

Latin AmericaLatin America has been a net importer ofsteel since 2010. While Mexico is part ofNAFTA (North American Free TradeAgreement) worldsteel counts it as part ofLatin America. “In spirit and in action theyappear to be more South American thanNorth American and, therefore, in ourfigures, when we talk about LatinAmerica, it is South America plus Mexico,”Basson explained, adding that the LatinAmerican economy is dominated by whathappens in Mexico.

Mexico imports a fair amount of high-endsteel products for the oil industry and forthe automotive sector via the USA. In 2012,Mexico produced just over 18Mt of steel.

Chile, Peru and Ecuador are big regionalplayers along with Argentina, which has itsown fairly sizeable production capabilityand produced 5Mt of steel in 2012. All ofthese countries, however, rely uponimports, particularly for flat-rolledproducts, but are more self-sufficient inlong-rolled steel, which is used by theconstruction industry. Urbanisation willdrive some steel demand growth in theregion and, according to Basson, ‘there isa lot of infrastructure upgrading that stillneeds to be done’ so expect strongdemand growth in the future.


29EXCLUSIVE INTERVIEW

* Editor, Steel Times International

worldsteel 2_30_AIT_0110 3/6/14 4:49 PM Page 2

30 EXCLUSIVE INTERVIEW


USAThe shale gas boom in the USA has twopotentially positive effects: one is reducingthe pure cost of steel production; and theother is the possible revival of US steelproduction capabilities.

The US produces 80Mt of steel perannum, but demand stands at 100Mt. Forthe last decade or so, the USA hasimported 20Mt of steel and, according toBasson, has been ‘a consistent and, for themoment, natural net importer of steel’.

For Basson, the USA’s need to import20Mt of steel has been the chief cause oftrade friction with Chinese and South EastAsian steel exporters. While it is acceptedthat the US needs to satisfy its importrequirement, whether it has to rely uponthe lowest cost material around isdebatable.

That 20Mt discrepancy creates a clearopportunity for new production capability,Basson argued – an opportunity that theUS shale gas revolution could facilitate. Hesaid that 65-67% of US steelmakingcapacity was EAF-based with theremainder being BOF. “Most likely whatcould happen is that as these blastfurnaces reach the end of their life cyclethey may be replaced by otheropportunities, maybe a mix of DRI andEAF, purely because the US has surplusenergy and has suitable iron oreresources,” he said.

“Our current estimation of future DRIproduction in the USA is higher than it isat the moment, but not outrageously so.We think there’s about another 5Mt thatwill be added into the USA, but at presentit seems to be replacing other iron makingmethodologies,” Basson said.

For worldsteel, the US shale gasrevolution will prove highly beneficial bothin terms of energy availability and itsextremely positive effect on the USeconomy. “The US is still a growingeconomy even if it has many aspects ofmaturity about it. It’s not impossible thatsteel demand will continue to grow in theUS for a number of years,” said Basson,arguing that the US will continue to be anet importer of steel – in the region of 10-20Mt – depending upon the state of theeconomy.

JapanOver the past two decades, Japan hasreduced its steelmaking ability by about15Mt, down from 80Mt to something like67Mt, Basson said. “They’ve done this in avery controlled way, largely throughconsolidation of their domestic industry asdemand has tapered off,” he said.

Japan’s infrastructure development hasslowed considerably due to an ageing andstable population. “It has become moreabout replacement than newdevelopment,” said Basson, adding thatautomotive demand has stabilised.“Overall we see a very stable future goingforward at demands that will allow themto probably export between 10-15Mt peryear,” he said.

Where users of Japanese steel areconcerned, the last 20 years has seenautomotive production moving towardsSouth Asia alongside joint ventureagreements and regular exports toIndonesia, Thailand and elsewhere. “Thatprocess, I think, will continue,” said Basson.

The Middle EastWhile a thawing of relations between theWest and Iran is likely to be beneficial tothe Iranian steel industry, Basson said thatdemand in Iran ‘has been pretty robust allalong’. “They have been a net importer of6-8Mt for the best part of five to sevenyears on top of the 14.5Mt they areproducing, so logically one could probablyestimate that there is space to expandcapacity,” he said.

Onerous sanctions have prevented Iranfrom gaining access to technology andresources, as very few suppliers have beenwilling to risk going against sanctionslegislation. “Thawing relations will mostlikely make it easier for steel capacitydeveloping in Iran and while I haven’theard any specific announcements, there isspeculation that Iran is contemplating asubstantial increase in its own productioncapacity,” said Basson.

The fact that Iran has access to anabundance of clean energy means that itcould be an interesting player in a regionthat is expanding at present. “The wholeMENA region has been picking upmomentum over the last three to fouryears and we think it will continue. They’reright in the middle of a very vibrant processof urbanisation,” Basson said.

“Much of what we’re seeing in terms ofthe debate about future capacity in Iran islinked to so-called DRI [Direct Reduced

Iron] as a production route. It appears tobe going down the route of DRI linked toEAF and DRI with natural gas as one of thereducting agents, which is similar to whatwe see in other countries in that region,”he said.

In the ‘Arab Spring’ nations, Bassonargued that the biggest single impact ofrecent political instability has been aninability to move material from one placeto another; this prevents worker mobilityand causes project delays. Egypt, he said,was a case in point. There will, of course,be strong future demand when ‘peacebreaks out’ in Syria and the rebuildingprocess begins.

Going forward, Basson believes that theMiddle East steel industry will grow giventime, but will be stunted by incidents ofpolitical instability. While Iran is showingpromise and is close to getting access tointernational resources, any process ofreconciliation with the West will nothappen overnight and this casts a shadowof uncertainty over its future growth insteel terms.

Political instability is behind Iraq’s lack ofsteelmaking capacity, although Basson saidit has always been an importer rather thana producer and is likely to continue thatway going forward.

Europeworldsteel harbours plenty of optimism forthe European steel industry based on whatBasson describes as a ‘change of mindset’.“It seems that collectively Europeanindustry leaders have come to the pointwhere they’ve said enough is enough,” hesaid.

“There is growing optimism and it’sbeen helped by the fact that Germany – allalong – has done pretty well throughoutthe crisis, partly because Germany is anexport-driven economy,” he said,explaining how a weak Euro supportedGerman growth. “The European story hasturned a corner, but I don’t think for amoment that it will be aggressive growth,”he said. “But at least it will stop the 3-3.5%annual decline of the last two-to-threeyears.”

worldsteel’s economic committeeestimates that 2014 growth in Europecould be as high as 2% on top of 2013.

“Alright, 2013 was a low base – andpositive growth from a low base is nothingto shout about – but it’s still positivegrowth and it’s a huge improvement in theminds of the industry,” he said. �

Next month, we publish part three of Steel Times International’sexclusive interview with worldsteel’s director general,

Dr. Edwin Basson.

worldsteel 2_30_AIT_0110 3/6/14 4:49 PM Page 3

APART from some very special grades ofsteel, nearly all of it is continuously casttoday, with only a small proportion beingmade using the more traditional ingot-making process.

In order to explain the causes of surfacecracking, it is necessary to understand thecontinuous casting (concast for short)process.

Unlike ingots, which are all separatelycast pieces of steel that are made inmoulds into which liquid steel is poured,the concast process casts just a few verylong pieces of steel, which are later cutinto the desired lengths. The cross-sectionis very much smaller than an ingot, so thatless rolling is required to make the finalproduct, and this is a great cost advantagewhich also eliminates the need for a so-called ‘roughing mill’, traditionally used tocarry out the initial rolling of ingots. Inaddition, because there are only a fewpieces of cast steel, the amount of steellost due to contraction cavities at the topis much reduced, resulting in a higher yieldthan is obtained with ingot-making.

In the concast process, a short coppermould is used at the top of the machine. Itis open-ended and shaped to produce thedesired cross section, and is tapered toallow for shrinkage of the steel. There mayonly be one mould, but generally there aretwo, or up to eight in the case of smallcross section machines such as billetcasters. A concast machine is described ashaving so many ‘strands’, according tohow many moulds it has. The mould iswater cooled to produce a solid 'skin' veryquickly, so that the strand can be safelywithdrawn from the mould early on,because it proved to be very difficult tocast with a long mould. Water is thensprayed intensively at the strand surface toensure that it stays solid during the rest ofthe casting process.

Because there is usually more than onemould, a tundish is located above themoulds to receive liquid steel from the

ladle in which it has been made. Thetundish distributes the steel into thenumerous moulds in a controlled way. Atthe start of casting, a ‘dummy bar’ is used,which blocks off the lower end of themould, such that the steel will not runstraight through it. The dummy bar iswithdrawn as casting commences,followed by a strand of steel which has apartially liquid centre and a solid skin (or‘shell’). On some machines, the moulds aredesigned to cast a strand which is curved,so that a curved strand emerges from themould. This is primarily to avoid the needfor either a very tall caster or else a verydeep pit, which would be necessary if thestrand were straight, and it also makesdownstream operations easier. With acurved strand, it is necessary to straightenit during casting using a set of special rolls.

