The UK steel industry has undergone a very public breakdown in recent months, with the shutdown of the SSI plant on Teesside, job cuts at Tata in Scunthorpe, and Caparo entering administration. Government has stepped in and staged an emergency summit to look for ways to help the beleaguered industry, but it remains to be seen whether it will be able to follow through with measures to save the sector.
The problems in the UK are indicative of a global crisis, with firms across Europe and the US trying to stay afloat in a market flooded with cheap Chinese steel and facing ever tighter environmental legislation.
While the political machine whirrs on with talk of anti-dumping legislation and the revaluation of what many see as unfair business rates and environmental costs, big steel firms are investing heavily in research and development on innovative products and manufacturing techniques, to remain competitive in the turbulent global market.
To increase competitiveness, companies must tackle problems of high energy prices, varying raw material supply and carbon dioxide legislation, says Professor Sridhar Seetharaman, leader of the Advanced Steel Research Centre at Warwick Manufacturing Group. Companies must also find innovative ways to compete with China, which is dumping its vast stockpiles of steel. Steel exports from China almost doubled to 88.6 million tonnes in 2014, according to the International Steel Statistics Bureau.
To fight back against cheap imports, firms should produce specialised and advanced products that can’t be replicated easily in China and elsewhere, says Seetharaman. However, becoming too specialised can pigeonhole a company into making just one product. Instead, he advocates flexible factories to create a competitive advantage.
“You want an advanced product, but to make it as late as possible. Imagine a process whereby you can make steel with whatever happens to be the cheapest energy source – whether that is electricity, shale gas, carbon or biomass – and whatever is the cheapest iron ore source,” he says.
But how do you achieve this kind of flexibility? Different countries have been adopting various technologies depending on whether they have an abundance of certain raw materials or energy supply, to produce iron and steel in the most flexible way.
Seetharaman points to the US, where steelmakers have adapted their manufacturing methods for two main reasons: there is a wealth of scrap metal and also, because of the boom in fracking, a lot of cheap natural gas.
Recycling scrap
This trend has seen a move away from traditional blast furnaces fuelled by coke to produce large amounts of iron from ore. Instead, almost 70% of steel is now produced from melted recycled scrap, he says. This is a much leaner method, saving energy and reducing CO2 emissions.
To achieve this change, US manufacturers have started using an alternative production process called direct reduction. Unlike blast furnaces, where a liquid metal is formed during reduction, it involves reducing iron ore in its solid state using a reducing gas – a mixture of hydrogen and carbon monoxide. The output, direct-reduced iron (DRI), is sold as pellets or briquettes, and contains from 90 to 97% pure iron.
DRI is consumed primarily by mini steel mills – which can melt only rich sources of metal, such as scrap, but not iron ore – to improve the quality of their output. Since the reduction process consumes large amounts of natural gas, it is economically viable only where that fuel is abundant and relatively cheap. “The advantage of natural gas is not just the economics of its availability, but that using hydrogen as a reductant lowers CO2 emissions,” Seetharaman says.
Factories could combine an electric arc furnace that melts scrap using electrical energy and a DRI plant that produces iron from natural gas, and switch between the two depending on when scrap is cheap or when natural gas is cheap, increasing flexibility.
The volumes produced are much lower than from traditional blast furnaces, but as global demand has fallen this doesn’t pose much of a problem, and the approach has been successful in the US, says Seetharaman.
However, direct reduction is just one potential route for manufacturers to take, and depends on having an abundance of natural gas. Other companies are choosing to invest their R&D budgets in novel technology, in an attempt to create steel in a more energy-efficient, less carbon-intensive way.
One example is the HIsarna pilot plant at the Tata site in IJmuiden in the Netherlands, which uses a new type of blast furnace called a cyclone converter furnace. Designed for hot metal production capacity of 8 tonnes an hour, the HIsarna process produces liquid hot metal from iron ore fines, using non-coking coal as a reductant.
The fine iron ore is pneumatically injected into the smelt cyclone through multiple injection ports, to create a swirling flow. Process gases are added to the cyclone to produce heat for melting and reduction of the iron ore. Oxygen is then added to create a liquid film of molten iron oxides, which gravity causes to flow into the smelter. The iron oxides dissolve in a slag layer that covers a liquid iron bath, which is injected with granulated coal. The bath is strongly reduced, turning the iron oxides in the slag into carburised iron, which collects in the bottom of the furnace and is continuously tapped.
The pilot plant uses 750kg of coal per tonne of hot metal produced. “This is much higher than for a commercial unit because of the relatively high losses on a small scale,” says Tata Steel. “Scaled up to a commercial size of one million tonnes per year, this would translate to a coal rate below 600kg/tonne of hot metal.”
"Tata Steel says that the pilot plant has been shown to be “remarkably energy efficient”. Seetheraman says that the process is also very flexible in terms of energy, carbon and iron source.” However, to create a commercial-scale plant will need much more research to model the reaction and extreme fluid flow conditions that take place in the furnace, he adds.
When it comes to the competitive automotive steel market, companies are investing in advanced products to stay ahead of competitors. They must also adapt to the needs of the market, with carmakers required to further reduce the weight of structural vehicle parts, to comply with EU regulations for CO2 emissions while maintaining strength and deformability to meet passenger safety regulations.
