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2016 February No.180
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SPECIAL FEATURE

Primetals Technologies Limited, a new joint venture between Mitsubishi-Hitachi Metals Machinery and Siemens VAI Metals Technologies, unites the world's top experts in steel technology, from "upstream" skills in iron and steelmaking to "downstream" strengths in rolling and processing. It's a 'dream team' arriving on the scene just when the world's steelmakers most need help - because steel now faces a crisis unprecedented in its long history.

Photo: A 'dream team' sets out to save steel from a historic crisis

Steel has been the king of industry since the dawn of the Industrial Revolution, indispensable to the making of myriad items of modern life. Steelmaking capacity was long regarded as a prime measure of national strength. And where conditions were right for making it, the world's great industrial cities grew.
The fundamental rules for success in steel were a staple question on high school geography exams for generations. It was all about location: a production site where iron ore, coal and limestone could be combined in a place where manufacturers needed finished steel.

Today, however, even the most logistically sweet spot no longer ensures success as steelmakers face a crisis unprecedented in 200 years. For producers worldwide, Rule #1 has suddenly become "evolve or die." Their urgent question is: "Who can help, and how?"

Against this backdrop, MHI and Siemens merged their metals technology operations in a new joint venture, Primetals Technologies. Launched in January 2015, the company unites the world's top talent in primary steelmaking technology - the "upstream" - with the leading experts in "downstream" metalworking. Backed by a global service network, they offer steelmakers a comprehensive suite of innovative solutions and a peerless R&D pipeline.

If anyone can rescue the world's steelmakers, this may be the team to do it. The "how" part - solutions offered by Primetals Technologies - is what this article will explore. But grasping the "how" first requires an understanding of the matrix of threats confronting steel. They boil down to four key challenges: greenhouse gases, global glut, scrap and alternate materials.

Four Challenges and Solutions
Move to challenge 1 Move to challenge 2 Move to challenge 3 Move to challenge 4

Challenge 1, Climate change and coal

It was coal, abundant and cheap, that powered the Industrial Revolution - and coal remains a key element of the global energy mix. But as coal burning produces significantly higher harmful emissions than other hydrocarbons, pressure to reduce or eliminate it is growing in step with concern over climate change.

Today, coal is used mainly to generate electricity or to make steel. But there is a critical difference between the two applications. "Thermal coal" used in power generation is merely a source of heat that can be replaced with cleaner fuels, such as natural gas. In steelmaking, while coal is likewise a heat source, the higher carbon content of "metallurgical" or "coking" coal is essential to the chemistry of the process. With most of the currently installed technology steel cannot be made from scratch without coal.

So while coal could be eliminated in power generation, steelmakers have few alternatives. But as steel mills account for more than six percent of global CO2 emissions, producers realize that will not excuse them from pressure to cut coal use.

Photo: The image of special feature Metals machinery

Solutions

MAKING MORE WITH LESS
As steelmakers seek ways to reduce their carbon footprint, the ideal solutions are those that also help them produce better steel at lower cost - and the best way to do that is to make more steel with less coal, meeting multiple goals with each investment. Primetals Technologies offers several useful solutions.

Keeping it endlessly hot with ESP
One of the best potential ways to boost efficiency and cut emissions is eliminating the waste involved in repeatedly heating and cooling materials. Get it hot, keep it hot and keep it moving - from liquid steel to hot rolled coil. This tightly integrated approach is the key concept in the Endless Strip Production (ESP) process invented by Arvedi of Italy and realized by Primetals Technologies. The most significant steel technology advance in decades, ESP cuts energy use by 45 percent with a corresponding cut in CO2 emissions. Instead of being cooled and stored, liquid steel is continuously cast and fed straight into the rolling line to produce uniform and homogeneous strip in flexible widths and thicknesses. Material temperature can be precisely controlled to produce advanced steel grades. The benefits are manifold, from reduced energy use and emissions through quicker process time to improved product quality to a smaller plant footprint.

Filtering flue gas
Another answer is to install an air-quality control system (AQCS).
The MHI Group's AQCS is a multilayered approach to flue gas treatment, comprising selective catalytic NOx reduction system (SCR), electrostatic precipitator (EP), flue gas desulfurization system (FGD) and CO2 recovery. The SCR removes nitrogen oxide from flue gas and EP removes the dust. FGD then removes the sulfur dioxide that produces acid rain. Finally, the remaining CO2 is captured and sequestered.
The MHI Group has its own technology, so called "KM-CDR Process®" in order to remove CO2, and is currently constructing the world largest post combustion CO2 recovery plant in Texas (U.S.).
Based on this, work is now underway to develop highly reliable and commercially viable environmental solutions that will allow steelmakers to significantly reduce harmful emissions.

Direct and efficient
Conventional steelmaking comprises sintering (agglomerating iron ore) and coke-making (processing metallurgical coal to near-pure carbon) before hot metal is smelted. As both steps are energy and emissions intensive and add complexity, eliminating them could mean a great leap forward. Primetals Technologies is the only supplier offering off-the-shelf solutions to that end: the COREX® and FINEX® processes.