Reciprocating mouldsIt was found early on that a static moulddoes not work well, and today all concastmachines have reciprocating moulds,which move up and down a little, so thatthe mould is moving relative to the strandbeing cast. Lubricating powder (or oil onsome smaller cross sections) is used toreduce the friction between the mould andthe strand. However, the reciprocation ofthe mould produces a series of transversemarks on the surface of the strand, knownas reciprocation marks. They are notdeleterious in most cases, but can makethe formation of cracks easier.

So, assuming the most usual sort ofconcast machine, we have reciprocatingmoulds casting curved strands onto whichwater is sprayed, and which are thenstraightened lower down the machine.

Surface cracking can occur in the mould,or further down the machine duringstraightening. It is generally possible todivide the cause of cracking into twofamilies: those that form due to pooroperational control; and those that formdue to the characteristics of the grade ofsteel being cast.

To consider first cracking caused in themould. It is possible to form transversecracks in the mould due to either poormould lubrication or variable mouldcooling, both of which can causetransverse depressions on the strandsurface, which are then insufficientlycooled. Cracking then occurs more easily.However, longitudinal cracks formed in themould are more common. These can formalong the entire length of a strand and aregenerally caused by mould wear andassociated uneven cooling of the strandsurface, leading to stresses which cancreate cracking. Unfortunately, it isnecessary to compromise on the taper ofthe mould in order to cast many differentgrades of steel which have differentshrinkage characteristics, and this itself cancause problems with longitudinal cracking.This is especially true for grades with acarbon content close to peritectictransformation, a point worth noting, butwithout a detailed explanation here.Therefore, careful monitoring of the mouldcondition is important, both in terms ofexternal wear and also internal coolingwater flow pattern.

During casting, a level of casting powderis maintained on the surface of the liquidsteel in the mould, which is carefullydesigned to melt and provide lubricationbetween the strand and the mould. Under

Surface cracking duringcontinuous casting is a problemacross all types of caster andmany different grades of steel.Without costly rectification atthe as-cast stage, such cracksaffect the final product. Thisarticle explains the main causesof cracking and various attemptsto reduce it. By Keith Walker*

Concast surface quality

* Steel consultant. Email [email protected]

US Steel continuous caster

32 CONTINUOUS CASTING


k walker_30_AIT_0110 3/6/14 4:50 PM Page 1



some conditions, it is possible for some ofthis slaggy material to become entrappedon the strand surface and then there willinvariably be cracks beneath it due toreduced cooling. Due to the water spraysfurther down the machine, such slaggymaterial may be removed in such a waythat the cause of the cracks is not obvious.Either poor choice of casting powder, giventhe steel grade being cast, or poor controlof powder composition are the usualcauses, but problems can be caused bypoor control of the addition rate ofpowder to the mould.

The composition of the steel can affectits susceptibility to cracking. In addition tothe carbon content mentioned above, thephosphorus level should also beconsidered. This element is usuallyundesirable in steel and much effort andcost is used to reduce it, but usually onlywhen required in relation to the steel's finalproduct properties. Phosphorus combineswith iron, or more usually iron andmanganese together, to form a lowmelting point compound in the steel, oftenassociated with the bottom ofreciprocation marks. This low meltingpoint compound (up to 100C lower thanthe melting point of the bulk of the steel)means that there are localised regionswhere the steel surface remains liquid forlonger in the mould, such that any stresseson the strand surface can more easilycreate a crack. For metallurgical reasons,phosphorus tends to be problematic athigher carbon contents. It is not possibleto do much about this other than reducethe phosphorus content of the steel.

It is also possible for sulphur to increasesusceptibility to cracking due to theformation of manganese sulphide (MnS)particles during the solidification of thesteel. Again, apart from some specialcases, sulphur is generally undesirable, butit is expensive to reduce the level of it.These particles can form in trails, especiallyclose to the strand surface where thecooling rate is fast, leading to what isknown as ‘type 2’ morphology. Such trailscan exacerbate the propagation of cracksonce they are initiated, and make themmuch more severe. This can be done in themould and also during the straighteningprocess further down the caster. Again, theonly solution is to reduce the level ofsulphur in the steel.

To move down from the mould andcracking there created, the straighteningprocess is by far the most prevalent causeof cracking. It is often very easy todistinguish straightening cracking becauseit is more severe on the inner radius of thestrand, which is, of course, subject tohigher tensile stresses during thestraightening process. Also, because thesestresses are transverse, it is veryuncommon for straightening to cause

longitudinal cracks unless something isseriously wrong with the roller alignment.

At the straightening stage, thecomposition of the steel being cast has astrong bearing on the amount of crackingthat may occur. It is usual to consider thelevel of ‘hot ductility’ that the steelpossesses. This concept is the equivalent ofcold ductility, but at the sort of elevatedtemperatures at which the strand surfaceis deformed during straightening, andreflects the ability of the steel to deformwithout cracking. The actual straighteningtemperature of the strand surface may varyconsiderably, but is always above theeutectoid temperature by design, such thatthe strand surface has not transformedcompletely to ferrite, thereby ensuring agreat deal more hot ductility as a startingpoint.

The level of residual (or tramp) elementsis important too. Copper and tin are

present in surprising levels in steel due totheir presence in steel scrap, especiallyfrom cars and other things that containelectrical wiring and solder, which isrecycled in the steelmaking process. Sincesteel made by the electric arc process tendsto use far higher levels of scrap than thebasic oxygen process, it tends to be moreof a problem for those plants. Particularlytogether, copper and tin form a very lowmelting point compound which tends toform at grain boundaries, exposed at thestrand surface. Since it is still liquid duringstrand straightening, it vastly reduces hotductility and transverse cracking is greatlyexacerbated. While tin alone does notappear to cause cracking, it greatlyincreases the effect of copper and it isusual to consider the level of Cu% +10Sn% as an indicator of the likely hotductility. While nickel has been shown toreduce the negative effect of copper (byincreasing its solubility in iron), it is soexpensive that its use is rarely justified, andcontrolling the level of copper and tin is amore common way of ensuring a goodlevel of hot ductility.

The addition of a small amount ofaluminium to steel is desirable for itsprofound effect on the grain size of the finalproduct, making it finer in a relativelyinexpensive way, and thereby improving thesteel's mechanical properties - bothtoughness and strength simultaneously.However, the aluminium will combine withnitrogen in the steel to form aluminiumnitride (AlN) particles, and indeed it is theseparticles that create the smaller grain size.But they are present at the sort oftemperatures at which the concast strand isstraightened, and tend to form at grainboundaries. Although AlN particles arerelatively small, they can occur in largenumbers and vastly reduce hot ductility. AINparticle formation is increased by the cyclingof the strand surface temperature causedwhen it passes through the arrays of watercooling sprays that are essential tooperations. If at any stage any part of thestrand surface drops below the temperatureat which ferrite starts to form, a very largeamount of AlN particles will form at thatlocation. This can occur quite high in thecasting machine at the corners, and heavycracking at the corners is an indication thatthis may have occurred. It happens due tothe vastly decreased solubility of AlN inferrite compared to austenite, and gives riseto a so-called ‘ductility trough’ (Fig 1). Theseverity of AlN formation is greater in thepresence of niobium, often used in micro-alloy steels for structural sections and plates,and is also more severe when the level ofsulphur is very low (<0.005%). Many pipe-plate grades of steel require the addition ofniobium and also such low sulphur levels inorder to achieve final product properties, sothese grades tend to be particularlysusceptible to surface cracking.

Adding TitaniumAlthough no one has been able to solvethe problem of AlN causing cracking, it canbe lessened by the addition of titanium,which forms a nitride at a highertemperature in preference to aluminium,and ties up the nitrogen such that there isless of it available for the formation of AlN.Titanium Nitride (TiN) particles do not giverise to a great reduction in hot ductility, sothe overall effect is beneficial, if not acomplete solution to the cracking problem.

It is also possible to control thestraightening temperature so that it isoutside the ductility trough, but there arepractical limits to the extent that this can beachieved.

