Firstly, what is an alloy? This is a material comprising two or more elements, at least one of them a metal. Alloys achieve better specific characteristics than their constituent parts, and steel is itself an alloy of iron.

Alloy steels are steels in which additional elements have been added to the usual iron, carbon, manganese and silicon that is present in ordinary carbon steels in order to improve their properties and performance. This typically involves better strength and/or hardness and/or ductility and/or corrosion resistance. Several additional elements may be present, and sometimes the desired properties are achieved through a combination of alloying and heat treatment.

There is a vast array of alloy steels developed for very specific applications – such as bearings, gears, shafts, drills, saws, bolts, tyrecord, car bodies, aircraft undercarriages, armour, etc, etc. Alloying elements include bismuth, boron, calcium, chromium, cobalt, lead, nickel, molybdenum, selenium, silicon, sulphur, tellurium, tungsten and vanadium.

Annealing is the heating of metal to restore desirable properties after rolling, forging etc. Its function is to soften the metal, relieve internal stresses or improve internal structure. In steel the process is mostly used on cold rolled products – predominantly sheet, but also wire.

However, long products (which are mainly hot rolled to final dimension) are sometimes annealed to meet the onward processing requirements of the customer, eg. cutting, forming, bending, forging. When steel is cold rolled it can become brittle and difficult to work; austenitic stainless is particularly prone to this. The material is heated to a temperature that allows the internal grain structure to regroup (recrystallise), is held at that temperature, and then cooled.

Anti-dumping duties on imports are sought by a trade group or producer(s) in a country or trading bloc. They do so when the goods are believed to be being sold at significantly below their home market price – or even below their cost of production – and as a result cause, or threaten, significant economic injury (material injury) to domestic producers of similar goods.

Countervailing duties on imports are sought when the supplying country’s production and/or exports are directly or indirectly subsidised to the extent that they cause or threaten material injury to domestic producers of these goods.

Both duties are allowed under WTO rules, but are only imposed after an investigation which may reject them.

The US market is attractive to steel exporters most of the time, and this has meant that over the years these duties have been a noticeable feature of that country’s steel trade. But AD and CV duties are also used elsewhere, including by the EU, Canada, Mexico, Southeast Asian countries etc.

AOD stands for argon oxygen decarburisation, a refining process associated with the production of stainless steel.

Most stainless steel is initially produced in an electric arc furnace before being transferred to a separate ladle furnace for refining to achieve the precise metallurgical content required – a process known as secondary metallurgy or secondary refining.

In the AOD process, a mixture of argon and oxygen is blown through the molten steel in the ladle furnace, and the oxygen achieves the main objective of oxidising unwanted carbon in the steel melt. But because the vital and expensive chromium contained in all stainless steels is also prone to oxidation and subsequent loss with the process slag, the argon is introduced to inhibit this reaction.

This is a statistically-derived figure for national or regional steel consumption during a given period. It is based on the sum of reported mill shipments of finished steel plus steel imports into the country/region, minus steel exports.

While a useful indicator, it does not necessarily accurately reflect real steel demand. This is because stock building or stock depletion in the supply chain (by distributors and/or steel users) can result in apparent consumption either exaggerating or under estimating true steel demand.

Arbitrage is where a trader, broker or individual sees and exploits small variations in commodity prices, or currency conversion rates or the value of other financial instruments in different markets. The profit comes from buying at one price in one market and then immediately selling the same commodity in a different market for a higher price.

With currencies, traders will take advantage of small differences in conversion rates. Currency exchange rates will also play a part in commodity arbitrage, but the scope for arbitrage is reduced where commodity exchanges in different countries use a common currency (such as the US dollar).

Because the variations in values in different markets are usually quite small, it is necessary to engage in a large volume of transactions, at low transaction cost, to achieve any significant gain. Consequently, arbitrage tends mainly to be the province of trading companies rather than of individual speculators.

In a rolling mill, back-up rolls exert force on the two rolls which are actually in contact with the metal being processed (the work rolls). The back-up rolls prevent the work rolls from bending under the forces exerted on them as they "squeeze" the metal passing through the mill into a new profile.

Carbon steel and non-ferrous rolling mills are usually 4-high (2 work rolls + 2 back-ups), or 6-high. But in the case of stainless steel, because of the very high forces involved during cold rolling, there is a whole cluster of back-up rolls around the (quite small diameter) work rolls – hence the name "cluster mill" (as an alternative to Sendzimir mill, which is widely used to describe this design).

This is a document used in seaborne trading to indicate the ownership, quantity, condition and destination of goods, and to act as a receipt for them.

A bill of lading (B/L) is issued by the carrier (ship’s master or ship owner’s office) to the owner or person organising the movement of the goods (the shipper), and provides proof that they have been loaded.

The value of a B/L as a statement of condition is more debatable, for the reality and economics of loading a vessel may make it impractical for a carrier to verify the precise condition of every item of cargo – if for no other reason than packaging may prevent this.

However, if on arrival the quantity and/or condition of the goods is not as stated on the B/L, it is the carrier who is liable for any discrepancy, even though the bill may have been prepared by the shipper.

Normally the recipient of the goods has to show the B/L to take delivery at the destination.

The blast furnace (BF) is a key installation in steelworks using iron ore as their principal raw material. These tall, shaft-like structures extract iron from ore in a continuous thermal process that produces molten iron (pig iron) for conversion into steel in a basic oxygen furnace (see Insight 20, 13/9/2006).

Iron ore, coke and limestone are the main inputs, and are charged to the top of the BF. Preheated air blown into the furnace at a lower level sustains a thermal reaction involving the coke, and releasing carbon monoxide (CO). This reacts with the iron ore (iron oxide) to produce carbon dioxide (CO2) and molten iron – which settles to the base of the furnace and is tapped at regular intervals.

