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Indian Sponge Iron Industry in Global Perspective (October 2001)

By Sanjay Sengupta

The future has greater challenges for DRI producers in an era of a global recession of the steel industry


Globally iron ore is the major feedstock for BF-BOF steelmaking for the production of about 60 per cent of world crude steel. But it requires various types of treatment of raw materials, involves high capital costs and substantial investment on infrastructure. It also leads to environmental problems and has a long gestation period.

To find a way out of these shortcomings of BF-BOF process, EAF steelmaking was introduced more than 100 years back. The share of EAF steelmaking in the global output of crude steel has increased substantially from 26.6 per cent in 1988 to 33.4 per cent in 1999. The increasing trend in scrap prices in the nineties and its short supply led to the use of sponge iron / Direct Reduced Iron (DRI) for use in the charge-mix for steelmaking.

DRI is a high quality metallic product produced from iron ore, pellets etc as a feedstock in Electric Arc Furnaces (EAFs), Blast furnaces and other iron and steelmaking processes. Hot Briquetted Iron (HBI) is a denser and compacted form of DRI designed for the ease of shipping, handling and storage. DRI can be used in steel units where the DRI reduction unit is situated at the site of the steelmaking plant.

The global steel industry is using about 22 per cent of alternative iron like DRI/HBI, merchant pig iron and hot metal to produce high quality steels in the EAFs. DRI is now recognised as a high purity, top quality charge material the world over. In comparison with scrap, the use of sponge iron / HBI offers the benefits like consistency in composition, low trace elements due to its porous nature and environment -friendliness.

World production of DRI

From a global production of 7.8 million tonnes in 1981, world total output of DRI has reached 43.2 million tonnes in 2000. As will be evident from Table -1, the growth between 1990 and 2001 has been remarkable.

Table-1 : World production of DRI : 1990 to 2000 (million tonnes)

Year            World Production of DRI     Yearly Growth%

1990            18.5                                     -

1991            19.0                                     2.7

1992            19.9                                     4.7

1993            23.1                                     16.1

1994            27.5                                     19.0

1995            31.3                                     13.8

1996            32.8                                     4.8

1997            36.2                                     10.4

1998            37.1                                     2.5

1999            38.6                                     4.0

2000            43.2                                     11.9

Source : IISI & MIDREX

According to a projection of Sponge Iron Manufacturer’s Association (SIMA), the global production of DRI may reach 60 to 65 million tonnes in 2005, But in view of present trends, this seems to be an over estimation.

Raw materials for making DRI

The major raw materials required for the production of DRI are iron oxides in form of lump iron ore / pellets, non-coking coal and fluxes (limestone and dolomite). Some precautions are necessary in selecting the iron oxide specially the phosphorous content and its reliability for easy reduction. Use of high quality pellets with low phosphorous at an economic price helps in the cost effective production of DRI.

Composition of DRI

The usual chemical composition of DRI / HBI traded in the international markets is as follows:

Contents                               %

Total Fe                                 94-95

Metallic Fe                             88-90

Degree of Metalisation             93-95 + 1.2

Carbon                                   1.0 - 1.5 + 0.3

Sulphur                                  0.0005 - 0.015

Phosphorous                          0.02 - 0.09

Silica                                     1.0 - 2.0

 

For maximum yield, the metallic iron content should be at the highest possible level with sulphur and phosphorous as low as possible. Gangue should be as low as possible with Silicon less than 2.5 per cent to ensure lower slag volume, less power consumption and for achieving higher productivity.

Size of the DRI should be less than 3 mm fraction to prevent losses during charging and handling operations. The density should be high to facilitate faster melting which in its turn will save energy.

DRI : Benefits for EAF Steelmakers

(a) The addition of DRI in the charge - mix in an EAF process brings about a remarkable reduction of impurities such as Sulphur and phosphorous. This dilution of the charge-mix decreases the refining requirements which results in simplification of the metallurgical operation inside the furnace and increases furnace productivity. Very often it has been found that sufficient dilution helps to complete most of the refining during the melting operation itself, thus further increasing productivity.

Continuous feeding of DRI

(b) Continuous feeding of DRI results in achieving power level higher than 100 per cent scrap charge with similar electrical settings on the furnace. Due to the heterogenous nature of scrap and continuously varying arc length between the electrode and scrap leads to wide fluctuations in the melting scrap. Such arc fluctuations reduce the effective power input. On the other hand, the melting of continuously fed DRI helps in an increased yield of 10 to 15 KwH per tonne in the power input.

