By ANANDA BHATTACHARJEE
India is sitting on a gigantic stock of steel scrap, which is of huge value to the secondary steel producers, but is yet to find its way into the electric arc furnaces (EAF) and induction furnaces (IF) in India. This heap is probably lying in some obscure corner of old garages and fields, standing in the form of dented and scratched bodies on deflated wheels. Others are plying on roads, consuming more fuel and emitting more fumes than their desirable limits. Yes, this is about all the vehicles in India that are old and depreciated, yet existing in their old, inefficient form.
On November 7, 2019, the Ministry of Steel, through a notification, came up with the Steel Scrap Recycling Policy, which states that the “Ministry of Steel’s endeavour is to develop a globally competitive steel industry by adopting state-of-the-art, environment-friendly technologies. Ferrous scrap being the primary raw material for EAF-/IF-based steel production, the policy envisages a framework to facilitate and promote establishment of metal scrapping centres in India. This will ensure scientific processing and recycling of ferrous scrap generated from various sources and a variety of products. The policy framework shall provide standard guidelines for collection, dismantling and shredding activities in an organised, safe and environmentally sound manner.”
In October 2019, the Ministry of Road Transport and Highways (MoRTH) had come up with a draft policy giving guidelines for setting up, authorisation and operation of Authorised Vehicle Scrapping Facility (AVSF) in the country for end-of-life vehicles (ELV). However, the definition of ELV does not make it mandatory to scrap a vehicle after a definite life has been crossed (say 15 years). This deficiency in the guidelines has taken away the impetus from the systematic scrapping at present. Scrapping is still dependent on other circumstances:
- The vehicle is no longer validly registered,
- Owners are desirous of scrapping their vehicles,
- Statutory powers have impounded or seized a vehicle,
- Court directions to that effect.
One can only hope that in the near future such shortcomings in government policies will be removed and the prospect of including all vehicles above 15 years of life in the category of ELV will become a reality. This will actually open up a huge stock of steel scrap to Indian secondary steel makers in the country.
Impact On Secondary Producers
The importance of steel scrap is significant for the Indian steel production scenario. Its higher availability impacts the secondary steel producers positively. These manufacturers depend fully on scrap and DRI to produce steel. The primary steel producers also use scrap and DRI, but only to the extent of about 15% of their metallic charge in the basic oxygen furnaces (BOFs). The secondary steel producers in India comprise the EAFs and IFs (electric furnace route) and together they contribute to the major chunk of Indian crude steel production.
It may also be mentioned that melting of scrap emits lesser CO2 compared to production of steel through the blast furnace/oxygen furnace route and is therefore more environment-friendly.
Increase in the volume of domestic scrap supply will bring telling benefits for the local secondary steel produces who rely heavily on this raw material:
The scrap price is expected to soften because of more local supply. This will directly reduce the charge mix cost. The charge mix of secondary steel makers contains both scrap and DRI.
The difference between the prices of scrap and DRI, the former’s price being higher, is likely to narrow down.
Scrap has a higher metallic iron value and a lower gangue/oxide content compared to DRI. This results in higher yield of liquid steel from scrap than DRI. Simply speaking, one tonne of scrap yields more liquid steel compared to one tonne of DRI. This will give the secondary steel producers the option of increasing the proportion of scrap in their charge mix, thereby reducing the overall metallic raw material cost.
Increased scrap usage percentage in the charge mix will proportionately reduce production costs – viz. power cost, graphite electrode cost, flux cost, etc. – as more steel scrap replaces DRI in the metallic charge mix for these producers.
Scrap recycling is not just recovery of steel and other ferrous material from discarded automobiles, white goods and industrial and domestic items. It is also about enriching the recovered ferrous material by getting rid of rust, soil and other unwanted materials that cling on to the steel. The process of shredding and shearing cleans up the steel scrap as well. It is a huge benefit that steel makers look for with a discerning eye.
Around 1,000 kg of clean steel scrap can replace about 1,107 kg of coal-based DRI because of its higher metallic iron content. It can also save natural resources that are consumed in DRI production.
For the country in general, it means that the reduction in scrap and non-coking coal imports is a relief on the foreign exchange spending. Additionally, systematically phasing out depreciated fuel-guzzling vehicles and replacing them with modern fuel-efficient ones will reduce the government’s spending on petroleum imports.
Volume Of Business
The point of interest is how much of the scrap imports can be reduced by replacing these with domestic scrap generation. According to a Metal Bulletin Research (MBR), of the 16.82 million tonnes (MnT) of scrap
consumed in India in 2017, 4.38 MnT – or 26% – were imported. The report also mentions that India’s overall ferrous scrap usage will rise to 22.36 MnT in 2023, considering the expected growth in steel production. In spite of emerging local shredding operations, scrap imports will also rise, to reach 7.37 MnT in 2023.