Hot gases rising inside the BF preheat incoming material, initiate ore reduction and convert limestone into CO2 and calcium oxide. This reacts with impurities in the molten iron to form slag which is drawn off.

BFs typically have an annual iron output of 1m-5m tonnes and routinely operate for several years between maintenance stops. Colour coat avoids strict environmental controls at manufacturers’ paint shops, since the onus of compliance is on the coil coater.

Blooms are large, long, continuously cast pieces of steel with a minimum square section of 150mm x 150mm, but usually much larger. They are cut-to-length immediately after casting.

After reheating, blooms are used to roll medium and large sections, as well as large profiles such as sheet piling, and rails. Sometimes when large “H” or “I” beams are to be rolled, partially shaped blooms called “dogbones” are cast to shorten the rolling process.

Billets are long, continuously cast semis of less than 150mm square/round section. Like blooms they are cut-to-length after casting, and are reheated for rolling. Billet is the starting point for rolling products like rebar, plain bar, merchant bar and light sections, narrow strip and wire rod. Some special steel bar is rolled from blooms rather than billet to enhance its properties.

Where ingot casting of carbon steel is still the only option, or in the case of certain highly specialised alloy steels where ingot casting produces higher quality material, blooms are rolled from cast ingot in a blooming mill. Both blooms and billets are used for seamless tube making.

This is the term used to describe the main structure of a car before fitting any components (engine, seats, transmission, steering etc) and trim. Opinion is divided as to whether the body in white (BIW) includes or excludes closures (doors, bonnet, boot lid etc).

The BIW largely defines the size, shape and strength of a car, and comprises a monocoque structure made from steel sheet pressings welded together by robots. It is a strong, stiff structure and, without closures, accounts for about 20% of final vehicle weight (so about 280-290kg for a typical small/medium family saloon).

Both hot and cold rolled steel coil, most or all of it galvanized, is used to fabricate the parts that make up the BIW.

The basic oxygen furnace converts iron from the blast furnace into steel. This is achieved by blowing oxygen through the molten iron in the BOF vessel, where it combines with and removes carbon as carbon monoxide and carbon dioxide. Unwanted silicon, phosphorus and other elements are also driven off, while added fluxes (typically lime) combine with other impurities to be removed as slag.

The reactions in the BOF vessel generates heat, so ferrous scrap is added to act as a coolant. Scrap can account for up to 30% of the charge weight, which can total several hundred tonnes.

Alternative names for this plant/process are steel converter, BOS (basic oxygen steelmaking), basic oxygen process (BOP), and LD process (after the Linz steelworks in Austria where it was developed just over 50 years ago).

An equivalent European grade is E8 new scrap, and in the UK Grade 8A.

North America’s Institute of Scrap Recycling Industries defines busheling as clean steel scrap not exceeding 12 inches (305mm) in any dimension, including new factory sheet clippings, stampings etc. It must not include old auto body steel, must not be coated, and must not include electrical sheet containing over 0.5% silicon.

The European specifications refer to “thin new production scrap” and allow larger sheet sizes, but specify that the scrap should be “predominantly less” than 3mm (0.12in) thick and be prepared in a manner to ensure direct charging to a furnace.

The UK specifications refer to “new loose light steel cuttings” and say limited proportions of galvanised steel can be included by joint agreement between the parties.

These are cargo vessel size categories. Capesize refers to dry bulk carriers that are too big to pass through the Suez or Panama canals. Consequently they have to go round the southern tip of Africa (Cape of Good Hope) or South America (Cape Horn). They are usually around 80,000-160,000 deadweight tons (dwt – see Insight No. 10, 25 May 2006) but can be larger, and typical cargoes are iron ore and coal. Needless to say they require deep berths or trans-shipment facilities on arrival.

Panamax cargo ships are the largest that can go through the Panama Canal, and are usually about 65,000 dwt. Handymax vessels typically carry dry bulk cargoes like steel, are in the 35,000-60,000 dwt range, and are equipped with on-board cranes.

Coke, iron ore and limestone are the principal inputs for blast furnace (BF) ironmaking. Coke provides thermal energy, combines with the oxygen in the ore to release iron, and ensures a permeable physical structure within the furnace to allow hot gases to move upwards, heating the incoming materials, and molten iron and slag to move downwards for tapping.

The quality of coke has a significant influence on furnace productivity and iron production costs.

Coke is produced by heating coal to about 1,100^oC in a reducing (oxygen deficient) atmosphere. This is done in coke ovens, and volatile compounds like tars are released along with hydrogen and methane to leave a carbon-rich product.

Desirable qualities for coke are high carbon content; low sulphur, phosphorus and moisture content; low ash residue; and physical strength.

Coke consumption per tonne of liquid iron produced has fallen significantly over time and currently is around 400kg. Consumption, and costs, can be further reduced by the injection of pulverised (non-coking) coal.

Colour coated steel, or prepaint, is steel coil to which a paint, powder or film coating has been applied in a continuous process prior to it being cut and shaped. It provides a durable uniform surface finish, and can be an alternative to conventional post-manufacture painting of steel parts.

Steel coil is coated on one or both sides in a process similar to that used for newspaper/magazine printing. Rolls apply first a primer and then a topcoat to the moving steel strip. The substrate is usually cold reduced galvanised coil, but galvanised HRC, and even uncoated coil is used.

Building applications account for around two thirds of consumption, with cladding on steel frame buildings a well known use. But it is also widely used for domestic appliance casings and for some furniture.

A real breakthrough would be prepaint’s use for automotive bodywork, but there are issues regarding the stamping and bending of complex shapes and then joining them without surface damage.

This is a process for converting liquid steel directly into a semi-finished shape suitable for further processing.

