SteelMint Scrap Summit: Oxygen deficiency

SteelMint Scrap Summit: Oxygen deficiency

Should China tilt away from basic oxygen furnace (BOF) production, it will enhance the growth of scrap-fed steelmaking in the approaching decade.

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September 5, 2019

Scrap-fed electric arc furnace (EAF) steelmaking is on a growth trajectory around the world, according to presenters at the 4th Steel Scrap, Billet & DRI Trade Summit, hosted by SteelMint in Bangkok in late August.

In the first two decades of this century, China soared to become by far the world’s largest steel producer, relying largely on the iron ore-fed basic oxygen furnace (BOF) process. Other parts of the world, meanwhile, have installed considerable EAF and scrap-fed induction furnace capacity, and now in China a perceptible tilt toward EAF steelmaking is underway.

Li Hongmei of Shanghai-based Mysteel said environmental protection factors are prompting an “old-for-new capacity swap deal” to take place in China’s steel sector, with “equal or less capacity for blast furnaces, but more for electric arc furnaces.”

Mysteel forecasts that China’s overall steelmaking capacity will decline from 1.13 billion metric tons in 2015 to slightly below 1 billion next year.

Yi Qian of Shanghai-based ICCSINO said, “There is still room for electric steel production capacity growth in China,” even though the nation’s EAF output declined by about 800,000 metric tons in the first half of 2019 compared to the first half of 2018.

Yi said ICCSINO knows of nearly 40 million metric tons of new EAF capacity being installed in China from 2020 to 2023, being put in place by 16 different steelmaking firms.

Li Shubin, secretary general of the China Association of Metal Utilization (CAMU), said China is about to enter “a new era for us to use the EAF steelmaking method” thanks to government policies “promoting the development of EAF steelmaking.”

Stated CAMU’s Li, “The development of EAF steelmaking based on steel scrap resources is the fundamental solution for ultra-low emissions [and] the most effective way for the green development of the steel industry so as to [bolster] recycling.”

Li pointed to a smaller but more scrap-fed steel sector in China’s future, saying, “By 2030, China’s crude steel output will drop to 700 million tons, and [obsolete ferrous scrap] reserves will reach 13 to 13.5 billion tons, with steel scrap generated each year reaching 300 to 320 million tons.”

EAF and induction steelmaking also is growing in the Indian subcontinent as portrayed by several presenters at the SteelMint event. Satadri Chanda of India-based induction furnace equipment maker EMT Megatherm described scrap-fed induction furnaces as a “growing phenomenon globally.”

Chanda said in India steelmaking via the induction furnace route “has increased from 20 percent to over 40 percent [of market share] in the past two decades.” He said such furnaces also are being installed in the Middle East, in Southeast Asia and are almost the “exclusive” steelmaking method in Pakistan and Bangladesh.

All this activity is good not only for the ferrous scrap market but also members of the International Iron Metallics Association (IIMA), according to John Atherton, secretary general of the United Kingdom-based organization.

Atherton said ore-based metallics (OBMs) “are not scrap substitutes, they are supplements [and] value-added feedstock” that provide “greater value than their iron content.” He listed pig iron, hot briquetted iron (HBI), direct reduced iron (DRI) and granulated pig iron (GPI) as the main types of OBMs.

Atherton characterized Russia as the global leader in exported pig iron, with Bahrain, Venezuela and India among other producers. In the HBI sector, a major development is the pending startup of what Atherton called a 1.9 million tons per year plant in Toledo, Ohio, in the United States by Cleveland-Cliffs Inc.

The SteelMint 4th Steel Scrap, Billet & DRI Trade Summit was August 27-29, 2019, at the Hotel Avani Riverside in Bangkok.