STEEL STEALS THE SHOW

B. Muthuraman

Managing Director Tata Steel Limited, Jamshedpur

INTRODUCTION

Some major structural changes have occurred of late in India, which have resulted in robust industrial performance of Indian industry, so much so, that it has become the subject of global discussions, applauded or envied by many. The industrial recovery in this country really began to be seen in 2002-03; was consolidated during 2003-04; gathered momentum during 2004-05; and scaled new heights in the last financial year. Several factors have contributed towards this remarkable state of affairs. These include: the dramatic decline in lending rates, significant turnaround in public investment, introduction of infrastructure development programmes, the consumer durable boom, and so on and so forth. The resultant climate has been instrumental in unprecedented acceleration of industrial growth in India.

HISTORY OF STEEL USAGE
The industrial society has always been closely linked to iron and steel production. Iron, along with bronze, was used in Asia Minor for producing weapons as early as the 10th century BC. In the period between 800 and 400 BC, iron became such a predominant material that this era is commonly referred to as the Iron Age. Later, the Romans began bulk steel production by installing large plants for extracting iron. The method of extraction of iron changed little over the next two thousand years, i.e., until the industrial revolution in the 18th century. The first coke blast furnace was commissioned in 1735 in England, and soon thereafter, iron production became a key industry. 20,000 tonnes of pig iron was produced in England in 1740, one hundred times this amount in 1845, and since then, there has been no looking back. Almost 850 million tonnes of crude steel was made and consumed in 2000 and over 1100 million tonnes last year. The dominance of steel as a commodity required by mankind is thus well established.
Steel is without doubt the most widely used metal or more broadly speaking, material today. What is perhaps particularly significant in today's ecology conscious world is that steel is also the most recycled material; so much so that every new steel product, contains recycled steel. In fact, steel is 100% recyclable without "downcyling", i.e., without losing quality. The use of steel scrap is estimated to prevent the mining of close to 800 million tonnes of iron ore and 250 million tonnes of coking coal worldwide per year. To this extent, steel is a material that prides itself in being almost 'natural'.
The steel industry as whole is convinced that with sustainability as the paradigm of the future, recyclability of steel will be a feather in its cap. This industry has also already recognised that the earth's resources are not unlimited, and time has come to initiate a process of rethinking. It is heartening to note that the steel business is continuously working towards reduction in emissions along with using lower amounts of resources and energy. It has also become extremely aware of finding more economical ways of utilising its by-products.
Thus, the long-term sustainability of steel production appears to be guaranteed. Nonetheless, the steel industry is conscious that over the long haul, it will need to develop a whole generation of technologies, where being environmentally benign will be as important a consideration as providing top-class products at reasonable cost.

STEEL IN THE SERVICE OF SOCIETY
There is more to an assessment of sustainability of a material than just looking at the use of natural resources. The positive and negative effects of the application of any material also play a role. In this context, steel is currently in the process of positive developments. For example, in power stations new steel materials that can be exposed to higher pressures and temperatures are making a significant contribution towards increasing efficiency, thereby reducing CO2 output to help society. The development of new steels for thick-walled high-performance components for boilers and pipes has begun. Pipelines made of steel have proved the ideal solution for the bulk transport of oil and natural gas over long distances before they are used by customers. High-strength steels with superior cleanliness and greater resistance towards corrosion have found widespread use, for example, in sea-water desalination plants. There has been remarkable progress in the area of eco-efficient light-weight steel constructions, which is a classic example of the synergetic advantage that can be gained by society at large from disciplines like construction, material science, and production technology coming together

INDIA'S TRYST WITH STEEL
India's association with iron and steel began more than three centuries ago. High-quality Wootz steel was made in southern India more than a thousand years before steel as good was even thought of in the West. The Harappan civilisation used a variety of minerals and metals, including iron. The Rig Veda mentions the use of minerals as gem stones; the significance of minerals and metals in Indian civilisation was also referred to by Chanakya in his famous dissertation "Arthashastra" dating back 320-620 A.D. The Iron Pillar in Delhi made over 15 hundred years ago is a metallurgical wonder since it has not rusted at all over all these years.
It can thus be justifiably claimed that India's association with iron and steel has stood the test of time. The production of steel in India on an industrial scale began early. By setting up The Tata Iron and Steel Company (now Tata Steel Limited) at Jamshedpur almost exactly hundred years ago, Jamsetji Nusserwanji Tata pioneered the Indian steel industry. Immediately after Independence, India's iron and steel production increased quite rapidly. The visionary behind this achievement was the late Prime Minister Jawaharlal Nehru who considered steel plants to be 'temples of modern India'. Unfortunately, India's steel capacity was not augmented to any appreciable extent over the next three decades.