Steel is poured into the top of a long mould which at the point of entry is vertical, but which gradually curves to end horizontal. It has the cross-section of the desired semi.

As the steel passes down the mould it solidifies, emerging as a continuous strand which is cut into useable lengths. “Conticasters” (as they are often referred to) are used to produce slabs (for rolling plate and strip), blooms (for sections) and billets (for light sections and bars).

The key attractions of the process over its predecessor (casting discrete lumps or ingots of steel), are higher productivity and lower costs, as it avoids having to roll ingot into slab or bloom. Costs can be further reduced by casting cross-sections closer to the finished product (typically beam blanks for beams, or thin slab and even strip casting for flat products).

It is a two-stage process where lump ore, pellets or sintered iron ore, or a mixture of these, is firstly charged to a reduction shaft where it is transformed into direct reduced iron by a reducing gas. The hot DRI then enters a melter/gasifier, along with coal and oxygen, where liquid iron and slag are produced and periodically tapped off.

Corex was developed by VAI (now Siemens-VAI), and after first operating commercially in the 1980s is now in service with a handful of steelmakers in Asia and in South Africa, the latest being this month’s start-up of a 1.5m tonnes/year unit at Baosteel subsidiary Pudong Steel in China.

The developer says Corex’s emission values already comfortably meet future European standards.

Competing technologies include Finex, HIsmelt and Tecnored.

Deep drawing is a mechanical process in which steel sheet is severely deformed to make a pronounced shape with a uniform thickness – such as a can body, canister, box or specific component. Consequently, deep drawing steels have properties that allow a rapid and radical change in shape in a die without tearing or rupture.

These steels are widely used in the food and drinks packaging industry, in the automotive industry, and in general engineering. Car makers typically use hot rolled deep drawing steels for body and structural parts, chassis components and wheel rims, and steel in the cold reduced condition for complex body parts, door sections, floor panels and other parts.

Deep-drawing steels have a low carbon and low manganese content and, depending on application, low quantities of residual elements like titanium, chromium, nickel and copper. They can be coated or uncoated, and some stainless steels can be deep drawn.

Direct reduced iron (DRI) is a metallic iron product used in electric arc furnace (EAF) steelmaking. It is produced from iron ore in a thermal, natural gas based process, & because of its purity and consistency tends to carry a price premium to scrap. It is sold as pellet, lump or in briquetted form (HBI – hot briquetted iron).

DRI is principally used as part of a furnace charge when EAF steelmakers need a high quality raw material to dilute undesirable elements in their main scrap feed. It is mostly favoured by mills producing sheet or special quality long products.

This is the internationally accepted unit of measure for iron ore pricing.

A dry metric tonne unit (dmtu) is 1% of iron (Fe) contained in a tonne of ore, excluding moisture. The price per tonne of a consignment of iron ore is calculated by multiplying the cents/dmtu price by the percent Fe content of the ore in that shipment.

For example, a 67% Fe content iron ore will priced at the contracted dmtu price multiplied by 67, a 55% Fe content ore at the dmtu price multiplied by 55, etc.

Iron ore contract prices are quoted in US$ cents.

This steel combines the properties of austenitic and ferritic stainless, the two most widely used grades (see Insight 18, 29 August 2006).

With its approximately 50% austenite and 50% ferrite microstructure, duplex stainless is characterised by high strength and corrosion resistance, along with greater hardness and ductility than ferritic grades and similar ductility, though less toughness, than austenitic stainless.

First produced in Sweden around 1930, Duplex steel achieved more enhanced properties 50 years later when improvements in refining technology allowed the introduction of nitrogen alloying. The composition of the main alloys is chrome 18-26%, nickel 4-6.5%, and molybdenum 0-3%.

Duplex stainless is often specified for oil/gas applications, process plants like pulp, paper and desalination, and for heat exchangers.

SBB Insight Issue 49

Electric arc furnaces produce steel directly from scrap. This can be supplemented by other inputs like direct reduced iron and pig iron. They account for about one third of global steel output. Basic oxygen furnace (converter) steelmaking accounts for the rest.

The EAF is a refractory-lined vessel with a retractable cover through which large graphite electrodes are lowered once the scrap has been charged and the furnace top closed. EAFs are usually of 60-150t capacity per melt, but occasionally larger. However, they are usually much smaller than BOFs.

Melting occurs due to the energy released by arcing between electrode and scrap. There are normally three electrodes, but only one with direct current furnaces.

Much effort has been directed at minimising the time from scrap charging to steel pouring (tap-to-tap time). It is now standard practice to transfer steel to a separate furnace for alloying modifications (secondary metallurgy) to free-up the EAF for the next charge. Scrap pre-heating and oxygen injection also raise productivity and reduce energy use.

The energy optimising furnace (EOF) burns coal, enhanced by oxygen injection, to generate the thermal energy needed to preheat and then melt a mixture of scrap and pig iron, or other steelmaking raw materials, in an enclosed hearth.

It is a vertical process with the hearth at the base, and chambers above in which scrap etc is preheated by off-gases before descending into the melting zone. Steel is tapped off at the bottom of the vessel. The technology was pioneered in Brazil, but most working examples are in India, and commercial units are typically in the 500,000-600,000 tonnes/year range.

The EOF is recognised as a way of producing good quality steel with relatively low investment and operating costs, and is ideal where power networks cannot support the heavy electrical loads imposed by electric arc furnace (EAF) steelmaking. However, the EOF may be more environmentally damaging than the EAF.

Extrusion is method of producing lengths of steel to a particular profile by forcing the metal though a die cut to the cross-sectional shape required. The result is a profile with good dimensional tolerances (near net shape), though not as dimensionally accurate as a machined part.

