November-December 2017 – Do steelmakers dream of electric arc furnaces?

November-December 2017 – Do steelmakers dream of electric arc furnaces?

I drove all the way from Memphis, Tennessee, to Osceola, Arkansas, and I got a lot more than a lousy tee-shirt. I got an exclusive interview with Dave Stickler, CEO of Big River Steel (BRS), the most technologically advanced steel minimill on the planet, thanks to the combined efforts of the company and its technology supplier, SMS group of Germany.

It was always going to be an interesting encounter as Big River Steel is the talk of the town (and the world) in a big country where electric steelmaking rules the roost (accounting for 69% of all US steel production). Stickler is the electric warrior, the  metal guru, the ‘new kid on the block’ of EAF steelmaking, and the David to the integrated steel mills’ Goliath.

When Betty Hutton and Howard Keel sang Anything You Can Do in Annie Get Your Gun, little did they know that the song title would prove relevant to the phoney war that exists between integrated steelmakers and their ‘friends electric’.

In 1980 when Nucor Corporation announced it was going to make flat-rolled steel, the integrated community gasped, like the Toecutter in Mad Max One, and countered that EAFs – ‘those meddlin’ kids’ – were good for just one thing: making garbage cans. How wrong they were! These days in America, electric steelmaking is clearly the leader of the pack.

BRS was designed with a clean sheet of paper to produce steels that, prior to the company’s arrival, had never been produced by a minimill. In short, BRS has adopted the motto of the Starship Enterprise, ‘to boldy go where no EAF steelmaker has gone before’, and soon it will be producing fully processed, grain oriented steels and more. 

The key to the current and future success of BRS is its Flex Mill, which enables the company to compete not only with other minimills, but also with integrated steelmakers. Stickler has his sights firmly set on a variety of new markets including that of electric vehicles and their charging stations too.

Is this the beginning of the end of integrated mills? Some say yes, but others believe there will always be a place for ‘virgin steel’. That said, today less than 45% of flat-rolled steel is produced by integrated steel mills. In 10 years it will probably be less than 35%, says Stickler.

November-December 2017 – Do steelmakers dream of electric arc furnaces? Contents

October 2017

October 2017

It’s a shame that the word ‘steel’ has to come into it, but it does, even if the problem involves ‘the miracle metal’ – aluminium – and copper. The fact remains that a steel company (Japan’s third biggest producer, Kobe Steel) has admitted it may have falsified data about the quality of its products. Why this has happened is anybody’s guess, but the admission has had dire consequences for the steelmaker as the products concerned have found their way into aircraft, cars and trains; and the bigger question now is whether or not safety has been compromised.

The question of ‘why’ is important because in the case of Kobe Steel the sorry outcome – $1.6 billion wiped off the company’s market value, shares plunging 18% in Tokyo – has surely negated the effort of falsifying the data in the first place. Wrongdoing, after all, is always uncovered – eventually.

The problem appears to be peculiarly Japanese with other ‘reputable’ companies (Takata Corp and Nissan) both implicated in similar misdemeanours. Nissan is to recall one million cars and Takata pleaded guilty to misleading carmakers over the safety of its airbags. Most worrying, however, is that whenever something like this raises its ugly head, the initial scandal proves to be just the tip of the iceberg.

For Kobe Steel there are potentially big costs involved, not to mention untold harm to the company’s reputation (which will linger for years); and, of course, there will be legal challenges too.

Toyota (a Kobe Steel customer) has described the situation as a ‘grave issue’ and rightly so; and whether Kobe Steel’s conduct is systemic remains to be seen, but either way, surely, the spotlight will now shine brightly on the company’s other products, namely its steel output.

Unauthorised inspectors, misleading automakers, a breach of compliance rules, falsified data – they’re all phrases that would spell trouble for any company and they have certainly put another phrase – ‘Made in Japan’ – on the naughty step.

While aluminium and copper account for just 20% of Kobe Steel’s output, what about steel? And even if steel is not affected by the scandal, the company’s deteriorating reputation will deter potential buyers not only from purchasing Kobe’s steel, but also from buying steel from other Japanese producers.

October 2017 Contents

September 2017

September 2017

Is it just me? I’m now what you might call a ‘frequent flyer’ and while I don’t particularly worry about flying when taking scheduled flights (where the inflight magazines have route maps) I’m always a little apprehensive when aboard a charter flight with a holiday company. I don’t know why, it’s just the way things are – possibly because I have my family with me when normally I fly alone. 

So I’m in a bus on my way to Alghero airport having enjoyed a week of Sardinian sun, and on the day I’m flying home the wind picks up and the rain starts to fall. But all was well, the flight was smooth and the plane landed softly in my ‘safe European home’, although it’s not so safe anymore. These days, there’s no escape from nutters. However, having read Nevil Shute’s On the Beach I figure that if any nation is going to survive a nuclear winter, it will be Australia. That said, with Beach Ball face nearby, firing off missiles like there is no tomorrow and threatening to attack Guam, I’m not so sure.

If you’ve got this far you’ve probably guessed that I’ve returned from my vacation suffering from writer’s block. I’ve been away from the steel industry for a week and I’m floundering, although North Korea seems like a topic worthy of discussion. Every day of last week, while waiting in my hotel room for dinner, I watched a French television channel, broadcast in English, showing footage of the aforementioned Beach Ball consulting with his uniformed cohorts and clapping as missiles were launched into the sky.

North Korea has a steel industry, but it’s not in the big league. While Platts has reported a steelmaking capacity of 12Mt/yr, the country was producing just over 1Mt/yr in 2015. The Kim Chaek Iron and Steel Complex is the country’s star player, capable of producing 6Mt/yr of steel.

Despots with missiles are not to be tolerated and while military action would prove disastrous, the UN has approved more sanctions against the ‘rogue state’ – sanctions which have led North Korea to engage in a sneaky practice of changing the composition and names of its state-run commercial enterprises and putting them under the nominal ownership of individuals to circumvent the latest UN sanctions. Dick Dastardly once said he was so sneaky he didn’t even trust himself, but clearly the Beach Ball has no such qualms.

September 2017 Contents