Logistics Feasibility Study for Ultra Mega Power Plant (UMPP)
SIP401257013
1. A
Summer Internship Project Report
On
“Slag Handling System”
&
“Forecasting the Price and Production of Steel”
in the partial fulfillment of the Degree of
Master of Business Administration
Submitted By
Zorawar Singh Nandwal
MBA 2nd
Year & Roll No:401257013
Batch: 2015-17
Under the Guidance of
Mr. Vikas Aggarwal
&
Mr. Sambit Mishra
(ED & CTO Office, Jindal Steel & Power Ltd.)
L.M. Thapar School of Management
(Thapar University, Patiala)
Dera Bassi Campus, Mohali - 140507
2016
2. 2
A
Summer Internship Project Report
On
“Slag Handling System”
&
“Forecasting the Price and Production of Steel”
in the partial fulfillment of the Degree of
Master of Business Administration
Submitted By
Zorawar Singh Nandwal
MBA 2nd
Year & Roll No:401257013
Batch: 2015-17
Under the Guidance of
Mr. Vikas Aggarwal
&
Mr. Sambit Mishra
(ED & CTO Office, Jindal Steel & Power Ltd.)
L.M. Thapar School of Management
(Thapar University, Patiala)
Dera Bassi Campus, Mohali - 140507
2016
3. 3
Declaration
I hereby declare that the project work entitled “Slag Handling System” & “Forecasting the Price
and Production of Steel” is a record of work done under the guidance of Mr. Vikas Aggarwal,
Manager – Best Practices Technology Group and Mr. Sambit Mishra, Manager – Best Practices
Technology Group at JSPL, Angul. This project work is submitted in the fulfillment of the
requirement of academic credit for Summer Internship in Masters of Business Administration at
LM Thapar School of Management.
Place: Dera Bassi Zorawar Singh Nandwal
Date: 22nd
August 2016 401257013
5. 5
Acknowledgement
I would like to express my gratitude to all the workforce at JSPL, Angul who have guided and
advised me through the course of my internship. I am indebted to my mentors Mr. Vikas Aggarwal
and Mr. Sambit Mishra for their constant support and tutelage during my internship. Also I Would
like to thank Dr. Rudra Rameshwar (Assistant Professor, LM Thapar School of Management) for
his constant support for the initiation, duration and completion of my training. I would take this
opportunity to thank Mrs. Sonia Garg who through her course of Managerial Accounting made my
basics clear which helped me in the Slag Handling Project.
Under the constant tutelage and advise from the faculty at LM thapar school of management, I was
able to witness the steel industry from a management perspective and was able to apply the skills I
have learnt during the course of my degree.
Zorawar Singh Nandwal
Roll no.- 401257013
LM Thapar School of Management
6. 6
Abstract
Slag Handling system at JSPL is handled by Ecomaister Beads India. The process involves
atomizing and crushing the slag. Although since the inception, the operation has largely been
expensive for JSPL since most of the slag was crushed which was costlier as compared to
Atomizing. This project was initiated to find out the bottlenecks and the reasons due to which it
was non-profitable. Also the authorities were seeking alternatives to the present operation. In this
project, the main focus was to find the most profitable and beneficial way to process the slag.
Forecasting projects require a lot of data. This project involved forecasting the production and
price of steel in India. Forecasting technique of regression is used in this project to forecast the
price and production of steel. Also trend analysis is performed month wise depicted through a
graph.
7. 7
Contents
Certificate ......................................................................................................................................................................4
Abstract..........................................................................................................................................................................6
About the Organization ...............................................................................................................................................10
Jindal Steel and Power Ltd. .....................................................................................................................................10
Company Profile.................................................................................................................................10
JSPL Vision ........................................................................................................................................12
JSPL Mission ......................................................................................................................................12
JSPL Core Values ...............................................................................................................................12
Products ...................................................................................................................................................................13
Business...................................................................................................................................................................14
JSPL Angul..................................................................................................................................................................14
Technology..............................................................................................................................................................14
Project Highlights....................................................................................................................................................15
PROJECT-I..................................................................................................................................................................17
Methodology................................................................................................................................................................18
Data Collection ............................................................................................................................................................19
Data Analysis & Discussion.....................................................................................................................................20
Findings & Suggestions ...........................................................................................................................................28
Alternatives .........................................................................................................................................28
Summary of Analysis and Suggestions ....................................................................................................................30
Conclusions & Recommendation.............................................................................................................................32
References................................................................................................................................................................34
Project-II......................................................................................................................................................................35
Forecasting the Production and Price of Steel in India............................................................................................35
Steelmaking Process............................................................................................................................36
Methodology............................................................................................................................................................37
Data Analysis and Discussion .................................................................................................................................40
Correlation Analysis ...........................................................................................................................42
Forecasts Made (Findings) ......................................................................................................................................46
8. 8
List of Tables
Table-1: Slag Crushing Rate with respect to PS Ball Generation
Table-2: Calculation of Rate per Ton
Table-3: Net Impact of Slag Charges per Ton of Finished Steel
Table-4: Net Impact of Slag Charges per Ton of Finished Steel
Table-5: Cycle Time
Table-6: Kress Maintenance Data
Table-7: Alternatives
Table-8: Alternatives
Table-9: Alternatives
Table-10: Alternatives
Table-11: Comparison with other vendors
Table-12: Eco-Maister Yes or No?