The method is used to produce a wide range of shapes, from rounds, squares, “L” shapes, “T” shapes and tube, though to complex sections that can be difficult to make by any other method. The latter are often specific to a particular application, and a stock of ready-made dies will be held by an extrusion works ready for when these sections are needed.

The starting material for an extrusion press is usually a pre-heated round billet and, depending on steel type, sections up to a size that will fit within a 250mm diameter circle would be typical of what an extruder can produce.

The method is also widely used for non-ferrous metals, particularly aluminium, as well as plastics.

These are the condiments of steelmaking. They are alloys of iron with other key elements, which when added to the steel melt determine whether the metal will end up as paper clips, a car body, the undercarriage of a jumbo jet, or a beam in a high-rise building.

Three ferro-alloys account for most demand: ferro-manganese, the most widely used, confers strength and hardness, as well as desulphurising and deoxidising the steel; ferro-silicon is a deoxidiser that improves steel strength, heat resistance and magnetic/electrical properties; and ferro-chrome, which is essential for making stainless steel, but is also used in other alloy steels to give hardness and impact resistance.

CFR
Contracts settled on a cost and freight (CFR) basis require the seller, in addition to paying for the goods, to arrange and meet the cost of transporting them to the agreed port of destination. Risk passes to the buyer as goods cross the ship’s rail. Additionally it might be specified that the seller provide appropriate marine insurance. (The terms cost and freight (C&F) and cost, insurance and freight (CIF) were replaced some years ago.)
 
C&F
See CFR
 
CIF
See CFR
 
FOB, FOT
A sales contract negotiated on a free on board (FOB) basis means the seller pays for the goods and the cost of transporting them to the port of shipment and loading them. The buyer pays for shipping, unloading, and transportation to the final destination, as well as insurance. Risk passes to the buyer as goods cross the ship’s rail. Free on truck (FOT) places similar conditions on the supplier, but at his premises, when goods are to be transported to the customer by road.

This is a way of producing individual metal parts by mechanical impact. It is suitable for working a wide range of steels, and can done with the metal cold, warm or hot. Forging differs from casting in that the metal changes shape while in a solid rather than molten state.

Forgings are used principally where strength and in-service integrity are key requirements. They are stronger than cast or machined parts because the mechanical deformation allows the grain structure of the metal to closely follow the part’s finished shape.

Cold forging tends to be for smaller parts, and offers precise dimensions and high productivity. With warm forging the ductility of the metal is increased, so reducing tool loadings. Hot forging, which is performed at the metal’s recrystallisation temperature, allows deformation of larger workpieces. Examples would include shafts for power station turbines or jumbo jet main undercarriage components.

There are a number of forms of forging which involve containing the metal workpiece to a greater or lesser degree. The starting material may be steel bar, billet or ingot, and this is often sourced externally from steelmakers.

Also known as free-machining steel, this has very good cutting properties during mechanical machining operations like drilling, turning and milling. It is used for making engineering components and is most commonly supplied to the machinist as hot rolled, cold drawn, turned or precision ground bar. These are typically round, square or hexagonal.

Good free-cutting steels will allow fast material feed rates and high cutting/drilling speeds (for maximum productivity), low cutting forces (for long tool life), and generate swarf (steel offcuts) that is easy to clear away from the machining area. A key feature of these steels is that they allow good dimensional tolerances and a good surface finish to be achieved.

The key element in making these steels so machineable is lead, and to some extent sulphur. Apart from carbon, the other main constituents are manganese, phosphorus and silicon. Adding tellurium enhances machining rates.

In commodities, and SBB readers’ interest will primarily be with steel and non-ferrous metals, a futures contract is an agreement between two parties to buy or sell a specified amount of a commodity, on an agreed future date, at a price that is set at the time that the contract is agreed.

Futures contracts are traded on a futures exchange, such as the London Metal Exchange, and are sometimes referred to as exchange traded derivatives.

It is possible to have contract settlement dates in excess of two years forward.

A common variation on a futures contract is an options contract. This gives the buyer, or holder of the contract the right, but not the obligation to exercise the futures contract.

A hot-dip galvanised sheet which after the zinc coating stage on a continuous galvanising line passes through a further furnace. This re-heating enables iron in the carbon steel strip to migrate into the zinc layer to form a zinc-iron alloy.

Galvannealed strip has a dull grey appearance without the characteristic spangle of hot-dip, and is both easier to weld and smoother than a conventional zinc finish. These characteristics make it popular with car manufacturers.

These are certificates issued by an international bank in more than one country denoting ownership of foreign-based shares, and they can be traded in various capital markets around the world.

Global depository receipts facilitate the trading of shares. They are frequently used by companies in emerging markets seeking to raise funds by listing for the first time on a major foreign stock exchange.

Very similar in concept and use are American depositary receipts.

In the steel industry, global depository receipts have featured in moves by Russian mills such as Evrazholding, Severstal and Novolipetsk to list on the London or other overseas stockmarkets.

High strength low alloy is a term applied to flat rolled steels which, through the addition of small amounts of various specialised alloying elements, exhibit good strength with excellent formability. Corrosion resistance can also be enhanced.

Typically these steels have moderately low carbon content (0.05-0.1%) and use one or more of the alloying elements niobium (columbium), titanium and vanadium at around the 0.01-0.05% level, hence their alternative name microalloyed steels.

HSLA steels have found widespread use in applications such as the automotive industry, where good formability is needed during body panel production, but strength is required for the in-service conditions encountered by vehicles.

HMS stands for heavy melting scrap, and 1 & 2 are the two grades within that definition. They are widely traded, particularly in the western hemisphere.

Both HMS 1 & 2 comprise obsolete scrap only. That is iron and steel recovered from items demolished or dismantled at the end of their life.

