September/October 1997
Transforming old steel scrap into new steel products is business as usual for SMI-Texas. A walk through its modern minimill near San Antonio illustrates how the firm works its metal magic.
By Robert L. Reid
Robert L. Reid is managing editor of Scrap.
About 3,000 tons of ferrous scrap arrives each day at SMI-Texas, a minimill located just east of San Antonio in Seguin, Texas.
Before leaving the mill, the scrap will be moved by electromagnets, railcars, and charge buckets, melted in an electric-arc furnace, tested, refined, and alloyed, cast into billets, rolled into shapes, run through a line of mill stands, straightened, bent, or cut, and finally shipped to customers. The new steel products go to work in projects ranging from highways and stadiums to dams, schools, utility transmission towers, even prisons (as the cell bars, no less).
The scrap undergoes this incredible journey at SMI-Texas 24 hours a day, seven days a week. This review of its operations shows precisely how the mill transforms old steel into new steel.
The Scrap Equation
SMI-Texas began life as Structural Metals Inc., a minimill founded in 1947 by Marvin Selig. Commercial Metals Co. (CMC), a Dallas-based scrap processing company, acquired the mill in 1963 and has used it to build a considerable presence in the minimill steel-producing industry.
Today, SMI-Texas, as the mill was recently renamed, has about 850 employees and ships more than 750,000 tons of steel products a year. From its home in Seguin, the firm—celebrating its golden anniversary this year—serves as headquarters for CMC’s Steel Group, which encompasses four mills and some 45 other locations from Virginia to Nevada that together employ more than 5,000 people.
In making its 300-plus products—from rebar to special bar quality steel—SMI-Texas consumes about 65,000 to 70,000 tons of ferrous scrap a month, says Monty Parker, vice president of raw materials. The mill sources about 30 percent of this scrap from the six processing facilities within the Steel Group and the network of 28 CMC scrap plants across the Sunbelt. The CMC family relationship is “arm’s-length,” Parker says, noting, “We aren’t required to buy from CMC yards, and they aren’t required to sell to us. They offer us scrap just like any processor would, and if we need it, we buy it. We pay them the going market price.”
Still, given the “feeding frenzy” of today’s scrap market, Parker concedes that it’s comforting to know that SMI-Texas could get all its scrap in-house in a pinch. For now, though, the mill is content to buy most of its scrap directly from outside processors. The minimill rarely uses a broker, Parker notes, because that merely adds another layer between his staff and the processor. “If you have a problem, it has to be filtered through the broker,” he explains. “If you have feedback, it’s filtered through the broker.”
To meet its voracious scrap needs, the mill buys from about 175 processors a month, using mostly one-month and occasionally two-month contracts, with each contract covering multiple grades.
Most of those processors are regular suppliers to SMI-Texas, which expresses an almost anachronistic loyalty to its long-standing relationships. “We have some regular suppliers who ship us month in and month out, and we buy from them month in and month out, regardless of what our scrap program looks like,” even if that means the material may end up being inventoried, Parker says.
While the mill buys about 80 percent of its scrap within the Lone Star State, it also shops around, buying material from as far as the West Coast and the Midwest. “There was a period within the last year,” Parker notes, “when we could buy on a delivered basis cheaper from California than we could from Houston, only 175 miles away.”
Talking Strategy
SMI-Texas’s scrap buying strategy begins with regular meetings between the raw materials department, melt shop personnel, and sales reps. These meetings examine the mill’s production plans in the coming two months. “It basically breaks down into a couple of categories,” Parker explains, “one being MBQ, for merchant bar quality, and SBQ, for special bar quality. MBQ is rebar, which is our primary product. SBQ is steel that takes a little more effort, a little more control over residuals and alloys than does rebar.”
Using computer models, the mill plots out the estimated tons of steel by grade it plans to produce, figures the raw materials required for each grade, compares those requirements with its scrap inventory—including how much is on hand and how much is in transit—and, in the end, determines how much and what kinds of scrap to buy.
On a monthly basis, SMI-Texas buys and consumes No. 1 and No. 2 heavy melt, shredded scrap, turnings, No. 2 bundles, home scrap (including reclaimed and mill scrap), and busheling and/or No. 1 bundles. The mill buys most of its shredded scrap from two sources: its own shredding operation in Austin, Texas, and Newell Recycling of San Antonio. The company, however, is in the process of installing a supershredder, with startup slated for 1998. (For more on these plans, see “A Supershredder in Seguin” below.) SMI-Texas doesn’t buy mixed scrap because the material’s content is too subjective from processor to processor, Parker says.