THE LAST TWENTY FIVE YEARS
The decade of the eighties (and even early nineties) saw the Indian steel industry at cross roads. After a number of companies had decided to go in for new steel plants, the South East Asian boom turned into a crash. To make matters worse, this coincided with a downward turn in local demand, followed by a collapse of some industrial financial institutions of India. The net result was that fresh investment in the Indian steel industry was considered extremely risky, leading to a period of lull.
Fortunately, this is now all a part of history. The liberalisation of the Indian economy in the early nineties has resulted in a rejuvenation of the Indian steel industry. Huge investments have been announced both by the Government as well as many private players from India and overseas. Consequently, over the last few years, the steel industry has been witnessing unprecedented growth. This turn around is really not surprising, since India has always been reckoned as a 'potential' global steel hub.

FUTURE OF INDIAN STEEL
World renowned 'pundits' are "gung ho" about the future of the Indian steel industry. Perhaps this is because India is amongst a few countries in the world having the dual advantage of fast growing domestic demand coupled with access to raw materials. Further, the trend that is already discernible is that the axis of global steel production / consumption is shifting towards Asia. With their large populations, China and India already account for 35 % of the total world steel production - more than double of Europe. Asia is expected to outpace other regions of the world to an even greater extent in the coming years.
Several macro-trends favour growth in Asia. First, Asia is now experiencing what the developed nations faced in the previous century - strong industrial demand led by infrastructural and construction needs. Second, regulations on industrial pollution control have become so stringent in the US and Europe that the capital cost required to install environment approved new capacity has become prohibitive. Third, for long-term sustenance of the industry, access to raw materials is a must, and Asia as a whole has some of the best and largest deposits of iron ore and coal.
Amongst the Asian nations, China has established a huge, unbridgeable lead. It is accepted that China will continue to be the leader. However, India is slated to emerge as the second Asian giant in the next ten years. Figuratively speaking, while the "Dragon" has reached maturity; the "Lotus" is about to bloom in resplendent splendour. In 2005 Chinese steel consumption was around 320 Mt, i.e China swallowed almost 32% of global steel. It is unlikely that future production and consumption would continue to flourish at growth rates of 8% and 18% respectively as has been the case over the last few years. On the other hand, it is sun-rise time for India where the demand has increased by 7-8% in the last couple of years. In the long run, Indian steel is likely to be more cost-effective since unlike China, India has relatively large reserves of iron ore (14 billion tonnes), which if strategically exploited, can sustain domestic production of 120-130 million tonnes for at least 25-30 years.
However, the position with coal is not so favourable. Though thermal coal reserves of over 92 billion tonnes can fuel industry, large-scale ironmaking using the traditional blast furnace route would require coking coal. India does not have adequate reserves of coking coal; nor is the meagre amount available of appropriate quality. Thus, the steel industry always had to contend with the dual problems of inadequate availability and poor quality of Indian coking coal. This has been partly addressed by adopting alternative ironmaking processes that are not dependent on coking coal; it can not be denied that coal is the biggest cause for concern for bulk steel production in India.
It is here that China, with 11% of the world's coal reserves, has an advantage. Today, China is the world's leading coal producer followed by USA. The Indian reserves are only 7.6%, of which coking coal is only 15%. These meagre reserves also have high ash content and are of low rank. Therefore, for the last ten years or so, Indian integrated steel producers have made extensive use (30-50 % of the total coal requirement) of high grade, low ash (10-12%) coking coal imported from Australia.
Despite such large scale imports, over the last four years, the demand for coal in India has consistently outstripped supply. While coal production has grown at 2% annually, the demand has risen at 8%. Even in allocating the limited production, priority is given to the power sector. Because of the paucity of indigenous coal, attempts have been made by steel producers to ensure long-term supplies by tying up with global majors or by acquiring mines in other countries. This is the only long-term solution, but with a global shortage of coal it may not remain cost-effective in the long run.