There are few steelmaking firms which donot have the means to remove crackingfrom the cast product, either by grindingaway the surface or using an expensiveflame-scarfing machine. Surface crackingremains a long-standing problem and agood deal of R&D continues to investigatesolutions. �

Siemens caster at JSW

k walker_30_AIT_0110 3/6/14 4:50 PM Page 2

Demand for cleaner steels and better mechanical properties (YS, UTS & % elongation) increase everyyear. Experienced steelmakers are experiencing clogging in Al-killed steel grades in slab casters, but theproblem is more severe in bloom and billet casters due to the low SEN diameter and the high castingduration coupled with infra-structural facilities like argon through mono-block stopper and ladle-to-tundish argon-sealing. By KK Keshari , N Pradhan* and TS Suresh**

Process technology for continuouscasting of Al-killed steels

IN addition to demanding the lowering ofnon-metallic oxide inclusions, customersalso want the specific morphology,composition and size distribution ofinclusions. Inclusions generate manydefects in the steel product. For example,low carbon Al-Killed steel (LCAK steel)suffers from cracked flanges, which arecaused by inclusions identified as aluminaafter de-oxidation or re-oxidation of theproduct, calcium aluminates from tundishslag and entrained mold slag inclusions.For LCAK steels to form liquid calciumaluminates by calcium and inclusionflotation treatment, low levels of sulphurare necessary to avoid SEN clogging duringcontinuous casting. High (FeO+MnO)levels coupled with viscous slag during LFrefining adversely affect de-sulphurisationcapability. Studying steel refining practicesfor the production of LCAK steels revealsthat major technological change in de-oxidation, flux and refining practice isnecessary to avoid SEN clogging. Aluminais generated during the steelmakingprocess as de-oxidation or re-oxidationproducts due to contact between liquidsteel and oxygen. The most importantrequirements for trouble-free casting withthe desired end-quality of the product are;

• Minimal generation of aluminaduring primary refining in converter.

• Removal of de-oxidation product –mainly alumina – from liquid steel byselection of a suitable steel refiningpractice.

• Minimal ingress of air-to-ladle-to-tundish shroud during continuous casting.

Present status of knowledgeSEN clogging is mainly caused by non-metallic inclusions like Al2O3 and CaS (1),which is generated during the process ofsteel making and refining. The mainsources of these inclusions include:

• De-oxidation products, such asalumina inclusions, which cause the

majority of indigenous inclusions in LCAKsteels. They are generated by the reactionbetween dissolved oxygen and added de-oxidant, such as aluminium. Aluminainclusions are dendritic when formed in ahigh oxygen environment, or may resultfrom the collision of smaller particles.

• Re-oxidation products, such asalumina generated when (a) the Alremaining in the liquid steel is oxidised byFeO in the slag or (b) by exposure of liquidsteel to the atmosphere.

• Exogenous inclusions from othersources, such as loose dirt, brokenrefractory brickwork and ceramic liningparticles. They are generally large andirregular-shaped and may act as sites forheterogeneous nucleation of alumina.

• Chemical reactions, such as theproducts of inclusion modification whenCa treatment is improperly performed.

Refining slag fluidityThe fluidity of refining slag plays animportant role in deciding the heat transfer

and fluid flow behaviour of ladletreatment. The slag used in ladle refiningunits mainly consists of CaO, SiO2, Al2O3and MgO. Variation in the composition ofslag constituent changes the melting point(MP) and viscosity of refining slag. Aviscosity study by P G Jonsson, L Jonsson &D Sichen (2) revealed the effect of thereplacement of CaO by Al203 on viscosity.Slags with the same MgO and Si02 contentdrastically change the viscosities of refiningslag at all temperatures with a slightchange in the ratio of wt% Al2203 / wt%CaO. The fluid slag increases slag metalinteraction for efficient desulphurisationand absorbs inclusions.

Slag de-oxidationAn important source of re-oxidation iscarry-over slag from the converter to theladle, which contains a high percentage ofFeO and MnO. These oxides react with thedissolved aluminum to generate alumina inliquid steel, owing to the strong,favourable thermodynamics of the


39CONTINUOUS CASTING

*Research and Development Centre for Iron & Steel **Corporate Office, New Delhi Steel Authority of India Limited, Ranchi, E-mail: [email protected]

Fig 1 Phases and melting point of calcium aluminates compounds

2600 2570

15421415

1390

1605

1789

2020CaO + liquid

3CaO. Al2O3+ liquid

12CaO.7Al2O3+ liquid

CaO.Al2O3+ liquid

CaO.2Al2O3+ liquid

CaO.6Al2O3+ liquid

Al2O3+ liquid

Liquid

CaO + 3CaO. Al2O3

3CaO. Al2O3

+12CaO. Al2O3

12CaO.7 Al2O3

+CaO. Al2O3

CaO.Al2O3

+CaO. 2Al2O3

CaO.2Al2O3

+CaO. 6Al2O3

CaO.6Al2O3

+Al2O3

2400

2200

2000

1800

1600

1400

1200

1000

800

600

4000 10 20 30 40

% Al2O3

Tem

pera

ture

°C

50 60 70 80 90 100

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following reactions;

3FeO +2Al = Al2O3 + 3FeΔGO = - 853700+ 239.9 T (J / mol )

3MnO +2Al = Al2O3 +3Mn ΔGO= - 337700 + 1.4T (J / mol)

The higher the FeO and MnO content inthe ladle slag, the greater the potential forre-oxidation and the correspondinggeneration of alumina inclusions. High FeOand MnO is not a favourable condition forsteel de-sulphurisation. Control carryoverslag from the primary vessel and adoptionof proper slag de-oxidation practice isnecessary to achieve low levels of sulphuras well as control further generation ofalumina after refining treatment.

Calcium treatmentNozzle clogging induces serious castabilityproblems in LCAK steels, such as loweringthe casting speed, inducing asymmetricalfluid flow and level fluctuations in themould, thus entrapping more inclusions,and sometimes causing a break-out.Removing more inclusions beforecontinuous casting is the best way toprevent nozzle clogging, and is the onlyoption for steels with very strict formabilityrequirements, because calcium treatmentat the ladle may generate new hardinclusions. Low sulphur levels in steel arenecessary for calcium treatment. Theinjection of CaSi/CaFe wire into the moltensteel at the end of ladle refining treatmentleads to formation of calcium aluminates.The optimisation of CaSi/CaFe wireinjection is very important and should bedesigned in such a way as to form acompound of low melting calciumaluminates at a refining temperature rangethat can be easily removed from liquidsteel by flotation treatment. The possiblecompound inclusions generated bycalcium treatment include CA6, CA2, CA,C12A7 and C3A (Fig 1) where C and Arepresent CaO and Al2O3, respectively. Thefirst two should be avoided owing to theirhigh melting point over 1700oC.

Adding too much or too little calcium canalso induce SEN clogging. However CaSi

treatment should be designed in keepingwith the aluminium addition, sulphur andoxygen levels in the steel (Fig 2). Too muchcalcium can generate CaS, which has ahigh melting point (2450oC) and causesclogging. Increasing dissolved aluminiumalso decreases the oxygen activity,generating sulphide inclusions. Too muchsulphur in the steel and too low atemperature also enables CaS generation.A lot of work has been done in this areaand there are varied opinions about Calevels in steel, but as a rule of thumb, [Ca]in the range of 25-50 ppm in liquid steel,is maintained by most steel makers forsmooth casting of LCAK steel.

Gas shroudingGas shrouding is the usual method forprotecting tundish-to-mold streams fromatmospheric contamination. Ingress of airin the ladle-to-tundish shroud in LCAK steelforms alumina and may lead to SENclogging. Using argon to seal the gapbetween the ladle-to-tundish shroudprovides reliable prevention of airaspiration at the interface between theladle’s exchangeable nozzle and the ladleshroud. Argon flow rate and pressure canbe regulated to prevent air contact withliquid steel to avoid alumina generationand nitrogen pick-up (Fig 3).

Industrial scale experimentationAn industrial scale trial was carried out atthe Steel Authority of India Ltd’s (SAIL)

Durgapur Steel long products plant (DSP)in Durgapur. The plant was facing achronic SEN clogging problem duringcontinuous casting of LCAK grades of steelsince the inception of a bloom caster forLCAK (SWR -10/14) and Al-killed SAILTower grades of bloom heats routedthrough LF. Critical analysis of steel refiningpractice for production of LCAK steelsrevealed that major technological changesin de-oxidation, flux and refining practiceare necessary to avoid SEN clogging.

In order to make the optimum slag fluidfor better slag-metal mixing and inclusionabsorption, ~ 3.0 kgs/t of calcined bauxitewas added to the ladle during tapping in ablast oxygen furnace (BOF). Petroleumcoke was also added in the ladle bottom(~1.0 kg/t) to reduce the oxygen level inthe bath to form a gaseous de-oxidationproduct.

Aluminium additions were made basedon specific oxygen consumption in therange of 2.0-2.5 kg/t to build upaluminium and reduce the (FeO+MnO)level in the slag for better de-sulphurisation– a mandatory requirement for calciumtreatment. CaSi ~ 3.0-4.0 m/t was injectedat the end of treatment for modification ofsolid alumina inclusions to liquid calciumaluminates at steel making temperatureand was followed by soft purging (6.0-8.0Nm3/hr) for inclusion flotation.