C) Hot charging of DRI

To reduce cost of DRI production steel producers all over the world are looking for upstream process designs that can further improve operational efficiency. A variety of systems have been developed to transport hot DRI (HDRI) from a direct reduction furnace to an EAF.

MIDREX has designed a system to transport HDRI to an EAF or similar melter using gravity. This system called HOTLINK, is primarily intended for greenfield sites and takes advantage of lower power and electrode consumption as well as higher EAF productivity which can be realised by hot charging.

Advantages of Hot Charging of DRI

The concept of hot charging of DRI is not new. In fact, some of the facilities of MIDREX Direct Reduction Corporation have in the past helped to effect significant savings by charging HDRI into an EAF. Hot charging of DRI is an effective means of lowering the cost per metric tonne of liquid steel because of the reduction in power and electrode consumption. It has been found that power consumption can be reduced by about 20 KwH per tonne of liquid steel for each 100°c increase in the composite charge temperature. Electrode consumption is also reduced due to its linear relationship with power consumption (about 0.004 kg/KwH)

In addition to the power and electrode savings, hot charging will increase EAF productivity for a meltshop designed to charge cold DRI.

For a greenfield site, significant capital cost savings can be achieved by downsizing the EAF electrical system in order to take advantage of this increase in productivity.

Hot link has been claimed as the most efficient way to charge HDRI to an EAF because of the following advantages.:

(a) Minimum temperature loss since the distance transported is short.

(b) Minimum HDRI degradation since the material velocities are low.

(c) No-reoxidation of material takes place since the system is totally sealed.

(d) Low maintenance and high reliability since the system uses gravity for transport and is based on existing technology.

The Indian Experience

Essar Steel Ltd. has listed the following advantages of charging Hot DRI at their greenfield project at Hazira, Gujarat.

(i) One per cent increase in metallisation

(ii) No moisture (Compared to 1.5 per cent in HBI)

(iii) Very low heat loss in the 90 - ton container (less than 5°c/hr)

(iv) Reduction of 0.6 per cent in product fines generation

(v) Power savings at briquettes of 8 to 10 KwH per tonne.

(vi) Savings in wear of briquetting die segments and its maintenance.

Essar Steel has effected a saving of about US$ 2 per tonne by hot charging of DRI. It is charging 26 per cent or more of hot DRI in the charge-mix. Total savings at HDRI land SMP ends is US$ 12/tonne.

UHP transformer facilitates faster melting

Ultra High Power (uhp) transformers can help to achieve better thermal efficiency which facilitates fast melting of hot DRI charge. Use of VHP transformers results in increased productivity and a saving of power up to 15 kwh pertonne.

Other Benefits of dri use in an EAF :

d) Lower Electrode consumption

Use of DRI vis-a-vis scrap helps in lower electrode consumption due to the following reasons :

(I) Scrap collapse results in increased breakdown which is much less in case of dri.

(ii) The productivity of the furnace is high when dri, specially Hot dri, is used as a charge material.

(III)Due to high CO content in the furnaces, electrode oxidation is reduced.

(e) Lower oxygen consumption

Use of DRI helps to lower the oxygen consumption on following counts:

• The need for oxygen in scrap cutting is avoided

• The oxygen input in dri is associated with unreduced oxides.

• The unreduced iron oxide in DRI is sufficient to provide the slag requirements for iron oxide

(f) Lime consumption can be reduced

By using lime or dolomite bonded pellets for dri production, the requirements for lime addition can be minimised.

(g) Refractory consumption is lower.

The following factors help in the reduction of refractory consumption in the use of DRI in EAFs.

(i) During continuous feeding of DRI, maintaining a deep foamy slag can minimise arc radiation and the foamy slag also increases thermal efficiency as compared to all scrap charges.

(ii) By balancing the feed rate with power input and raising the bath temperature towards the end of the melting stage with a lower rate of feeding.

(iii) Addition of MgO improves slag basicity control and reduces the slag attack on refractory lining.

DRI Production Processes

A number of processes exist for the production of DRI. These may be grouped into (a) Coal-based processes and (b) Gas-based processes.