Photo: The image of special feature Metals machinery

COREX directly uses non-coking coal as the fuel/reducing agent and lump ore/pellets as the iron oxide feed. It is less costly to install than similar conventional plants, more flexible, less energy-intensive and produces less emissions. Seven COREX plants have already been built in four countries.

FINEX, jointly developed by Primetals Technologies and Posco, the South Korean steelmaker, takes COREX a step further. Two FINEX plants now operating at Posco's Pohang steelworks are producing iron at 15 percent less cost than similar conventional facilities due to their ability to process low grade oxide fines and coal fines. The FINEX demonstration plant, successfully in operation for more than 10 years, is currently planned to be relocated to India.

Even though COREX and FINEX were both commercialized at a time when few new mills were built beyond China, existing producers are expected to adopt these newer processes as the initial plants prove themselves and stricter environmental regulations force them to reinvest.

More power, less CO2 from exhaust gas
One promising way to increase energy efficiency and reduce CO2 emissions is to install Blast Furnace Gas (BFG) fired Gas Turbine Combined Cycle (GTCC). This technology can achieve greater efficiency and produce approximately 35 percent more power with about a 35 percent reduction of CO2 emissions (per kilowatt hour) than Boiler Turbine Generators (BTGs) technology. The key is the ability to burn low-caloric BFG in gas turbines, a technology pioneered by Mitsubishi Hitachi Power Systems with more than two million hours of operating experience in the world.

Challenge 2, Glut in a market now global

A generation ago, steel was sheltered by tariff walls that limited competition to battling for market share within national markets. But with trade liberalization steel has become a global commodity, which means competition can now come from anywhere.

Then came China's spectacular rise. A relatively minor producer 30 years ago, China produced nearly 822 million metric tons of steel in 2013, half the global total of 1.649 billion tons. As booming demand shifted to China, producers elsewhere were left with idle plants: only 73 percent of global capacity was in use in 2013. But that quickly worsened as China's economy began to cool. In 2015, with global steel production dropping by an estimated 1.7 percent to just over 1.5 billion tons, prices plunged as Chinese steelmakers exported surplus product.

Photo: The image of special feature Metals machinery

So just at the moment that society demands steelmakers invest to overcome climate change, market forces demand they slash costs in order to survive. Still, that's not the end of the dilemma.

Solutions

MAKING IT THROUGH A HARSH BUSINESS CYCLE
Steel's current harsh business climate is forcing many makers to close older, unprofitable mills. But keeping even the best facilities open is a daunting challenge: costs must be cut to the bone; aging equipment must be kept running; and skilled staff cannot be replaced as they retire.

In this bind, many are turning to Primetals Technologies as a "life-cycle partner," extending the company's role from a supplier of plant and equipment to a provider of proactive maintenance. In many cases, maintenance can be enhanced and labor needs reduced through automation - with the crucial added benefit of greater workplace safety. To that end, Primetals Technologies offer a variety of advanced ICT solutions that allow processes to be automatically and continuously monitored from a safe distance.

Another strategy is moving up-market into higher-value-added niches where competition is less intense. Here again, Primetals Technologies can help, working closely with producers to increase process efficiency and develop new products.

One particular target for improvement is "pickling," chemically removing surface impurities like rust or scale from steel. The company's Jet Pickling technology offers process speed at twice the rate of conventional deep-bath pickling. Meanwhile, new "i - BOX" pickling technology has been developed that needs no jet stream but still achieves the same process speed as Jet Pickling.
There is further scope for downstream improvement in rolling steel strip. The new line of ultramodern rolling facilities supplied by Primetals Technologies for a new finishing mill at Usiminas, Brazil, features stands equipped with pair cross rolls and work roll shifting in a tandem arrangement that results in steel strips of highly precise thickness.

At this time the company's newly developed Cross Seam Welder (CSW) system can be applied to downstream cold mills to provide instant steel plate welding and contribute to much higher rolling process efficiency.

Above all, now is the time to plan ahead. In a cyclical business like steel everyone knows the tough times will eventually end. But winners in the next up-cycle will have to be vastly more efficient: energy frugal, environmentally immaculate, automated, flexible and faster.

Challenge 3, From scrap or from scratch?

Photo: The image of special feature Metals machinery

After 200 years of smelting steel in ever-growing volumes, the world has mountains of scrap that are retrieved ever-more efficiently. That should spell opportunity, since recycling scrap uses less energy than making steel from scratch with iron ore and coking coal. But there are barriers to overcome.

In conventional steelmaking, scrap is added to molten iron - but only limited amounts can be used without over-cooling the mixture. So most scrap today is recycled in electric-arc furnaces by so-called "minimills" that are relatively cheap and viable on a smaller scale. Plus, they burn no coal - at least not directly. But as huge amounts of electricity are required - 425 kilowatt per ton of liquid steel - minimills have less of an environmental edge if that power is generated with thermal coal. Another drawback is that while minimills are potent competitors in lower-grade products like structural steel, 100 percent scrap is not suitable for making high-grade specialty steels.