Table-13: Pros & Cons of the Present Contract
Table-14: Options with the present Contract
Table-14: Steel Imports
Table-15: Steel WPI
Table-16: Steel Production
Table-17: Correlation Analysis of Price
Table-18: Regression Analysis of Price
Table-19: Correlation Analysis of Production
Table-20: Regression Analysis of Production
Table-21: Month-wise Steel WPI (2006)
Table-22: Moth-wise Steel Production (2006)
Table-23: Model for Forecasting Price
Table-24: Model for Forecasting Production
9. 9
List of Graphs
Graph-1: Percentage of PS Ball Generation
Graph-2: Rate per Ton of Liquid Steel Produced
Graph-3: Trend Analysis of Steel Price
Graph-4: Trend Analysis of Steel Production
List of Figures
Figure-1: JSPL Plants in India
Figure-2: Products by JSPL
Figure-3: JSPL Plants State-wise
Figure-4: Kress Carrier
Figure-5: Steel Making Process
10. 10
About the Organization
Jindal Steel and Power Ltd.
Company Profile
With its timeless business philosophy JSPL is primed to not merely survive but win in a
marketplace marked by frenetic change. Indeed, the company’s scorching success story has been
scripted essentially by its resolve to innovate, set new standards, enhance capabilities, enrich lives
and to ensure that it stays true to its haloed value system. Not surprisingly, the company is very
much a future corporation, poised to become the most preferred steel manufacturer in the country.
JSPL is an industrial powerhouse with a dominant presence in steel, power, mining and
infrastructure sectors. Part of the US $ 18 billion OP Jindal Group this young, agile and responsive
company is constantly expanding its capabilities to fuel its fairy tale journey that has seen it grow
to a US $ 3.3 billion business conglomerate. The company has committed investments exceeding
US $ 30 billion in the future and has several business initiatives running simultaneously across
continents.
Led by Mr Naveen Jindal, the youngest son of the legendary Shri O.P. Jindal, the company
produces economical and efficient steel and power through backward and forward integration.
From the widest flat products to a whole range of long products, JSPL today sports a product
portfolio that caters to markets across the steel value chain. The company produces the world's
longest (121-meter) rails and it is the first in the country to manufacture large-size parallel flange
beams.
JSPL operates the largest coal-based sponge iron plant in the world and has an installed capacity
of 3 MTPA (million tonnes per annum) of steel at Raigarh in Chhattisgarh. Also, it has set up a
0.6 MTPA wire rod mill and a 1 MTPA capacity bar mill at Patratu, Jharkhand, a medium and
light structural mill at Raigarh, Chhattisgarh and a 2.5 MTPA steel melting shop and a plate mill
to produce up to 5.00-meter-wide plates at Angul, Odisha.
An enterprising spirit and the ability to discern future trends have been the driving force behind
the company's remarkable growth story. The organisation is wedded to ideals like innovation and
11. 11
technological leadership and is backed by a highly driven and dedicated workforce of 15000
people.
JSPL has been rated as the second highest value creator in the world by the Boston Consulting
Group, the 11th fastest growing company in India by Business World and has figured in the Forbes
Asia list of Fab 50 companies. It has also been named among the Best Blue Chip companies and
rated as the Highest Wealth Creator by the Dalal Street Journal. Dun & Bradstreet has ranked it
4th in its list of companies that generated the highest total income in the iron and steel sector.
Alongside contributing to India's growth story the company is driving an ambitious global
expansion plan with its sights set on emerging as a leading transnational business group. The
company continues to capitalise on opportunities in high growth markets, expanding its core areas
and diversifying into new businesses. In Oman (Middle East), the company has set up a US $ 500
million, 1.5 MTPA gas-based Hot Briquetted Iron (HBI) plant. It has now added a 2 MTPA
integrated steel plant.
In Africa, the company has large mining interests in South Africa, Mozambique, Namibia,
Botswana and Mauritania and is expanding into steel, energy and cement. In Australia, the
company is investing in greenfield and brownfield resource sector companies and projects to
supplement its planned steel and power projects in India and abroad.
FIGURE-1
12. 12
In Indonesia, the company has invested on the development of two greenfield exploration assets.
It is also exploring investment opportunities in the power and infrastructure sector in Indonesia.
The company endeavours to strengthen India's industrial base by aiding infrastructural
development, through sustainable development approaches and inclusive growth. It deploys its
resources to improve infrastructure, education, health, water, sanitation, environment and so on in
the areas it operates in. It has won several awards for its innovative business and social practices.
JSPL Vision
To be a globally admired organisation that enhances the quality of life of all stakeholders through
sustainable industrial and business development.
JSPL Mission
We aspire to achieve business excellence through:
The spirit of entrepreneurship and innovation
Optimum utilization of resources
Sustainable environment friendly procedures and practices
The highest ethics and standards
Hiring, developing and retaining the best people
Maximizing returns to stakeholders
Positive impact on the communities we touch
JSPL Core Values
Passion for People
Ownership
Sustainable Development
Sense of Belonging
Integrity
Business Excellence
14. 14
Business
JSPL has its business in India as well as in other countries. In India it has plants in Patratu,
Raigarh, Angul, Tensa, Raipur, Barbil, Godda & Asanboni.
