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Other steelmaking raw materials
London
July 2011
Other steelmaking raw materials
Manganese
LimeSilicon
Electrodes
Chromium
USED IN ALL STEELS
USED IN MOST STEELS
Chromium
Nickel
Zinc
Cored wire
TinMolybdenum
Tungsten
Vanadium
Titanium
USED IN SOME STEELS
MINOR ALLOYING ELEMENTS
Other steelmaking raw materials –Fairly
low % of steel production costs
Manganese avg. $20/tonne
Lime avg. $20/tonne
Silicon avg. $10/tonne
Electrodes avg. $7/tonne
Iron avg. $300/tonneIron avg. $300/tonne
Chromium avg. $200-400/tonne (stainless)
Nickel avg. $500-1000/tonne (stainless 300)
80% of ferroalloy revenues are driven by steel
Aluminium
AlloysSilicones
Electronics
& Solar
Iron
Castings
CRUDE
STEEL
Aerospace &
Superalloys
40% 5%55% 65%25% 100% 95% 5% 100%
Silicon FeMn
SiMn Chrome
End
Uses
Quartzite Manganese
Ore
Chrome
Ore
Silicon
Metal
$5.3bn
FeSi
$10.5bn
SiMn
Mn metal
$17.4bn
FeCr
$9.0bn
Chrome
Metal
$0.5bn
$8.5bn $3.3bn
Ferro-
Alloys
Ores
Estimated revenues for 2010
USED IN ALL STEELS - Manganese
• Manganese is the world’s fourth most heavily consumed metal
• Global mine output of 14 million tonnes in 2010 – over 90% goes into steel
• All steels contain manganese
• Manganese is used to remove sulphur from liquid steel
(sulphur causes steel to crack)(sulphur causes steel to crack)
• There is no viable substitute for manganese as a de-sulphiriser
• Manganese is also used to improve the strength of certain steels
(structural steels, high strength flat steels)
• Non-steel consumption of manganese includes de-polarisation of dry-cell
batteries, and as an additive in certain aluminium and copper alloys
Manganese – consumption in steel
• Manganese content of steel ranges from 0.4% to 2.5%. Average is 0.8%
• Manganese is added to steel in the form of one of four types of ferroalloy:
• Silicomanganese (SiMn)
• High-carbon ferromanganese (HC FeMn)
• Medium and low-carbon ferromanganese (MLC FeMn)
• Manganese metal (Mn metal)
• The choice of manganese ferroalloy is driven by the chemistry of the steel
(Mn, Si and C specifications)
• Ferroalloys are added to steel in the ladle furnace after decarburisation in the
BOF / EAF, so their carbon content can be critical
Manganese – ore into ferroalloy
• Manganese ore is usually concentrated at the mine site. Sintering of fines is
commonplace, sometimes at mine sites and sometimes at smelters
• Grades of manganese ore range from 20% to 50% Mn content
• Manganese ore is smelted in an EAF, with metallurgical coke as a reductant, to
produce silicomanganese and ferromanganese
• SiMn typically contains 66% Mn , 17% Si, 2% C, balance Fe
• HC FeMn typically contains 76% Mn , 7% C, balance Fe
• MLC FeMn typically contains 82% Mn, <2% C, balance Fe
• The production of Mn metal involves dissolving manganese ore into sulphuric
acid, and extracting the Mn metal from the solution using electrolysis
• Mn metal typically contains 99% Mn
Manganese – ore production
• Manganese ore is a highly
concentrated industry. The top 5
producers account for 60% of world
output. The top 10 producers account
for 75% of world output
• Production is dominated by blue chip
Manganese ore output by company in
2010 (million tonnes contained Mn):
Company OutputMkt
share
1. BHP Billiton 3.5 25%
2. Eramet 1.5 10%
3. Assmang 1.4 10%
4. Privat 1.4 10%• Production is dominated by blue chip
mining groups such as BHP Billiton,
Vale and Eramet. In this regard, it has
great similarity to iron ore
• High grade manganese ore (>40% Mn)
is even more dominated by the blue
chip companies. BHP Billiton, Eramet
and Assmang together account for
85% of high grade production
4. Privat 1.4 10%
5. Vale 0.7 5%
6. UMK 0.5 4%
7. MOIL 0.5 3%
8. ENRC 0.4 3%
9. OM Holdings 0.4 2%
10. Buritirama 0.3 2%
Others 3.5 25%
Total world 14.1
Manganese – ore reserves
South
Africa
16%
Ukraine
19%Gabon
7%
China
6%
Other
countrie
s
18%
Other
countrie
s
25%
Reserves Resources
• Around 75% of the world’s manganese resource is in the Kalahari basin in South
Africa. Most of this is not explored sufficiently to count as reserves
• Ukraine, Brazil, Australia and west Africa also have significant manganese
reserves. China has a small reserve of low grade ore which is depleting fast
Brazil
15%
Australi
a
12%
India
7%
7%
South
Africa
75%
Manganese – ore vs ferroalloy output
South
Africa
25%
Brazil
7%
India
6%
Ukraine
4%
Other
countrie
s
12%
China
52%S.Africa
6%
Norway
4%
Japan
4%
S.Korea
3%
Other
countrie
s
15%
Mn ore output Mn ferroalloy output
• China accounts for 52% of the world’s production of Mn alloys, but just 16% of
the output of Mn ore. Thus there is a huge import of Mn ore into China. Other
