steel sector report
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This article gives overview on Steel SectorTRANSCRIPT
A Sector Analysis Report
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Steel Sector: Risk & Future Insurance potential
Steel Sector: Risk & Future Insurance Potential
In De- traiff, it is the leader who decides the rates and others just follow, perhaps, with
slight variations." It will be a catch 22 situation for the insurers as they will see premium
going down.
If we look at the history of the Insurance industry, major landmark have taken place in
every other decade starting from the 1930s till the end of the last century. It was in 1938
the insurance Act setting the rules and regulations for the insurance market was passed, in
1972, the general insurance Nationalization Act was passed nationalizing all general
insurance companies and organization them into four subsidiaries of the General Insurance
Corporation & finally in 1999, Insurance Regulatory and Development Authority Act was
passed opening up the industry to private and foreign participation.
Insurance is a long-term business and takes a while for the market to mature and support
the economic growth of the country. But can the Indian market wait for another two
decades for development of essential support agencies to take place?
The insurance sector in India has come as full circle from being an open competitive
market to nationalization and back to a liberalized market again. Tracing the
developments in the Indian insurance sector reveals the 360 degree turn witnessed over a
period of almost two centuries.\
Reforms in the Insurance sector were initiated with the passage of the IRDA Bill in
Parliament in December 1999. The IRDA since its incorporation as a statutory body in April
2000 has fastidiously stuck to its schedule of framing regulations and registering the
private sector insurance companies.
12 general insurers operating in the country eight are private non-life insurers. The
insurance industry has been able to attract foreign direct investment (FDI) of up to
Rs.1288.44 crore which is one of the highest in the services sector,
The non-life insurance industry has seen 180 per cent growth in these five years, writing a
gross premium of Rs18,095.25 crore in 2004-05, up from Rs10,087.03 crore in 2000-01. The
private players have come out with innovative products including weather index-based
crop insurance policies, health insurance covers, liability products and others."
INTRODUCTION
Steel Sector: Risk & Future Insurance Potential
The Indian insurance industry faces multiple challenges today. One of them is the issue in
moving from a traiff to de-traiff market. Best experience is when marine insurance de-
traiff in 1994 was disastrous for the industry. The general insurance industry then thinks
risk management. Premium rates touches low level and all insurance company can’t afford
such a low level premium.
The reason is at that time Indian market does not have reliable, sufficient and detailed
data required for actuarial analysis and pricing. Preferred rating would not be possible.
Thus client, with a claim free track record are clubbed with those having a poor claim
record. In a growing competitive environment, can Insurer afford to offer to offer a
uniform to all? Growing insurance awareness bring with it a discerning insurance public
who do not accept the one rate fits all policy any longer.
The market is getting fragmented, with entry of new insurance provider. As far as the
private insurer are concerned, at this stage their premium turnover is too small to base
any actuarial exercise. Collecting & collating all data for analysis at the time of de-
traiffing steel and other sector is extremely time consuming, difficult and expensive.
The private players are excited about detariffing, regardless of its multiple impacts on
their top and bottomlines. In a free pricing regime, the premium rates are expected to
fall. This in turn would reduce the fund availability for investments.
The other whammy is the increase in brokerage and agency commissions. Currently, the
brokerage and agents commission in the case of non-tariff business is 17.5 per cent and 15
per cent respectively, and in the case of tariff business it is 12.5 per cent and 10 per cent
respectively. When the rates are freed, payments to intermediaries will go up.
One sector that has benefited immensely from liberalisation is the corporate sector.
Competition has resulted in premium rates going down. While the corporates are enjoying
the benefits, individual policyholders haven't seen too much improvement, in terms of
premium rates as well as claims settlement.
Players will focus more on market share than on profitability. This can be done through
better risk profiling, as well as learning more about the risks through risk inspections and
data warehouses."
Steel Sector: Risk & Future Insurance Potential
Our own experience and detailed study in any sector helps to face this situation. This
helps in better pricing, Improved market segmentation, optimum reserve creation for
unexpired risks and assist in product design. This saves the our company valuable
resources and time.
In de-traiff market winner are those, who have ability to respond suitably to the dynamic
of the market, meeting regulatory, statutory and legal requirement could be possible with
the least turnaround time. A base product can be converted a ‘vanilla’ product if we
understand all risk and company specific requirements.
In de-traiff market insurance business cannot succeed without access and use of
authentic, detailed and lots of underwriting, claim data & industry specific requirement.
That is a pre-requisite before a successful move to a de-traiff regime can be
contemplated.
India has a long heritage of iron and steel making. The journey started in ancient
times and through the ages this evolved and matured into a vibrant and modern
industry at par with the best in the world. The iron and steel industry in India started
nearly 100 years ago in Jamshedpur. The Tata Iron and Steel Company (TISCO),
started under the aegis of the pioneering Indian entrepreneur Sir Jamshedji Tata had
been the icon of the nationalistic pride during the colonial period.
The steel sector was one of the primary vehicles of economic development in
independent India. India is endowed with essential raw materials such as iron ore
and coal. The industry has widespread forward and backward linkages with the rest
of the economy. The founding fathers of India’ s Five Year Plans treated this as a
priority sector and the industry rose to commanding heights of the economy through
STEEL SECTOR: AN OVERVIEW
Steel Sector: Risk & Future Insurance Potential
large-scale capacity creation in the public sector. Since then it has passed through
various phases of changing domestic and external policy environment. The industry
as a whole has responded to the emerging compulsions of the changing times. It has
survived well with its impressive array of achievements.
In the initial years of economic planning the State stepped in as a regulator and a
guide to reconcile the interests of the producers and consumers of this vital
economic input. It also protected the industry from the vagaries of the international
market. The change came in the last decade of the 20th century with the
liberalisation of the Indian iron and steel industry. The environment of globalization
and competitive market orientation combined well with the formidable legacy of a rich
experience in the art and craft of steel making acquired over four decades of
controlled growth. The industry responded magnificently to the opportunities
provided by the new policy regime. The private sector led the resurgence from the
front.
The decade following the deregulation of the Indian steel sector saw the largest
additions to capacity. The new entrepreneurs also showed extreme pragmatism and
foresight in the selection of technology. As a result, the Indian steel industry today
can boast of some of the latest in the state-of-the art technologies in use globally.
The post-deregulation Indian iron and steel industry adopted modern technologies
and varied product categories. In these years, the industry both in the public and the
private sectors saw impressive gains in efficiency of resource use and productivity.