It has its international plants in Oman, Australia and Indonesia.
JSPLAngul
Expanding its reach in the domestic market, the company has made considerable investments in
various parts of Odisha. It invested US $ 6 billion in the state for steel production and power
generation. The then proposed steel plant to be set up in Odisha will produce 12.5 MTPA steel and
generate 2600 MW of power in phases.
The company set up a 6 MTPA integrated steel plant at Angul. A 2.5 MTPA steel melting shop
(SMS) has been commissioned. The project is in a fast-track mode, with the 1.5 MTPA plate mill
and an 810 MW captive power plant already commissioned. The plate mill is capable of producing
5-meter-wide plates, making it the widest to be ever produced in the country.
Technology
The DRI-BF-EAF route technology would be adopted for steel production. The DRI plant has a
unique feature of using syn gas from the coal gasification plants as reductant. It is being used for
the first time in the world and has the advantage of using high ash coal which is predominantly
available in the vicinity of the project site. The company has signed an agreement with Lurgi
Technology Company- South Africa, for providing technology for coal gasification.
FIGURE-3
15. 15
The major facilities at the plant include:
Coal washery
Sinter plant
Pellet plant
Coke oven and by-product plant
Coal gasification plant
DRI plant and blast furnace
Steel melting shop
Slab caster
Plate mill and hot strip mill
Oxygen plant
Lime and dolomite plant
Power plant
Project Highlights
The proposed coal gasification technology to be used in this plant offers a practical means of
utilizing indigenous coal for meeting stringent environmental control requirements.
Work is in progress for the establishment of:
o Coal gasification plant to produce 225,000 nm3
/hr of syn gas
o DRI plant of 2 MTPA capacity
o Promotion of small-scale industries in and around Angul by giving adequate support with respect
to land, power and buying most of their products for their end-use in the plant (like aggregates,
bricks etc.)
The coal gasification plant is in final stages of commissioning; this marks the completion of 1.5
MTPA integrated facilities of the first phase.
For the next phase, further construction and infrastructure development activities are in advanced
stages. Area grading, soil investigation and various other civil jobs are under progress at site.
16. 16
The company has partnered with several companies of international repute for the purpose of
technology supply and key equipment, detailed engineering, procurement of other equipment,
construction phase, manpower supply and project management services. More than 350
companies, ranging from the biggest international players to the regional vendors are partners in
this endeavor.
17. 17
PROJECT-I
Analyzing the existing slag handling contract with EcoMaister beads India and performing
a cost analysis to suggest alternatives to make the operation more profitable for JSPL
EcoMaister Beads India(EBI) is Subsidiary of EcoMaister Korea. JSPL and EcoMaister Beads
India came into a contract in August 20XX. The contract came into being to address to the Slag
Handling operations of Steel Melting Shop at JSPL. The agreement for processing of the Electric
Arc Furnace & LF Slag at Jindal Steel & Power Limited, Angul through Slag Atomizing
Plant(SAP) and Slag Crushing Plant(SCP).
Under the contract, EBI was required to convert 60% of slag into Precious Slag Balls (PS Balls)
& 40 % of slag into Crushed Slag.
According to the contract, JSPL would pay ₹225/ton of Slag Atomized and ₹350/ton of Slag
Crushed and after Atomizing EBI pays ₹100/ton as royalty to JSPL. These rates were applicable
irrespective of the percentage of Slag Atomized and Crushed.
Keeping the variation of Atomizing and Crushing in mind, JSPL and EBI made changes to the
existing contract of payments and changed the cost according to the percentage of Crushing done.
With the changes in the Crushing Rate it was expected that the expenses would fall down. The
table below shows the new Crushing Rate:
But the inconsistent atomizing and crushing always pushed the expenses towards the higher end.
Following this, management decided to form a committee to find out the reasons for the increased
Table-1
18. 18
expenses and inability of EBI to perform the operations. Also it required the committee to
recommend whether to continue with PS Ball generation concept or get refund back from the
contractor.
Methodology
The first step in this project was to study and understand the contract completely so as to be up to
speed when required. Few major points under this contract were:
60% Electric Arc Furnace(EAF) Slag to be Atomized and 40% EAF Slag to be Crushed at
a cost as per the contract
JSPL shall pay ₹350/ton of Slag Crushed and ₹225/ton for slag Atomized.
Later the contract was modified and under which Crushing Rates varied in regards to PS
Ball generation
As per the Contract, EBI was supposed to Atomize 60% of slag and crush the remaining 40%. But
since the inception of this contract only 4% of slag was Atomized and the remaining 96% was
crushed which increased the expenses of JSPL.
0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
14%
22%
17%
4% 3%
0% 0% 0% 0%
8%
2% 0%
0%
5%
10%
15%
20%
25%
Apr'2014
May'2014
June'2014
July'2014
Aug'2014
Sept'2014
Oct'2014
Nov'2014
Dec'2014
Jan'2015
Feb'2015
Mar'2015
Apr'2015
May'2015
June'2015
July'2015
Aug'2015
Jan'2016
Feb'2016
Nov'2015
Dec'2015
Jan'2016
Feb'2016
Mar'2016
Apr'2016% PS Ball Generation
Graph-1
19. 19
The above graph clearly depicts the lack of PS ball generation by EBI. Further the committee
decided to go to the ground level and find out the reasons which majorly affected the PS Ball
generation.