Because both grades guarantee a minimum piece thickness – at least 1/4inch (6.3mm) for HMS 1, and 1/8in for HMS 2 – consignments have a high density. Both also have defined maximum dimensions (usually 60in x 24in), and should be prepared to facilitate handling and charging to a furnace.

This density, sizing and preparation makes for efficient furnace operation by minimising the time to charge enough scrap for a full melt. In contrast, thin mixed scrap greatly increases charging time, cutting furnace productivity.

Variations on maximum piece size are covered by ISRI (North America’s Institute of Scrap Recycling Industries) codes. HMS is usually traded as a blend of 1 & 2, either a premium blend (80:20) or a lower grade mix (60:40). Other major heavy scrap grades include Japan’s H2 and A3 from the CIS.

This is a way of producing fully formed steel parts by using internal hydraulic pressure within a tubular blank to achieve the desired final shape.

Its attractions are that complex parts, often requiring quite significant deformation, can be produced simply from a single piece of steel, rather than from multiple pieces which then have to be welded together. Also, production from a single workpiece means the required mechanical performance can be achieved with thinner steel.

The most common applications are in the automotive sector where hydroforming is used to shape tubular parts into important structural components like engine support cradles, suspension parts, impact beams and some bodywork items.

Production involves placing the tubular steel feedstock into a die and then subjecting it to internal pressure to force the steel into the shape of the die that encloses it.

Several steelmakers are involved in hydroforming as part of their bid to get closer to their automotive customers. Some produce the tubular blanks used to form specific parts, while others are actually producing finished components.

Iron is a naturally occurring element which was first smelted from its ore into a tough silvery/white metal about 2,400 BC. Cast iron is hard and brittle, while wrought iron is soft and malleable. Iron from a blast furnace is an alloy of iron and carbon (about 4%), along with smaller quantities of silicon, manganese, phosphorus, sulphur and other elements.

Iron is a far less versatile metal than steel, which is also an alloy of iron. It is produced in a BOF* and has a much reduced carbon content. Other elements, particularly manganese, are adjusted or added to achieve specific properties. There are many thousand different steel grades. Even high carbon steels contain no more than about 1.5% carbon, though some high alloy steels reach 2.5%. Carbon allows hardening of the steel via heat treatment.

Internationally-traded iron ore is priced in US cents per unit of iron contained in a ton of ore. The usual measure is a dry metric tonne unit (excluding moisture content), although dry long ton units are sometimes used.

A unit of iron is 1% of iron, and a typical current price is 75 cents per dry metric tonne unit (see Dry metric tonne unit). So, at this price for ore assaying 63% iron, a tonne sells for $0.75x63 = US$47.25 (excluding freight).

Iron ore types differ, so there is a wide range of prices to account for varying physical and chemical properties, including the presence of deleterious matter such as silica and sulphur. Lump ore and pelletized ore – which can be charged directly into the blast furnace – attract a premium over fine ore which needs pre-processing (usually sintering).

Merchant bar is a range of commodity carbon steel long products widely used in the manufacture and fabrication of a broad range of items. It includes round, square and hexagonal bars, angles, channels and flats. Maximum diameter or width is usually 80-100mm, although flats up to 150mm wide are included. These are a staple item for many steel stockholders, large or small.

Most pig iron is produced in blast furnaces for subsequent steelmaking at integrated steelworks, and is transferred as molten iron from BF to nearby oxygen converters (see Insight Nos. 33 and 20).

But a much smaller tonnage is produced for sale as a steelmaking or foundry raw material. This merchant pig iron is mostly made in coke or charcoal fuelled BFs and sold as ingot. Electric arc furnace (EAF) steelmaking, rather than foundry castings, is the main application. Some integrated steel mills also sell surplus pig iron.

Total global merchant trade is around 25m tonnes/year, with some 17m t/y internationally traded, according to International Pig Iron Association data. The figures exclude China, which has a very large, but difficult to quantify, domestic market, and is an occasional exporter.

Pig iron is a supplement to ferrous scrap in the EAF, and may be used instead of, or in addition to direct reduced iron or hot briquetted iron (Insight No.1) in order to make higher grades of steel that may not be achievable using only scrap.

A resource is an occurrence of minerals that is believed to have the potential to be technically and economically extracted. The degree of confidence that is held in the estimated quantity, quality and mineability of the minerals is reflected in the different categories assigned to resources – namely ‘inferred’ (the least certain), ‘estimated’ and ‘measured’ (the clearest indication of expected grade and tonnage).

A mineral reserve is part of a resource that more detailed geological and metallurgical evaluation has show to be economically mineable. The degree of certainty in this evaluation is given by the categorisation of reserves as either ‘probable’ or ‘proven’.

 Although this term is becoming less widely used, it refers to scrap-based steelworks, usually producing mainstream/commodity products, which are mainly sold into local/regional markets.

Mini-mills first flourished in northern Italy and the USA from the mid-1960s as basic, privately owned, non-unionised, entrepreneurial operations producing long products. They capitalised on the increased volumes of scrap that were becoming available as open hearth steelmaking gave way to BOFs (see Insight No.20, 13 September), a low cost base and their proximity to local markets.

Minis have grown in scope, scale and geographical presence, often dominating long products supply in the regions where they operate. They have become increasing active in making more demanding grades/shapes/sizes of longs, and moved into flat products, including galvanized and plate

The most stunning example of mini-mill evolution is Nucor, which is now the largest and top earning producer of steel in the USA.

This is financing where the lender is only entitled to repayment from the revenue or profits of the project/activity that the loan is funding, and not from any other assets of the borrower. This is in contrast to full-recourse financing, where the borrower fully guarantees the debt, and repayment is not in any way conditional on revenue from the activity being funded.