Steel Sector: Risk & Future Insurance Potential
The most remarkable achievement of this decade has been a rapid integration of the
Indian steel industry with the global market. The quantum jump in exports from India
bears witness to that. Globalization has led to manifold expansion in the marketing
opportunities for the Indian producers and India has emerged as a net exporter of
steel. Production for export has become an integral part of the profit-maximizing and
loss-minimizing business calculations of the Indian corporate. The producers can
now source their inputs, both physical and financial, from the least cost source
beyond the boundaries of the national economy.
The performance of the Indian steel industry during the last decade, though
spectacular, has not been altogether smooth. The euphoric developments in the first
few deregulation years were cut short when deceleration set in from the autumn of
1997. The external global environment worsened progressively under pressure from
a series of financial meltdowns in various parts of the world while our domestic
economy also stagnated. Prices started falling continuously even as the world steel
industry strained under conditions of extreme oversupply and cut-throat competition.
The domestic market also dwindled on the back of slow growth in construction and
other forms of capital formation/investment. Most worrying was the threat posed by
narrow national interests which misused the WTO. Non-tariff barriers imposed on the
Indian exporters of steel bear ample witness to this predilection. There has been
some respite in the last few months with some firming up of domestic and
international prices. Prices have risen as a result of improved demand conditions at
Steel Sector: Risk & Future Insurance Potential
home and abroad and also because of some rationalization of capacities across the
globe, though on a limited scale.
The industry now looks ahead with a new resolve and determination. Deregulation
endows the producers with the freedom to take their own business decisions, but at
the same time, it devolves a great deal of responsibility. These include the
responsibility to maintain quality standards to remain cost and price efficient and,
above all, to meet the consumers’ demand as best as possible. Globalization has
its opportunities and dangers. Reaping the benefits of a globalized market calls for
utmost vigilance from all the stake-holders – the producers, the consumers and the
State. The industry must be able to capitalize on the opportunities and mitigate the
dangers of synchronized global downturns. This must be done in association with the
consumers and the state machinery.
At the present juncture, one can say that the industry has successfully made the
transition from a controlled to a market-driven economic environment. The future of
this industry is grounded in its past and its present. Now, there are signs of revival
both in the domestic and international steel market. Steel prices and demand have
gone up as a result of increased spending on construction and consumer durables
both at home and in South East Asia, Japan, the USA and some parts of the Euro
zone. There has been some cut back on capacity world – wide and this has helped
in restoring the supply-demand balance to some extent.
Steel Sector: Risk & Future Insurance Potential
The Indian producers have been alert enough to detect cases of violation of their
trading rights within and outside their national boundaries. The industry helped by
the official machinery has moved the available international bodies to seek redressal.
It is also constantly striving to better its performance in every sector. As a result, the
Indian steel industry has grown not only in competence but also in confidence. It
looks ahead with a resolve to carry the journey which started 100 years ago towards
a pinnacle of greater glory.
Plant where steel manufacture
– integrated steel plants and
– mini steel plants.
Integrated steel plants are large factories with a complex structure and a broad range of
products. They comprise blast furnaces, basic oxygen steel plants, and continuous casting
plants, with downstream plants such as hot and cold rolling mills and surface-coating
plants. They are designed for high levels of output.
Mini steel plants are less complex in structure and their range of products is usually
limited. Scrap steel, sponge iron from direct reduction plants, or pig iron from smelting
reduction plants is processed in an electric-arc furnace. The steel is cast in a continuous
casting plant. Downstream plants include relatively simple rolling mills.
OVERVIEW OF STEEL MANUFACTURING PROCESS
Steel Sector: Risk & Future Insurance Potential
Layout of steel plant
1 Coal
2 Fluxing agents
3 Iron ore
4 Coking plant
5 Blast furnace
6 Direct reduction plant
7 Alloying addition
8 Oxygen
9 Fluxing agents
10 Scrap
Steel Sector: Risk & Future Insurance Potential
11 Converter
12 Ladle furnace
13 Mould
14 Continuous casting plant
The figure shows a flowchart of the integrated manufacturing process for iron and steel using
the blast furnace and basic oxygen furnace (denoted BF and BOF hereinafter, respectively),
which is presently the most commonly used method (51% of world steel production). After
the BF-BOF process, molten steel is controlled to a target composition and temperature and is
then cast by continuous casting machine to produce slabs, blooms, and billets. These castings
are rolled to the required dimensions by the rolling mill to produce steel products. The
smelting and refining process for iron and steel in the BF-BOF process involves the carbon
reduction of iron ore (Fe2O3) in the BF to make molten iron, and decarburization of molten
iron in the BOF to make molten steel.
Major reducing agent in the BF is the carbon monoxide gas(CO) generated by the oxidation
of the carbon(C) in coke. Consequently, carburization takes place at the same time as
reduction, producing hot metal(molten iron) containing about 4% carbon. The hot metal is
decarburized to the required carbon content in the BOF. The main reaction in this process is
the oxidization of the carbon in the hot metal by both pure oxygen gas (O2) and iron oxide
(Fe2O3). The residual oxygen, after contributing to this decarburization reaction, remains in
the molten steel. This oxygen is fixed and removed by deoxidation reagents such as silicon
and aluminum as SiO2 and Al2O3 or is removed as carbon monoxide gas in the subsequent
vacuum degassing process.
In addition to the BF-BOF process, there is another process which utilizes mainly scrap as an
iron source, with some direct reduced iron whenever necessary. The direct reduced iron is
produced by reducing iron ore with reformed natural gas, whose principal components are
hydrogen, carbon monoxide, and methane. The scrap, along with direct reduced iron, is then
melted in an electric arc furnace (denoted EAF hereinafter) to produce molten steel which is
subsequently processed by the continuous casting machine, as mentioned above.
The molten steel from the BOF and EAF is then deoxidized and alloying elements are added
in the prescribed amounts. The molten steel is then held at the target temperature and
continuously cast, and the castings obtained are cut to the prescribed length. After heating to
Steel Sector: Risk & Future Insurance Potential
the rolling temperature in a reheating furnace, these castings are hot-worked to the required
products. Steel shapes, bars, and wire rods are worked on section and bar mills and wire-rod
mills equipped with caliber rolls, plates are worked on reversing mills, and hot-rolled steel
sheets are worked on hot strip mills. After pickling to remove scale from the surface, the hot-
rolled steel sheets are worked to cold-rolled steel sheets on reversing mills or tandem rolling
mills, and the cold-rolled steel sheets are tinned or galvanized as required to produce various
surface-treated steel sheet products. Steel pipe is produced by forming and welding steel
sheets or plates, or by piercing a billet and rolling to the final dimensions without a seam.