In order to assess the effectiveness ofmodified flux, de-oxidation and refiningpractice, data was collected for dissolved



Fig 3 Ladle totundish argonshrouding system

Grade Sample Avg Dissolve Avg. Tundish analysis (%)size Oxygen (ppm)

SWR-10 10 3.8 0.09 0.54 0.024 0.018 0.07 0.018 -

SWR-14 10 3.6 0.12 0.50 0.024 0.016 0.10 0.020 -

SAIL Tower 50 3.2 0.18 1.28 0.026 0.015 0.21 0.029 0.038

Table 1 Dissolve oxygen and tundish analysis of experimental heats

C Mn P S Si Al V

Grade Sample LF final slag analysis (%) M.P. Viscositysize (°C) (Pa s) at 1600°C

SWR-10/14

& SAIL Tower 20 46.28 12.04 22.12 2.2 0.9 11.12 1449 0.59

CaO SiO2 Al2O3 FeO MnO MgO

Table 2 Average slag analysis, melting point and viscosity of LF final slags

Fig 2 Relationshipbetween alumini-um, calcium andsulphur level

30

25Total [o] = 20 ppm

CaS saturation

s = 0.005s = 0.010

s = 0.020s = 0.040

Calcium-aluminate saturation

CaO-Si

O 2sa

turat

ion

20

15

10

5

0 100 200 300

Aluminium, ppm

Ca, p

pm

400 500 600

Potentialair ingress

Argon shield

Ladle shroud


41


CONTINUOUS CASTING

oxygen and sulphur and aluminium levelsof liquid steel for evaluation of productquality. Detailed observations are given inTable 1.

More than 100 heats of Al-killed SAILTower and twenty heats of SWR-10/14have been successfully cast without anyclogging. The LF final slag was collected fordetermining the viscosity and meltingpoint of modified slag using empiricalcorrelations (Table 2). The analysis of LFfinal slag revealed a very low level of(FeO+MnO) which favoured effective steeldesulphurisation.

Slag fluiditySlag fluidity in refining units plays a vitalrole in deciding the slag metal interaction,inclusion absorption, noise level duringarcing and slag zone erosion of ladles. Therefining slag in LF during the trial periodwas found to be fluid with modifiedpractice compared to normal practice. Theaverage slag viscosity was calculated (usingempirical correlation) and was found to be0.59 Pa s at 1600oC. Melting was found tobe 14490C (Table 2). The result of the trialwas very encouraging and has beenimplemented in regular practice.

Analysis of trial results showed a drastic

improvement in steel de-sulphurisation (~60% DeS in trial heats) because of betterslag reduction i.e. low FeO+MnO (Avg.3.1% only) coupled with better slag-metalmixing. The average “S” level in trial heatsof Al-killed SAIL Tower was 0.015% withslag basicity from 1.75 to 3.71, which alsohelped improve the ladle slag zone healthof basic lined ladles.

Calcium and inclusion flotationtreatmentAlumina inclusions are dendritic whenformed in a high oxygen environment; andformations of cluster-type aluminainclusions from de-oxidation or re-oxidation are typical of LCAK steels.Alumina inclusions easily form three-dimensional clusters via collision andaggregation due to their high interfacialenergy. Individual inclusions in the clustercan be 1.0-5.0 microns in diameter.

The agglomeration of solid inclusionscan occur on any surface aided by surfacetension effects, including refractory andbubble surfaces. The high contact angle ofalumina in liquid steel (134-146 degrees)encourages an inclusion to attach itself torefractory in order to minimise contactwith steel. High temperatures enable

sintering of alumina to occur. Largecontact angle and larger inclusion sizefavour the agglomeration of inclusions andclogging of ladle nozzle and SEN.

Calcium treatment was performed toimprove product performance throughinclusion modification. To establishinclusion modification, shape andcomposition of inclusions, 0.3 to 0.5 kg/tof CaSi wire was injected in steel in LF atthe end of refining followed by inclusionflotation treatment to remove liquidcalcium aluminates from the steel to theslag phase.

The final calcium in the steel was in therange of 20-35 ppm in trial heats andhelped to eliminate nozzle clogging duringcasting.

References 1. LIFENG ZHANG, BRIAN G. THOMAS“Evaluation and Control of SteelCleanliness – Review” 85th SteelmakingConference Proceedings, ISS-AIME,Warrendale, PA, 2002 pp. 431-4522. P. G. JONSSON, L. JONSSON & D.SICHEN, “Viscosities of LF Slags and TheirImpact on Ladle Refining” ISIJInternational, Vol. 37 (1997). No. 5, pp.484-491 �

Contact us to fi nd out why many of the world’s largest steel companieschoose to work with CAN-ENG FURNACES INTERNATIONAL LIMITED.

P.O. Box 235, Niagara Falls, New York 14302-0235www.can-eng.com | T. +1 905.356.1327 | F : +1 905.356.1817

To learn more about Can-Eng Furnaces’ engineering, design andmanufacturing capabilities visit www.can-eng.com, e-mail Mike Klauckat [email protected] or visit Can-Eng at Tube 2014, stand 7AD13

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Today, the continuous caster is the primary production process for steel slabs, blooms and billets. Therehave been countless developments in the design of these machines over the last 60 years that touch allaspects of their operation. This article addresses a new development in bearing design that is aimed atthe float positions on slab support rolls in the bow, straightener and horizontal segments of continuousslab casters. By Nigel A. Los*. Co-authors: John H. Rhodes*, Georg Daberger*

Timken’s ADAPT bearing forcontinuous caster slab support rolls

The applicationAFTER a continuously cast strand leaves themould it must be carefully supported inorder to maintain its shape and its thin andfragile solid skin. The prevailing method ofproviding this support is by rollers – theserollers are positioned on all four faces ofthe slab immediately beneath the mouldbut only on the top and bottom [wide]faces in the segments below this point.

The rollers in the first segments aresmaller in diameter than those furtherdown the machine to allow them to bepositioned close together to provide therequired support to the slab. Furtherdown, wider spaced and larger diameterrolls can be used because the cast slabcools and gains strength as it movesthrough the segments.

The design of the slab support rollassemblies continues to be a challenge.This is not surprising upon observation ofthe current operating environment anddesign requirements of the rolls:

• Intimate contact with a red hot slab attemperatures as high as 900° C [1650° F].

• Internal cooling.• Operation under a constant flood of

external cooling water and steam that iscontaminated with scale.

• Accommodation of significantthermal axial growth – up to 6 mm.

• Loads on the rolls are high – up toapproximately 100 tons. Roll deflectionmust, however, be held to a minimum.

• Rotation at low speeds between 1.5and 15 RPM depending on diameter andslab speed.

• Driven rolls must transmit the drivetorque across their full-face width.

• Assemblies must be serviceable andre-buildable.

Roll assembly designs vary betweencaster suppliers but, from the bearingsupplier’s perspective, share manycommonalities. The design variations arenumerous, but slab widths and, therefore,roll lengths, are such that all rolls needintermediate support bearings across theirwidth in order to minimise deflection. Theprovision of intermediate support positions

is achieved in various ways depending onthe basic roll configuration. In one design,separate short roll assemblies are mountedin-line to provide the required overallwidth. Each separate roll section featuresone fixed and one float bearing. A wideroll assembly comprising three sectionswould, therefore, require six bearings asshown in Fig 2. When used in a drive rollposition, the roll sections are mechanicallycoupled between the bearings.

Alternately, a narrower roll assembly ofthe through-shaft design would require abearing at each end plus one centralsupport position bearing for a total ofthree bearings as shown in Fig 3.

The resulting large number of bearingsand their performance in the caster is,therefore, very significant to the operatorin terms of cost and reliability. Thechallenge to the bearing supplier can bedistilled down to providing float positionbearings that:

• Have a high static radial capacitywithin compact dimensions. Static capacityis the consideration because of the low


43CONTINUOUS CASTING

*The Timken Corporation

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rotational speed. They must be compact inwidth, to minimise the amount ofunsupported slab, and outside diameter,to allow both a robust housing top sectionand maximum housing to slab clearance.

• Can accommodate misalignment of0.5° resulting from the roll and supportframe deflections not only during normaloperation, but during periods of overload.

• Have an axial internal float capabilityof plus or minus 6 mm to accommodatethermal axial growth of the roll.

• Tolerate operation with little or noelastohydrodynamic lubrication filmthickness because of low rotational speed.

• Are easy to install, remove andinspect.