About 30 percent of the mill’s purchased scrap arrives by rail, while an additional 30 percent is back-hauled by SMI’s trademark green and orange trucks. Scrap processors deliver 20 percent via their own vehicles, and about 20 percent arrives back-hauled on common carriers. SMI-Texas pays the freight costs on most of its scrap purchases, in part because it benefits from CMC’s total volume of freight. Also, Parker likes to know the breakdown between scrap and freight costs. “I don’t want a price that makes me guess what I’m paying for the material,” he says.
Checking Out the Goods
The mill’s incoming scrap shipments are visually inspected before being weighed to check for obvious problems in a load, such as a sealed container. During weighing on one of the mill’s two scales—one for truck deliveries, the other for railcars—each load is also scanned for radioactivity. The truck scale has radiation detectors on both sides as well as top and bottom, while the rail scale features two sets of detectors on the sides, stacked atop each other to scan extra-tall gondolas.
When these alarms go off, the minimill doesn’t automatically reject the load, says Steve Larick, compliance supervisor in the environment department. Instead, it sorts through the load, trying to isolate the contaminated material. If it does so—and if the rest of the load can pass through the detectors a second time without setting off the alarms—the remaining scrap might be accepted. That may seem like a lot of work, but SMI-Texas sympathizes with processors who get stuck with returned shipments of radiation-contaminated scrap, especially when it involves naturally occurring radioactive material, or NORM. Oil field pipe scrap, for instance, sets off alarms nearly every day at mills in oil industry states such as Texas and Louisiana, even though its NORM levels usually aren’t dangerous. “We see the radioactivity issue from both sides of the fence because we have scrap yards as well as manufacturing facilities,” Larick notes.
The issue of radioactive scrap is so important that SMI-Texas even helps its scrap suppliers do a better job detecting contaminated material—before the scrap is shipped to its mill. “We go to yards to look at their systems, see if we can give suggestions on how they can improve their radiation detection equipment, any techniques that we know to improve their sensitivity,” Larick explains, adding that he’s even taught training classes at processors’ yards.
Melting Metal
After scrap is weighed and passes the radiation test, it moves on to either the mini-mill’s melt shop—where an overhead crane with double electromagnets transfers the material directly to a charge bucket for dumping into the electric-arc furnace—or to the large outdoor storage space where material is inventoried in roughly 30 separate bays.
About 75 percent of scrap delivered by rail is direct-charged to the melt shop. If trucked material is needed for melting right away, it must first be transferred by the mill’s overhead crane to a railcar. SMI-Texas prefers to receive scrap by rail, Parker says, because each time scrap is handled it adds to the cost.
Quality inspections continue both in the inventory area and as the scrap is loaded, either from a truck into a railcar or from a railcar into a 20-foot-diameter charge bucket. “Every time the crane operator takes a layer of scrap off, he looks to see if there’s anything out of sorts before putting the magnets back down,” Parker notes.
If something is noticed—from a potential safety hazard such as a sealed container to the wrong material in the load—the operator stops loading and the material is checked by hand. At this stage, outright rejections of a load are uncommon, but the material may be downgraded and the price adjusted. “Every one of our suppliers has to acknowledge that although we buy the material f.o.b. shipping point, it’s still subject to quality inspection when we unload it,” Parker notes. Sometimes, SMI-Texas even cuts off a sample from several pieces of scrap in a load and tests the material for chemistry, especially when making its SBQ products.
Using a “recipe” of scrap ingredients, the crane operator at the melt shop fills the charge bucket by weight and density, with the latter factor especially crucial, explains Ned Leyendecker, vice president and works manager. For instance, SMI-Texas generally uses two buckets of scrap in each heat, but if the density is wrong, it has to drop a third bucket into the mix, which causes the furnace to lose energy. Moreover, if the scrap is loaded incorrectly in the bucket—such as if all the heavy material is on top—it could damage the furnace or break one of the electrodes, Leyendecker says.
The furnace’s three 24-inch-diameter carbon electrodes send a three-phase alternating current through the metal charge that, in combination with four gas-oxygen burners, shoots the temperature up to nearly 3,000oF, melting roughly 100 tons of scrap per heat in 42 minutes.