At Ground Zero the whole process flow was understood i.e. right from the SMS to the SAP & SCP.
The bottlenecks were observed and noted. Cycle time was also noted for the ongoing process to
understand the level of efficiency at which they were performing. Following a couple of visits, an
Action Plan was made entailed the tasks ahead.
Multiple Alternatives were discussed amongst the committee members and data was brought in
from JSPL, Raigarh where the contract is practiced between EBI & JSPL. After Observing the data
inferences were made which depicted a much clearer picture of the costs involved and the reason
for high expenses.
Subsequently meetings were held with the Production Department and the Best Practices Group
Team of JSPL which further discussed the possible solutions and alternatives.
Data Collection
Data Collection played a pivotal role in the completion of this project as it lead to a clearer and
crisper results. The data collection process involved the following:
Approaching EBI and collecting the data of the past 2 years which included Slag
Transported, Slag Atomized & Slag Crushed
Slag produced per year was taken into consideration through which very important
inferences were made
Daily reports were generated and collected (Kress Maintenance, SAP, SCP etc.)
20. 20
Slag Handling costs were collected from different departments and an inference was made
regarding the Net Slag handling cost per ton of steel
Costs of each and every operation were taken into consideration and further analysis was
carried out
JSPL, Raigarh was contacted multiple times for data collection
Kress Maintenance Data was collected
Data from SMS was collected to calculate the cost involved in Slag handling process.
Data Analysis & Discussion
Slag Handling price per ton of Liquid Steel
After reading the contract carefully all the costs were noted and the present scenario was realized
and presented.
Slag handling cost per ton of Liquid Steel depicted a clear picture about the costs that were incurred
by JSPL when lower amount of Slag was Atomized.
1 2 3 (4)=(TS*1) (5)=(TS-4) (6)=(2*3*4*5)/10^7) 9 (8)=(6-7*TS)/10^7 (8*10^7)/SP
PSBall generation% SlagCrushingRate(₹) PSBallRoyaltycost(₹) PSBallGeneration(tons) SlagforCrushing(tons) TotalCost Buybackprice FinalPrice RateperTon
4% 113 100 1492.4 35817.6 0.4197 225 0.386 30
9% 113 100 3357.9 33952.1 0.4172 225 0.342 26
19% 131 100 7088.9 30221.1 0.4668 225 0.307 24
24% 154 100 8954.4 28355.6 0.5262 225 0.325 25
29% 168 100 10819.9 26490.1 0.5532 225 0.310 24
34% 183 100 12685.4 24624.6 0.5775 225 0.292 22
39% 200 100 14550.9 22759.1 0.6007 225 0.273 21
44% 221 100 16416.4 20893.6 0.6259 225 0.257 20
49% 245 100 18281.9 19028.1 0.6490 225 0.238 18
54% 273 100 20147.4 17162.6 0.6700 225 0.217 17
59% 308 100 22012.9 15297.1 0.6913 225 0.196 15
60% 350 100 22386 14924 0.7462 225 0.243 19
Table-2
21. 21
Table-2 above shows that with increase in Slag Crushing or a decrease in PS Ball generation
increases the slag handling price per ton of steel. At 4% PS Ball generation the rate per ton goes up
to ₹30/- whereas if we look at 60%(As per the contract PS Ball generation should be 60%) the rate
per ton come out to be ₹19/-.
The graph below would further depict how Slag handling price varies with respect to the decrease
in PS Ball generation.
Graph-2 clearly shows the difference in Rate per Ton @60% and @4%(Present rate). The total
costs incurred are also mentioned in this graph which will be discussed later.
The major point to be noted here is that the difference in Rate per ton at different PS Ball generation
rates. If the contract is followed, JSPL could save almost ₹2 crores.
Graph-2
22. 22
Net Impact of Slag Handling Charges per ton of Finished Steel
This calculation was done keeping in mind that all expenses are brought into consideration so that
we could find out the net impact of slag handling on finished steel. The following parameters were
taken into consideration:
Slag Generation
Slag given for PS ball
Slag For Crushing
Electricity charge for Slag Processing(kWh)
Slag Processing Rate
Metal Recovery fee, Metal Recovery
Oxygen Charge
Recovery
Recovery Against PS Ball Production
The purpose of this calculation was to find out:
1. The present net impact of slag handling charges
2. The price of Slag Crushing at which each level of production would incur the same slag
handling charges.
PS Ball Production 0%
Expenses
Particulars Rate Qty Amount
Slag Generation 0.287
Slag given for PS ball 0
Slag For Crushing 113 0.287 32.43
Electricity charge for Slag Processing(kWh) 3 0.287 1
Metal Recovery fee , Metal Recovery @4% 700 0.011 8.04
Oxygen Charge @38 Nm3/ton 7 0.4362 3.05
Slag Handling Expenses Per ton of Steel (in Rs.) = 44.38
Recovery
Oxygen Charge @38 Nm3/ton 7 0.436 3.05
Recovery of Metal @12000/ton (FE min 60%) 12000 0.011 138
Recovery Against PS Ball Production 125 0 0
Total Recovery (in Rs.) = 141
Net Impact of Slag Handling Charges/ ton of Finished steel (in Rs.)