Among the elements composing the crust of the earth, iron exists in the largest quantity next
to oxygen, silicon, and aluminum. Iron exists as natural ores in the form of oxides, and the
estimated amount of ore deposits in the world is approximately 800 billion tons. Typical ores
are hematite (Fe2O3) and magnetite (Fe3O4), having theoretical iron contents of 70% and
72%, respectively. The iron content of practical ores is about 65% at maximum, and these
ores include 2-6% silica and 1-3% alumina (Al2O3).
Iron ore & its pretreatment
In the smelting process for iron and steel, coke serves as the source of carbon, which works
as a reducing agent when reducing iron ore in the BF. At the same time, coke acts as the heat
source for heating and melting the charged materials. Coke is made by baking coal in a coke
oven.
Steel Sector: Risk & Future Insurance Potential
In the coke oven, the raw coal obtained by crushing and blending is charged into the coke
chamber, where it is then baked (carbonized) by indirect heating at 1,473-1,573K (1,200-
1,300 ) for 14-18 hours to form coke that contains about 90% fixed carbon. The coking
process also produces such by-products as gas, coal tar, and pitch which can be refined and
treated into useful secondary products such as fuel gas, pure hydrogen gas, chemical products
such as benzene, toluene, xylene, naphthalene, dye, and carbon fibers.
Coal & Coking
The blast furnace (BF) has a vertical cylindrical structure externally covered with a shell of
thick steel plate and internally lined with refractories. The refractory structure is cooled by
water-cooled metal components called staves, which are embedded between the shell and the
refractories. The furnace body is composed of (i) the shaft, which tapers outward from the
top, (ii) the belly, which is a straight cylinder, (iii) the bosh, which tapers inward toward its
bottom and is located immediately under the belly, and (iv) the hearth, at the bottom of the
furnace. The shaft, belly, and bosh are usually lined with chamotte brick and silicon-carbide
brick, and the hearth is lined with carbon brick. Depending on the size of the furnace, the side
wall of the hearth is radially fitted with some 20 to 40 of water-cooled copper tuyeres, which
are used to inject the hot blast into the furnace from the hot stoves through the hot-blast main
and bustle pipes. Tapholes for discharging hot metal and cinder notches for discharging slag
are also installed in the hearth section. The largest BFs at present are about 80m in total
height, with a furnace body height of about 35m and a maximum internal diameter of about
16m, and have an internal volume of about 5,200m3. A furnace of this size can produce
approximately 10,000 tons of hot metal a day.
All BFs have auxiliary equipment such as (i) belt conveyors for transporting raw materials
(ore and coke) to the furnace top, (ii) hoppers for temporarily storing these raw materials, (iii)
a bell-type or bell-less-type device for charging the raw materials into the furnace with
appropriate distribution in the radial direction, (iv) hot stoves for heating the blast, (v)
blowers for feeding the blast, and (vi) equipment for dust removal, and recovering and storing
the gas from the furnace top. Blast furnaces in which pulverized coal is injected from the
tuyeres (PCI = pulverized-coal injection) are provided with equipment for pulverizing the
coal and feeding it under pressure. With bell-type charging equipment, the raw materials
enter the furnace through the gap created by moving down a small inverted bell. This bell
closes and a larger bell (big-end-down) opens to allow material to fall into the shaft below.
Steel Sector: Risk & Future Insurance Potential
With bell-less charging equipment, the raw materials are dropped into the furnace through a
rotating chute. The hot stove is a cylindrical furnace about 12m in diameter and some 55m in
height, and has a chamber filled with checkered silica bricks. The hot stove is a type of heat
exchanger in which the heat produced by combustion of the BF gas is stored in the checker-
work chamber, after which cold air is blown through the hot checker-work to produce the
preheated hot air blast to the furnace. Two or more stoves are operated on alternate cycles,
providing a continuous source of hot blast to the furnace.
A BF is usually operated with a furnace-top pressure of about 250 kilopascals. To recover the
energy from the large volume of high-pressure exhaust gas, the BF is equipped, after dust
removal, with a top-pressure recovery turbine (TRT), for generating electric power by
utilizing the pressure difference between the furnace-top and gas storing holder.
Blast Furnace Facility
A total of about 1,600 kg/ton-hot metal of such iron-bearing materials as sintered ore, lump
ore and pellets, and about 380 kg/ton-hot metal of coke as the reductant are charged in
Steel Sector: Risk & Future Insurance Potential
alternate layers from the top of the BF. It has recently become common practice to inject
usually 90-120 kg/ton-hot metal of pulverized coal as part of the reductant from the tuyeres in
the lower part of the furnace. At present, heavy-oil injection from the tuyeres is rarely used
for economic reasons. Approximately 1,000 Nm3/ton-hot metal of hot blast is also blown
through the tuyeres after preheating to 1,423-1,523K (1,150-1,250 ) at the hot stoves. The
humidity and oxygen concentration of the hot blast are also controlled.
The hot blast reacts with the coke and pulverized coal in the belly and bosh of the BF to form
a mixture of carbon monoxide and nitrogen. This mixture ascends in the furnace while
exchanging heat and reacting with the raw materials descending from the furnace top. The
gas is eventually discharged from the furnace top and recovered for use as fuel in the works.
During this process, the layer-thickness ratio of iron-bearing materials to coke charged from
the furnace top and their radial distribution are controlled so that the hot blast can pass with
appropriate radial distribution. During the descent of the burden in the furnace, the iron-
bearing materials are indirectly reduced by carbon monoxide gas in the low-temperature zone
of the upper furnace. In the lower part of the furnace, carbon dioxide, produced by the
reduction of the remaining iron ore by carbon monoxide is instantaneously reduced by coke
(C) into carbon monoxide which again reduces the iron oxide. The overall sequence can be
regarded as direct reduction of iron ore by solid carbon in the high-temperature zone of the
lower furnace. The reduced iron simultaneously melts, drips, and collects as hot metal at the
hearth. The hot metal and molten slag are then discharged at fixed intervals (usually 2-5
hours) by opening the tapholes and cinder notches in the furnace wall.
The materials discharged from the BF are hot metal at 1,803K (1,530 ), about 300 kg/ton-hot
metal of molten slag, and dust-bearing exhaust gas discharged from the furnace top. Hot
metal is poured into a torpedo car, where it is subjected to hot metal pretreatment, and then
transferred to the steel making plant. Molten slag is crushed after cooling and is recycled as a
material for roadbed and cement. After dust removal, the exhaust gas is used as a fuel for the
reheating furnaces.