The internal cooling of the rolls andbearing housings together with externalcooling of the slab and rolls results inbearing operating temperatures that areonly moderately high at 80° to 90° C duringnormal operation. Special considerationsrelating to the operating temperature arelimited to using a higher than standard

radial internal clearance and, sometimes,using bearings that are dimensionallystabilised to a higher temperature than thestandard 150° C [300° F].

Existing bearing designsThe spherical roller bearing [SRB] performswell in fixed positions and is almost alwaysthe bearing type chosen here. However,the float position bearings have alwaysbeen a challenge. Earlier designs usedSRBs that were allowed to float in theirhousings but this was not ideal – it takesa considerable axial force to move abearing that is under a high radial load.This introduces exaggerated non-uniformreactions in the bearing. The SRB does,however, accommodate static anddynamic misalignments well. The mainalternative bearing types that have beenintroduced in attempts to provide asolution are:

• Cylindrical Roller Bearings [CRB] withaggressive roller and/or raceway profiles[Fig 4].

• CRBs incorporated within a sphericalbushing. These are generally referred to asSelf Aligning Cylindrical [SAC] bearings[Fig 5].

• Toroidal bearings [Fig 6]. All of the attempted solutions have been

met with some degree of success, but allhave limitations or disadvantages. Withrespect to bearing type, problems rangefrom limited misalignment capability todifficulties with installation and removal.The ideal bearing needs to combine theaxial float characteristics of a CRB and thestatic and dynamic misalignmentcharacteristics of an SRB together withsimple construction and ease of handling.

The Timken Adapt bearingThe Adapt bearing has been designedspecifically to address the limitations ofthe existing designs and is a completelynew bearing configuration. The bearingoffers the axial float capability of a CRBwith similar misalignment capability of anSRB. A key feature is that the bearing’sabilities to accommodate float andmisalignment are independent of eachother. Specifically, the bearing’s axial floatposition does not affect the ability tomisalign and vice-versa. This isaccomplished with a typical configurationof two rings and a complement of rollers.Load capacity is not compromised by theinteraction of these two operatingconditions. An additional benefit is thatthe full complement version for casterapplications features a unitised roller andretainer assembly.

Basic designThe design combines a cylindrical inner-ring with profiled rollers and outer ring.The configuration is shown in Fig 4. Itshould be noted that the profiles aresignificantly exaggerated for the purposeof illustration.

The combination of these profiles resultsin what can be described as ‘three pointcontact’. Specifically the inner-ring to rollercontact occurs at a single location whilethe roller to outer-ring contact occurs attwo separate locations. The outer-ringcontacts are symmetrically disposed ateither side of the inner-ring contact, whichleads to inherently stable roller dynamics.The mechanics of each contact pointfollow established design practice forprofiled rollers to raceway interaction,loading and resulting contact stresses.

Bearing operationDuring centered and aligned operation theloads and reactions are balanced asrepresented in Fig 8. It can be seen thataxial movement (or float) of the plaininner-ring has no affect on the loaddistribution – just as in an NU type CRB.

When an angular misalignment is

Fig 1 Typical slabcaster layout

Figs 4, 5, 6 Solution with different bearing types

Fig 2 Assemblywith six bearings

Fig 3 Assemblywith three bearings

Fig 2

Fig 3


introduced, the initial roller to outer-ringreactions become imbalanced – the loadincreases at one end of the roller anddecreases at the other end as representedin Fig 9.

Since the roller will always seek tobalance the loads, the axial component ofthe higher loads drives the roller over untilthe loads are again balanced and stabilityre-established. This is represented in Fig 10.

Roller and raceway surfaces haveenhanced surface texture to maximise theload bearing surface area. The low level ofsurface finish also increases the relative oilfilm thickness [lambda ratio] inapplications where there is sufficientrotational speed to develop anelastohydrodynamic lubricant film.

The bearing retainer is roller piloted andmanufactured from nitrided steel forstrength and wear resistance. The designallows for a full complement of solidrollers to be used while containing them ina single removable assembly. Whencombined with the separable inner-ring itresults in a bearing that is straightforwardto install, remove and inspect. Dependingon the caster roll design, the inner-ringcan be installed separately on the shaftwhile the outer assembly is installed in itshousing. Installation is further eased byinterchangeable inner-rings because it isnot necessary to keep specific inner rings



Fig 7 and 7a ADAPT bearing

and outer assemblies together as matchedsets.

Contact stress distributionModeling of contact stress distributionshows that stress levels remain withindesign limits. It should be noted that thedesign limits are those that apply to staticloading because of the low rotationalspeed.

Figs 11 and 12 show the traditionalroller-to-raceway contact stressdistribution at the inner-ring for appliedloads equivalent to 25% and 50% of thebearings’ static load rating [Co]. Figs 13and 14 show the unique distribution atthe outer-ring for the same loads. Notethat there are no edge stress spikes. It canbe seen in Figs 12 and 14 how the outerring contact stress distribution spreadsalong the roller length as the loadincreases. This characteristic allowsoptimum stress distribution andacceptable stress values to be maintaineddespite the high applied loads.

The three-point contact means that theroller is subjected to bending when it isunder load. In order to accommodate this,the rollers in the ADAPT bearing aremanufactured from case-hardened steel.The inner and outer rings are

manufactured from through hardenedmaterial.

Design validationPrototype bearings for designvalidation were manufactured to theISO 2212 boundary dimensions atthe Timken Technology Center [TEC]in Canton, Ohio. Heat-generationand bearing life tests were alsocarried out at TEC. Multiple test

stands were utilised with each standfitted with two ADAPT yoke bearings

and two slave SRBs of the same size.Testing involved running the bearingsthrough a matrix of load and speedcombinations with speeds ranging from1,200 to 4,800 RPM and loads between10% and 50% of the ISO calculated C1rating. Test results showed that the designwas sound.

The bearings ran cooler than thecomparator slave bearings and exceededthe calculated L10 life.

In-house validation testing in asimulated caster environment wasimpractical because of the low operatingspeed, which would have required testdurations in excess of one year. Thesepositive results allowed testing to progressto the next stage using production-sizedbearings.

Testing and field trialsThe ADAPT bearing concept waspresented to the Continuous CasterDivision at Siemens VAI in Linz, Austria,and it agreed to co-operate with Timkenin arranging for field trials to be carriedout at a commercial production caster.

The agreed bearing sizes for these trialswere full complement versions of the4024 and 4032 bearings that would beinstalled on Siemens VAI caster rollassemblies.

The specific Timken part numbers areTA4024VC4 and TA4032VC4. The testbearings were manufactured at aproduction plant using standard

Fig 7a

Fig 8 Balanced loads and reactions Fig 9 Imbalanced reactions during angularmisalignment

Fig 10 Re-established stability


47


CONTINUOUS CASTING

production processes. Siemens VAIsubsequently advised us that VoestalpineStahl, also of Linz, Austria, had agreed totrial the bearings on its new #6 caster. Thiscaster was supplied by Siemens VAI andcan produce slabs up to 235mm thick and1,650mm wide at speeds of up to 2m perminute. The 4024 bearings would beinstalled in a straightener segment and the4032 bearings in a horizontal segment. Thesmaller bearings would be installed firstwith an initial successful performancemilestone of 1Mt cast.

Life, heat generation and exaggeratedmisalignment testing of the same sizebearings would be conductedsimultaneously at TEC. The life and heatgeneration testing at TEC was done in asimilar manner to the 2212 prototypebearings, but with different speeds and aconstant load equivalent to 40% of the ISOcalculated C1 rating. The speeds rangedfrom 400 to 1,600 RPM. In addition, forcedmisalignment testing was carried out at0.2°, 0.35°and 0.55° of misalignmentunder loads ranging from 10 to 40% of theC1 rating and at 600 RPM.

Test resultsThe in-house tests produced similar resultsto the testing of the 2212 prototypebearings. The ADAPT ran cooler than theslave bearings and life exceeded thetheoretical L10 value by a significantmargin. The cooler operation suggests lesssliding friction within the bearing and theimproved life/load rating suggestsimproved reliability. The misalignmenttesting confirmed that the there was noroller and retainer assembly protrusionbeyond the outer-ring faces up to themaximum specified misalignment of 0.5°.

The TA4024VC3 bearings installed at theVoestalpine Stahl caster successfullyreached 1Mt in January 2011. TheTA4032VC3 bearings had successfullyachieved 650kt by this time. Theexpectation is that the 4024 size bearingssuccessfully reach 2.7Mt and that the 4032size reach 4Mt.

ConclusionsThe objective of producing a reliable highcapacity bearing, offering simultaneousindependent misalignment and axial float

capabilities together with ease ofinstallation, removal and inspection, hasbeen achieved. The successful trials atTimken and, more importantly, in aproduction caster, have confirmed that thebearing meets the design intent andspecification. �

AcknowledgementsThe author and co-authors wish to thankSiemens VAI and Voestalpine Stahl for theirco-operation and participation in the fieldtrials of these bearings.