= 96.4
TABLE-3
23. 23
In Table-3 we can see how these factors help us in calculating net impact of slag handling charges
per ton of finished steel. With the current crushing rate, the net impact was affected drastically with
values that changed at every level of production. So the plan was to create an algorithm because of
which now we can keep the costs incurred similar at every stage of production.
25. 25
Table-4 on the previous page depicts a constant net impact of slag handling charges and the slag
crushing rate was changed to get a constant Net impact at every stage of production.
Major Problems
Apart from the cost analysis, one of the major problems was the inefficiency in the operations
Being carried out by JSPL & EBI. Major problems were:
• No atomizing possible due to unavailability of Kress Carrier; hence the high costs
• Maintenance of Kress Carrier not done by Certified Mechanics which leads to longer and
consecutive breakdowns
• Road No. 8 and the path of the Kress Carrier is not clear; used by other vehicles
Cycle Time Calculation
To get rid of these bottlenecks, the cycle time was calculated for each and every process.
TABLE-5
26. 26
Table 5 shows the cycle time of this complete process.
Kress Maintenance Data
This cycle time was calculated considering the situation at that moment that is with one Kress
Carrier only. Also Breakdown data of both the Kress Carriers was collected and arranged to find
out what were the most common reasons leading to a breakdown.
Table-6 shows the issues that came up in Kress carrier which lead to breakdown and was a major
bottleneck in the process. Using Pivot tables, at any time there was always a Kress Carrier in
breakdown and this affected the process flow of the slag handling process.
TABLE-6
27. 27
During the data collection process it was also found out that on many occasions JSPL themselves
stopped the Atomizing Process for in house usage and all this information was not given to the
concerned team on time.
Summary of the data collection
1. Calculated cost per ton of liquid steel (rate per ton)
2. Calculated Net Impact of Slag Handling Charges per ton of Finished Steel
3. Cycle Time of the Process
4. Kress Carrier Breakdown Data
Figure-4
28. 28
Findings & Suggestions
After taking all the data into account, observations were made and alternatives were suggested to
the concerned team. The following tables depict the alternatives:
Alternatives
ALTERNATIVE-I
• Both the Kress carriers are made available at all times
• This would decrease the losses by almost ₹1.94 crores per year and would also lead to
60% atomizing & 40% crushing as per contract
ALTERNATIVE-II
• Both the Kress carriers are made available at all times as shown in the animation.
TABLE-7
TABLE-8
29. 29
• This would decrease the losses by almost ₹1.94 crores per year and would also lead to
60% atomizing & 40% crushing as per contract.
• But due to decreasing in-house demand of crushed slag, the contract may be negotiated to
increase the PS ball production (to 80%) which would also increase our income. This
would cut our losses by ₹3.82 crores.
ALTERNATIVE-III
No PS balls generation. Only slag crushing done at the rate of ₹113 per ton.
This alternative would lead to piling up of slag and would not generate income.
ALTERNATIVE-IV
TABLE-9
TABLE-10
30. 30
Proposing new slag crushing rates upon negotiation so as to achieve equal cost (per ton of
liquid steel) at each rate.
Also another alternative was considered, which involved ending this contract and starting a new
one with a different firm.
Ecomaister turns out to be the least expensive out of all 3. Also these are 2012(for vista mining
and M/S K.Rao) costs and would have increased in today’s date.The new contracts will include
expenses and would also take considerable time to begin operations.
The following table depicts the scenario.
Slag Qty(tons/year) 5,03,629 5,03,629 5,03,629
Slag Crushing Rate(₹/ton) @90-100% 113 220 286
Remarks: Additional
monthly charges
of ₹ 37lacs
₹14.4 cr
M/S K.Seshagiri Rao &Co.
₹5.69 cr ₹11.07 cr
EcoMaister VistaMining
Summary of Analysis and Suggestions
Current Status of Ecomaister Operation In Angul
Average generation of PS ball is only 4% of slag generated against 60% forecasted
JSPL incurring higher cost per ton of liquid steel due to lower number of PS ball
generation
Currently we are paying approx. ₹ 30 per ton of ls whereas it can be ₹19 per ton if we
make 60% PS ball (we are considering only slag crushing & PS ball generation costs).
Please refer slide no 3 for details
TABLE-11
31. 31
Why Less Generation of PS Ball?
Kress carrier non availability, frequent break down of Kress carrier
Due to double slag pot operation they are not getting time for making PS ball
A/c of Kress in not working due to which Kress operators are not willing to make PS ball
With single slag pot operation, slag pot is filled 100% with slag & there are chances of
reactions in slag which can spill & can damage the Kress. So we wait to cool down the
slag.
Due to crushed slag requirement in phase 1- b, we stopped PS ball generation for some
time
Most of the time single Kress carrier in operation
Is it possible to make PS Ball in Current Situation?
It is possible to make the PS ball with current single slag pot operation provided Kress carrier is
properly maintained.
32. 32
Conclusions & Recommendation
The following table considers the consequences of continuing and ending the contract with EBI.
Will it be profitable to end it or can we turn the loss into profit?
The following table depicts the pros & cons of the contract with EBI.
TABLE-12
TABLE-13
33. 33
The table below compares the operations with and without EBI. This table critically examines the
scenario.
Personally, I would suggest to continue with the contract but with certain changes:
Amend the crushing rates with respect to a value at which Atomizing is constant.