Hot Metal Pretreatment process
Steel Sector: Risk & Future Insurance Potential
The basic oxygen furnace (BOF), whose profile is shown in the figure, is a tiltable vessel
lined with refractories such as magnesia carbon brick. Auxiliary equipment includes a chute
for scrap charging, hoppers for alloys and fluxes, a lance for injecting pure oxygen gas, a
sublance for measuring the temperature and carbon concentration of the molten steel, lifting
devices for the lance and sublance, equipment for tilting the vessel, and equipment for
recovering and cleaning the exhaust gas. The BOF capacity is expressed as the weight of
crude steel that can be decarburized per heat.
The main function of the BOF is to decarburize the hot metal using pure oxygen gas. In the
top-blown BOF, pure oxygen is injected as a high-velocity jet against the surface of the hot
metal, allowing penetration of the impinging jet to some depth into the metal bath. Under
these conditions, the oxygen reacts directly with carbon in the hot metal to produce carbon
monoxide. The pure oxygen top-blown BOF can decarburize 200 tons of hot metal from
4.3% C to 0.04% C in about 20 minutes. As a result of this high productivity, the BOF
replaced the open hearth furnace, which was a much slower process.
Reduction Process
Heating in an electric furnace is made by electric energy. Raw ferrous materials consist
mostly of scrap, some cold pig iron and DRI. For this reason, the electric furnace plays an
important role in the recovery and recycling of waste iron resources. In areas where an
abundant supply of scrap and electric power are available, the proportion of steel making via
Steel Sector: Risk & Future Insurance Potential
the electric furnace route is relatively high, because both energy consumption and equipment
investment are substantially smaller than via the integrated route using a BF and BOF to
produce steel from ore. Electric furnaces are classified as arc furnaces or induction furnaces,
according to the heating method. The arc furnace is used far more extensively for steel
making because its capacity is large and production efficiency is high.
DC Electric Arc Furnace
The production of high-grade steel, refining under vacuum was initially introduced to remove
such gas components as hydrogen before casting the molten steel tapped from the converter.
This is called vacuum degassing because the gas components in the molten steel are removed
by reducing the balanced partial pressures during and after pouring the molten steel into a
reduced-pressure vessel. The functions of temperature control, final refining, and
composition control were subsequently added to the secondary refining equipment because
the function of the converter is increasingly concentrated on decarburization, and further
reductions in impurity elements and nonmetallic inclusions should therefore be performed by
other means. The allowable ranges of target temperature and composition have also become
tighter requiring fine tuning. Thus, secondary refining has recently become the standard
process for producing high-grade steels. The most important functions of secondary refining
are final desulfurization, degassing of oxygen, nitrogen, hydrogen, etc., removal of
inclusions, and final decarburization for ultra-low carbon steel.
Steel Sector: Risk & Future Insurance Potential
Desulfurization is conducted by adding CaO, Na2CO3, CaF2, etc. in a similar manner to that
used in the hot metal pretreatment process. Denitrification and dehydrogenation are achieved
by treating the molten steel under reduced pressure in a vacuum vessel. Deoxidation is
conducted by adding silicon and aluminum to the molten steel to form nonmetallic inclusions
of silica (SiO2) and alumina (Al2O3), which are coagulated by stirring the molten steel for
enhanced flotation. These are then absorbed into the top slag and removed. Additional
decarburization, if required, is carried out by blowing pure oxygen gas onto or into the
molten steel in the vacuum vessel to remove the carbon as carbon monoxide.
Secondary refining equipment typically used in the mass production of high-purity steel at
integrated steel mills includes the RH (Ruhrstahl-Hausen) vacuum degasser and LF (ladle
furnace). The RH equipment injects argon gas into one (suction tube) of the two tubes
(snorkels) immersed in the molten steel in the ladle, and the molten steel in the ladle is drawn
through the suction tube into the vacuum vessel by the operation of air-lift pumping. After
being exposed to the vacuum in the vessel, the molten steel flows back into the ladle through
the down snorkel. Since the recirculation rate is relatively high, the RH process is suitable for
rapid degassing of a large amount of molten steel. The refining functions of the RH process
have also been expanded. For example, decarburization and heating-up are conducted by
injecting pure oxygen gas, while the desulfurization and deoxidation rates are increased by
adding fluxes, both onto or into the melt in the vacuum vessel. On the other hand, the LF
Steel Sector: Risk & Future Insurance Potential
equipment offers strong heating functions, permits the addition of a large amount of alloys,
and enables precise temperature control. It also provides outstanding desulfurization by high-
temperature treatment with reducing fluxes and the removal of deoxidation products. The LF
process is therefore often used for the secondary refining of alloy steel.
National Steel Policy
The Government has announced the National Steel Policy (NSP) in early November, 2005.
The policy envisages a compounded annual growth rate (CAGR) of 7.3 percent per annum
in the steel sector up to 2019-20. To achieve this, the NSP aims to increase indigenous
production from 38 Mt level of 2004-05 to about 110 Mt by 2019-20, through multipronged
strategy.
The focus of the NSP would be “to achieve global competitiveness, not only in terms of
cost, quality and product-mix but also in terms of global benchmarks of effiency and
productivity.
The government proposes to create incremental demand for domestic consumption of
steel through promotional efforts, awareness drives and strengthen then delivery chain,
particularly in the rural areas.
The justification is that the growth rate of steel for the past 15 years has been 7 percent
per annum. The proposed increase will compare well with the projected income growth
rate of 7 to 8 percent, given an income elasticity of steel consumption around one.
According to available estimates, the NSP mentions, that domestic consumption of steel in
India stood at 31 Mt in 2003 - 04. Bringing production up to 110 Mt would, therefore, mean
a domestic consumption of 90 Mt. The urban percapita consumption is expected to go up
from the present level of 77 Kg to 165 Kg in 2019-20 at a CAGR of 5 percent while in the
rural areas, the consumption is slated to double from 2 Kg to 4 Kg at a CAGR of 4.4
percent.
A ressume of the greenfield projects is presented below –
Tata Steel at Jamshedpur, Jharkhand
Tata Steel is setting up a 12 Mtpy capacity steel plant near the existing steel plant in
Jamshedpur at cost of Rs. 42.000 crore.
Tata Steel In Orissa
UPCOMING STEEL PROJECTS IN INDIA
Steel Sector: Risk & Future Insurance Potential
Tata Steel is setting up a six million tpy capacity steel plant at Kalinganagar in the Jaipur
district of Orissa. The proposed project will involve an estimated investment of Rs. 15,400
crore and will be completed in two phases of three million tpy each.
Tata steel In Chattisgarh
Tata Steel is planning to install a 5 – Mtpy capacity integrated steel plant in the Baster
region of chattisgarh at a cost of Rs. 15,000 crore. In the first phase,
Essar Steel In Orissa
Essar Steel Ltd. is setting up a 4 – Mtpy capacity steel complex at Paradip in Orissa at an
estimated cost of Rs. 10,000 crore.