At present India is the largest producer of coal based DRI and the 620,000 tpy coal- based project of Jindal Steel and Power Ltd. is the second biggest producer of coal-based DRI in the world.

Gas-based process of producing DRI has the following advantages:

(a) Degree of furnace utilisation is higher

(b) Energy control and its conservation are easier

(c) Bigger sized furnaces can be used which lessens maintenance hazards.

Modern Processes for producing DRI

(a) HYL III

The process uses natural gas in the form of steam to obtain a hydrogen rich reducing gas which reacts with iron ore lumps and pellets in the reactor at 930°c. Hot DRI is charged at 700°c. The hot DRI is either briquetted to form HBI or cooled as cold DRI. Since gaseous reductant is used, the HBI/DRI produced is very clean and of high quality

(b) HYL 4M

In this process, the operation is performed by injecting pre-heated oxygen and natural gas into the reduction reactor where elevated temperature and elemental iron in the DRI are available to reform the resultant Co2 and H2O into CO and H2. FeO generated during the reforming reactions is re-reduced and thus the catalyst for this reforming reaction is continually replenished.

Another result of this in-situ reforming is increased carborizing potential of the DRI in the natural gas presence at an elevated temperatures. Formation iron carbide (Fe3C) within the DRI pellet occurs and has carbon contents as high as 5.5 per cent at metallizations over 94 per cent. Hylsa has installed a 675,000 tpy HYL4M plant at Monterrey, Mexico. It is charging 70 per cent DRI in Fuchs finger-shalf furnace and 100 per cent DRI in the Denieli-designed Danarc, twin-calhode DC melter. Grasim Industry's is Vikram Ispat Ltd. was globally the first to install a HYL III HBI plant.

(c) MIDREX Process

The major components of a MIDREX Reduction Plant include shaft furnace, reformer, heat recuperator which are supported by ancillary systems for iron ore handling and also for gas, water and DRI. Direct reduction is carried out continuously in the MIDREX shaft furnace. Iron Oxide (pellet or lump ore) is fed to the top of the shaft furnace. The iron oxide is preheated and reduced by the counterflowing reducing gas containing H2 and Co. The hot reducing gas is continuously discharged from the shaft furnace into a hopper and is fed directly into a Hot Briquetting machine.

Essar Steel is using MIDREX process at its HBI Plant at Hazira, Gujrat which is the world's largest and has recently increased the capacity to 2.2 Mtpy.

(d) Miderex Megamod Process

MIDREX MEGAMOD is a process that facilitates capacity expansion. It is a single - shaft furnace capable of producing 2.5 Mtpy or more of DRI and provides tremendous economy of scale. Ispat industries was the first in the world to set up such a plant. OPCO plant in Venezula is also using this process for which it has renovated existing reformers with a 6.5 meter internal diameter.

(e) Fastmet & Fastmelt Processes.

Fastmet uses iron ore fines and steelmill wastes and mixes them with coal or other carbon bearing materials and formed into pellets which are then fed into a doughnut shaped rotary hearth furnace (RHF) and is heated to 1350°C. Under high heat, pulverised coal acts as a reductant and burns off the oxygen in the iron ore, leaving pellets with high iron content. Cold DRI can be charged into an adjacent furnace or may be compacted in HBI for shipment.

Fastmelt process uses the Fastmet RHF to produce DRI or briquettes, which are then fed into a specially designed electric melter to produce high quality liquid iron known as FASTIRON.

The world’s first FASTMET commercial plant started operation in mid-2000 at Nippon Steel’s Hirohata works. The second commercial FASTMET DRI plant was commissioned recently at Kobe Steel’s Kakogawa works.

(f) Finmet Process

Finmet process has been jointly developed by VAI of Austria and FIOR of Venezula as an improvement of the earlier FIOR process and is often known as FIOR II. Fine ores with high iron content is converted into DRI using natural gas as a reductant. As compared to the earlier process, its lower specific natural gas consumption of 2G cal/tonne and saves electrical energy of 10Kwh/tonne.

g) FINEX Process

POSCO of Korea and RIST of VAI, Austria has jointly completed a smelting reduction process plant called FINEX at POSCO’s Pohang works for production of high quality hot metal utilising low cost fine ore and non-coking coal.