Change the rates such that at each percentage of PS Ball generation the rate per ton is equal
Maintain both the Kress Carriers at all times. Trained experts should be brought in to
maintain the Carrier.
Road No. 8 (Path on which Kress Carrier moves should be free of vehicles)
In future, EOT can be used to minimize the Kress carrier movement
TABLE-14
34. 34
References
Kress Carrier: Functioning and Models (www.kresscarrier.com)
Data regarding Contract (JSPL, Angul & JSPL, Raigarh and EBI, Angul)
Information about the Organization. http://www.jindalsteelpower.com/
35. 35
Project-II
Forecasting the Production and Price of Steel in India
Steel is an alloy of iron, primarily of carbon and is used in construction and other applications like
construction, machine. They are used majorly because of high tensile strength and low cost. In
India, Iron and Steel Industry in India. At present, India is the largest producer of raw steel and
the largest producer of sponge iron. The industry produced almost 91.46 million tons of total
finished steel and 9.7 million tons of pig iron. Most of the production in India is from Iron Ore.
TATA Iron and Steel Company was established by Dorabji Tata in 1907 and by 1939 it had
launched the largest steel plant in the British Empire. The major companies that produce steel in
India:
TATA Iron and Steel Company
Indian Iron and Steel Company
The Visweswaraya Iron and Steel Ltd.
Bhilai Iron and Steel Plant
Hindustan Steel Ltd. (Rourkela & Durgapur)
Bokaro Steel Ltd.
Salem Steel Plant
Vijayanagar Steel Plant
Vishakhapatnam Steel Plant
Daitari Steel Plant
TATA Steel, Kalinganagar
Dolvi Steel Plant
Jindal Steel and Power Ltd
Bhushan Steel
India is also a major importer of steel although the imports fluctuate. The following table depicts
the trend.
36. 36
Steelmaking Process
Figure-12 clearly illustrates the process of steel making. The basic raw materials used in steel
making are:
Iron Ore
Coal
At JSPL, the major parts of the process were:
Coal Gasification Plant
Direct Reduced Iron (Gas Based)
Steel Melting Shop
Plate Mill / Bar Mill
TABLE-15
Figure-4
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There are two types of DRI Plants:
Gas Based DRI (JSPL)
Coal Based DRI
In this project the aim was to forecast the price and demand of steel in India.
Methodology
Any forecasting technique has one standard technique to follow:
a) Determine the purpose of Forecast
b) Establish a Time Horizon
c) Select a forecasting technique
d) Gather and Analyze Data
e) Prepare the Forecast
f) Monitor the Forecast
Determine the Purpose of Forecast
The purpose of this forecast is to find out the price and demand of steel in India. It is aimed to
analyze the past, present and future trend of the price and demand of steel.
Establish a Time Horizon
The time horizon established was of 10 years i.e. from January 2005 to December 2015.
Selection of Forecasting Technique
The forecasting technique used is Correlation and Regression Analysis using MS-Excel.
Correlation Analysis: Correlation analysis, analyzes the association between two factors such as
steel WPI and coal WPI in this project. Higher the value the better is the correlation.
38. 38
Regression Analysis: It is a statistical process for estimating the relationship variables. It
establishes a relationship between a dependent and an independent variable. The regression
equation:
Y= a + bX
In regression analysis, the R-Squared value is a measure which depicts how close the data are
fitted to regression line.
Gather and Analyze Data
Different scenarios require different factors. In this project, we chose certain criteria’s which
affect the price and demand of steel. Factors like WPI, production etc. were considered.
Prepare the Forecast
Forecasting is done using the forecasting tools on MS-Excel. Illustrative charts will be prepared
which will demonstrate the trend.
Monitor the Forecast
After all the forecasting has been done, we monitor it to find out if there are any discrepancies.
Data Collection
In any forecasting project, data plays a crucial role. A data would help in understanding the trend
in terms of the following.
Defining
Measuring
Analyzing
Inspecting
Controlling
39. 39
In this study data was collected month wise from January 2006 to December 2015. The data
collection was done from various online and offline sources, details of which have been provided
under the title references at the end of the report.
In this project, there were two aspects of steel that were to be forecasted:
1. Steel Price
2. Steel Demand
Steel Price
For forecasting the price(WPI) of steel we used the following factors:
Coal WPI
Ore WPI
Power WPI
Steel WPI
Exchange Rate ($)
Oil per Barrel Cost ($)
GDP Growth Rate
All these factors were taken into consideration to forecast the price of steel. Table-13 depicts the
data for the year 2006.
