Blog: Potential game changers for the future of steelmaking

Potential game changers for the future of steelmaking

Potential game changers for the future of steelmaking

Baris Çiftçi, Head, Raw Materials, worldsteel

3 May 2017

I recently gave a speech at the 5th International Steel Industry & Sector Relations Conference in Istanbul, Turkey where I provided an outlook on the global steel industry. Part of my speech focused on the growing global ferrous scrap availability and the innovative steelmaking technologies which are potential game changers for the future of steelmaking.

In 2016 the steel industry used about 1.2 billion tonnes of blast furnace iron (hot metal), 520 million tonnes (Mt) of ferrous scrap and 75 Mt of direct reduced iron - to produce about 1.6 billion tonnes of crude steel globally.

Global ferrous scrap demand has stagnated in the last couple of years, and the share of ferrous scrap in the total metallics demand for steelmaking has declined. This is reflected in a reduced share of electric arc furnaces in the total global crude steel production, which today stands at around 25%. Electric arc furnaces use mainly ferrous scrap to produce steel.

Our estimates suggest that global scrap availability - the amount of ferrous scrap that can be collected and melted - stood at about 700 Mt in 2016. Global scrap availability is expected to reach about 1 billion tonnes by 2030, suggesting that the steel industry will be increasing its use of ferrous scrap considerably in the medium and long-term. The use of ferrous scrap in the steelmaking process is beneficial to the environment as it preserves the natural resources that would be used instead, reduces emissions and supports the circular economy.

The steel industry has already improved its environmental footprint considerably in the past 50 years. For example, worldsteel data show that from 1960 to 2015 global steel industry decreased its energy intensity, that is energy consumption per tonne of crude steel produced, by around 60%.

Nevertheless, as an energy intensive industry, which accounts for about 7.0% of total CO2 emissions globally, the steel industry is challenged to do more.

The industry is actively investing in innovative and breakthrough technologies that can have a dramatic impact on the steel industry’s environmental performance and its steelmaking materials demand. One potential breakthrough technology is the use of hydrogen to replace carbon in metallurgical processes, thereby directly avoiding CO2 emissions. This would have a substantial impact on the demand for metallurgical coal.

There are also initiatives that focus on process integration and thus eliminating some traditional parts of the steelmaking process, such as cokemaking and iron ore agglomeration. The use of such technologies at an industrial scale would also result in considerable savings both in energy and CO2 emissions, and would have a significant bearing on metallurgical coal and iron ore markets.      

I would be very interested to hear your view on the impact of growing scrap availability and the technological developments in the steelmaking industry in the future.

Add your comment here:

  • 1

    At what stage of production is hydrogen used "instead of carbon"?

    avatarserge VinogradMay 4, 2017 12:58:19 AMReply

  • 2

    As iron occurs only as iron oxides in the earth’s crust, the ores must be ‘reduced’ to iron. Coke reduces iron ore in blast furnaces to molten iron, called ‘hot metal’. The hot metal is then processed in basic oxygen furnaces to produce liquid steel. The idea behind hydrogen steelmaking is to partially replace carbon with hydrogen (produced from ‘clean‘ electricity ) for iron ore reduction, which would result in a significant reduction in CO2 emissions from ironmaking.

    avatarBARIS CIFTCIMay 4, 2017 9:43:25 AMReply

  • 3

    Blogs like this really important to demonstrate the potential of our industry. At the same time, let's not mislead our customers or investors into thinking that if they ask us to increase the scrap content in our steel this will create a low carbon economy. We can only use what is available, and there is unlikely to be enough to really change the game for some time to come.

    avatarAnnie HeatonMay 17, 2017 6:45:44 PMReply

  • 4

    Hello Annie - Many thanks for your comment. As you rightly pointed out, our aim is to assess, demonstrate and discuss the potential of our industry. We have developed a scrap availability estimation model in order to have a clearer understanding of the global steel industry's recycling potential. Estimation of scrap availability is a complex task, which is very data and assumption intensive. We are currently supporting many academic studies in the area of recycling and life cycle assessment. We are sharing our data, knowledge and assessments openly so that we can have a structured, informed and fruitful discussion within the industry as well as with all of our stakeholders. It is widely known that steel is the material that is recycled the most. And our estimates show that more than 80% of economically recoverable and recyclable, and sufficient quality scrap is being recycled every year. This is a ratio that is probably higher than those for most other materials and hence a ratio that we should all be proud of. I agree with you and do not expect to see significant changes in scrap use soon as the increase in scrap availability will be very gradual, and mainly come from the developing countries. Nevertheless in the long-term, we might expect to see the scrap consumption to grow considerably, particularly in the developing countries, in line with the increase in availability.

    avatarBARIS CIFTCIMay 29, 2017 4:53:51 PMReply

  • 5

    You mention hydrogen use for iron ore reduction and refer to the voestalpine project. Is this a one-timer or are you aware of other businesses looking into that possibility?

    avatarValentin VoglJun 16, 2017 9:54:24 AMReply

  • 6

    Hello Valentin - Thank you for your question and interest. SSAB’s HYBRIT project and Salzgitter’s SALCOS project are other examples of initiatives focusing on the use of hydrogen to partially replace carbon in metallurgical processes.

    avatarBARIS CIFTCIJun 16, 2017 10:33:08 AMReply

  • 7

    Which role do you think ULCOS had in this? Hydrogen was not part of any of the proposed breakthrough technologies, but now it seems to have gained traction. Has ULCOS failed?