These pressures have led to a focus on creating ever stronger press-hardened steels, or hot-stamping steel. Hot-stamping is the process of forming metal while it is very hot – over 900°C – and then cooling it rapidly in the die. The process converts low-tensile-strength metal to high-strength steel.
This area is exactly where ArcelorMittal is focusing. It has recently decided to increase its production capacity for aluminium-silicon (Alusi)-coated Usibor hot-stamping steel in southern Europe. By adapting the hot-dip galvanising line of its flat steel finishing plant in Sagunto, Spain, ArcelorMittal aims to meet the growing demand for innovative coatings for the automotive industry.
The €9 million investment involves modifying the galvanising line, adapting the snout for this new product and adding a second coating pot, together with several other coating-line adjustments. The project started in summer 2015, with the first production and client product approvals expected by the end of the year.
The Sagunto plant already supplies the automotive industry with hot-dip galvanised and electrogalvanised products, including advanced high-strength steels. After Mouzon and Florange in France and Dudelange in Luxembourg, Sagunto will be the fourth plant in Europe to produce Usibor Alusi and the second to produce large-width Usibor.
Wide automotive portfolio
Sagunto site manager Pablo Avello says: “We will become the ArcelorMittal plant that will produce the widest portfolio for the automotive sector, from the very softest to the hardest steel, and will produce almost everything in this plant, not specialised to just one product.”
Hot-stamping is one of the biggest growth areas in the automotive market, says Philippe Baudon, chief executive of tailored blanks at ArcelorMittal. “It is the highest-resistance strength steel that you can obtain. We are at 1,500MPa, and we are working on 2,000MPa. In a cold-stamp material you can get up to around 1,000MPa, but it is difficult.”
The unit that Baudon heads creates components for the automotive sector. A tailored blank is a sheet of steel that combines several grades and/or various thicknesses or different coatings. The different parts are laser-welded together to “place the best material at the best place in the right thickness”. Tailored blanks are used especially for the car’s body-in-white and closures.
When using Usibor for tailored blanks, ArcelorMittal had to develop a laser ablation method to weld the steel together. “Usibor has an Alusi coating and steel doesn’t like aluminium,” says Baudon. “If we weld the aluminium, it creates a weak weld. We use a high-power laser to remove the aluminium near the edge of the material, to allow us to get a good-quality weld.”
ArcelorMittal has also added to its speciality range with a product called Ductibor 500, a high-strength steel that can absorb the energy from a crash without deforming. The company is now working on a Ductibor 1000 range that will double the strength yet retain ductility, allowing for further weight reductions while retaining vehicle crash safety.
Optimising crash behaviour
ArcelorMittal has developed laser-welded blanks combining the benefits of hot-stamped Usibor 1500P and Ductibor 500P, reducing the weight of the parts and ensuring optimal crash behaviour. These new applications can often be stamped as one part instead of the multiple parts that are usually required, for example by welding five door parts to form one whole piece. Hot-stamped laser-welded blanks have now been adopted by most big carmakers.
“We have a full demonstrator of what you can achieve on the body-in-white, using the latest products and solutions developed by our R&D department,” says Philippe Aubron, chief marketing officer at ArcelorMittal.
“On a C-segment vehicle, such as the Golf or Mégane, you can achieve a 20% body-in-white weight reduction using Usibor 500P and Ductibor 500P advanced high-strength steel.”
ArcelorMittal has run the same exercise on a pick-up truck in the US and achieved 23% body-in-white weight reduction. “You can look at the Volvo XC90 SUV which contains 40% Usibor and it cuts the weight by more than 300kg, which is as or even lighter than its competition which uses a mix of aluminium and steel,” says Aubron.
An exercise was also run on premium D-segment cars, which achieved a 24% body-in-white weight reduction.
These developments have has seen sales in Europe of Usibor and Ductibor steel increase dramatically, with ArcelorMittal doubling the proportion of those products in its portfolio over the past five years to 25%, and a further expected increase to 35-45% in the next five years. Aubron says: “Overall, the auto industry is buying more of those products. It is more efficient and less costly to reduce weight with steel than with other materials such as aluminium or carbon fibre.”
Investing in research and producing new products is key to staying a market leader, says Gregory Ludkovsky, head of global R&D at ArcelorMittal. “We have 80 products in development, and we have much more to discover. But we do not aim to dominate only in volume. We have phenomenal coverage in terms of intellectual property, and this goes beyond just material. We also invented unique technologies of welding, and all tailored blanks made with this are based on our proprietary technology.”
There is also a strong alignment between the commercial business and R&D. Ludkovsky manages a network of engineers who are based at the headquarters of clients such as Ford and Volkswagen. They work with the client from concept to final implementation, when a vehicle is launched, to create tailored solutions.
“We are taking this job to the next level, from co-engineering the vehicles to co-designing the vehicles. Our vision is to be more than a provider of coils or piles, but to offer complete engineering solutions,” says Ludkovsky.
For the near future, ArcelorMittal will continue to focus on press-hardened steels. The rise of aluminium and carbon fibre is not to be ignored, although Ludkovsky seems unperturbed by any threat from these lightweight materials.
“One of my favourite journalists was Mark Twain,” he says. “One quote in particular has stuck with me: ‘The reports of my death have been grossly exaggerated’. The same can be said about rumours of steel being dead in the future for automotive, and that alternative materials will take over. It is not going to happen.”