Between the two, and with similarities to non-recourse financing, is limited-recourse financing. Here the majority of loan repayment comes from project/activity revenue, but the lender also seeks other assurances of repayment from sponsors, contractors, raw materials suppliers, governments etc, as well as guarantees of cash flow – such as by a project securing advance sales contracts. A common option in regions where financial risks are higher.

This is shorthand for Oil Country Tubular Goods, a category of steel tube used in oil and gas drilling and extraction. Much of it is seamless, but welded tube is also very prominent.

OCTG comes in three forms, drill pipe, casing and oil well tubing. It does not include pipe for conveying oil/gas from the point of production to the refinery or customer; this is linepipe. Drill pipe connects the drill bit with the drilling motor during well drilling and is usually about 2-6.5in (50-165mm) outside dia. Drilling mud is pumped down the pipe to cool the drill bit, while drilled material travels up it to the surface. The very demanding operational conditions mean drill pipe is always seamless.

Casing acts as the liner and structural wall of oil/gas wells, preventing contamination of the well and of the surrounding water table, and can be up to 26in dia. Casing accounts for about three quarters of all OCTG shipments. The third type is oil well tubing. This is used to bring oil/gas out of a well and is usually around 2-4.5in dia.

This is principally a cost reducing technique in ironmaking. It involves substituting part of the normal coke charge to a blast furnace with coal that is cheaper than the hard coking variety needed for coke making. PCI also reduces environmental impact because less cokemaking capacity is required.

The low-volatile coal used for PCI can typically be 20% cheaper than coking coal. Also pulverisation is less capital intensive than coke making.

Coal is prepared by pulverising it into very small particles before injection into the furnace, typically at rates of 120-150kg per tonne of liquid iron production. This is about one third of the normal coke requirement of a blast furnace operating without PCI.

Pickling is a continuous operation that requires the decoiling and subsequent recoiling of the HRC so that it can pass through the acid-based liquid pickling process. This cleans the steel, removing surface scale, rust and dirt or grease, before rinsing and drying.

Applying a surface oil film after pickling helps protect the steel from corrosion and assists further processing operations, such as press-forming, by providing lubrication to the die.

Quarto plate is hot rolled from slab. Desired thickness is achieved by passing the slab back and forth through the mill (a 4-high, hence “quarto”, reversing mill). This distinguishes it from plate rolled on a multiple stand (tandem) mill without reversing direction (continuously produced plate, CPP).
 
 Quarto plate mills tend to be dedicated to plate rolling, and can achieve a wider, thicker product than on a tandem mill. It ranges from 5-400mm thick (though usually up to 150mm), can exceed 5,000mm wide and be as much as 35m long. A single quarto plate can weigh 35t or more.
 
 Depending on steel grade – and the term applies to carbon, alloy and stainless – applications include shipbuilding, pressure vessels/boilers, offshore structures, large oil/gas pipe, construction/mining plant, railway stock, and engineering moulds/dies.

This is a complex process to describe fully because it involves fundamental changes to metallurgical structure. But in outline, pre-heated steel is rapidly cooled (quenched), increasing its hardness and brittleness. It is then reheated (usually to between 400-600oC) resulting in reduced brittleness but greater toughness and the desired ductility.

Control of time and temperature during tempering is critical, and is specific to each grade of steel treated.

Quenching and tempering is used both on flat and long products. It is, for example, applied to bar used for manufacturing fasteners like bolts, or when making wire for automotive engine valve springs. In flat products, the high strength structural and wear resistance plate achievable with this process would typically go into mining equipment.

Rectangular hollow sections (RHS) are tubular products rolled from steel strip. They are made by first forming the strip into a longitudinally welded tube (see Insight No.37, 3 May 2007) before rolling through further mill stands to change the shape to a rectangular, rather than circular, cross-section.

Also generically known as hollow structural sections (HSS), they are often also made with a square cross-section.

Rectangular hollow sections are predominantly, though not exclusively made from carbon steels, and are usually cold formed, rather than rolled with the steel pre-heated (hot formed).

A typical size range for cold formed RHS is 50-450mm x 25-250mm, with a steel thickness of 2-15mm.

Hot formed RHS can be produced with larger sections and with a greater steel thickness. RHS have a wide range of mechanical and structural applications in the engineering and construction sectors.

Steel is rolled to reduce its thickness (gauge) by passing it between a pair of rolls in a rolling mill (a mill stand).

But as it is rare to achieve the desired final thickness or cross-section in one step (single pass); the steel will need to go through the same mill several times (with a reduced roll gap, and/or changed roll profile each time), or transferred to other mill stands for further reduction/shaping.

When steel is rolled back-and-forth through the same mill, this is a reversing mill. When it moves directly in a continuous process to other mill stands, this is a tandem or continuous mill. These can achieve far higher throughputs than a reversing mill.

Tandem mills are associated with flat products and typically have 4 or 6 stands. Continuous mill is a long products term, and can be followed by an indication of the number of stands and product (eg. 8-stand bar mill, 10-stand rod mill etc).

  SBQ, or special bar quality, is a predominantly North American term to describe steel long products for more demanding processing or end-use applications than can be met by commodity grades. Elsewhere the term “engineering steels” is widely used.

The chemistry and production routes for SBQ are more complex than for merchant bar and other commodity grades, and they are generally machined, forged or cold drawn during subsequent processing.

The main application area is the automotive industry for engine, transmission, steering and suspension components, but these steels find widespread applications from hand tools to electric motors and in the petrochemicals and other industrial sectors.

Seamless tubes have greater strength than welded tubes because of their homogenous microstructure, but are much more expensive to produce. They are made by rolling a preheated billet between offset rolls (the axes form an “x”) At high rolling speeds and pressures this configuration sets up stresses in the centre of the billet that facilitate its piercing with a pointed bar, or plug, to create a tube shell.

