Better automation and processes are on the rise. it is now time to find ways to increase demand
Steel must be big business, in spite of being a volatile product. Just last month, in order to add to its steel manufacturing capacity, Bhushan Steel Ltd (BSL) secured the environment clearance for Rs 3,000-cr pellet plant unit with a production capacity of seven million tons per annum (mtpa) in Odisha where it currently operates a 5.6mtpa integrated steel plant in Dhenkanal area of the state. Sources said that there is a scarcity of lump iron ore in the market as currently only iron ore fines are available, which need suitable beneficiation and pelletisation before they can be used as feedstock.
In another instance, the Environment Ministry has granted nod for the expansion of the Tata Steel plant at Jamshedpur Steel Works in Jharkhand. In the project, Tata Steel will expand crude steel production from 9.7mtpa to 11mtpa at Jamshedpur plant by augmenting the steel manufacturing capacity of the plant in question. Early this year, in a bid to add to its existing steel manufacturing capacity, Rashtriya Ispat Nigam Limited (RINL) has signed an MoU with the Andhra Pradesh government for an investment of around Rs 38,500 crore involving multiple projects. The new projects included the expansion of RINL’s capacity to 7.3mtpa and modernisation with an investment of Rs 3,600 crore, construction of coke oven battery-5 and other projects at an investment of Rs 3,400cr, and further expansion of RINL’s capacity to 11.5-12mtpa with an estimated investment of Rs 25,000cr.
Steel is a term given to alloys containing a high proportion of iron with some carbon. Other alloying elements may also be present in varying proportions. The properties of steel are highly dependent on the proportions of alloying elements, so that their levels are closely controlled during its manufacture. The properties of steel also depend on the heat treatment of the metal.
global chances
Steel is by far the most important metal, in tonnage terms, in the modern world, with the annual global production of over 700 million tonnes dwarfing the approximately 17 million tonnes of the next most prolific, aluminium. The low price and high strength of steel means that it is used structurally in many buildings and as sheet steel it is the major component of
VIII-Metals-A-Steel-2 motor vehicles and domestic appliances. The major disadvantage of steel is that it will oxidise under moist conditions to form rust. A typical steel would have a density of about 7.7g cm-3 and a melting point of about 1650oC.
Automation in steel
Way back in 1990, the Automation division of Tata Steel was created to bring a structured approach to the process. Automation was realised as a strategic choice in gearing for the future in the fastest possible way, to counter the inertia of size and diversity that is intrinsic to a large steel plant. Information technology and automation were integrated in the initial stages and later bifurcated. This enabled the automation division with its competencies to devote itself solely to the solution of real plant problems in real time.
In any steel plant, the automation division is the central agency for design, development, integration and implementation of process automation. These division have a dedicated team of professionals and experts in various disciplines from laser, robotics and instrumentation to mathematical modelling and simulation.
Such divisions are also structured around various expertise groups that include process optimisation, instrumentation & control, communication & networking, CAD/CAM and mathematical modelling, system integration, product development, and robotics & mechanical engineering.
Increased automation, adherence to new standards and regulation, as well as better efficiencies and capacity utilisation are compelling reasons for sensor vendors to sit up, take notice, and make use of these opportunities. A combination of hardness, flexibility, and tensile strength made steel one of the pillars of the industrial revolution. Since then, in major steel-producing countries, the steel industry has represented a large percentage of GDP and is expected to remain so in the foreseeable future.
The other major trend in the steel industry is its rapid change from a labour-intensive to a more capital-intensive industry, driven by serious concerns regarding energy consumption, emissions, standards, and requirements from end markets. All steel manufacturers are affected and all see that addressing these concerns will mean increased automation and adoption of methods to reduce emissions and energy consumption. This trend in particular holds great promise for sensor and instrumentation vendors.
demand for steel
The construction and automotive markets are still the largest consumers of steel, absorbing more than half of the total steel produced. Houses, buildings, skyscrapers, and bridges rely on steel for their strength. Other steel-consuming industries include electrical equipment, appliances, agricultural implements, all types of containers, energy production, including the steel used in generation, transmission, and distribution, and industrial machinery.
A deceleration in China’s economic growth from investment to consumption-led growth to avoid any hard landing for the world’s second largest economy has meant the cycle of capacity, production and demand for the world steel industry has come to an end. India, according to World Steel Association (WSA), is one of the few countries to remain a “resilient” economy in the face of a “global slowdown” because of its commitment to “reforms”. Indian steel demand in 2015 rose to 81.5mt from 75.9mt in 2014. WSA says its use will further improve by 7.6% to 87.6mt next year. Hopefully, the three-year high of 6.4% rise in industrial growth in August last year, supported by good showing in manufacturing, mining and electricity, was sustained to generate good demand for steel in the months ahead. A WSA official said that the world steel industry’s low growth will last till “other regions of sufficient size and strength” deliver “another major growth cycle”. Such hopes largely rest on India.
No single country has the heft that China has. There was hope that the developed world will grow faster, but WSA says momentum here has slowed. Emerging markets are also in hot water. But there are some bright spots. Among the top 10 consumers, Mexico and Turkey are expected to consume more steel than expected earlier.
The world market for steel was expected to reach $1.3 trillion in 2015, with production levels to reach 1,694.73 million tonnes whilst consumption would have been 1,545.50 million tonnes. However, the market has been declining over the past few years as a result of the large oversupply of steel that pressured prices downwards. The global recession that hit the commodities sector hard also contributed to the shrinking growth. As a result, the steel market is expected to grow at a slow rate in the first half of the forecast period (2015-2020) before accelerating at a higher rate in the second half of the forecast period (2020-2025).
The profitability of individual companies depends on efficient operations, because most products are commodities sold based on price. Big companies have large economies of scale in production. Accordingly, most producers of secondary products buy raw metal from the large producers. Small companies can compete by serving regional markets or producing specialty products.
The use of recycling in the manufacturing process of these metals has been a main driver of improvements in energy efficiency within the industry. Primary production, in which steel is made from iron ore and aluminum from bauxite ore, is energy intensive. However, secondary production, which involves the use of recycling scrap to make steel and aluminum, is much more energy efficient. Another alternative to using a blast furnace to produce pig iron is using direct reduced iron (DRI), a process typically fueled by natural gas. Scrap continues to be the primary raw material used in EAFs, but DRI may become a larger component in the raw materials mix.