So conventional producers need new ways to use more scrap while minimills need to harness greener power with higher efficiency and move up the value chain.

Solutions

MAKING THE MOST OF SCRAP
Scrap metal is normally used to produce lower grades (like structural steel) and not high-grade specialty steels. So as steelmaking continues to follow two separate paths, scrap will be a key element either way, and Primetals Technologies offers solutions for both routes.

Jet process allows more scrap
To cut CO2 emissions and boost efficiency, conventional producers would like to use more scrap, but current converter technology limits them to about 20 percent. The Jet Process raises that to 50 percent or even higher by blasting coal, oxygen and lime into the converter in order to burn the coal with very high efficiency. By releasing the coal's energy with greater intensity, much more scrap can be melted. Benefits include significantly lower CO2 emissions along with enhanced operational flexibility.

Minimills, maximum performance
Primetals Technologies offer end-to-end minimill solutions focused on ultra-frugal use of electricity (the key cost input) to achieve maximum efficiency with minimal emissions. The heart of this concept is the EAF Quantum, which uses 20 percent less power than existing minimills. By ingeniously recycling heat and exhaust gas to pre-heat the next load of scrap, power use is cut by 10 percent and CO2 emissions are lowered. By pairing this upstream efficiency with the downstream advantages of Arvedi ESP lines, minimills can turn scrap into finished steel sheet coils in just two hours.

Figure: Equipment and arrangement of the Jet Process

Challenge 4, Alternate Materials

Steel's strength, durability, workability and low cost made it the unchallenged king of industry. That it's also heavy did not matter much until the 1940s when mass production of aircraft spurred the rise of lightweight aluminum. Still, alumi-num's high cost and low recyclability has largely kept it from gaining market share in steel's most valuable market sector - until now.

As the average car contains 900 kilograms of steel, automakers buy 80 million tons of it annually - about five percent of global production. But as that five percent is one of the most valuable slices of the steel pie, it is market share that steelmakers are determined to protect.

Automakers, though, now see weight reduction as the easiest way to cut fuel consumption and emissions. So every gram of steel going into new models is scrutinized against aluminum and new carbon-composites developed for aircraft. An even bigger threat is the advent of electric vehicles that do away with heavy steel parts like engine blocks, exhaust systems and gearboxes.

So steel's nightmare scenario is fighting for a declining share of auto components at a time when stricter environmental rules narrow the cost-to-weight ratio edge over aluminum and carbon-composites.

Solutions

SUPERIOR METALS FOR THE FUTURE
As automakers strive to reduce vehicle weight by questioning every gram of steel versus aluminum and carbon composite alternatives, steelmakers are responding with stepped-up R&D efforts. Among their goals is developing new products that offer equal or better tensile strength with less weight - solutions like thinner steel sheet and lighter but more rigid frames.

But here's the rub: these sophisticated new products are trickier to make. To achieve the desired mechanical properties with many new steels, heating and cooling must follow very precise gradients, without fail. So producers are relying on the experts at Primetals Technologies to develop new processes to build tomorrow's super grades of steel - with immaculate environmental credentials.
Still, it is up to the customers to decide which material best suits their future needs - and no matter which metal they choose, Primetals Technologies will be ready with state-of-the-art solutions. As well as steel, the company offers technologies for aluminum, copper and other non-ferrous metals.

Whatever metal the world requires, the "dream team" is ready to provide.

Figure: Iron and Steelmaking Flow
Photo: Mr. Yasukuni Yamasaki / Chairman & CEO/ Primetals Technologies Limited

READY WHEN THE WORLD IS, TO SOLVE STEEL'S DILEMMA

In Japanese, we say "isseki ni cho." In English, it's "two birds with one stone." The concept of achieving two seemingly contradictory goals with one pitch is universal.

This sums up the dilemma now shared by society and the world's steelmakers, our customers at Primetals Technologies. On the one hand, modern society depends on steel for countless products that enhance our well-being. On the other, the world has reached consensus on the imperative to reduce CO2 emissions, of which coal has been identified as a major source. While there are ready alternatives to coal in most industrial applications, there are few in steelmaking, which accounts for more than six percent of global CO2 emissions. To complicate matters further, all steelmakers now face severe business conditions that makes it difficult for them to invest in new solutions.

At Primetals Technologies, this dilemma does not fill us with despair, it motivates and even excites us. For we have in hand the stone that can achieve both goals, solutions that can radically cut CO2 emissions while producing better steel more efficiently. In fact, we have not one but many stones, and more in development. As you will discover in this article, all we need is for steel-producing nations to provide their industries with the means to invest in the future.

-- Yasukuni Yamasaki
Chairman & CEO
Primetals Technologies Limited

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