Scrap Management &

Optimization
Solutions
®
ScrapMaster is a trademark of Harsco Corporation. All rights reserved.
BOSS™ is a trademark of Management Science Associates, Inc. All rights reserved.
This presentation is intended for customers of Harsco Corporation. All information included in this presentation, including copyright and trademarks, is expressly reserved
and no part of these materials may be reproduced or distributed outside of the customer’s organization in any form without Harsco’s prior written consent.
Harsco's Core Ideology

Core Purpose
To build teams that win with integrity anywhere in the world
ƒ Customers ƒ Value Creation ƒ Ethical in Thought, Word and Deed ƒ Customers
ƒ Employees ƒ Value Capture ƒ Disciplined Thought, Disciplined ƒ Targeted Market
ƒ Shareholders ƒ Value Selling Action and Disciplined People ƒ BHAG
ƒ Suppliers ƒ Be the Best ƒ Transparency ƒ Envisioned Future
ƒ Sustainable ƒ Safety
Superior ƒ Personal Accountability and
Performance Responsibility
(20-Mile March)

Core Values
1 Uncompromising Integrity and
Ethical Business Practices
ƒ Harsco Integrity Framework:
ƒ Code of Conduct ƒ Security Practices
ƒ Safety Practices ƒ Global Management Practices
3 Continuous Improvement
ƒ Continuous Improvement
Discipline through Lean and Six
Sigma Methods
ƒ Business Transformation

2 4
ƒ Internal Control

People – the "A Team" Value Creation Discipline

ƒ Human Capital Framework: ƒ Economic Value Added (EVA®)
ƒ Global Talent Management System for Recruiting, ƒ Value Selling Culture
Developing, Retaining and Assessing Human Capital

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Scrap consumption in Steelmaking
Crude Steel Production 2009
Europe
„ Global Steel production in 2009 totalled
1.2 billion tonnes, using approx 600 N. Am

million tonnes of scrap Rest of Asia

China EAF
„ The value of that scrap amounts to BOS
approx $140 billion* India

M.E. Africa
„ As the worlds largest steel producer
CIS
China consumes more scrap in
steelmaking than any other country S. Am

Oceania
‰ 550 million tonnes LST in 2009
0 50 100 150 200 250 300 350 400 450 500
‰ 170 million tonnes scrap Steel Production (million tonnes)
consumption in 2009

160
Steelmaking Scrap Consumption 2009
140

Scrap Used (million tonnes

120
EAF
100 BOS

80

60

40

20

0
China Europe Rest of N. Am India CIS S. Am M.E. Africa Oceania
Asia

*Based upon 2009 average scrap price of $230 per tonne

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Scrap is the most significant raw material cost

Estimated Scrap input cost

70% of steelmaking costs are
raw materials $204 million/year 3 million tonne BOS plant
Scrap makes up a large
proportion of this
$374 million/year 1 million tonne EAF plant
*Based upon average scrap price of $340 per tonne

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Best Practice scrap management

Best-in-Class scrap management

allows the Steelmaker to:
‰ Downgrade/reject merchant
scrap loads
‰ Reduce scrap yard landfill
costs
‰ Minimise scrap stocks
‰ Optimize scrap charges

4
Through Processes Impact

Consequences of poor scrap management:

=> EAF delays waiting for scrap

=> Incorrect weights charged
=> Low yields
=> Increased slag volumes
=> Missed specifications
=> Increased refractory wear
=> Greater flux, O2, power consumption

Financial impact:
‰ 1 minutes lost production time approx $3000
‰ 10oC Cooling requirement approx $440 per heat
‰ +100 ppm [O] at tap approx $51 per heat

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Harsco Metals Scrap Management Solutions

‰ Optimum scrap mix is charged each and every time on time – the correct weight, the correct quality, zero delays

‰ Full inspection, including state of the art radiation detection for all purchased scrap

‰ Proactive reporting of scrap deliveries to enable cash recovery associated with OOS loads, rejected loads and
contaminated loads

‰ Real time IT control for internal and purchased scrap with full stock tracking and reporting system

‰ Full traceability and accountability of scrap throughout site so that potential for fraud can be eliminated

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ScrapMaster ®

Four integrated operating modules for cost-effective management of the entire scrap supply chain,
with full segregation and traceability.

Basket Loading

Incoming
scrap

Scrap handling

®
ScrapMaster Powered by

Optimizing

Management information reporting puts you in control

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ScrapMaster Value
®

ScrapMaster can unlock significant savings

®

„ Save on external scrap purchasing

„ Realise the maximum value of internal scrap
„ Charge the optimum scrap mix on time, every time
„ Monitor the entire scrap charge history

The unique video review function in ScrapMaster ®

allows the furnace manager to monitor exactly what
scrap was loaded at what time, in case of any
problem with a particular heat.