major importers of Mn ore are India and Ukraine
• S.Africa, Australia, Gabon and Brazil are the largest net exporters of Mn ore
Australi
a
19%China
16%
Gabon
11%India
9%
Ukraine
7%
6%
Manganese – prices
12
16
20
Mn ore prices, US$/dmtu
5000
6000
7000
Mn ferroalloy prices,
US$/tonneSiMn
HC FeMn
0
4
8
12
0
1000
2000
3000
4000
Manganese – points to watch
• Manganese reserves are plentiful. There are enough world resources to satisfy
demand for the next 50-100 years
• Nevertheless, with 75% of world resources, much of future demand will have to
come from South Africa
• Logistical constraints in South Africa are chronic. Rail and port links to Kalahari
are at capacity levels, unlikely to be eased before 2018-20are at capacity levels, unlikely to be eased before 2018-20
• Price bottom of >$5/dmtu, with upside based on potential logistical bottlenecks
in South Africa, but as yet these have had little impact
• Grades are deteriorating. High grade premium will most likely increase
• Manganese can be very harmful to health. Exposure linked to brain disease and
Parkinson’s Disease. Pollution and exposure will become bigger issues,
especially for Mn metal production in China
USED IN ALL STEELS - Lime
• Limestone is calcium carbonate
(CaCO3)
• Calcium is used to remove silica, the
major impurity in iron ore, out of
molten iron into slag
• Limestone is added into the blast• Limestone is added into the blast
furnace at the iron-making stage.
The heat decomposes the limestone into lime and CO2
(CaCO3 CaO + CO2)
• The lime reacts with silica to form calcium silicate
(CaO + SiO2 CaSiO3)
• Calcium silicate rises to the top of the blast furnace and is removed as slag
• On average, 500kg of limestone is used to produce one tonne of pig iron
Lime – Consumption in BOF/EAF
• Lime is also used in the steel-making process, in both the BOF and EAF routes,
to remove remaining silica impurities
• At the steel-making stage, lime is usually added as dolomite and quicklime
• Dolomite is calcium magnesium carbonate (CaMg(CO3)2). As well as removing
impurities into slag, the magnesium helps to separate the slag from the liquid
steel, and helps reduce wearing of the lining of the BOF / EAFsteel, and helps reduce wearing of the lining of the BOF / EAF
• Quicklime is lime which is bought having already been reduced from limestone
• At the BOF / EAF stage, between 35-50 kg of lime is added per tonne of steel
• Fine limestone and dolomite are also used as a binding agent in the production
of iron ore sinter
Lime – Cost
• Lime is a very abundant material. Calcium is the fifth most common element in
the earth’s crust
• Consequently lime is relatively cheap. The prices of limestone and dolomite
are mostly within the range $20-120/tonne
• The price range is wide, reflecting the fact that transportation is the main cost
componentcomponent
• Many steel plants are quite close to a domestic lime source, and consequently
pay a price at the lower end of the range
• International trade in these products being relatively low, prices fluctuate in US
dollars from country to country in response to exchange rate changes
USED IN MOST STEELS – Silicon
• Silicon (Si) is the second most abundant metal in the earth’s crust. It exists
naturally in the form of clay, sand, granite and quartzite. It is so abundant that
reserves and resources are not worth calculating
• Most steels contain Si, in order to deoxidise liquid steel after tapping from the
BOF / EAF. A minority of steels are deoxidised by Al instead of Si
• Si also adds electrical conductivity to steel. On average, steel is 0.3% Si, whilst • Si also adds electrical conductivity to steel. On average, steel is 0.3% Si, whilst
electrical steels contain up to 7% Si
• Si is added to steel either as SiMn (already discussed), or as ferrosilicon (FeSi)
• FeSi is a ferroalloy usually containing 75% Si, 20-25% Fe. It is produced in an
EAF by smelting quartzite together with coke and iron ore
• 75% of FeSi is consumed in steel production. Most of the rest is consumed in
the production of foundry castings and magnesium metal
Ferrosilicon – production
• China produced 71% of the world’s
FeSi in 2010. Its share of global
consumption was 55%, hence China
remains a major net exporter of FeSi,
mostly to other Asian countries and
the USA
• The major cost component for Brazil
Norway
3%
USA
2%
Iceland
2%
India
2%
Other
countries
9%
FeSi output
• The major cost component for
producing FeSi is electricity
• With high electricity prices and
government closures of small
ferroalloy plants, it is questionable
whether China can continue to
export large volumes of FeSi.