This shell is then elongated in a multi-stand rolling mill with a mandrel, or long bar with a shaped end, inserted inside the tube to achieve the desired wall thickness and a limited range of diameters.

Tube diameter can also be achieved with a sizing collar, but for significant diameter changes the tube is reheated and passed through a stretch-reducing mill – a multi-stand mill that reduces outside diameter but not wall thickness. Boiler tubing, the oil and gas industries, and automotive transmission components are typical applications.

Typically the composition, purity and temperature of the steel are adjusted at this intermediate stage by adding alloying elements or by more sophisticated treatments such as vacuum degassing. Key operations can include deoxidation, desulphurisation and dephosphorisation.

Not only does the use of secondary metallurgy enable a larger range of steel grades to be cast, but fine tuning steel composition in a separate furnace greatly improves the productivity of the main steelmaking unit. This is because with metallurgical adjustments taking place elsewhere, the time from steelmaking raw materials in, to tapped liquid steel out, is shortened.

When there is a requirement for a very large loan, such as for financing a new steelworks, a group of banks, or other financial institutions qualified to conduct credit transactions, often work together as a syndicate to provide the necessary funds to the borrower.

Banks favour this approach to minimise their exposure to a default on the loan and to avoid large, unexpected losses. Up to 20 banks could be involved, though usually it is fewer.

There is always a lead bank, and although this arranges the syndicate it only guarantees the part of the loan that it commits to. There may be more than one lead bank. Participating banks are invited by the lead bank(s) to join the syndicate. The correspondent bank, which manages the loan, is usually the lead bank.

This lumpy material is produced by integrated steelworks for use as a raw material in ironmaking, and is the main way of introducing iron ore into blast furnaces. Sinter is made by mixing iron ore fines, coke and a flux, such as limestone, placing this mixture on a steel conveyor belt, and igniting it. The resulting high temperature causes the constituents to fuse into a porous clinker but not to melt.

Iron ore fines are the principal iron source for steelmakers, but without such agglomeration they would be difficult to charge to the blast furnace and, in the large volumes required, would form a dense impermeable mass once inside the furnace, seriously affecting the efficiency of the ironmaking process.

Good corrosion resistance due to a high chromium content is the key characteristic. Opinions vary on the level of chromium (Cr) at which a steel becomes stainless, but it is at least 10.5%. Nickel (Ni) and molybdenum (Mo) are often present, and manganese, copper, titanium, silicon + other alloying elements may be added.

The principal grades are austenitic (typically 16-26%Cr, 6-22Ni); ferritic (10.5-28%Cr with no/low Ni); martensitic (higher carbon content than ferritic and typically 12-19%Cr with low/no Ni); and duplex, a dual-phase austenitic/ferritic steel (Cr>21%, Ni <8%).

Austenitics are non-magnetic, easily formed, but harden rapidly during processing (typically used in the process industries, heat exchangers, cutlery). Ferritics are less corrosion resistant, easily formed and magnetic (catering, architectural, materials handling). Martensitics are magnetic, have higher strength, are less easily worked (surgical instruments, shafts, fasteners). Duplex is strong with good impact resistance (desalination, heat exchangers).

These are shaped sheets made up by welding different grades and/or thicknesses of steel together to form a blank which is ready for final stamping by car makers – say for an inner door panel or engine compartment.

Tailor welded blanks (TWBs) were developed to reduce vehicle weight. Previously all car body parts had to be of a grade and thickness of steel capable of meeting the most demanding duties of that component. With TWBs it is possible to achieve a better utilisation of steel by putting material with appropriate properties and gauges only where it is needed. The rest can be cheaper steel.

As well as reducing weight, TWBs can reduce the number of parts and therefore final assembly costs. But clearly the cost savings in steel purchasing are offset by the higher costs of preparing a TWB versus a normal plain blanked sheet. Also their surface finish means they are not suitable for visible parts.

In steelworks producing flat rolled products, molten steel is continuously cast into slabs in excess of 200mm thick. These are either allowed to cool before reheating for hot rolling, or kept hot in a nearby furnace before being sent on to the hot mill.

With thin slab casting (TSC) the molten steel is cast as a much thinner slab – usually around 50-60mm thick. This allows the mill to use a simpler hot rolling line (no roughing/breakdown mill) so reducing capital and operating costs. Connecting the exit of the caster to the entry of the hot mill with a tunnel furnace is common practice to minimise energy losses and shorten overall production times.

Because TSC was pioneered by scrap-based mini-mills (like Nucor) who were targeting the less sophisticated part of the flat rolled steel market, they could also cut costs by having fewer mill stands in the hot mill – typically four rather than six or seven.

Although classed along with tinplate as a tinmill product, tin-free steel is a chromium-coated, corrosion-resistant steel which, like tinplate, is used for food and other packaging applications. It is correctly known as electrolytic chromium coated steel (ECCS).

The coating is applied to a cold-rolled, low-carbon steel coil substrate in a continuous electrolytic process using chromic acid. The result is a very thin layer of chromium and chromium oxide.

Apart from its packaging uses, it does find other applications, such as in some electrical equipment.

Compared to tinplate, ECCS is easier to recycle because tin is a contaminant in scrap.

Tinplate is cold reduced steel sheet coated with a thin layer of tin. It has good corrosion resistance and food compatibility – although many products require a thin coating of lacquer to maximise the shelf life of the contents.

Around 90% of tinplate is used in packaging, with food and drinks cans the biggest market, but it is also widely used for other consumer and general packaging, such as aerosols, paints and oils.

Tin is applied in a continuous process where decoiled steel (tinplate feedstock is called blackplate) passes through an electrolytic plating bath containing tin in solution.