Essar In Chattisgarh
According to a report in Metal Bulletin (6/7/05), Essar Steel Chattisgarh, a subsidiary of
Essar Steel, has signed a MoU with the Chattisgarh Government to build a 3.2 Mtpy
capacity integrated steel plant in the Baster district of the state at a cost of Rs. 60 billion.
Ispat In Orissa
The Ispat Group is planning to set up a 5 Mtpy capacity steel plant of Paradip in Orissa.
Ispat has requested the Orissa Government for a 240 Mt of iron ore reserve for 30 years for
building the project.
Tata - Blue Scope JV In Jharkhand
The new joint Venture Company in India between Tata Steel and BlueScope of Australia
will set up a 250,000 tpy of metallic coating facility and a point line capacity of 150,000
tpy. The plant will be set up at Bara in Jamshedpur and is expected to be operational by
2008. The capital cost would be about Rs. 1400 crore. The two companies will have a
50:50 share in the joint venture project.
Bhushan Steel & Strips in Orissa
BSSL has planned to set up a 1.2 Mtpy capacity hot strips plant along with a 300 MW
captive power plant at Lapanga in the Jharasguda district of Orissa. The first phase of the
project will involve an investment of Rs. 16502 crore. A further investment of Rs. 1850
crore in the second phase will take the capacity of the plant to 2.8 Mtpy by 2007.
Jindal Stainless Ltd. In Orissa (JSL)
Steel Sector: Risk & Future Insurance Potential
JSL has signed a MoU with the Orissa Government for setting up a 1.6 Mtpy capacity
integrated steel plant along with a 500 MW capacity captive power plant at Kalinganagar
in the Jaipur district of Orissa. The project will be set up in Phases and the total cost
involved will be USD 9.5 billion.
JSPL in Orissa
Jindal Steel and Power Ltd. (JSPl) has signed a MoU with the Orissa Government for setting
up a a 2 Mtpy capacity steel plant, a 8,000 tpy ferro alloys plant a 200 MW capacity
captive power plant in the Angul area of Orissa. The integrated project will involve an
investment of Rs. 4000 crore.
JSPL in Jharkhand
Jindal Steel & Power Ltd (JSPL) has signed a memorandum of understanding (MoU) with
the Jharkhad Government to set up a 5 – Mtpy capacity integrated steel plant and a 1000
MW capacity captive power plant at an investment of about Rs. 11,500 cr.
Murrugappa Plant In Orissa
Tube investments of the Murrugappa Group based in Chennai has signed a MoU with the
Orissa Government for the installation of a 2.5 Mtpy capacity steel plant at an investment
of Rs. 6000 Cr.
NINL in Orissa
Neelachal Ispat Nigam Ltd. (NINL) is planning to set up a 1 Mtpy capacity steelmaking
facility at Kalinganar in Orissa. The steel project is scheduled to be completed by 2007- 08
and involves an have a bar and rod mill to produce quality wire rods, reinforcement bars
and billets.
MSP Metalliks is setting up an
integrated steel plant near Jharasguda in Orissa. plant. A cumulative investment of Rs.
260 crore is envisaged for the project.
VISA steel in Orissa
VISA steel will invest Rs. 1600 crore for setting up a special steel plant at Kalinganagar in
Orissa.
Vedanta Resources in Orissa
Steel Sector: Risk & Future Insurance Potential
Vedanta Resources is planning to set up a 5 – Mtpy capacity steel plant in Orissa at an
investment of Rs. 12,000 crore.
Sunflag Iron & Steel in Orissa
Sunflag Iron & Steel Ltd. is setting up a 1 Mtpy capacity steel plant in the Sambalpur
district of Orissa at an investment of about Rs. 1000 crore.
SPS Sponge Iron In Orissa
SPS Sponge Iron is investing Rs. 400 crore for installing a sponge iron / steelmaking plant in
the Jharasguda region of Orissa.
Ispat Godawari in Chattisgarh
Ispat Godawari has siged a MoU with the chattisgarh Government for implementing an
integrated iron and steel plant at an investment of Rs. 493 crore.
Aryan Ispat & Power Plant in Chattisgarh
Aryan Ispat and Power has signed a MoU with the Chattisgarh state IDC to set up an
integrated steel complex in Chattisgarh at an investment of Rs. 860 crore.
SRMB Srijan Plant in West Bengal
SRMB Srijan is setting up a 100,000 tpy steel plant at Durgapur in West Bengal at an
investment of Rs. 100 crore. The plant will manufacture TMT bars, billets and structurals.
Ullas Steel in West Bengal
Ullas Steel will set up a 100,000 tpy MS ingot and alloy unit at Kadasole in the Bankura
district of West Bengal at an investment of Rs. 150 crore.
Shyam Steel in West Bengal
Shyam Steel Ltd. is setting up a plant at Durgapur in West Bengal at an investment of Rs.
110 crore for a 10 MW waste heat based captive power plant, a 100,000 tpy capacity
sponge iron unit and a steel rolling mill.
Foreign Steel Players in India
A MoU has been signed between the Orissa Government and POSCO of South Korea, the
Korean major and the fifth highest steel prodcer of the world. The 12 – tpy steel plant wil
be built at an investment of Rs. 52,000 crore and will be located at the port town of
Paradip in Orissa.
Steel Sector: Risk & Future Insurance Potential
Mittals In Jharkhand
Mittal Steel, the world’s largest steelmaker, has signed a memorandum of understanding
(MoU) with the Jharkhand Government to set up a 12 Mtpy capacity steel plant at an
investment of Rs. 400 billion to mine iron ore and build the steel plant. The plant will be
built in two phases of six
million tonnes each. The first phase of the project is likely to be commissioned by 2010.
The state wise distribution of number of Sponge Iron units in India are furnished in Table
SPONGE IRON PLANT: A FUTURE INSURANCE BUSINESS
Steel Sector: Risk & Future Insurance Potential
New units / Expansions
SAIL is planning to set up a sponge iron unit at one of its four major ISPs. Mecon is
preparing the feasibility report.
MSP steel will set up two sponge iron plants in Chattisargh and Orissa
(i) It will install a 350 tpd coal – based sponge iron plant and a 12 MW captive power plant
at Raigarh in Chattisargh in two phased. The first phase may be completed
by mid – 2006.
(ii) MSP will also set up a 300tpd coal – based sponge iron plant and a 12 mw captive power
plant at Jharasguda in Orissa. The project will be completed in two phases.
• Essar Steel Ltd. has already commissioned the 4th DRI module of one Mtpy capacity at
Hazira. Technology for the hot DRI was developed in-house. The sponge iron capacity of
the company now stands at 3.4 Mtpy.