Month Coal WPI Ore WPI Power WPI Exchange Rate OIL (/barrel) SteelWPI GDP Growth Rate Oxygen WIP
Jan-06 117.6 139.7 116.1 43.925 60.61 92.7 2.50% 105.1
Feb-06 117.6 133.8 116.9 44.275 58.95 93.7 2.50% 105
Mar-06 117.6 132.4 117.3 44.5 60.01 95.3 2.50% 105
Apr-06 117.6 159 117.6 44.9 67.06 102.6 2.50% 104.2
May-06 117.6 168.6 118.5 46.305 67.33 96.8 2.50% 104.2
Jun-06 117.6 170 121.5 45.88 66.90 95 2.50% 104.1
Jul-06 117.6 171.6 122.5 46.5 71.29 97 1.40% 101.4
Aug-06 117.8 177.2 122.9 46.48 70.87 96.9 1.40% 101.4
Sep-06 117.8 176.3 123.6 45.91 60.94 98.7 1.40% 101.4
Oct-06 117.8 178.3 123.4 44.92 57.26 101.6 3.30% 101.4
Nov-06 117.8 178 122.6 44.6 57.80 100.2 3.30% 101.2
Dec-06 117.8 173.2 120.3 44.115 60.34 99.3 3.30% 101.4
TABLE-16
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Steel Production
For the forecasting of steel production, we have taken the following factors into consideration:
Coal Production
Iron Ore Consumption
DRI
BFI
Per Capita Consumption
Steel WPI
Steel Production
Industrial Sector Growth
Data Analysis and Discussion
Steel Price
Correlation and Regression Analysis were performed on MS-Excel. The following table depicts
the findings.
Month Coal Production IronOre DRI Per CapitaConsumption SteelWPI Steel Industrial Sector Growth BFI
Jan-06 38.32 15.18 1.12 0.0037491 92.7 4.05 0.05 2.47
Feb-06 36.9 14.00 1.04 0.0035413 93.7 3.83 0.00 2.26
Mar-06 43.82 16.74 1.22 0.0038974 95.3 4.22 0.03 2.5
Apr-06 31.53 14.572 1.28 0.0037360 102.6 4.05 -0.03 2.19
May-06 33.23 14.741 1.31 0.0037778 96.8 4.10 0.02 2.31
Jun-06 31.92 12.625 1.25 0.0037458 95 4.07 0.00 2.3
Jul-06 30.7 11.149 1.27 0.0038150 97 4.15 0.04 2.27
Aug-06 29.2 10.767 1.22 0.0037463 96.9 4.08 -0.01 2.26
Sep-06 29.2 11.655 1.29 0.0036870 98.7 4.02 0.02 2.25
Oct-06 33.59 13.342 1.39 0.0039026 101.6 4.26 -0.03 2.44
Nov-06 36.4 14.882 1.3 0.0038798 100.2 4.24 0.12 2.4
Dec-06 39.49 17.526 1.35 0.0040033 99.3 4.38 -0.03 2.59
TABLE-17
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The findings from correlation analysis depict the High Correlation of Steel WPI with:
Coal WPI
Ore WPI
Power WPI
Oil cost per barrel
Exchange Rate
The regression analysis done came out with R square value of 90%. The standard error is
8.98.
Table-16 depicts the regression analysis of the data.
CoalWPI OreWPI OIL(/barrel) Oxygen WIP SteelWPI ExchangeRate GDP Growth Rate PowerWPI
Coal WPI 1
Ore WPI 0.912167 1
OIL(/barrel) 0.477987 0.618205332 1
Oxygen WIP 0.313904 0.21759252 -0.230769345 1
SteelWPI 0.916126 0.911594943 0.650676775 0.191298209 1
Exchange Rate 0.72184 0.654145884 -0.006383516 0.708318552 0.588240789 1
GDP Growth Rate -0.24189 -0.241024359 -0.127596292 -0.049824481 -0.326560474 -0.177815847 1
PowerWPI 0.878741 0.883481282 0.464592324 0.492227941 0.848830135 0.848800878 -0.168619866 1
Regression Statistics
Multiple R 0.949227
R Square 0.901032
Adjusted R Square 0.897589
Standard Error 8.997077
Observations 120
ANOVA
df SS MS F Significance F
Regression 4 84750.81658 21187.70415 261.7465586 9.19983E-57
Residual 115 9308.951336 80.94740292
Total 119 94059.76792
Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0%
Intercept 47.02339 7.383412548 6.368787928 4.05826E-09 32.39826945 61.64850796 32.39826945 61.64850796
Coal WPI 0.520472 0.071653545 7.263733399 4.83452E-11 0.378540367 0.662404133 0.378540367 0.662404133
Ore WPI 0.040212 0.015014634 2.678209979 0.008485795 0.010471242 0.069953441 0.010471242 0.069953441
Power WPI 0.372332 0.084142979 4.424993628 2.20425E-05 0.205661098 0.539003192 0.205661098 0.539003192
Exchange Rate -1.20426 0.214326405 -5.618802717 1.36076E-07 -1.628797145 -0.779718427 -1.628797145 -0.779718427
0
50
100
150
200
SteelWPI
TABLE-18
TABLE-19
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The correlation analysis clearly helped us in figuring out which factor affects the WPI of steel.
This in turn helped in creating a standard equation for regression analysis which was:
= Intercept + Coal WPI*X1 + Ore WPI*X2 + Power WPI*X3 - Exchange Rate*X4
Where X1, X2, X3… are the values in a particular month.
Steel Production
Correlation Analysis
The findings from correlation analysis depict the High Correlation of Steel WPI with:
Coal Production
Iron Ore Consumption
BFI
DRI
Per Capita Consumption
Steel WPI
Regression Analysis
Regression Analysis is done for forecasting the production of steel in India.
The regression analysis done came out with a high R square value of more than 99% and
with an error of 4.29%.
