How to calculate the efficiency of using alternative metallurgical raw materials

How to calculate the efficiency of using alternative metallurgical raw materials by way of example of skulls in electric furnaces

We have encountered various methods of determining the fair price for skulls.

The most optimistic approach among suppliers is: the current price for HMS in Turkey minus impurities. It means that with a scrap price of $350, these suppliers, wearing "rose-colored glasses", claim that the price for their material with 85% iron content should be around $300. However, no one is willing to pay such price for skulls.

Let's try to understand this issue nonetheless.

The current price of scrap, the proposed price for alternative material and the metallization of skulls are the main factors influencing the economic feasibility of using skulls.

So, financiers at the metallurgical plant want to know how much they are paying for 1% of iron in the raw material. But in addition to this they want to assess whether there will be additional expenses from using alternative material.

From the perspective of our metallurgists, it is advisable to melt skulls with an iron content of no less than 70% in electric furnaces. Material with metallization below 70% is suitable for blast furnaces, but there is a different economic calculation there, as the material becomes an alternative to iron ore, and accordingly the price of skulls will be compared to the current cost of iron ore.

It should be noted that even when using super-clean scrap, the yield will always be less than 100% as some of the material burns. This figure depends on the type of furnace, the competence of metallurgists, and the quality of the material used.

According to our metallurgist's estimates, the yield when using premium scrap is 90-95%, HMS 80/20, 70/30 yields 85-90%, and when using shredded scrap it's 80-85%.

Skulls is a relatively refractory material, and losses occur mainly not due to iron burning, but because of the presence of slag in the pieces.

Skulls' remelting increases the melting time of the material due to its refractory nature. It also reduces productivity because material with lower iron content is melted, and the amount of liquid metal after each melt decreases.

Despite these factors, our customers and other plants that have learned to use skulls efficiently never give up on it. This material is a strategic raw material and is included in the production program. Buyers know they need to provide a regular supply of skulls to maintain production.

According to our calculations, using 10 tons of skulls with 85% iron content increases the cost by $25-30.

Thus, a price of $250 for skulls given the current price of HMS results in savings of $45 per ton of final product.

If you are going to achieve economic benefits from using alternative raw materials in production, it is also important to know how to melt it correctly. We will discuss this topic in the next article.

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SmartScrap