• Tata Sponge Iron Ltd. has undertaken capacity expansion of sponge iron from 240,00 tpy
to 390,000 and an increase in power generation capacity from 7.5 MW to 26 MW with an
investment of Rs. 170 crore at Deongarh Bilaipara in the Keonjhar District of Orissa.
Completion of work is scheduled by the first quarter of 2006.
• Visa Industries Ltd. is setting up a DRI plant and captive power plant of 120 MW capacity
in connection with the installation of its 1.5 Mtpy integrated steel plant at Kalingangar
industrial area in the Jajpur district of Orissa.
• Real Ispat is setting up a 2x100 tpd sponge iron plant at Raipur in chattisgarh state with
an investment of Rs. 65 crore.
Steel Sector: Risk & Future Insurance Potential
Mahesh Sponge Iron & Power Ltd. is planning to install a 30,000 tpy sponge iron plant at
Belgal in the Bellary district of Karnataka.
• Ispat Domodar is planning to set up a 200,000 tpy sponge iron and a 300,000 tpy pig iron
plant at Nethuria in the purulia district of West Bengal at an investment of Rs. 110 crore.
• Vistar Venture has announced plans to set up a 100 tpd sponge iron plant a Dharwad in
Karnataka at an investment of Rs. 16 crore.
• Shyam steel Ltd. is setting up an integrated steel plant at Durgapur in West Bengal. The
company is investing Rs. 110 crore for setting up a 100,000 tpy sponge iron plant rolling
mill, 110,000 tpy billet unit and 10MW waste heat based captive power plant.
• Navbharat Group of Industries is planning a 100,000 tpy coal-based sponge iron plant at
Raipur in Chattisargh at an investment of Rs. 75 crore.
• Scaw Industries Ltd. will set up a 0.1 Mtpy capacity coal-based sponge iron plant in the
Dhenkanad district of Orissa in phase – I and has plans for another 0.45 Mtpy plant in
Phase-II
• Sundar Ispat is setting up a 100 tpd coal-based sponge iron plant at Mehaboobnagar in
Andhra Pradesh. The company intends to reach an ultimate capacity of 300 tpd by mid –
2006.
• Druvdesh Metal Steel is setting up a 30,000 tpy coalbased sponge iron plant at Koppal in
the Bellary district of Karnataka
The State of Jharkhand is witnessing unprecedented growth of the DRI mainly sponge iron.
The endeavors of various organizations related to the Sponge Iron are categorized in four
variants viz :
1. Category A : Existing Units
JHARKHAND A NEW HUB FOR SPONGE IRON PLANT
Steel Sector: Risk & Future Insurance Potential
2. Category B : Units Under Construction
3. Category C : Expansion Schemes
4. Category D : Mega Proposals
The state has operating kilns having 1.80 lakh tonness annual capacity Category A) and ten
companies with cumulative annual capacity of 4.63 million tonness is under various stages
of construction (Category B).(2005 Dec.)
In addition the expansion of the capacities of at least four major operators have already
left the drawing and are under various stages of financial back ups. This capacity amounts
to 8.51 lakh tonness/per annum. (Category C)
There are seven serious proposals being pursued by major players. The cumulative
capacity of these proposals is about 30.70 lakh tonness per annum (Category D).
Steel Sector: Risk & Future Insurance Potential
The National Steel Policy has visualized market demand of finished steel of 60 Mt by 2011-12. If all the announcement of expansion of capacities by the existing producers and installation of new steel plants take shape, India is expected to produce about 70/80 Mt of crude steel by 2011-12.
Steel Sector: Risk & Future Insurance Potential
Fire Insurance in steel Sector
In steel industry blast furnaces, electric furnaces, open hearth furnaces, and basic oxygen
furnaces all hold several hundred tons of molten metal, major fire damage could result if
this molten metal comes in contact with: combustible construction (roofs, floors, walls of
the building which contains the furnace, or adjacent control rooms of sheds); flammable
or combustible hydraulic oils (from exposed hydraulic oil lines and reservoirs used to tilt
the furnace); or ordinary combustibles in the vicinity (exposed electrical cables, wood
pallets, scrap lumber, or empty paper bags which held furnace materials that may,
inadvertently, have been thrown into the furnace pit area).
Steam or gas turbine-generators and large capacity compressors may suffer machinery
breakdown, while dust accumulations on cable trays may cause collapse or electrical
damage. In regard to Business Interruption, bottlenecks are found primarily on main
transformers, arc furnaces, or ladle furnaces. Replacement time for a furnace is generally
estimated at 18 months, while 9 months is required to replace hydraulic oil control and
casting lines. The loss of critical control rooms, electrical rooms, coal conveyors, or
junction towers can also generate relatively long Business Interruption periods.
Ferrous scrap can contain shielded isotopes such as Cs 137 and Co 60. Accidental
introduction of this material to the process will contaminate the finished product in
addition to the machinery and equipment. Clean-up costs for such accidents can be large,
and lead to a significant interruption of business.
In rolling mills, sprinklers are often needed in rooms housing the lubricating oil systems, as
well as large electrical rooms, cable tunnels, and cable cellars. Gaseous extinguishing
systems are usually recommended in non-occupied rooms, such as small electrical
rooms, as well as concealed spaces with relatively high combustible loading. These areas
include false floors and ceilings containing a high density of cables with combustible
insulation. Detection alone is generally recommended in concealed spaces with relatively
low combustible loading, and in normally occupied areas, such as control rooms. In
addition, it is strongly recommended to adequately seal cable and duct penetrations
through walls and floors in order to prevent fire spreading from one area to another.
RISK & LOSS PREVENTION IN STEEL SECTOR
Steel Sector: Risk & Future Insurance Potential
The level of detection or protection required depends on the continuity of combustibles,
the combustible loading, and the congestion (access and visibility factor) within
the process units. This should be investigated on a caseby- case basis during field surveys.
Some of the major potential hazards facing the steel industry include molten metal spills
and metal escape, molten metal explosions caused by injection of water, and subsequent
fires caused by these events. Adequate drainage and retention facilities should be
provided in order to mitigate the damage.
• The use of non-combustible construction materials and the protection of critical
steel structural members with refractory covering;
• no allowance for water accumulation, and drainage if needed; and
• regular thermography analysis of the furnaces and electrical equipment.
Adequate formalized contingency plans should be developed for critical utilities, critical
electrical rooms, Motor Control Center rooms, control rooms, main conveyors, and
junction towers. This contingency plan should include all internal and external back-up
capabilities, in order to mitigate the Property Damage and Business Interruption loss.