Tinplate can be produced with different coating thicknesses on either side of the sheet. The coating on each side is typically in the range 2.8-5.6 grams/sq metre, but can be 1-14 g/m2. (11.2 g/m2 on each side equates to one pound “per basis box”, a unit of measure still used in the USA.)

Overall tinplate thickness is usually in the range 0.13-0.49mm.

The ton is a unit of weight, but takes various forms. A metric ton (usually written tonne) is 1,000 kilograms (kg) and is the most widely used.

A long ton is 2,240 pounds (lb). Historically it was used across the British empire, but now is only likely to be encountered in the USA for bulk commodities like scrap and iron ore. Also know as a gross ton. (Equates to 1.015 tonnes)

A short ton is 2,000lb and is predominant in the USA. Also known as a net ton, and in South Africa as a harbour ton. (Equates to 0.906 tonnes)

There are other tons. Deadweight ton (dwt) is a measure of a ship’s carrying capacity (cargo, fuel, crew etc). Traditionally measured in long tons, this is increasingly being quoted in tonnes.

Torpedo ladles – or torpedo cars – are large, well insulated vessels used to transport liquid iron from blast furnace to steel converter.
 
 They have a distinctive appearance, being long, circular in cross-section, but with a larger circumference in the middle than at either end. Clearly good, robust insulation is essential to prevent significant heat loss or a blow-out and spillage of the metal.
 
 Torpedo ladles can contain several hundred tonnes of iron at temperatures approaching 1,500oC, and are moved by locomotive along dedicated rail tracks. They may travel just a few hundred metres or up to several kilometres.
 
 A modern blast furnace can produce around 10,000 tonnes of iron daily, so several torpedo ladles would normally be in use.

Vacuum degassing (VD) is used following steel making to reduce the carbon, nitrogen, hydrogen and sulphur content of molten steel. Phosphorus can also be reduced. The process takes place under vacuum in a ladle furnace, and is frequently employed by both volume and special steels producers.

When dealing with high-chromium steels, VD allows very low carbon content to be achieved without heavy chromium losses from the melt.

Vacuum degassing has become widespread as demand for higher quality steels has grown in sectors like automotive, construction, offshore, pipe making and rails. In alloy steel products like bearings VD steels improve fatigue life, while in flat products, very low carbon VD steels are well suited to demanding processing and fabrication.

About 80% of world vanadium production goes into steelmaking, but it is also an important constituent of certain high performance non-ferrous aerospace alloys. It is usually added to steel as a ferro-alloy (FeVa).

In steel, vanadium increases tensile strength, toughness and fatigue resistance, as well as improving the hardenability of some grades and conferring rust resistance. An early application was armour plate.

Today, vanadium’s main applications are in high-strength low-alloy sheet for the automotive sector, in engineering steels – such as for axles, crankshafts and gears – and in spring and high-speed tool steels. In stainless steels it is typically used for producing grades needed for applications like surgical instruments.

This is made from hot rolled or cold reduced strip, sheet or plate. Small and medium diameters are produced in continuous, multiple-roll mills that progressively bend incoming, unheated strip into a circular cross-section prior to welding along the longitudinal seam. Tube may subsequently be cold-drawn through dies to achieve precise dimensions and finish.

This is cheaper than the seamless process (see Insight No.31, 22 February 2007) but welded tube generally has a lower mechanical and pressure performance.

Large diameters are made from discrete plate. First this is bent into a “U” shape, then an “O” shape, which is welded prior to mechanical or hydraulic expansion – the “E” of the UOE process – to achieve final dimensions. This pipe can be 400-1,600mm diameter.

Spiral welded tube/pipe uses HR strip that is twisted as it goes through a mill to form a hollow spiral which is then welded. It is cheap to make but has traditionally had a lower integrity than conventional welded pipe – though it is improving. Diameters of up to 2,500mm are possible.

These heavy duty structural sections are often referred to as H-beams (because of their cross-sectional appearance). They are mainly used in the frames of industrial and hi-rise structures, are internationally traded and are a stockholder item in standard lengths. Dimensions are in metric, except in the USA where they are sold as “W” shapes in inches.

H-beams are mainly hot rolled from blooms. They are classified by depth (web plus end-flange thickness – hence the “W” notation in the US) and weight per unit length. These parameters are typically up to 1,000mm-plus and 600 kg/metre respectively.

They are sometimes confused with I-beams, which have similar uses but narrower flanges and smaller web depths and steel thicknesses.

This is the process by which steel wire is produced from a larger diameter feedstock, usually wire rod.
Wire is the smallest diameter steel product, and to achieve the gauges needed for manufacturing items like fencing, nails, tyrecord and ultra-fine filtration gauzes, the cold rod is pulled through a series of drawing dies, each of successively smaller bore diameter.
A continuous multi-die wire-drawing machine can have up to 15 blocks, each containing a die. These have a metal casing but the forming hole is made in a ‘nib’ of tungsten carbide, or natural or synthetic diamond. Though mostly round, wire can be flat or have other profiles.
A wide range of steels may be drawn, from the mild steel used for paper clips and champagne cork wire, to spring grades and the high strength steels needed for suspension bridge cables and piano wire.

Hot rolled from low, medium and high carbon or alloy steel billet, wire rod is delivered as coil, most commonly at 5.5mm dia, but in sizes up to 60mm dia. Close control of final cooling is a critical part of production.

Low carbon rod is used for undemanding applications like fencing wire and concrete reinforcing mesh, while medium and high carbon rod goes into higher performance uses like steelcord for car tyre reinforcement.

Some rod (cold heading carbon and alloy grades) is used to make fasteners (bolts, screws, nails, rivets), and alloy rod is commonly machined into products like engineering bearings. Some rod provides filler metal in welding operations.