British Steel looking to introduce electric arc furnaces

By Scunthorpe Telegraph | Posted: 2 Jun 2017

The Scunthorpe-based British Steel business is looking at introducing electric arc furnaces to run alongside the traditional blast furnaces, executive chairman Roland Junck revealed when announcing the company's first year trading results.

The use of such furnaces recycling scrap metal could maximise the profits from making liquid steel.

Mr Junck told a press conference: "We are working on it. But it is not an easy option.

Earlier the company announced during the first of trading the cost of raw materials, coal and iron ore, used in traditional steel-making had soared by 44 per cent.

British Steel reported a pre-tax profit of £47 million since family investment firm Greybull Capital bought the former Tata Steel Long Products business last June.

It was the first time since 2008 the Scunthorpe steelworks has been in the black and was in stark contrast to a £79 million loss in 2015-16.

Read more: British Steel reveal £126MILLION turnaround on first birthday

The U-turn was achieved despite a slight drop in steel production to 2.7 million tonnes and sales to 2.5 million tonnes.

Company chiefs insisted that even better times were ahead for the town's 3,000 employees, who since June 1 will share a five per cent stake in British Steel..

Newly-appointed chief executive officer Peter Bernscher said: "British Steel has achieved a remarkable turn-around but this is just the beginning.

"To guarantee our future as a sustainable business for decades to come we must now seize and capitalise on the opportunities that have been created."

Managing director Paul Martin revealed a £40 capital investment programme had been set aside for 2017-18. Of that sum, around £35 million would be spent on up--grading the 2,000-acre site which has produced steel since 1890

Stressing he had "great optimism" for the future, Mr Junck said he could see no reason why the profit could not be doubled to £100 million next year.

Mr Junck added: "In 12 month we have started transforming from an-inward from an inward-looking production hub into a profitable, more agile business by controlling costs, improving our product range and quality and through strategic investments.

Read more: British Steel's fantastic birthday gift to Scunthorpe workers

"After significant capital investment we have made a small net profit and although it hasn't been easy an entrepreneurial spirit is starting to flow through British Steel.

It means we are fast becoming the efficient, customer-based business we need to be".

Asked if Greybull Capital had given a commitment to the future of British Steel, Mr Junck said the owners were in for the long-term and not after a quick sale.

Mr Martin said another sign of the success of British Steel was a ten-fold increase in applications for jobs in the past year.

Since last June 500 new employees have joined the company.

Paul McBean, the chairman of the works multi-union committee, however warned: "Today's news isn't mission accomplished and people should be in no doubt a lot of hard work lies ahead".

Calling for more government support, the union chief added: "I have great confidence in our employees and as we continue our growth, they will ensure British Steel keeps flying the flag for manufacturing excellence at home and abroad".

Read more: 120 jobs up for grabs at Scunthorpe Steelworks

The use of electric arc furnaces allows steel to be made from a 100 per cent scrap metal feedstock.

This greatly reduces the energy required to make steel when compared with primary steel-making from ores.

Another benefit is flexibility: while blast furnaces cannot vary their production by much and can remain in operation for years at a time, arcs can be rapidly started and stopped, allowing the steel mill to vary production according to demand.

As the arcs require large amounts of electrical power, many companies schedule their operations to take advantage of off peak electricity pricing.



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