Exports have fallen substantially
already between 2007 and 2010
China
71%
Russia
7%
Brazil
4%
Total: 6.9 million tonnes
Ferrosilicon – prices
1500
2000
2500
FeSi prices, US$/tonne
0
500
1000
1500
USED IN SOME STEELS – Electrodes
• Around 30% of global steel output takes
place in electric arc furnaces
• Electric arc steelmaking uses electrodes to
pass electrical current through the EAF
• The most common form of EAF uses
alternating current (AC), in which there are alternating current (AC), in which there are
three electrodes in the EAF
• A typical modern AC EAF would be rated at
60 million volt amperes (60 MVA),
producing 650,000 tpy of liquid steel
• Electrodes for steel EAFs are made from
synthetic graphite
Electrodes – Consumption in EAF
• Electrodes for EAF steel production are
produced by mixing petroleum coke with
petroleum pitch, then shaping and baking
the mixture at over 3000 degrees celsius
• This turns the material from carbon into
synthetic graphitesynthetic graphite
• Currently, between 1-2 kg of electrode is
consumed per tonne of EAF steel produced
• World consumption of electrodes in
steelmaking is around 600,000 tpy
Electrodes – prices
• Electrode prices are linked, on a
lagged basis, to the prices of oil
and coal/coke
• Prices in first half of 2011
averaged US$5000/tonne
• At this price, the electrode cost 4000
5000
6000
7000
Graphite electrode prices,
US$/tonne
• At this price, the electrode cost
per tonne of liquid EAF steel
produced is around $7/tonne
• Electrodes are much more
important to the steelmaker than
the low proportion of operating
costs suggests, as electrode
malfunction can result in a large
amount of lost production
0
1000
2000
3000
4000
USED IN SOME STEELS - Chromium
• Chromium (Cr) is the 13th most abundant metal in the earth’s crust
• Global mine output of 8 million tonnes of contained Cr in ore (2010)
• Around 75% of Cr is used in steel. Its main properties in steel are its supreme
resistance to corrosion, temperature and wear
• Cr is used intensively in stainless steel and in some special rebar grades. • Cr is used intensively in stainless steel and in some special rebar grades.
Stainless steel typically contains 18% Cr
• Cr is added to steel as ferrochrome (FeCr). FeCr is a ferroalloy containing
50-65% Cr, 0-8% C, balance Fe. It is produced in an EAF by smelting chrome ore
together with coke. Due to the high quantity required, FeCr is sometimes
added to stainless steel in the EAF, as opposed to the ladle furnace
• Non-steel Cr consumption takes place in a variety of applications – including
welding, superalloys, iron castings, chemicals
Ferrochrome – ore vs ferroalloy output
South
Africa
39%
Turkey
Oman
4%
Russia
4%
Brazil
3%
Other
countrie
s
12% South
Africa
41%
India
Russia
7%
Finland
3%
Other
countrie
s
6%
Cr ore output FeCr output
• China is the major consumer of FeCr. It is a net importer of both FeCr and Cr ore,
of which its reserves are very small
• The major producers in the chrome sector are in South Africa, Kazakhstan, India,
Turkey and Russia
Kazakhs
tn
17%
India
13%
Turkey
8%
China
20%
Kazakhs
tn
13%
India
10%
Ferrochrome – prices
300
400
500
Cr ore prices, US$/tonne
400
500
600
FeCr prices, US c/lb
High-
Carbon
FeCr
0
100
200
300
0
100
200
300
USED IN SOME STEELS – Nickel
• Nickel (Ni) is a base metal, around 60% of which is used in stainless steel
• Global mine output of 1.5 million tonnes of contained Ni in ore (2010)
• Nickel is used extensively in stainless steel, but not in other steels. Its main
usefulness in stainless steel is its extreme corrosion resistance. Stainless steels
in the 300 grade family are 8-10% Ni. Other stainless steels have a much lower
Ni contentNi content
• Nickel is mostly added to steel in pure metal form. A minority of steel
producers prefer to add their nickel as ferronickel (FeNi)
• Nickel is characterised by low ore grades (mostly <2% Ni content), and a long
and complicated process chain. Nickel metal is traded on the LME
