ASEAN steelmakers want ban on Chinese furnaces

ASEAN steel manufacturers have asked the governments of the 10-member country economic bloc to restrict the importation of induction furnace facilities from China warning this could result in the bringing in of obsolete technology that is harmful to environment that could only produce substandard steel products.

In a position paper, the Singapore Iron and Steel Industry Group (SISIG) urged the respective governments in ASEAN to take immediate action to the import of induction furnaces from China for the purpose of producing carbon steel products.

The group also said that imports of induction furnaces are only permissible for the following purposes:

Foundry industry that uses induction furnace as a melting equipment to produce various types of casting products; in the production of ferroalloys with specific properties; and in stainless steel and high alloy steel production process.

“The moving of the induction furnace facilities from China into ASEAN could result in the bringing in of an obsolete technology that is not suitable for carbon steel production. These induction furnaces produce sub-standard quality steel products and are environmentally unfriendly as they emit uncontrolled harmful gases and particulates and consume higher electrical energy than electric arc furnace,” said the letter signed by Ashish Anupam, president of the ASEAN Iron & Steel Council (AISC) and chairman of Singapore Iron and Steel Industry Group (SISIG).

According to the group, to support its objective of total elimination of illegal induction furnace operations in the country, the Chinese government also strictly prohibits companies from moving the facilities and restarting the operation in the other regions of China. However, there is no law that restricts the export of these mothballed induction furnaces.

Just as in the case of finished steel products, the group said, ASEAN has also become a preferred destination for the export of the obsolete and unwanted equipment from China. Countries like Indonesia, Malaysia, Philippines and Thailand have all reported increased activities in this direction.

“Our main concern arising from the above development is that ASEAN is becoming a dumping ground for these obsolete and outdated machinery and equipment, which, because of their inherent technology limitations and constraints, could adversely impact the orderly development of the iron and steel industry in the region,” the group said.

The adverse impact could arise in the production of sub-standard quality steel products, which could pose safety hazarde as construction materials.

Unlike steelmaking through the electric arc furnace (EAF) process, which is the predominant technology favored by established steelmakers in ASEAN, induction furnace lacks refining capability to remove harmful elements in liquid steel.

This is compounded by the absence of precise chemical composition adjustment and uniform solidification which could greatly affect the product's mechanical and physical properties. It has been reported that 90% of the rebar produced in China with the induction furnace process were sub-standard with poor mechanical property in elongation and strength which could easily fracture during application.

They also said that such obsolete facilities would cause high energy consumption. Induction furnace generally consumed more than 550 kWh of electricity to produce one ton of steel and the electricity consumption can reach as high as 800 kwh/ton. In comparison, electricity consumption in EAF averages only 450 kwh/ton.

Worse, these induction furnace facilities generally lack proper environmental control and are not equipped with waste gas treatment system. As a consequence, the process releases harmful gases and generate high degree of pollutants to the environment. EAF, on the other hand, adopts advanced technology with strong environmental control.

It usually comes with excellent fume extraction and good waste management system, the group said.