Once molten, the steel is tapped from the bottom of the furnace into a ladle, though about 15 tons of molten steel is left in the furnace as a “hot heel” to help melt the next charge.
In the ladle, the process of trimming begins. This stage involves adding alloys such as silicon, chrome, nickel, copper, manganese, and others to the molten metal to produce the specific grade of steel required by the customer. The ladle then swings over to the Ladle Metallurgical Station (LMS), where an electromagnetic coil “stirs” the molten mixture, separating slag from steel to produce a homogenous heat. The coil’s magnetic force is so powerful that it shakes the images on the computer screens and closed-circuit monitors in the LMS control room.
At this point, a sample of the molten metal is taken and sent for analysis to the mill’s quality control lab, which uses spectrographic equipment to determine the sample’s metallurgical composition. This analysis indicates whether any additional trimming is required.
The sample is also checked one final time for radioactivity by newly installed detection equipment.
From Billet to Rebar and Beyond
Once the heat is trimmed to perfection, the ladle moves to the top of the casting tower, where the molten steel is poured through a series of oscillating copper molds, cooled by a torrent of water. The steel emerges from the casting tower in four continuous strands, still glowing bright orange but solid enough to be torch-cut into billets of a specified weight and length. From the caster, the billets pass through a gas-fired furnace that reheats them to approximately 2,000oF, making the steel pliable enough for the rolling process.
Up to 17 in-line rolling stands await the billet, reducing its size and reshaping it to meet the customers’ requirements for squares, rounds, angles, or other shapes. The stands can be arranged either horizontally or vertically, depending on which of the mill’s products is being made.
Different stands are used in different configurations to roll each product. When the stands need to be changed, the entire line can be rearranged by hydraulic cylinders in just two hours. Before the hydraulics were added, it took eight hours to move a single stand, notes Dennis Malatek, mill superintendent.
Shooting out of the final stand at speeds up to 3,000 feet a minute, the still-glowing lengths of steel move onto a 260-foot cooling bed before heading into the finishing department. Here, computer programs guide fabricators as they bend rebar and other products to meet the customer’s specifications.
Finished products are then stored until electromagnets load them onto a customer’s vehicle or any of the mill’s fleet of more than 60 trucks. As many as 2,000 loads a month leave the finishing department, on their way to job sites throughout the Southwest.
And when the bridges and buildings constructed out of SMI-Texas’s products are torn down and the steel once again becomes scrap, who knows, that metal may be headed right back to a small Texas town just east of San Antonio.
A Supershredder in Seguin
SMI-Texas is planning to install what some are calling the largest shredder in North America. But the minimill wasn’t trying to set any records—it just wanted to save some money.
The foundation for a 122-by-108-inch supershredder from Texas Shredder Inc. (San Antonio) is scheduled to be laid by the end of the year, with construction due to start in February 1998 and startup planned for March, says Ned Leyendecker. The 6,900-hp wet shredding system will feature 900-pound hammers along with dual in-line eddy current nonferrous separation systems.
To accommodate the shredder’s power demands, a new substation must be built at SMI-Texas. Also, two new rail spurs will be laid—one for inbound shreddable scrap and the other for shredded scrap headed to the mill’s melt shop.
SMI-Texas decided to buy its own shredder for several reasons.These include the fact that the mill’s existing shredder—located in Austin, Texas—needs to be rebuilt. Moreover, transporting shreddable scrap first to Austin and then to Seguin adds to the cost of the material. And finally, the restaurants, hotels, and other businesses around the Austin site are growing sensitive to having a shredder as a neighbor, leading the mill to conclude that it makes more sense to locate a shredder in Seguin.
Currently, SMI-Texas processes about 8,000 tons of ferrous scrap a month at the Austin shredder, which will be sold. The Seguin supershredder, in contrast, is expected to handle about 50 percent more, or roughly 12,000 tons monthly, Monty Parker says. He quickly adds that the new shredder is not an effort by SMI-Texas to dominate the local scrap business. The mill has no plans to sell shredded scrap to other companies, and because of transportation costs it will not ship shredded material to other mills within the Steel Group. What’s more, despite adding this supershredder, SMI-Texas plans to continue buying a sizable amount of shredded scrap from its outside suppliers. •
Transforming old steel scrap into new steel products is business as usual for SMI-Texas. A walk through its modern minimill near San Antonio illustrates how the firm works its metal magic.