COMPETITION TO STEEL FROM OTHER MATERIALS
Another "litmus test" that has to be passed is whether steel will remain competitive relative to alternative materials like aluminium, magnesium, plastics, titanium, etc. These materials are already finding use in the automobile industry, which is without doubt the biggest individual consumer of steel. Therefore, a long-term view has to be taken as far as their threat to steel in the automobile industry is concerned.
Competition from aluminium: Aluminium is often touted as a metal that steel has to contend with in future in the automobile sector. Even today, average European cars contain 70 kg aluminium and upto 120 kg of plastics; just double of the 1980's figures. Despite this, steel has continued to be the predominant metal used partly because of the fact that concerted efforts were made by the steel industry to arrest the growth of the usage of aluminium in automobiles. Some five years back, more than 35 steelmakers across the globe (including Tata Steel and SAIL from India) embarked upon an exercise entitled "Ultra Light Steel Automobile Body" under the aegis of the International Iron and Steel Institute to promote the usage of steel in automobiles. This effort was a success and automakers were convinced that steel had an edge.
For example, Audi who were experimenting with aluminium for car bonnets, roof, etc. reverted to high strength, light weight steel sheets. They became aware that improper use of aluminium can result in problems in contrast to steel. The reduction by two-thirds in weight by using an aluminium part compared with a similarly sized iron / steel part seemed enormously attractive, but it was found that it was accompanied by a reduction by two thirds in the stiffness of the part.
However, the threat from aluminium replacing steel in packaging (cans, foil, etc.), water treatment, construction (windows, doors, siding, building wire, etc.), consumer durable goods (appliances, cooking utensils, etc.) is real. In fact, for beverage cans aluminium has replaced steel to a large extent in USA, in particular. Fortunately these markets are small, and not of great significance in many developing countries.
Plastics / composites replacing iron / steel: The automotive industry is also viewed as a huge and growing market for plastics and composite materials. Self reinforced plastics (SRPs) combine the versatility and easy recyclability of a thermoplastic with the high performance of fibre-reinforced composites. Though SRPs are in the nascent stage of development, their low weight, high stiffness and impact resistance are making them candidate materials for a wide range of semi-structural and structural automotive applications. SRPs are being actively marketed as a suitable material for making lighter and smaller cars that save fuel. It is claimed that the weight of a mid-size car is likely to decrease from 1,400 kg to 1,150 kg by 2010, if SRPs are able to penetrate this market. However, as of now, in order to meet the new design requirements, automobile manufacturers are still in search of low density plastics that possess good mechanical properties.
Titanium and its alloys: Titanium is lightweight, corrosion resistant, and has high strength. The density of titanium is about half that of copper, nickel and approximately 60% of stainless steel. The strength of titanium and titanium alloys ranges from ~205 MPa to ~1585 MPa. Titanium exhibits the highest strength to density ratio amongst all materials upto 550°C. Further, in many environments, particularly those where oxidising conditions exist; it is highly resistant to corrosion. From a property point of view, titanium appears to be a threat. However, at the current premium price of titanium, only special sports vehicles are able to use titanium. Only in such vehicles can the initial high cost of the material be compensated for either by the advantages of weight reduction or by the increased life of the component on account of its extremely high corrosion resistance.
If the general anticipation that the price of titanium metal will decrease substantially with increasing production and improvement in processing using some recent revolutionary developments involving extraction of titanium from ilmenite comes true, titanium may be able to replace steel in automotives. For the moment, there is no real threat.