    avatarValentin VoglJun 20, 2017 9:51:51 AMReply

  • 8

    Hello Valentin - Thank you for your comment. The ULCOS programme consists of several projects, which have reached different stages of development. The HIsarna project, for example, is an ULCOS initiative focusing on process integration, and has reached the planning stage for the construction of a demonstration plant. In my blog article, I have mentioned the initiatives focusing on the use of hydrogen to replace carbon and the initiatives focusing on the process integration. There are other initiatives focusing on carbon capture and usage, such as ArcelorMittal's Steelanol project.

    avatarBARIS CIFTCIJun 22, 2017 11:24:47 AMReply

  • 9

    Excellent insights Baris. In addition to your recommendations, a few things that come to the top of my mind with regards to improving the energy efficiency are: 1. Adaptation of EAFs installed with scrap preheating technologies in steelmaking can play a significant role in reducing the specific energy consumption. A few examples include proprietary technologies developed by Tenova, Siemens VAI (Now Primetals) etc. 2. Usage of hot metal in the range of 30-50% in combination with solid charge to EAF has also reported significant benefits. However, this practice demands an excellent operations team. 3. Use of a tunnel furnace for hot charging of semis directly to the rolling mills also enables significant energy reductions by eliminating the requirement of a reheating furnace in rolling mill shops. 4. Usage of iron oxide pellets in combination with Formed/Ferro coke can also bring down the specific energy consumption in the Iron Making Zone and improve the raw material security by lowering the pressure on high-grade lump ore and metallurgical coking coal requirements. Additionally, a higher usage of Pulverized coal injection (PCI) in excess of 100 kg/tonhotmetal , installing a BPRT or TRT in BF operations can also significantly bring down the coke rate and specific energy consumption. 5. The usage of hydrogen as a reductant has already been in vogue due to steam injection in Blast Furnaces. However, the major challenge that remains is controlling this reaction and maintaining the Raceway Adiabatic Flame Temperature (RAFT). Further, we need to mitigate a few risks with regards to widespread scrap utilization. These risks may inter alia include: 1. Widespread utilization of scrap seems commercially viable in US or European markets that have access to high-quality segregated scrap primarily owing to the high penetration of Automobiles/SUVs. However, this remains a challenge for steel producers in countries such as India or other emerging economies. 2. It may be difficult to produce certain critical grades through scrap based steel making due to the inclusions arising because of long term previous application. This may lead to additional pressure during secondary metallurgy operations. In addition to the above, I firmly believe that the need of the hour is to turbocharge the development and commercial deployment of technologies such as ULCOS, ITMk3 etc. We may also think of increased deployment of Carbon capture and storage in Steel units and its further usage in Enhanced oil recovery.

    avatarSHANTANU RAIAug 4, 2017 6:46:14 PMReply

  • 10

    How about the electrode issue, which is a major concern right now. When EAF's start to run out of electrodes what happens then.

    avatarKarun MittalAug 5, 2017 11:27:22 AMReply

  • 11

    Hello Karun - Thank you for your comment. Electrode availability has indeed been a concern recently. But I do not expect the electrode availability to be a long-term issue. The electrode market went through a period of consolidation during the last few years amid weak demand and a fierce competition environment. Reportedly Chinese authorities' recent efforts to close backward and polluting facilities have also resulted in a reduction in the country's electrode production capacity. This year, better operating environment for EAFs globally resulted in an increase in the demand for electrodes and the shortage we have been observing recently. We should see additional supply coming to the markets and a gradual narrowing down of the gap between supply and demand.

    avatarBARIS CIFTCIAug 8, 2017 9:05:07 AMReply

  • 12

    Hello Shantanu - Many thanks for your comments. We also believe that the global steel industry can improve its energy efficiency and environmental performance significantly by progressively making greater use of best available techniques and technologies. On this front worldsteel carries out various studies to benchmark and analyse the steel industry’s performance. Thanks to these studies companies can compare their results against benchmarks and identify the areas for improvement. I also agree with your comments about the challenges we are faced with in the development of new technologies and increasing the scrap use. I believe that in the future we will also see improvements and innovations in scrap sourcing, sorting and refining, and control of scrap melt chemistry. Such improvements and innovations might help resolve some of the problems associated with increased scrap use.

    avatarBARIS CIFTCIAug 8, 2017 9:33:22 AMReply

  • 13

    Hello Dr Baris Çiftçi You state that world steel production is still using carbon. I have some questions: 1. Is it true that steel production is using cleaner energy and in a highly efficient way? 2. Do you think steel scrap will make a big market ?

    avatarbluesAug 30, 2017 10:09:20 AMReply

  • 14

    Hello - Thank you for your question and interest. Regarding your first question, we know that the global steel industry has improved its energy efficiency and environmetal performance considerably. However, we also know that there are significant differences between the performance of best performing steel production facilities and others. Hence we believe that, in the near term, the global steel industry can make significant energy and emission savings through modernization and making greater use of best techniques and technologies. We also believe that worldsteel and steel industry associations will be playing key roles in this process through benchmarking studies and establishing platforms for sharing of best practices. Regarding your second question, we estimate that about 600 million tonnes of ferrous scrap were recycled in 2016, and global exports of ferrous scrap stood at about 100 Mt. We know that scrap consumption will probably grow, particularly in emerging countries such as China, thanks to growing scrap availability. However, it is difficult to estimate the size of the global scrap exports market in the future. Even if there will be some growth, it will probably remain as a small market, when compared with seaborne iron ore and metallurgical coal markets.

    avatarBARIS CIFTCISep 6, 2017 1:25:02 PMReply

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