How does Steel Scrap contribute to the Steel Economy?

Steel scrap from the demolished ships is a major source of raw material for the re-rolling mills in our country. Normally at least 70 % of the total light displacement tonnage of a ship broken constitutes of re-rollable scrap. These are converted into bars and rods that are used in the construction sector. The other raw materials to produce bars and rods are re-rollable scrap from railways, pencil ingots from induction furnaces, semis from the integrated plants and imported re-rollable scrap.

Scrap from ship breaking fetches a very good price in the market. If prices express consumer preference, then there is a strong preference for the ship-recycling scrap. This is because of the high quality of steel that comes in the form of re-rollable scrap from ships. Ships are manufactured with acute specifications. The manufacture of ships is done usually in the developed countries and the specifications are monitored closely in order to avoid accidents. The general features of steels that are used to manufacture ships are ability to withstand pressure, high impact and strain on account of severe cold. These features if translated into manufacture of bars and rods may give us similar qualities of steel with equal strength.

The material processed from ship breaking scrap is better in terms of yield strength, notch impact strength and through thickness ductility. In terms of chemical composition it is consistent and has low sulphur and phosphorus content. In terms of metallurgical properties, steel from ships are normalized, fully killed and has finer and more compact grain structure, free from inclusions, pores and cracks and austenitic properties. Hence for all kinds of applications those require impact resistance, corrosion resistance, machinability, bendability, and formability, steel from ship breaking scrap has been found to be more suitable than steel from ingots and billets. Incidentally, everywhere else in the world the scrap from the demolished ships are usually sent into melting furnaces, India is probably only country that has the technique of re-rolling scrap into producing construction steel without having to first cast scrap as billets and ingots.

In order to produce a tonne of steel through the integrated steel plants one tends to consume more power and fuel and non-replenishable resources like coal, iron ore and limestone and other minerals. The sunk costs in terms of capital employed are higher in the integrated steel plants and the integrated plants create far less employment. Indeed, we can obtain our required input material from the ship recycling industry at a fraction of the costs of the integrated plants.

Steel Produced via Ship breaking route vis-à-vis other route. Capital investment required for producing 2 million tons of steel through ship-recycling route will not be more than INR. 300 crore as compared to over INR. 6000 crore required via alternative route. Solid waste generation in ship recycling is negligible as compared to major steel plants. During its peak on 1999-2000, it was producing more than 2 million tons of re-rolling steel per annum.