The large loss potentials in the steel industry are those associated with the furnaces and
rolling mills. Blast and steel making furnaces present explosion and molten metal spill
hazards, some of them also present the risks associated with fuel firing. Rolling mills
include the hazards associated with large motors and gear drives, and combustible
cooling, hydraulic and rolling fluids. Most equipment in the steel industry is very expensive
and can take a long time to replace. Furthermore, environmental regulations often require
older equipment to be upgraded. For these reasons, both the property and the business
interruption portions of a loss can be huge. Therefore, it is important for a steel
processing facility to install adequate protection systems for all hazards and implement
extensive loss prevention programmes.
Steel Sector: Risk & Future Insurance Potential
Figure 1 shows the Industrial Risk Insurers’ (IRI) steel industry losses over USD 1 million in
1975 – 1995. Furthermore, Figure 2 clarifies the property damages losses and business
interruption losses over USD 1 million split by peril.
(Reference: GE Global Asset Protection Services)
common hazards and assumptions for probable maximum loss (PML) and maximum
foreseeable loss (MFL) scenarios are described.
PML describes a loss scenario under reasonably adverse conditions in conjunction with a
single failure situation; either mechanical, electrical, process, human element or other.
MFL describes a loss scenario under severely adverse conditions in conjunction with
ineffective passive protection mechanisms.
Raw material handling and preparation
Coke is a key ingredient of the iron making process and responsible for the iron-oxide
reduction in the blast furnace. Coke is produced by destructive distillation of coal at high
temperatures in a coke oven.
Limestone is a low hazard product. It is crushed and screened to the required size for the
blast furnace and then transported via conveyor belt or other means of transfer to the
furnace loading area.
Fire, explosion, machinery and other hazards
The fire protection concerns involved in coke production are the same as at any other coal
handling operations. Depending on the origin of the coal, it might be necessary to
reshuffle coal from time to time to prevent self-ignition. If the coal comes from colder
regions, especially in the winter, it might be necessary to crack frozen coal blocks using
open flames or other heating sources. Routine safety management tasks like housekeeping
and hot work supervision programmes are commonplace. Combustible materials on
primarily combustible transportation belts are also cause for concern. The mostly high and
long ore transport bridges are susceptible to windstorm losses. Pollution control systems
and by-products plants, generally chemical facilities with risks associated to dust, light oil
and ammonia handling, are also hazardous areas. Coke ovens depend on large exhausters
and other large machinery objects where from a business interruption point of view, it is
critical that equipment is not exposed one by the other in case of fire or explosion loss.
Spare parts for key-machine objects are important.
Critical machinery, such as revolving drum mixers, crushers, gear sets and electric motors
Steel Sector: Risk & Future Insurance Potential
should have necessary spare parts to prevent or lower business interruption in case of
damage. Preventive maintenance of utilities and production equipment is one crucial
management task. Fire and explosion protection concerns for the ore processing are
related to the combustion control systems involved with the mainly gas fire sintering
machines.
PML and MFL estimates
Property damage (PD) for the coke by-products plant depends on the plant layout. A very
congested plant could have a PML of 100%, whereas a site with good spacing could have PD
PMLs ranging from 10 to 25%. The business interruption (BI) estimate depends on what
must be repaired or replaced, and can range from three to four months. The PD PML for
coke ovens would be approximately 10% of the value of one oven battery. From the PML BI
prospective a three-month downtime for the compartments affected should be
considered. The MFL for coke by-product plants can be 100% PD and five-month BI. The PD
MFL for a coke oven would be about 25% of the value for one oven battery.
Iron reduction
Loss exposures from blast furnaces include molten metal breakout, cooling water supply
loss and leaks, turbo-blower breakdown and combustion explosions. About 60% of all
molten material losses are caused by failure of the refractory in the furnaces.
Breakthroughs can happen at any time of the life of the refractory, however, most failures
occur soon after installation due to poor workmanship or defective materials. Breakouts
are not prevalent during the middle of the refractory useful life but they increase again
near the end of the projected life-span
The success of any blast furnace lining depends strongly on the design of the cooling water
system. Pumps with individual capacities of 200,000 l/min or more are installed to
maintain effective cooling over an extended furnace campaign. Therefore, it is the highest
priority to have a reliable and redundant cooling water system and power supply to
electric motors driving the cooling water pumps. Although long refractory life is usually
the result of using a superior quality refractory, a major part of the improvement in life
undoubtedly results from more effective cooling, such as multiple stack-cooling plates.
With the integrated charging, lining and cooling systems concept, it has been proven that
a campaign of ten years is achievable without interim relines or grouting programmes. The
other major refractor life-span parameters are the consistent process conditions resulting
from ideal furnace burdening, charging and operation. This can be achieved through
Steel Sector: Risk & Future Insurance Potential
computer controlled process flow and supervision. Failure of this control equipment bears
one other hazard associated with the operation of blast furnaces. Turbo blowers represent
a high loss potential covered under machine damage exposure. The drivers for the turbo
blowers can either be steam turbines or electrical motors, but damages to steam turbines
cause higher PD losses and BI times.
PML and MFL estimates
The PD PML for a blast furnace might be estimated at 20% of the complete installation
value with 15 weeks downtime. One PD MFL estimate of 50% of the unit value with nine-
month BI can be assumed. The PD PML for a 3,000 HP direct current motor driving a blast
furnace turbo blower, from the boiler and machinery perspective, can be estimated at 50%
damage of the unit (unit value estimate USD 460,000*), with 20 days PML BI. Compared to
an industrial 2,500 kW steam turbine as the driver for the turbo blower, estimated would
be in the region of a 30% damage of the unit (unit value estimate USD 1.7 million*). The
MFL scenarios give a PD of 115% unit value with 6-month downtime for the electric motor.
The steam turbine equivalent can be estimated with similar values.
Iron refining
Fire, explosion, machinery and other hazards
Loss scenarios for steel making furnaces include molten metal spills, steam explosions and
hydraulic fluid fires. Damage to the large gear sets of furnace tilt mechanisms and
transformer breakdown associated with the operation of electrical furnaces is possible.
The failure rate of arc furnace transformers is triple the rate of ordinary liquid filled
power transformers greater than 10,000 KVA. Estimated time between transformer failures
is seven to eight years. Failures include furnace switching before removing the electrodes
to break the arc and high voltage bushing flash over which can be caused by dust build-up.
One important issue is the prevention of radioactive contaminated scrap entering the steel
making furnaces. Radioactive scrap can contaminate the production equipment and make
finished steel useless for customers. To prevent this, scrap should be scanned with Geiger
counters before it enters the steel making furnaces.