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Scrap Optimization

®
„ ScrapMaster now integrates BOSS (Blending Optimization
Software Suite) functionality
„ Under license from Management Science Associates, Inc.
„ World leading optimization program
„ Yield-based cost calculation
‰ Actual scrap cost per tonne of steel
‰ Value of the scrap inventory on a real-time basis
‰ Minimises scrap charge cost, grade by grade
„ Based on specific grade production data entered by the
steelmaker
‰ planned tonnage, scrap composition, prices, availability
and inventory

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BOSS References

„ Essar Steel Algoma Canada Integrated

„ ArcelorMittal PST USA EAF

„ AK Steel USA Stainless Steel

„ ATI USA Stainless Steel

„ Carpenter Technology USA EAF

„ Universal Stainless USA Stainless Steel

„ MetalTek International USA Special Steels

„ McConway Torley USA Special products

„ Sparrows Point Scrap Processing USA Integrated

„ The Federal Metal Co USA Special products

„ Waukesha Foundry USA Special products

„ WCI Steel USA Integrated

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BOSS Functions

„ Single heat optimization

„ Multi heat optimization
„ Campaign optimization
„ Scrap buy planning
„ Inventory management
„ Results feedback and interpretation

11
Optimization Process Flow

STAGE 1 STAGE 2 STAGE 3

Input Scrap Grade Data Input Steel Grade Data Optimized Charge Design

Scrap Grade Name Scrap Grade Name

Steel Grade Name

Scrap Type

Chemical Analysis
Chemical Analysis
Restrictions

Physical Properties Element Recovery

Yield Restrictions

Cost Information

12
Scrap Input Data

13
Steel Grade Data

14
Inventory Data

15
Optimized Charge Solution

16
Solution Information

17
Scrap Buying Plan

18
Successful Optimizing

Factors for Optimization Accuracy Factors for Optimized Operations

„ Input scrap analysis is critical „ Accurate recording of scrap charge weight

‰ Regular melt tests and spectrographic analysis ‰ Use ScrapMaster system to ensure scrap charge
of scrap required to build database weights are recorded heat by heat
‰ Update model as more and more information is
gathered
„ Exact Knowledge of scrap being charged
„ Furnace characteristics to be established ‰ Use ScrapMaster DGPS system to ensure full
‰ Full partnership approach needed so that details tracking of scrap charge
of furnace characteristics and production plan
are shared
„ Clear demonstration of optimization impact
‰ Compare actual scrap charge recipe, weight and
cost heat by heat and day by day with optimized
solution

19
Scrap Analysis

„ Accurate chemical analysis data is required for scrap materials

„ Need to begin population of scrap database
„ To start process, need melt tests of each scrap
„ Ongoing testing of scrap will be required to populate database with a large number of samples to improve model
accuracy

Melt Test of Scrap

Incoming scrap type Update scrap analysis

database

Spectrographic Analysis
Of Scrap

Load data
into optimization model
Repeat analysis regularly to build database
and improve model accuracy

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Optimization Improvement

1
Receive
8 Scrap 2
Analyse
Feedback Chemical
Data Data

7 Continuous Feedback 3
Confirm
Results Update Scrap
Analysis

Process Improvement
6 4
Analysis Melting
Scrap vs Steel EAF
(residuals) 5
Results
(history)

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Optimized Savings Example
„ Analysis of existing scrap
# of Savings per
charge practice is made and Grade Name
hts
%
month
then compared with optimized 1424 Plate HIC 66 2.09%
solution
1674 Plate Linepipe 27 0.86%

„ Total cost of both are 1988 Plate LowAlloy 126 3.99%

established and savings 1412 Plate MicroAlloy 82 2.60%
calculated 1981 Plate MildSteel 623 19.75%

1608 Section LowAlloy 22 0.70%

1639 Section MicroAlloy 760 24.10% £77,210

1655 Section Mild Steel 120 3.80% £34,867

1962 Strip HIC 96 3.04%

1451 Strip High Carbon 188 5.96%

40 Strip IF 458 14.52%

1932 Strip Linepipe 35 1.11%

1437 Strip Low C 277 8.78% £32,863

1915 Strip Low S Ca 35 1.11%

1449 Strip Med C 239 7.58% £27,755

3,154 100.00% £172,695

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The Value of Charge Optimization

„ Quantifying the cost of production constraints (e.g.

sulfur composition of the heat)
„ Lowest cost liquid steelmaking
„ Optimized use of scrap available
„ Use data for informed scrap purchasing and
negotiation
„ Planned scrap buy
„ Full control of scrap cost
„ Tangible savings

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End-to-End Scrap Management Solution

„ Full management of scrap from the moment it arrives on site until it is

melted
„ Handling of scrap arriving by road, rail and barge
„ Order receipt, radioactivity control, scrap quality control
„ Processing of scrap on site
„ Collection, transport and upgrading of all internally arising scrap
„ Reception, storage and real time scrap inventory control
„ Scrap charge optimization
„ Loading scrap baskets according to menus received electronically
from the production schedule
„ Transport scrap to the furnace on specialist vehicles

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