Fig 11 and Fig 12 show the traditional roller-to-raceway stress distribution at the inner ring for applied loads equivalent to 25% and 50%of the bearings’ static load rating (Co) Fig 13 and Fig 14 show the unique distribution at the outer ring for the same loads

Fig 11 Fig 12 Fig 13

Fig 14


48 INTERNATIONAL BUSINESS


For many years the European Union (EU) has promoted the idea that there should be globalcompetition to ensure fairness in the global market place. However, so far, the EU’s trading partnershave not agreed to launch negotiations on the creation of an international competition watchdog orthe fair standards to be applied by that watchdog. By Bernard O’Connor*

Steel’s unfair trade practices

THERE are sophisticated fair competitionrules in the EU, in the United States and inmany other major markets, withindependent authorities competent toimpose significant penalties whencompetition is distorted. The rules coverthe abuse of market dominance, specificsubsidies and collusion among competitorsto divide markets or to fix prices. The EUwants global rules to cover these issues.

History and common sense tell us thatcomprehensive rules are needed to ensurefairness in the market place; and thatstrong independent enforcementmechanisms are essential.

Trade rulesThe temptation to fix or rig markets is sostrong that severe penalties are the onlyeffective deterrence. These mechanismswork well in major markets like the EU andthe US. But what happens betweenmarkets and across borders? Who or whatensures fair competition in the globalmarket? Today it is trade rules that must fillthe gap at an international level. Traderules cover a range of issues. There are themulti-lateral agreements like the WorldTrade Organisation (WTO) and specifictrade agreements between differentcountries.

These usually regulate the terms of tradeand often address macro distortions suchas, for example, the protection of marketsfrom unfair external competition. Even ifthese trade agreements do have an impacton how a market operates, they are onlybetween governments and cannot alwaysbe invoked by private parties.

Anti-dumping and anti-subsidyThe main instruments that can be used byprivate parties are the anti-dumping rulesand the anti-subsidy rules (as well as theless often used safeguard mechanisms).Like for certain aspects of competitionrules, there is an on-going academicdebate about the effectiveness and thesuitability of using these trade rules indifferent situations. But unlike forcompetition, there is a somewhatdebilitating debate about the suitability ofthese rules to ensure fairness and aboutensuring that the sanctions are sufficient todeter unfair behaviour. It’s not clear whythis is so, particularly when it is evidentthat unfair trade practices can impactmarkets just as negatively as unfaircompetition practices.

Dumping is akin to certain types ofabuse of dominance like predatory pricing.An advantage or presence in one market isused to take an unfair advantage inanother market for the same product. Onedifference with competition is that the twomarkets are separated geographically. Anti-dumping measures sanction companiesthat practice dumping. One problem withthe anti-dumping sanction is that it appliesnot to the company itself but to goodsexported by that company from onecountry to one other country. It does notprevent the company acting unfairly inother markets or sanction the unfairnessitself.

Subsidisation also distorts markets. Ifone competitor has advantages in terms oflower costs or taxes then it allows sales atbelow fair market prices to damage other

competitors. Anti-subsidy measuresaddress this unfairness. But again thissolution is not ideal as it does not sanctionthe company directly and the unfairnesscan spread to other markets. But these arethe only instruments available to privateparties to deal with unfairness betweenmarkets and to minimise the damageinflicted by these unfair practices.

ModernisationThe EU is currently modernising its tradedefence mechanisms. In the absence ofglobal competition rules, most of thesechanges deserve the support of the steelindustry. It is right to remove the lesserduty rule. In practice, this is a sanction-softening mechanism for which there is noequivalent in competition law and it is notrequired in the WTO. And, as withcompetition enforcement, the competentauthority for trade matters should beentitled to act to sanction unfairnesswithout having to wait for a complaint. Ifthere is unfairness it must be tackled. Thesteel industry should support ‘ex ufficio’investigations proposed in themodernisation package.

All of these changes are to bewelcomed. But most of all, the steelindustry must work to ensure that thetrade defence rules, however imperfect,are applied rigorously and speedily. Moreneeds to be done in this regard, inparticular to ascertain that decisions areadopted only on the basis of the technicalfindings of the investigation. Politics shouldbe removed from trade defence decisions.This is not part of the modernisation

* Head of Brussels office, NCTM O’Connor, European lawyers

This paper was presentedat Stahl 2013 in Düsseldorf

business int_30_AIT_0110 3/7/14 10:54 AM Page 1

50 INTERNATIONAL BUSINESS


package, but it should have been. Politicsare not part of the competition rules. Whyshould they play a part in trade defencerules?

ChinaDespite the phenomenal changes thathave taken place over the last 30 or soyears, China is still not a market economy.In a normal competitive market it wouldnot be possible to increase steelproduction capacity by 170% between2000 and 2005. Capacity has faroutstripped domestic demand. This canonly come about when there is bothgovernment intervention and irrational (inthe sense of market risk taking) commercialbehaviour by individual enterprises. Theproblem of Chinese overcapacity in thesteel sector is global. Companies with toomuch capacity must sell at whatever priceto survive.

Long-term solutions must be found atthe political trade level. But in themeantime the trade defence mechanismsmust be used vigorously to limit thedamage to steel producers in othercompetitive markets such as the EU.

Chinese steel companies with too muchcapacity and insufficient domestic demandchoose to dump onto export markets for avariety of reasons. What is clear is thatthere is a willingness to sell at whateverprice is necessary to complete the sale. Thisis individual company behaviour that mustbe addressed through anti-dumping.

Dumping is about individual companiesselling in the export market at below thenormal value in the market of production.The normal value is the price on thedomestic market. But if that market isdistorted, as it is in China, determining thenormal value can be difficult. What costsand prices can be used if the costs and

prices in the books of the producers aredistorted? WTO rules stipulate that if acountry is a non-market economy, normalvalue can be determined by use of truemarket costs and prices. Often the costs inother markets are used. This ensures thatthe normal value is a fair normal value.

There are suggestions that there will bea change to this approach in 2016: thatChina will automatically be considered amarket economy and thus Chinese costsand prices will have to be used todetermine normal value. This is not thecase. The WTO rules clearly state thatChina must prove that it is a marketeconomy before being treated as one. EUlaw states that China is not a marketeconomy. If there is to be a change, therehas to be a change in the law – and thesteel industry has a role to play in thatchange. There are five criteria to determineif an economy is a market economy:

• Does the government influence theoperative decisions of firms or are theymade in response to market signals?

• Does the legacy of the commandeconomy, in terms of public ownership,barter trade and so on, affect firms'operations?

• Do firms have effective accountingstandards?

• Do firms operate under an effectiveframework of bankruptcy regulation andproperty-rights protection?

• Do firms convert currency atstandard market rates?

None of these conditions are met in theChinese steel sector. Around 70% ofproduction is by state-owned enterprises(SOEs). Production is controlled throughthe five-year development plans. Noliberalisation or change is currentlyforeseen.

In 2013 the EU concluded aninvestigation into subsidies in the OrganicCoated Steel sector. It found that this typeof steel was subsidised up to 44.7% of theprice in the market.

More than 40 subsidy programmes werefound at national and provincial level. Themain problem was the provision of inputsat less than adequate remuneration or, inother words, at below normal marketprices.

Overall the EU found that thegovernment of China exercises meaningfulcontrol ….. and SOEs are obliged to followthe five-year plan and other governmentalplans”. The EU also concluded that “it isdemonstrated that (…) all private bodies inthe steel sector are entrusted and directedby the State, (…) and behave in the sameway as public bodies”. As both public andprivate companies work under instruction,in this way, 100% of production iscontrolled by the state.

The most telling findings, relevant fordumping and subsidy investigations, showthat steel producers in China are forced to“act in a non-commercial manner byaccepting economically irrational prices”.

With this level of control it is notsurprising that China prevents foreigninvestment leading to control in Chinesesteel companies. There will not be fairnessuntil there is full competition in atransparent market. This is unlikely tohappen in the short-term and withoutinvestment from EU and US steelproducers.

RussiaRussia is recognised as a market economy,but this does not mean that there are nounfair distortions in the market. In the steelsector there are two stand-out issues: dualpricing for gas, and control in the miningsector.

Gas is sold in Russia at about one thirdof the price at which the same gas is soldacross the border in the EU. This givesRussian energy-intensive industries adistinct competitive advantage when theend product is exported to the EU.

Russia argues that it is entitled tomanage its own natural resources to itsown advantage. Nobody denies this, but ifit causes damage, unfairly, then remediesneed to be available.