EFFECT OF REVOLUTIONARY DEVELOPMENTS LIKE NANOTECHNOLOGY
I would to end this talk by spending sometime on the advent of nanotechnology, since many illustrious scientists have predicted that this revolutionary technology has the potential to change the very way we live. Thus if nanotechnology fulfils even a part of its considerable promise, the outlook for most metals / materials including steel could come in for scrutiny.
Many of you are probably aware of what nanotechnology is all about. One millimetre is one million nanometres and this forms the basis of the 'nano-magic'. Just to give a physical idea of how small a nanometre (nm) actually is, we need to visualise that ten hydrogen atoms make 1 nm, the width of normal human hair is 80,000 nm, and a red ant is 5 million nm thick. Thus, nanotechnology is all about really small objects, often down to the size of individual atoms. The application of nanotechnology would cover the entire range from 1 to 100 nm. For some, nano-scale includes objects as small as a tenth of a nanometer, which is about the size of the bond between two carbon atoms; for others, the range extends to 50 nm only.
What is clear is that the magic of nano-scale atoms and molecules is difficult to comprehend. Indeed it is mind-boggling to imagine the extent to which 'strange' things can happen in this 'new world'. If someone throws a tennis ball against a brick wall, he would certainly be shocked if the ball passed cleanly through the wall and sailed out to the other side. Yet, this is 'real' in the nano-world. It happens because at very small scales, the properties of materials including steel, can change dramatically in terms of colour, magnetism, the ability to conduct electricity and so on. In this nano-world, tiny particles of gold melt at temperatures several hundred degrees lower than a large nugget; and copper, which is normally a good conductor of electricity, can become resistant to electrical / magnetic fields because electrons, like the imaginary tennis ball, can simply jump from one place to another, and molecules can attract each other at moderate distances. By the way, this is the effect that allows geckos to walk on the ceilings of buildings using tiny hairs on the soles of their feet.
At the nano-scale, new, exciting and altogether different properties come into contention. If one were to start with a grain of sugar, and chop it up into even smaller pieces to simply end up with a tiny grain of sugar, that would not be surprising at all. However, if one is aware that as an object gets smaller, the ratio between its surface area and its volume rises, a new vista would open up because of the fact that the atoms on the surface of a material are generally more reactive than those at its centre. As a result, icing sugar, for instance, dissolves far more rapidly in water than does the granulated form. Similarly, if a metal like silver is turned into very small particles, it begins to show antimicrobial properties that are not present in the bulk material. A company overseas has already begun to exploit this phenomenon by making nanoparticles of cerium oxide, which are chemically reactive enough to serve as a catalyst. A company in USA, has created metallic rubber, which flexes and stretches like rubber, but conducts electricity like a solid metal. General Electric is trying to make flexible ceramics and many companies are working on materials that could one day be made into solar cells in the form of paint. The story of the researcher working in Japan who discovered that there was a new form of carbon that had extraordinary properties is already well known. The so called carbon nanotube is like a tiny sheet of graphite rolled into a cylinder, with a diameter of around one nanometer, and is very strong and light. It has become the 'star' of nanotechnology. A host of uses that has since been proposed include sensors, molecular probes, computer memory, televisions, batteries and fuel cells. Work is in progress to find a way of spinning nanotubes into fibres to make the world's toughest polymer.
If even a small percentage of these efforts, in which billions of dollars are being spent actually succeed, new materials would become available. At that stage, most materials we know of today would take a back seat. Indeed, nanotechnology has such tremendous potential that many believe that it may turn out to be as important as electricity or plastic. The comforting thought is that this is unlikely to happen in the next two to three decades at least, because of the inherent lag between the dreams of material scientists and the availability of the final product on a commercial scale.
Again, the future of steel looks 'safe' and steel will continue to be way ahead of the metals / materials pack in the foreseeable future.

SUMMARY COMMENTS
Prime Minister, Dr. Manmohan Singh, often refers to Victor Hugo's famous lines "No one can stop an idea whose time has come." Similarly, mankind can not stop the growth of a versatile material like steel from flourishing even more than at present in the years ahead. With a population of over one billion, land mass exceeding 3 million sq km and gross national income capita per year of just $ 620, the magnitude of India's market is enormous. India's biggest strength compared with any other country is the availability of well-educated technical and commercial personnel that are second to none. This is a factor that gives India a distinct advantage.
However, it may not be all smooth sailing for steel - the long-term outlook does not offer unalloyed good news. The pessimists (they call themselves realists) point out that if it has taken fifteen years for India's steel industry just to double capacity, how can it cope with such a dramatic increase in capacity in just a few years? They point out that the potential human and environmental costs of rapid industrial development in this country may stifle growth, fuelling a long-running debate on how to strike the right balance between alleviating poverty of India's masses without displacing many people and spoiling their lands. This is perhaps a justified reservation, since many of India's most valuable mineral and metal deposits are in the country's poorest states that are also home to some of its richest natural environments. These are issues that need to be addressed by the steel industry.
Summarising, it can be stated that though India has a major potential advantage over many other countries (including China) in terms of rich iron ore, this advantage is negated by the limited availability as well as the poor quality of coking coal. Though all out efforts have been made to utilise non-coking coal and natural gas for producing direct reduced iron, availability of energy remains a question mark. Natural gas is a clean fuel and by increasing the use of natural gas in the steel industry in India, the entire outlook of this industry could be transformed in the years ahead. This is because, utilisation of natural gas could encourage a shift in the mix of technology from large capacity BF-BOF based units to relatively smaller EAF based plants that are superior in terms of environmental sustainability.
I would now like to conclude by repeating what Rudyard Kipling had articulated many years ago:

Gold is for the mistress, Silver for the maid
Copper for the Craftsman cunning at his trade
"Good" said the Baron, sitting in the hall,
"But, Iron - Cold Iron, is master of them all".

ipling was not a man of metals, but he had the necessary mettle to recognise the difference between a dumb blonde (gold), an often used coin (copper), the finery of silver, and the promise of iron (steel).
May the sentiment of Kipling continue to reign.