Severstal Cuts Production Costs in Entire Technological Chain
Russian steel giant Severstal is implementing projects to improve production efficiency. In 2020, the company reduced production costs along the entire process chain at the Cherepovets Steel Works. Cost per tonne of slab in Q4 2020 was USD 160, compared to USD 227 in the same period in 2019.
The first limit of the metallurgical chain, coke & blast furnace production KADP, invests a large percentage in reducing costs and production costs. At the same time, a significant result was obtained from the effective work with its own raw material base. The economic effect of end to end projects with resource enterprises of Severstal amounted to USD 117.6 million. This is an increase in the share of using its own raw materials: Vorkutaugol coal, Olkon and Karelsky Okatysh products, sinter ore and blast furnace ore of Yakovlevsky GOK. The Upstream Technological Development Center, together with employees of CherMK production facilities and resource enterprises, is looking for solutions that reduce the company's dependence on market volatility. The savings in 2020, among other things, were obtained through the development of coke production technologies, sinter and cast iron with constant selection of the optimal composition of incoming raw materials. For example, in 2020, TCD developed its own technology for using an increased proportion of iron ore pellets in the charge in traditional blast furnaces. In addition, USD 26.8 million was brought in by local production initiatives as well as price effects.
A significant cost reduction by the end of 2020 was obtained in the steelmaking production of CherMK USD 56 million. About USD 41.7 million is the end-to-end effect of projects with the participation of the JV divisions. In the second half of the year, USD 12 million was the economic effect of the introduction of the technology for smelting converter steel without the use of scrap metal, which is currently in industrial use. The change in the technological process is due to the launch of a new blast furnace No 3 and the need to process increased volumes of liquid iron. Significant local savings were obtained due to a decrease in the metal filling, the specific consumption of loaded scrap and pig iron per ton of finished products. In 2020, this figure reached 1123.8 kg per tonne. In particular, equipping the converters with the combined steel blowing technology made it possible to increase the smelting efficiency and shorten the melting cycle. A system of digital tools (calculators) automatically calculates alloyed scrap and allows you to select the optimal charge for each melt. The software and control complex "Automated melt release" for controlling the drive of the converter rotation allows increasing the yield of suitable steel.
Also in 2020, the approach to the formation of the cost of the main products of rolling production was revised. Thus, the work of small project teams and the implementation of an agile approach in the production of flat products at CherMK brought about USD 6.4 million (more than 53% of the total reduction in conversion costs) due to the optimization of zinc consumption, reduction of metal consumption and the cost of paints and varnishes.