JSPL eyes big export opportunities in granulated pig iron

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by Madhumita Mookerji

Granulated pig iron (GPI) is likely to be the next big thing on the steel firmament and Chinese mills across the basic oxygen furnace (BOF), electric arc furnace (EAF) and induction furnace (IF) platforms are showing a keen appetite for the material.

GPI has several advantages over regular pig iron. For one, it is a clean state of pig iron. There is no dust, dirt, impurities or foreign particles like limestone or lime in it.

Secondly, granulated pig iron is in the form of chips, somewhat similar in shape to potato chips. So, when the scrap is added, it reaches all its nooks and corners (of the scrap) and helps in melting of the scrap fully. GPI also contains 3-4% carbon, which further helps in scrap melting. Since it is clean, it helps in 100% recovery of the metallic particles.

Thirdly, traditionally pig iron contains around 15% of slag. GPI recovers the metallic particles from the slag as well. Whatever slag is generated, GPI helps in bringing down the metallic contents which go into the slag.

Fourth, when this material is melted, it is very small in size, somewhat like chips, as a result the material itself consumes less power to melt compared to a larger metallic block which consumes a lot more power (to melt) as well as time to do so. It helps other metallics like scrap, sponge iron, iron ore etc to melt down. Thus, the power consumption comes down, especially in the electric arc furnaces, where electricity consumption is reduced by as much as 30-40 kWh per tonne.

JSPL consignments

Jindal Steel & Power Limited (JSPL), sensing huge opportunities in the GPI space in the overseas markets, has been quick to move in fast. It is the first player sending consignments to China although other GPI makers are JSW Steel, Tata Steel and Essar Steel. Very recently, JSPL sent a consignment of 50,000 tonnes of GPI to the HBIS Group in China through a trader at around USD340 per tonne FOB.

JSPL has been sending consignments of GPI to Malaysia as well as Bangladesh. “Since the latter does not use the BF-BOF steel-making route, GPI is being used in the EAFs which are now saving on power and increasing their yield,” V.R. Sharma, Managing Director, JSPL, informed SteelMint. JSPL has been selling 30,000 tonnes per month of GPI to Malaysia and Bangladesh each and 50,000-70,000 tonnes per month to China.

Going forward, Sharma said, plans are afoot to continue with such volumes of exports. However, he informed that there are capacity constraints at JSPL’s Angul plant. “We also have steel mills so we too want to convert GPI into steel. So whenever there is a surplus, we sell,” Sharma said.

The GPI production for JSPL at its Angul plant is 1 lakh tonne per month, which is 1.2 million tonnes (MnT) per annum. But, at present, whatever is being manufactured is being exported. “It is not about export markets being more lucrative. If the domestic market fetches a better price then we would want to sell in the domestic market,” he averred.

Export prices at present are USD360 CFR China and Malaysia while for Bangladesh, the rates are hovering around USD358 per tonne. Domestic prices, at present, are almost on par with export prices. However, domestic demand is not high and then there are additional transportation costs. “Our plant is in Odisha so if some player located in Coimbatore or Punjab wants to buy our GPI, then the freight cost increases, adding to the GPI price,” Sharma said.

Going forward, there will be a lot of stress on the export market for JSPL in terms of its GPI production. It is a new product and is being promoted only for the last one year. There is a need to create more awareness and depending on demand and business model, Sharma said, JSPL can add another capacity at its Angul plant for another 1 MnT.

GPI a Value-for-Money Product

Sharma said there are many reasons why demand for GPI is increasing in China and other markets. One, when the product is compared with scrap or any other material, it gives value for money, he said. In China, good quality scrap is about more than 3,000 RMB per tonne, at USD320-340 per ton. Yield-wise, per 1 tonne of such scrap, one gets only 900 kg of steel. Compared to this, if the GPI price for the Chinese buyers, including freight, touches even USD360 per ton against USD 340 per tonne for scrap, the difference is only of USD20 per tonne but in lieu of which the mills are getting at least 6% more yield at least 960-970 kg of steel out of 1 tonne of GPI (against only 900 kg of steel per 1 tonne of scrap). So GPI is a value-for-money product. “Additional steel is produced by BOFs at practically no extra cost,” Sharma said.

Secondly, the ferrous or Fe content of GPI is 96% whereas the total Fe content in scrap is around 88%. So, the mills get 8% extra Fe content, while the cost may be 3-4% extra. So, the users get at least 4% additional benefit in terms of cost per Fe content.

Thirdly, the additional benefit is in terms of power consumption which is less than 30-40 kWh per tonne, whether in the form of direct power or oxygen.

GPI applications

Where exactly is GPI finding applications in the large BF mills?

Sharma informed that GPI is finding application in both EAFs and basic oxygen furnace (BOF) converter shops, which are part of the steel melt shops, as well as in induction furnaces (IFs).

In EAFs, GPI can be charged through conveyors/hoopers and the fourth hole. Since the specific gravity is almost near to steel, the small particles are not sucked out by fumes extraction system.

In China, GPI is being used across BOF convertor shops, EAFs as well as induction furnaces, Sharma said. It is a good feed for BOF shops as a chilling agent, he added.