PML and MFL estimates
PD PML for an electric furnace can be estimated at approximately 25% of the unit value
with a BI exposure of six months. Another assumption could be the loss of a large power
Steel Sector: Risk & Future Insurance Potential
transformer. These units are commonly worth more than USD 5,000,000 and can take two
to three years to replace.
BOF’s PML depends on size and design. Many BOF shops have two or more BOF vessels that
share auxiliary production equipment. PD PML would be in the region of 20% whilst the BI
exposure would be about three months on the vessel where the loss occurred and one
month on any vessel that shares equipment with the affected unit. PD MFL for an electric
furnace can be 100% with a BI MFL exposure of up to nine months. For BOF the PD MFL
would be approximately 50% whilst the BI exposure would be about six months on the
vessel where the loss occurred, and three months on any vessel that shares equipment
with the affected unit.
Fabrication
Fire, explosion, machinery and other hazards
Continuos casting may present large loss potentials from molten metal breakout. Loss of
important computerised control equipment on automated lines can become very costly.
Rolling mills normally represent the largest steel fabrication loss exposure. Losses are
more frequent with cold mills, due to the use of combustible coolant components,
however, losses also occur on hot mills. The main fire hazard is associated with the
hydraulic oil systems supplying and supporting the mill stands as well as the possible
residue built up from applied rolling fluids (95% water, 5% animal fat or special oils) when
water is evaporated. Hydraulic fluid line break near a mill stand can be ignited on hot
metal surfaces and ignite residues from rolling fluid in the exhaust systems. Excellent
housekeeping is essential especially in the hydraulic fluid basements near the mill. The
ready availability of spare drive motors for all key motors associated with rolling mills
stands is important to reduce the downtime of the mill in the event of a motor failure or
winding fire. If it is not practical to maintain complete spare motors on site, plant
personnel should at least maintain spare parts for key components of the individual
important motors. This will reduce rewind or repair times in emergency situations.
PML and MFL estimates
PD PML assumptions for continuous casters would be approximately 10% of the entire unit
value with a BI exposure of three months. It is not uncommon for continuous casters to
process 100% of the steel at one facility. The MFL scenario can be estimated at 20% of the
unit value with six months’ BI exposure.
Steel Sector: Risk & Future Insurance Potential
The PD PML for a rolling mill is difficult to determine as a percentage of the replacement
cost for the entire mill. For one thing, most of today’s modern mills were built in the
1970s, and information on both their actual value and their replacement costs are very
difficult to obtain. Also, the total replacement cost must include the associated motors,
gears and control rooms and the cost of mechanical, electrical and structural installations.
Furthermore, various control systems and mechanical options on a mill can greatly
increase its value without substantially changing its size or appearance.
BI PML for rolling mills should be about four months for a hot mill and five months for a
cold mill. However, this could be higher, depending on the degree of automation and
computer control. The PD MFL for rolling mills would be 100% of the mill value, control
room and the buildings in which they are contained. Replacement costs for rolling mills
vary widely and must be carefully determined. Replacement values of USD 700 million are
not uncommon. BI MFL for rolling mills should be about eight months for a hot mill and
nine months for a cold mill.
Health Insurance Aspect
1. Health
Effects of steel industry on health
• Steel products in the natural state do not present an inhalation, ingestion,
or contact health hazard. However, operations such as welding, burning,
sawing, brazing, grinding, and possibly machining, which results in elevating
the temperature of the product to or above its melting point or results in
the generation of airborne particulates may present hazards. The above
operations should be performed in well ventilated areas. The major
exposure route is inhalation.
• Acute: Excess inhalation of all metallic fumes and dusts may result in
irritation of eyes, nose, and throat. Also high concentrations of fumes and
dusts of iron-oxide, manganese, copper, and selenium may result in metal
fume fever. Typical symptoms consist of a metallic taste in the mouth,
dryness and irritation of the throat, chills and fever, and usually last from,
12 to 48 hours.
INSURANCE ASPECT
Steel Sector: Risk & Future Insurance Potential
• Chronic: Chronic and prolonged inhalation of high concentrations of fumes
or dust of the following elements may lead to the conditions listed opposite
the element:
1. Iron (iron-oxide)-pulmonary effects, siderosis.
2. Manganese-bronchitis, pneumonitis, lack of coordination.
3. Chromium-various forms of dermatitis, inflammation and/or
ulceration of upper respiratory tract, and possibly cancer of nasal
passages and lungs. Based on available information, there does not
appear to be any evidence that exposure to welding fumes induces
human cancer.
4. Nickel-Ni fumes and dusts are respiratory irritants and may cause a
severe pneumonitis. Skin contact with nickel and its compounds may
cause an allergic dermatitis.
5. Selenium-nasal and bronchial irritation, gastro-intestinal
disturbances, garlic odor of breath.
6. Copper-pulmonary effects
7. Vanadium-no reported cases of exposure to vanadium
8. Cobalt-inhalation of cobalt dust may cause an asthma-like disease
with cough and dyspnea.
9. Molybdenum-pain in joints, hands and feet.
• Medical Conditions aggravated by Exposure: Chronic diseases or disorders
of the respiratory system.
2. Erection all risks insurance
The first thing is to determine whether the process is a conventional one or whether it is
still a form of prototype. The erection of steel plants usually involves large-scale
construction sites with high sums insured. As with all long-term projects, a construction
time schedule should be obtained for the purpose of risk assessment. It often happens that
cover is requested for revamping and modernization work. Risk-commensurate premiums
can only be calculated when the scope of cover is described in detail. On account of the
sheer physical weight of steel plants, attention must be paid to the quality of the subsoil
and the type of foundations used. A subsoil report should be obtained.
Steel Sector: Risk & Future Insurance Potential
Steel plants require large amounts of cooling water and are therefore usually located near
rivers or the sea. Attention must be paid to the danger of flooding. The windstorm risk is
also high on account of the many lifting operations using heavy cranes.
3 Machinery insurance
Here too the first step is to find out whether the process is a conventional one or a
prototype. Steel plants comprise a very large number of individual machines, so that
cataloguing them in detail is hardly practicable. A more general list of plants is more
suitable. The deductible should not be too low in this case. Refractory linings have a very
limited service life and must be replaced regularly. An agreement must be made with
regard to an adequate amount of depreciation being accounted for in the event of a claim.
The usual maintenance and depreciation endorsements for electric motors, transformers,
turbines, and generators are to be applied. Risk inspections are recommended.
4. Machinery loss of profits insurance
Owing to the type of processes involved, spare machines are often on stand-by and there
is usually a generous stock of spare parts on hand for the same reason. It is common to
have a relatively large maintenance department. In the event of a breakdown in
operations, it is often possible to purchase semi-finished products from other
manufacturers. These factors are important in rating the risk.