(h) COREX Process

In this process all metallurgical work is carried out in two separate process reactors, i.e. the reduction shaft and the melter gasifier. Oxygen is blown into the melter gasifier and, upon gasification with the coal, an excellent reduction gas is generated consisting of 95% CO+H2 and approx 3% CO2. Following its exit from the melter gasifier, the gas is cooled to the required reduction gas temperature between 800 and 850°c. After dedusting in a hot gas cyclone, the gas is fed to the reduction shaft where the burden, consisting of any desired combination of lump ores, pellets or sinter, is converted to DRI. JVSL has installed a 1.6 Mtpy COREX plant in Karnataka.

Growth of Sponge Iron Industry in India

Sponge Iron India Ltd. was the first sponge iron plant set up at Paloncha in Andhra Pradesh in 1980. In the next nine years, five more coal-based were set up and to-day there are 19 coal-based plants in India using various technologies like SL/RN, ACCR, Krupp, Codir, TDR, Jindal etc. India is the highest producer of coal-based DRI in the world.

In the late eighties, Indian producers became enthusiastic in setting up gas-based plants. The first plant was started at Hazira, Gujarat in 1990 by Essar Steel using MIDREX technology. Ispat Industries Ltd. also adopted MIDREX technology for their one Mtpy gas-based project at Raigad in Chattisgarh while the third gas-based was set up by Vikram Ispat Ltd. using HYL III technology at Salav Maharashtra.

There are at present three gas-based and 19 coal-based DRI projects in India. The present installed capacity is about 6 Mtpy. The growth of Indian Sponge Iron Industry has been spectacular. From a production of only 10,000 tonnes in 1980, it reached a level of 1.25 million tonnes in 1991-92 which has further increased to 5.44 million tonnes in 2000-01. India was the third highest producer of DRI in the world in 2000. India’s DRI production has grown remarkably in the nineties as will be evident from Table-2

Table -2: India’s DRI production 1990-91 To 2000-01
(‘000 tonnes)

Year                   Production        Yearly Rate of growth

1990-91                    868.0                               -

1991-92                  1306.2                          50.2

1992-93                  1504.0                          15.1

1993-94                  2419.6                          60.9

1994-95                  3386.4                          40.0

1995-96                  4326.0                          27.8

1996-97                  5009.1                          15.8

1997-98                  5344.5                            6.7

1998-99                  5180.0                        (-) 3.1

1999-2000              5328.0                            2.9

2000-2001              5442.0                            2.1

Source : SIMA & DCIS

According to provisional figures, during April-July 2001, India’s DRI production has recorded a growth of 7.1 per cent at 2 million tonnes over the same period last year.

The downtrend in DRI production in 1998 -99 was due to a serious recession in the EAF and IF steelmaking units.

Exports & Imports of DRI

The export and import of DRI by India between 1996-97 and 1999-2000 are presented in Table-3

Table-3 : Exports and Imports of DRI by India
(‘000 tonnes)

Year                  Export                          Import

1996-97                372.4                              1.1

1997-98                374.0                              0.3

1998-99                168.0                              1.9

1999-2000              53.0                              NIL

The gradual decline in exports was due to higher domestic consumption and lower global prices of DRI/HBI.

(C) Future Demand and Availability of DRI in India

Demand of DR/HBI in India as estimated by the working group for Ministry of Steel, Government of India for IXth plan period was as follows :

Year Demand (mill tonnes)

2001-02         7.67

2006-07       15.53

But due to slowing down of the global steel industry growth and depression in the domestic industry, the demands mentioned above are not likely to materialise. The availability of DRI in India is likely to be around 6 million tonnes in 2001-02 and about 8 million tonnes by 2006-07.

The Future

Global steel production is likely to fall by 2.4 per cent to about 824 million tonnes in 2001 or even lower. The terrorist attack on USA on 11th September 2001 will have a depressing effect on US economy and its steel industry which was already in a bad shape prior to the incident, affecting the global industry. World prices of steel scrap per tonne declined to US$ 79 in USA, US$ 56 in UK and US$49 in Japan. This may further decline and may retard the growth of global DRI consumption.

Though India’s production of DRI has gone up by 7% during April-July, 2001, cheaper scrap imports may impact the consumption level of DRI in the coming period. The constraints of bad infrastructure, supply of inconsistent quality of non-coking coal to DRI producers still continue. Allocation of railway wagons as per the preferential traffic rules of the Indian Railways may help the DRI industry. The future has greater challenges for DRI producers in an era of a global recession of the steel industry.

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