The low gas price is clearly a subsidy anddoes not reflect a true market price. Eventhough it is a subsidy, it is not clear thatthe anti-subsidy rules can apply as onlyspecific subsidies can be countervailed.Russia argues that the subsidy is availableto all consumers and, therefore, is notspecific. But for the purposes of dumping,it is quite clear that the gas price isdistorted and does not reflect a truemarket price even if Russia is considered amarket economy.


51


EU law can address this problem andallow the use of international market priceswhen calculating the normal value. InFebruary 2013, the EU’s General Court inLuxembourg held that this approach wasin line with the law. But in December2013, Russia initiated WTO disputesettlement procedures against the EU toget a different opinion. Russia argues thatthe gas price is not distorted and the localprice should apply. A ruling can beexpected in early 2015. The irony is thatRussia agreed to raise its gas prices but hasnot done so and is, therefore, probablyitself in breach of its WTO commitments.The Strategic Sectors Law (SSL) and theSubsoil Law, establish serious limitationson foreign investment in Russia. Under theSubsoil Law, mineral resources located inRussia are considered state property. Thelegislation covers products such as copper,iron ore, cobalt, nickel, tantalum andplatinum. The criteria followed in awardinglicenses to exploit the mining resources areoften non-transparent and burdensome.Some large mineral conglomerates havebeen forced to leave the Russian market.

Another unfair advantage to Russiansteel producers is the restriction on exportsof ferrous scrap. When Russia acceded to

the WTO it agreed to gradually reduce theduty from 15% to 5%, yet it did not accepta complete removal. Russia also appliesexport duties on copper, nickel and scrapother than ferrous, granting advantage todomestic producers.

In 2011, Russia restricted the number ofports through which scrap can beexported. It prohibited exports from majorports such as Vladivostok and Nakhodka,where around 90% of metal scrap istraded in the Far East. A Russian Courtannulled the measure, but Russia issued aDraft Decree in early 2012 foreseeingsimilar restrictions for the Northwesternports (including St. Petersburg). Themeasure seeks to secure access to rawmaterials for downstream Russian steelproducers and steel-consuming industries.

Russia has also implemented severalfiscal measures that have a distortingimpact on trade. Most notably, it providesfor VAT exemptions for scrap and ferrousmetal wastes and VAT rebates on exports.These measures allow Russian exporters toenjoy a competitive advantage whenexporting. Additionally, Russia extendedimport quotas on corrosion-resistant pipesuntil 1 November 2014.

ConclusionConstant vigilance is required to ensurefairness in markets. All instruments areneeded. It is normal to discuss theapplication of the rules. Most companiesnaturally consider that the rules should beapplied more strictly to others than tothemselves.

However, what cannot be doubted is theneed to have the instruments and the needto enforce them to the fullest extent. If it isshown that there is distortion ofcompetition, or dumping or subsidisation,then proper sanctions and remedies mustbe applied.

Politics should play a very limited role.Rather politics should be addressed toensuring that the overall trade frameworkis coherent and enforced. �

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52 PERSPECTIVES: MTAG TECHNOLOGY AG


Efficiencies drive demand

1. How are things going at MTAG? Isthe steel industry keeping you busy?MTAG Technology AG Switzerland wasvery busy during the global economicdownturn and we believe this was due tothe fact that, during those years, a specialaccent was placed on increasing theefficiency of existing and new installationsfor steel degassing.

Since 2000 MTAG has promotedmechanical pump technology in all typesof steel degassing applications (VD, VOD,VCT, VAD and recently RH).

We are now expanding around theworld. In 2014 we will sign partnershipsand open offices in Russia and Brazil inaddition to those we already have in China,USA, Mexico, Switzerland, Romania andthe UK.

2. What is your view on the currentstate of the global steel industry?The steel industry is focused on moreefficient production. Despite a slightincrease in demand for steel and theremoval of old and non-efficientsteelmaking capacities in 2012, the globalpercentage of excess capacity is greaternow than it was a year ago. In 2013,excess capacity remained the mostsignificant issue. High-cost producers havebeen challenged by sluggish global steeldemand, excess steelmaking and rawmaterial price volatility. Global steelindustry discussions have revolved aroundreducing production volumes from loss-making plants to stabilising steel prices andaddressing the over-supply situation,restructuring labour and cancelling (orreducing) supply contracts based on long-term payments.

Investment in new facilities andmodernising existing ones were frozen,indicating a lack of strategy and a reducedappetite for investment.

3. In which sector of the steelindustry does MTAG Technologymostly conduct its business?MTAG Technology specialises in thedevelopment of innovative, efficient andmodernised solutions for the secondarymetallurgy of liquid steel production. We

supply turn-key installations for variousindustrial applications and our clients arekey producers of quality steel for theautomotive, chemical, power generationand aviation industries.

Gas elements such as nitrogen,hydrogen, and oxygen, dissolved in steel,largely determine the mechanicalproperties of the end product. Using thevacuum degassing process to reduce thesedissolved elements results in high qualitysteel. Special alloys are also using vacuumdegassing and/or vacuum processing.

The strategic reason for starting adegassing project is the increasingchallenge to enter additional steel supplymarkets, either with a horizontal market-approach – by the penetration of new end-user product fields – or with a verticalmarket-approach offering significantlyimproved quality within an existing steelgrade mix. During recent years, improvedvacuum technology has become moreaccepted as an efficient and effective routeto meet the demands of such markets.

4. Where in the world are youbusiest at present? China, South America and CIS countries –in that order. The Middle East is showingan interest in our technology and we hopeto generate business there this year. Wehave a number of projects in Europe and

South Africa and producers in the USA areinterested in improving the efficiency oftheir degassing installations by replacingsteam ejectors with mechanical pumps.We’re expecting at least one or twoprojects in the US this year.

5. Can you discuss any major steelcontracts you are currently workingon?At this moment we are developing projectsfor three major steel suppliers in China –one will be the world’s biggest RH. Wehave set the benchmark in this field andyear-by-year the request for projects haveincreased, and this is reflected into ourgroup turnover over the last five years. In2008, turnover was approximately. EUR6.5million and for 2013 it closed at roughlyEUR55 million.

6. Where do you stand on thealuminium versus steel argument?Aluminium could be a next step for ourtechnology as it is also degassed. We haveplans to go into this market.

7. Aluminium is ‘greener’ than steel.What’s your view?It depends on what you mean by “green”and how you define “greener”. The steeland aluminium production processes arenot ‘green’ as they both require anextremely large quantity of power. Moderninstallations in developed countries arebecoming greener, but in developingcountries this is still a far target to reachdespite the many efforts undertaken. Fromthe perspective of energy consumed/CO2footprint neither technology is consideredas ‘green’. This is why any technologydesigned to decrease energy consumptionis of great importance.

8. In fact, talking of ‘green issues’and emissions control, how is thesteel industry performing in thisrespect?The steel industry has focused a lot onreducing emissions, which affect air quality(the main issue in steel productiontechnology), water pollution and energyefficiency). If modern steel facilities are

MTAG Technology AG of Switzerland will be opening offices in Brazil and Russia this year as part ofa global expansion programme. The company specialises in mechanical pump technology for steeldegassing applications and, says proprietor Adrian Bodea, the steel industry’s focus on increasedefficiency has kept MTAG busy through the global economic downturn

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54 PERSPECTIVES: MTAG TECHNOLOGY AG


respecting all the norms, our neighbour inEmmenbruecke, Switzerland, where we arelocated, could be seen as one of the bestexamples of its kind.

9. In your dealings with steelproducers, are you finding that theyare looking to companies like MTAGto offer them solutions in terms ofenergy efficiency and sustainability?If so, what can you offer them?We offer them solutions not equipment.We offer them better technology in termsof technological results at lower costs andwe offer them environmentally friendlysolutions, which result in clean emissions,no water contamination, lower energyconsumption and a lower CO2 footprint.

10. How quickly has the steelindustry responded to ‘greenpolitics’ in terms of making theproduction process moreenvironmentally friendly and arethey succeeding or fighting a losingbattle?On average, 1.8 tonnes of CO2 are emittedfor every tonne of steel produced.According to the International EnergyAgency, in 2010 the iron and steel industryaccounted for approximately 6.7% of totalworld CO2 emissions. The World SteelAssociation, the European SteelTechnology Platform and many otherglobal organisations are investing andsupporting research programmes and pilotprojects for developing new technologiesfor CO2 reduction. In Brazil new policiesfor replacing fossil fuels in steel productionare being introduced. Green steel will helpBrazil distinguish itself from thecompetition. It will be interesting to seewhat happens over the next 20 years. Themodern steel production process isbecoming more environmentally friendly(in terms of dust management, watercontamination, management of chemicalcomponents used in the process) but thereis much more to be done. The steelindustry is fighting but not winning yet.

