India is the third-largest steel producer in the world after China and Japan, having surpassed other large steel-making countries such as the United States, Russia, and South Korea over the previous decade, according to the World Steel Association. In 2016, about 57% of India’s steel was produced using electric-based methods—the second-highest proportion of electric-based steel production among major steel producers, behind only the United States, according to the US Energy Information Administration (EIA). Most other large producers use basic oxygen steelmaking processes.
The main feedstock for electric steel is scrap and direct reduced iron (DRI)—DRI being used primarily in India and the Near East. Two unique features of the steel industry in India are the large-scale use of electric induction furnaces for electric-based steelmaking rather than electric arc furnaces and the reliance on coal, rather than natural gas, to produce DRI.
Direct reduction of iron removes oxygen from iron ore or other iron-bearing materials in the solid state—i.e. without melting, as is done in a blast furnace. The reducing agents are carbon monoxide and hydrogen, coming from reformed natural gas, syngas or coal. Iron ore is used mostly in pellet and/or lumpy form.
There are several processes for the direct reduction of iron ore, according to the International Iron Metallics Association (IIMA):
gas-based shaft furnace processes, accounting for 82% of 2016 production (72.8 million tonnes); and
coal-based rotary kiln furnaces (mainly in India), accounting for 17.5% of 2016 production.
In India there are many small rotary kiln furnaces producing DRI—known locally as sponge iron—using coal as energy and reductant source. Some of the sponge iron plants are captive to steel mills, but there is a significant domestic merchant market, according to IIMA.
About half of India’s electric-based process steel is made using electric induction furnaces rather than the internationally more common electric arc furnaces. Electric induction furnaces use induction to convert materials such as scrap, direct reduced iron (DRI), or pig iron into steel. These furnaces use alternating magnetic fields to induce an electric current, which then heats up because of electric resistance.
Electric induction furnaces tend to operate at much smaller scales compared with other more common steelmaking technologies such as basic oxygen furnaces or electric arc furnaces. Electric induction furnaces typically produce less than 20 tons per batch; the All India Induction Furnaces Association says that currently, furnaces with up to a maximum of 16-tonne/charge are being used. By contrast, basic oxygen furnaces can produce approximately 250 tons per batch and electric arc furnaces produce approximately 170 tons per batch.
Although China and Japan produce more steel, India is the largest producer of DRI in the world. Direct reduced iron can be used in all major types of steel furnaces. Unlike direct reduced iron-making facilities in other countries, which largely use natural gas, most of the direct reduced iron produced in India is powered by coal. For this reason, DRI produced in India is much more carbon intensive than DRI produced in facilities in other parts of the world.
According to EIA’s International Energy Outlook 2017, India’s coal consumption is projected to grow by nearly 3% per year between 2015 and 2040 as a result of iron and steel industry growth and relatively intensive coal use in DRI.