Coal Production Iron Ore BFI DRI Per Capita Consumption SteelWPI Steel
Coal Production 1
Iron Ore 0.002283031 1
BFI 0.534169775 -0.443777514 1
DRI 0.035675631 0.306274336 0.000131629 1
Per Capita Consumption 0.622289042 -0.459039294 0.858798884 0.207549473 1
SteelWPI 0.563059929 -0.396906758 0.737148741 0.198233235 0.870459764 1
Steel 0.623620448 -0.470126798 0.878543526 0.193152845 0.997893463 0.878297942 1
TABLE-20
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The equation for the regression analysis above is:
Y=-1.1396 + 0.0015 X1 – 0.0054 X2 + 0.1292 X3 + 0.0297 X4 +1265.24 X5 + 0.0014 X6
Trends
Every forecasting project involves analysis of the trend on an annual, monthly or a
quarterly basis. In this project, an yearly trend analysis
Year Month Steel WPI
2006 January 92.7
2006 February 93.7
2006 March 95.3
2006 April 102.6
2006 May 96.8
2006 June 95
2006 July 97
2006 August 96.9
2006 September 98.7
2006 October 101.6
2006 November 100.2
2006 December 99.3
SUMMARY OUTPUT
Regression Statistics
Multiple R 0.999106061
R Square 0.99821292
Adjusted R Square 0.998107798
Standard Error 0.042920619
Observations 109
ANOVA
df SS MS F Significance F
Regression 6 104.9569931 17.49283218 9495.726235 9.9327E-138
Residual 102 0.187902309 0.001842179
Total 108 105.1448954
Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0%
Intercept -1.139630765 0.048677698 -23.4117638 8.11181E-43 -1.236182747 -1.043078782 -1.236182747 -1.043078782
Coal Production 0.001528748 0.000685771 2.229237877 0.027991285 0.000168523 0.002888972 0.000168523 0.002888972
Iron Ore -0.005423609 0.001654337 -3.278417297 0.001428158 -0.008704979 -0.002142238 -0.008704979 -0.002142238
BFI 0.129239564 0.013028938 9.919424312 1.22796E-16 0.103396727 0.1550824 0.103396727 0.1550824
DRI 0.029752951 0.015156437 1.963057051 0.052362718 -0.00030977 0.059815672 -0.00030977 0.059815672
Per Capita Consumption 1265.240636 20.00996738 63.23051968 1.22473E-83 1225.550961 1304.930312 1225.550961 1304.930312
SteelWPI 0.001405903 0.000286964 4.899231641 3.62801E-06 0.000836711 0.001975095 0.000836711 0.001975095
TABLE-21
TABLE-22
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This graph depicts a trend which could be observed upon careful consideration. E.g. There is a
always an increase in the price of steel always shows an increasing trend in March. It could be
because of the end of financial year and April always has an exponential increase.
GRAPH-3
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The trend analysis of production of steel depicts clear increase in the level of production in the
month of March which maybe because of the financial year ending. Also the month of
September shows decline in its production which may be due to the retreating monsoons.
Forecasts Made (Findings)
Steel Price
Steel Price was forecasted with very minute variance. In the excel sheet prepared, we can put the
values and forecast the price of steel in that particular month. Also we can forecast the WPI of
coal, ore etc. using moving averages method.
Steel Production
Similarly, production of steel was also forecasted and color formatting of the cells was done to
find out when the variance was more than the standard error.
Month CoalWPI IronOre WPI Power WPI Exchange Rate$ SteelWPI RealWPI Variance
Nov-15 189.8 340.1 177.9 66.462 145.68 139.9 -0.0413
Dec-15 189.8 306.8 176.8 66.208 144.24 137 -0.0528
Month Coal(MT) IronOre(MT) BF(MT) DRI(MT) PerCapitaConsumption(/MT) SteelWPI Steel(MT) RealProduction Variance
Dec-15 58.37 11.52433 4.78 1.71 0.005724 162.20 7.0241 7.07 0.006496
Jan-16 62.9 11.55000 4.76 1.51 0.005605 144.8 6.8468 7.41 0.076009
Feb-16 60.1 11.60650 4.78 1.50 0.005590 139.90 6.8182 6.94 0.01755
TABLE-24
TABLE-25
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Conclusion
The aim of this project is to forecast the Price and Production of Steel in India. Using Correlation
and Regression Analysis, forecasting was done and a model was created for Forecasting the Price
as well as the Production.
Also a trend analysis was done in this project to understand the kinds of trend the price and
production of steel follow.
A model was created which upon entry of values will predict the production and the price of the
steel in the subsequent month.
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References
Monthly Steel Prices and Production. (2013-2015). Steel 360, Steel Mint & Iron & Steel
Review
Kutner, M.H., Nachtsheim, C.J., Neter, J., Li, W. (2004). Applied Linear Statistical Models.
Monthly Production of Steel. Retrieved from: https://www.worldsteel.org/media-
centre/press-releases.html
Monthly WPI of Coal, Ore and Steel. Retrieved from: http://www.indiastat.com/default.aspx
Monthly Production of Steel. Retrieved from: http://www.steelmint.com/
Statistical Review of World Energy. Retrieved from:
https://www.bp.com/content/dam/bp/pdf/energy-economics/statistical-review-2015/bp-
statistical-review-of-world-energy-2015-full-report.pdf
Industrial Sector Growth in India. Retrieved from: http://www.oecd.org/india/
Information about Indian Steel Sector. Retrieved from: http://steel.gov.in/
Information about Coal Production. Retrieved from: http://coalindia.in
