The problem of making ferrous scrap

Last week this column spoke about the importance of condemned sea going vessels as a source of scrap steel, particularly plates for straight rerolling. But volume-wise, a more important source of ferrous scrap is imports. The imported scrap used as furnace feedstock originates in a variety of products like machinery and equipment and vehicles. Shredded and heavy melting scrap for which electric arc furnaces (EAF) and induction furnaces (IF) have a preference naturally constitute the major portion of our scrap imports.

The other two sources of scrap, both of very high metallurgical properties are revert material generated at different stages of metal making like melting, casting and rolling and new production scrap generated in the process of machine manufacture and structure fabrication. Producers of steel using the blast furnace and basic oxygen furnace (BOF) route will be recycling the scrap generated internally, occasionally topping it up by buying some quantities from the market. Revert scrap, also called own arisings, is required for cooling of BOFs, which move into high temperature zone when oxygen is injected and also because of the presence of carbon in iron.

 

Unlike in the highly industrialised economies, generation of market scrap here is limited. Moreover, in the absence of an organised scrap collection and segregation system all that is generated is not recovered well. G K Basak, executive secretary of Joint Plant Committee of the steel ministry, says that because of the use of increasingly better technologies of steel making and good housekeeping, scrap generation per unit of steel made is falling.

For the same reason, machinery and equipment will remain in use for a longer period than ever before they find their way into scrapyard. Cost control now being a commonly practised mantra, any machinery manufacturer worth the name is using CNC systems incorporating CAD/CAM programmes. Therefore, less and less generation of scrap while machines and their components are made. According to the 2009-10 steel ministry annual report, 47 per cent of the metal produced in the country is through BOF route, while the share of EAFs and IFs is 26 per cent and 27 per cent, respectively. EAFs in particular require large quantities of scrap for making steel. Basak says the rule of thumb for raw materials use by EAFs is 60 per cent sponge iron and 40 per cent scrap. But depending on supply and prices of the two, EAFs could, on occasions, be found using a lot more scrap than sponge iron in their feedstock than what thumb rule warrants.

As for IFs, the ideal practice is to have a raw materials mix of 80 per cent sponge iron, 15 per cent scrap and five per cent pig iron. Most of the time, however, IFs will be using a higher percentage of scrap than the rule book suggests. EAFs as they are equipped with refining facilities produce high quality metal good for making special and value-added steel. Some EAFs also make high quality flat products. This, however, cannot be said for IFs, except for a few armed with refining lines. What they make is primarily used for industrial castings.

Government everywhere is supportive of recycling of whatever is possible from metals to plastics to paper. In this particular case of ours, to the extent that ferrous scrap, originating either domestically or by way of imports is either directly rerolled or fed into furnaces leads to saving of iron ore, coal and energy. Basak will put Indian requirements of ferrous scrap at up to 12 million tonnes, a major part of which is met by imports. More importantly, in step with our growing steel production, ferrous scrap imports are rising. According to commerce ministry exim data bank, imports rose from 3.18 million tonnes in 2006-07 to 3.53 million tonnes in 2007-08 to 4.42 million tonnes in 2008-09 and 5.24 million tonnes last year. We are importing scrap mainly from the US, the UK, UAE, Germany, Singapore and Malaysia. All the scrap contracted for imports from UAE does not, however, originate in the Emirates. Dubai being an important trading centre, third country scrap gets routed through it in particular. Indian scrap requirements will further rise as our steelmaking capacity is to be raised by at least 30 million tonnes to 110 million tonnes by 2012, mostly through brownfield route.

Sadly, however, the country is still scratching the surface in securing scrap from end of life vehicles. We have shown an amazing ingenuity in keeping old, polluting vehicles on road with authorities looking the other way. Their growing numbers are proving to be a strain on our creaky urban infrastructure and environment. Last year, India produced 2.35 million passenger cars and 566,608 commercial vehicles and the sector this year is recording growth of over 30 per cent. Many cars allow 100 per cent recovery of steel. Responsibility befalls on Society of Indian Automobile Manufacturers to bring pressure on the government so that all end of life vehicles automatically go to scrap yard. Old vehicles will then become a good source of ferrous scrap for steel mills.