11. Where does MTAG Technologylead the field in terms of steelproduction technology?MTAG Technology is a leader in steeldegassing using dry mechanical pumps, atechnology that is highly efficient andenvironmentally friendly.

12. How do you view MTAGTechnology’s development over theshort-to-medium term in relation tothe global steel industry? Our expansion plans are focused on SouthAmerica, Africa and the Middle East. As weprovide a solution that tests the old way ofproducing steel we believe that our short-to-medium development will be slow and

safe. We will continue to serve our clientswherever they are in the global steelindustry. We follow global market trends,keep our technologies up-to-date and trainand recruit our engineers from world-leading universities and research centres.We constantly invest in researchprogrammes in collaboration with topfacilities in the field.

13. 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?The market regulates demand and theoffer for all materials – metals are noexception. Metal production in China isalready under scrutiny, but as long as theyfind buyers for their production, there isnothing to say.

14. The Chinese still rely heavilyupon Western steel productiontechnology. What is MTAGTechnology’s experience of theChinese steel industry?The Chinese market was and still is afascinating experience for our company.When we first developed our integratedsolution we focused our sales on Europeand the USA. We soon received requestsfor quotations from the Chinese and sincethen each year we have developed newprojects there. We have opened an officein Shanghai and have a team of specialiststhere. The fact that we have six majorprojects in China is proof that our solutionsets the benchmark and is highlyappreciated.

15. Where do you see mostinnovation in terms of productiontechnologies – primary, secondary ormore downstream?Most of the innovation will come inprimary and secondary metallurgy. Energyconsumption and the price of alloyingmaterials are strong reasons for developing

innovative technologies aimed at reducingprice and obtaining better materials.

Downstream processing will becomemore specialised and integrated and willbe able to supply materials with no furtherneed for supplementary processing.

16. How optimistic are you for theglobal steel industry going forwardand what challenges face globalproducers in the short-to-mediumterm?There is a famous architect in Canada whois building 20-floor structures from wood.He is arguing and supporting using woodinstead of concrete and steel. For him,wood is the future considering the housingneeds of humanity by the year of 2040.The steel industry will face variouschallenges and this is only one of them –and maybe the one least expected. I amconfident that the steel industry will goforward and succeed, provided that –globally – we all align our policies andprocedures and move towards bettertechnologies used in our processes.

17. What exhibitions andconferences will MTAG Technology beattending in 2014? Istanbul, USA, Russia, China, Germany,United Arab Emirates.

18. MTAG is based in Switzerland,but what’s happening steel-wise inthe country?Switzerland is better known for its steeltechnology centres than for steel mills. Ithas never been a mass steel producer andnever will be. There are, however, placeslike Swiss Steel, which is a centre ofexcellence for the production of high-grade steels used in the automobileindustry and the machinery, plant andequipment sectors.

19. Apart from strong coffee, whatkeeps you awake at night?I am a physicist, I have studied thin filmand surface physics, mass spectrometry ofnuclear reaction products, plasma physicsand charged particles. At night, however, Iam mostly awake thinking not about theUniverse and its mysteries, but my family,and my extended family, meaning all of mycolleagues for whom I feel a strongresponsibility in better managing thebusiness.

20. If you possessed a superpower,how would you use it to improve theglobal steel industry?To find innovative ways of producing liquidsteel with lower power consumption; andcreating a world of balanced welfareachieved through work and technologicalprogress – a dream that also constitutesMTAG’s corporate vision. �

MTAG.QXP_30_AIT_0110 3/7/14 8:55 AM Page 3

occupation. Field Marshal Joseph Radetzkyvon Radetz (1766-1858) responded witha decisive counterattack. By August, herestored Austrian authority throughout itsItalian provinces. The Radetzky March wascomposed by Johann Strauss Sr. in 1848and dedicated to the Field Marshal.

During World War I many people in Italywanted the country to join the conflict onthe side of the Triple Entente (GreatBritain, France, and Russia). Italy declaredwar against the Central Powers on May24, 1915. In 1918, the Italian Armyoccupied Tyrol and annexed the southernpart of it. ‘Italianisation’ was started byBenito Mussolini. The arrival of newItalian-speaking immigrants, led to strongdissatisfaction among South Tyroleans,which led to terrorist acts. In 1946autonomy for South Tyrol was grantedand in 1972 Ladin became a partiallyofficial language.

The DolomitesSouth Tyrol is entirely located in the Alps.The landscape is dominated by theDolomite Mountains; the highest peak is3,905m in the far west. The mountainswere so named after Déodat de Dolomieu(1750-1801) (Fig 2) the French scientistwho was the first to report that themountains are composed of a new,mineral magnesium-calcium carbonate,(Ca,Mg)CO3, which was named Dolomiteafter him many years later. It was grantedWorld Natural Heritage status by UNESCO.

The Romans settled in Bolzano but withthe end of the Roman Empire a Bavarianimmigration began. Bolzano became animportant trading point owing to itslocation between the two major cities ofVenice and Augsburg. Four times a year amarket was held and traders came fromthe south and the north. The mercantilemagistrate was, therefore, founded in1635.

Bolzano is completely closed onSundays – no shops and restaurants areopen, which is very strange for the greatnumber of tourists visiting the city daily.On weekdays everything is open, thestreets are full bicycles, motorcycles, andmotorcars and tourists.

Museum of NatureThe Museum of Nature occupies the 16thcentury building of the then tax collectorin Bozen from the time of EmperorMaximilian. The building was renovated in1973 and the Museum, which wasopened in 1997, displays animals,minerals and insects, among other things,and also houses an aquarium. The AntKingdom, where a colony of ants is keptalive in a large glass structure, is a displayof special interest. �

THE symposium was organised byChristopher Hauser of the AustrianGeological Department in Vienna incollaboration with Benno Baumgarten andEvelyn Kutatscher of the Museum ofNature. There were about 60 participants,mainly from Eastern and Western Europe,North America, Australia and Canada. Twoexcursions were planned during and afterthe symposium: one was to thePfundererberg mine and the other to theSchneeberg mine in the heart of the Alpswhere silver, lead and zinc were produced.Both mines were closed down in 1985and turned into museums.

The symposium covered a variety ofsubjects ranging from biographies offamous geologists and mineralogists topostage stamps showing cultural heritagein mining and metallurgy. Papers alsoincluded descriptions of archives located indifferent countries. There were a numberof presentations of interest to iron andsteel. For example:- The Sava ironworks in Slovenia, whichdates from the 16th century- The Ravne ironworks in Koroška, inSlovenia- The archives and iron making inSlovenia- The historic iron ore mining in theeastern Erzgebirge in Saxony

South Tyrol is an autonomous provincein northern Italy (Fig 1). It pays only 10%of its taxes to the Government of Italy andcan manage its own affairs. The provincehas a total population of 511,750inhabitants (2011). About 70% is ofAustro-Bavarian heritage and speaksGerman, around 26% speaks Italian, and4% have Ladin as their mother language.Ladin is a dialect mainly spoken in theDolomite Mountains and is closely relatedto the Swiss Romansh. The name derivesfrom Latin and is the oldest languagespoken in South Tyrol.

Following the defeat of the Austrians byNapoléon in 1805, the northern part ofTyrol was ceded to the Kingdom ofBavaria. Andreas Hofer (1767-1810) wasthe leader of a rebellion againstNapoleon's forces. He was subsequentlycaptured and executed. Tyrol was returnedto Austria by the Congress of Vienna in1814. The Austrian Empire repressed thegrowing nationalist sentiment amongItalians who struggled for unification. InMarch 1848, the city of Milan rose against

56

Tyrolian cultural heritageFathi Habashi* offers an historical perspective from the 12th Cultural Heritage Symposium, which took

place between 30 September and 4 October at the Museum of Nature, Bolzano, in Italy’s South Tyrol


HISTORY

* Laval University, Quebec City, Canada

1993 Freiberg/Sachsen, German Democratic Republic

1995 Leoben, Styria, Austria

1997 St. Petersburg, Russia

1998 Banska Stiavnica [Schemnitz], Slovakia

2000 Golden, Colorado, USA

2002 Idrija, Slovenia

2003 Leiden, Netherlands

2005 Schwaz, Tyrol, Austria

2007 Quebec City, Canada

2009 Freiberg, Germany

2011 Mexico City, Mexico

2013 Bolzano/Bozen, Italy

Munich280km

Vienna600km

Zurich310km

Milan280km

Rome650km

Fig 1 Location of SouthTyrol (red)

Table 1 Cultural Heritage Symposia

Fig 2 Déodat deDolomieu (1750 - 1801)

HISTORY STI_30_AIT_0110 3/7/14 9:48 AM Page 1

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