• The 40% of nickel consumed in non-steel applications goes into a variety of end-
uses, including aerospace superalloys and batteries
Nickel – ore vs refined metal output
Russia
19%
Canada
18%New
China
5%
Other
countrie
s
25%
China
22%
Russia
Cuba
3%
Other
countrie
s
30%
Ni ore output Refined Ni metal output
• China is the leading consumer of nickel, and is a major net importer both of nickel
ore concentrates and refined primary nickel
• The major nickel mining regions are Russia, Canada and Australiasia
18%
Australi
a
13%
Indonesi
a
13%
New
Caledon
ia
7%
Russia
19%
Japan
11%
Australi
a
9%
Canada
6%
3%
Nickel – prices
40000
50000
60000
Nickel LME cash prices, US$/tonne
0
10000
20000
30000
USED IN SOME STEELS - Zinc
• Zinc (Zn) is the 24th most abundant metal in the earth’s crust, but is the fifth
most heavily consumed metal in terms of tonnes mined
• Global mine output of 13 million tonnes of contained Zn in concentrate (2010)
• Around 60% of Zn is used in steel. Zn is used to “galvanise” steel sheet, to
improve corrosion resistance. Galvanised steel sheet is used extensively for
vehicle body panelsvehicle body panels
• Zn is added to steel in pure metal form downstream of the rolling process, using
one of two methods – electrogalvanising and hot dip galvanising
• Zn ore is concentrated, smelted then refined into pure metal form. Zn metal is
traded on the LME
• The 40% of Zn consumed in non-steel applications goes mostly into diecasting,
and into the production of brass and bronze
Zinc – ore vs refined metal output
China
29%
Canada
Kazakhs
tn
5%
Other
countrie
s
24% China
39%
Australi
Spain
4%
Other
countrie
s
33%
Zn ore concentrate output Refined Zn metal output
• China is the leading consumer of zinc, and is a net importer of zinc concentrate to
smelt and refine into primary zinc metal
• The major zinc mining regions are China, Australasia and South America
Australi
a
12%Peru
12%
USA
6%
India
6%
Canada
6%
S.Korea
6%
Canada
5%
India
5%
Japan
4%
Australi
a
4%
Zinc – prices
3000
4000
5000
Zinc LME cash prices, US$/tonne
0
1000
2000
3000
USED IN SOME STEELS - Cored wire
• Alloy additions need to be made to some
steels at the ladle furnace stage, just prior
to casting, especially for special steels
• In the ladle furnace the steel is covered by
a thick layer of hot slag; adding alloys in
lumps yields recovery to metal of less than lumps yields recovery to metal of less than
5%. Over 95% of the alloy fails to
penetrate the slag and is wasted
• By putting the alloy into hollow cored wire
in powder form and pushing it through the
slag using a wire feeding machine, recovery
increases to 20-25%
• Around 50% of cored wire additions to steel are of calcium silicon. Cored wire is
also sometimes used to add other metals to steel just before casting
- such as vanadium, magnesium, selenium, niobium and boron
USED IN SOME STEELS - Tin
• Tin (Sn) is used in tinplate steels
• Tinplate is a niche product with a small
global production volume. Only 20% of
global tin consumption is for tinplate
• The other 80% of Sn goes into non-steel
applications – notably producing solderapplications – notably producing solder
• Tin plating adds corrosion resistance to steel, but not as effectively as zinc
coatings. Galvanised steel has therefore displaced tinplate in most non-food
applications. Zinc is too toxic to use in food cans, which is now the main use for
tinplate
• As with galvanised steel, tinplate coatings are applied to treated cold-rolled
steel by either hot-dipping or electroplating. Sn is traded on the LME
Minor alloying elements
• Molybdenum (Mo)
Used in grade 316 stainless steels and a few alloy steels
Intensely heat resistant
• Tungsten (W)
Used in a few alloy steels
Very hard and heat-resistantVery hard and heat-resistant
• Vanadium (V)
Used in some high strength steels
Improves hardness
• Titanium (Ti)
Some application in steel, often through cored wire
Intense deoxidisation and grain refining properties