According to the Society of Indian Automobile Manufacturers (SIAM) data for the six years from the year 2013-14 to 2018-19 the passenger and commercial vehicles sector taken together added an average of more than 3.68 million vehicles per year (ignoring two- and three-wheelers). If we consider that each of these vehicles yields an average of 0.9 tonne of steel when scrapped after reaching their end of life, then the amount of steel scrap available for the steel makers is about 3.31 MnT per year. Scrap imports can be reduced to this extent. This amounts to a saving of nearly USD 1 billion of foreign exchange per year. If we include the two- and three-wheelers the savings will be even higher.
Scrap Recycling Infrastructure
India’s scrap recycling capability is at a very nascent stage. The existing scrap recycling in the country is mainly limited to scrap aggregators who collect discarded household and industrial items and manually recover the steel in them.
It is only recently that Cero, a joint venture between Mahindra Accelo (previously known as Mahindra Intertrade) and MSTC Ltd (a Government of India enterprise) has come into being. This is India’s maiden organised auto shredding venture and vehicle recycling unit. It recycles specialised steels and other non-ferrous metals that are present in automobiles. An adequate number of such ventures needs to come up fast in the country.
A major drive is required to develop and modernise the scrap recycling industry. There is a requirement of capital investment for establishing the supply chain of scrap recycling which will also generate employment in the country.
The scrap recycling process involves the following steps**:
Vehicle collection: End-of-life vehicles are collected from owners and taken to the recycling plant.
Depollution & dismantling: All hazardous waste is removed from the vehicle, prior to scrapping. It involves airbag neutralisation, fluid and CFC collection.
Shredding: The vehicle is shredded, leading to the production of ferrous and non-ferrous metals as well as shredder residues.
Deregistration: The vehicle is deregistered with the relevant R.T.O. and a certificate of destruction is issued to the owner.
Recycled material extracted: The ferrous and non-ferrous metals are used as recycled materials.
The Working Model
The Steel Scrap Recycling Policy, for the current situation, envisages setting up infrastructure to generate 7 tonnes (MT) of scrap from the domestic market itself. This shall require adequate collection centres and dismantling centres that shall work in a hub-spoke model and feed the scrap processing centres. To produce 7 MT more of scrap, the country shall require 70 scrap processing centres each with a capacity of 1 lakh tonne; this is without disturbing the existing dismantling centres. The 70 scrap processing centres shall require about 300 collecting and dismantling centres on the presumption that four collecting and dismantling centres cater to each scrap processing centre.
The dismantling centres are the sites where the automobiles or other scrap items will be stripped of non-metallic materials that are either of value are hazardous and need to be disposed of in an environment-friendly manner. For e.g. removal of batteries, seats, airbag detonation, emptying fuel tanks, recovering engine/gear oils and lubricants, emptying pressurised containers or cylinders, recovering tyres, plastics and e-wastes is a must. Radioactive detectors are also required to detect radiation hazards.
Relevant Acts and waste management regulations will be applicable to these units.
The stripped automobiles/other scrap items at this stage consist of metallic parts only. These are then fed into a shredding machine. The shredding machine with its associated systems is the most capital-intensive component in the scrap recycling system. A project for setting up a machine with a capacity of shredding at 30 tonnes per hour could cost anywhere between USD 4-6 million today.
Steel scrap shredders are a complex, heavy duty and sophisticated system of equipment. There is a lot of wear and tear of their parts because of the very nature of their work
– tearing down steel into pieces. Some of the important components of a shredding system are:
Shredder infeed conveyor
- Heavy duty feed chute
- Heavy duty double feed roll with hydraulic drive
- Shredder housing assembly
- Disc rotor assembly
- Hydraulic power unit
- Base weldment
- Heavy duty hammer pin extractor
Wound rotor motor drive:
- Wound rotor motor and controls
- Drive shaft arrangement
- Closed loop cooling system
- Power factor correction system
- Oscillation feeders
- Magnetic separators
The shredding system also comes with a magnetic separator thatseparates out non-ferrous materials like copper and aluminium. These are valuable materials that fetch cash when sold in the market.
As steel production in India increases gradually and moves towards the target of 300 MnTPA, the requirement of iron-bearing raw material will parallelly increase too, putting stress on our limited natural resources. Therefore, it will be very important to utilise all such materials that are usable in the steel-making process that will contribute their iron content to steel.
In the context of secondary steel makers in India, who rely heavily on scrap and coal-based DRI, full utilisation of available and prospective steel scrap sources in the country is therefore of utmost importance. The increased usage of steel scrap will benefit the steel makers with lower energy consumption, lower flux consumption, lower CO2 emission, etc. Natural resources of the country, namely iron ore, coal, limestone, etc are also conserved to the extent that scrap replaces DRI (India is a major production centre for coal-based DRI). However, it may be highlighted here that DRI will always have its rightful place and importance as a raw material for steel making.
Commercially, the country will save foreign exchange due to proportionate reduction in imports of scrap and non-coking coal.
The infrastructure for scrap recycling in the country is still at its infancy. A major drive is required to develop and modernise it. There is a requirement of capital investment for establishing the supply chain of scrap recycling which will also generate employment in the country.
(The author is a freelance steel technology consultant based out of Kolkata, India. He may be contacted at firstname.lastname@example.org or +919763777846)
This article is a compilation of information drawn from various sources and the author’s personal views on them.
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