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Defining Production Capacity for an Iron and Steel Plant

Steel production is generally considered to be an activity with fairly high fixed costs. Therefore, it is important to maximize the utilization of assets and operate the plant at high capacity utilization. However, this raises the question of how steelmaking capacity should be defined.

Define factory capacity

Nominal plant capacity is usually defined by plant and equipment suppliers based on a specific set of operating conditions. Typically, nominal capacity is calculated on a 21-shift basis (ie three shifts per day, 7 days per week), with normal maintenance periods provided and assuming a ‘typical’ product mix. However, reality often differs from these situations.

some variables

Some typical variables that may have the greatest impact Steel mill production potential (i.e. capacity) includes:

• Product Size: For example, for small diameter rods, the maximum output will usually be lower than in the case of manufacturing average diameter rods [e.g. 12mm versus 16mm average diameter]. The same happens if thin gauge coils are produced [e.g. 1mm rather than 2.5mm average coil thickness]. The best explanation is that less steel is passing through the mill at any one time.As a result, product mix can have a huge impact on capacity, by plus or minus 25% or more
• grade combination: Complex grades (for example, those requiring special heat and mechanical treatments in a start-stop rolling schedule) may take longer than commodity grades to pass through the rolling mill.Also, alloy grades may require more machining than carbon steel, reducing mill output
• order size: In rolling mills producing different product shapes (e.g. square, round and angular long bar products), smaller average order sizes result in longer setup times – adversely affecting mill capacity – if the mill plan is not optimized through Batch size maximization
• Coating amount: For some wires, the weight of the steel will be added during the production process. This can happen, for example, with galvanized coatings, which can add up to 250 grams per square meter per side of the steel sheet. Depending on coat weight (which can be as low as 25 g/m2), the weight of the final sale material can vary widely.In fact, we have seen multiple coating lines operating at over 100% capacity for exactly this reason
• unplanned downtime: Obviously, if a plant stops running for some unexpected reason (for example, due to “pebbles” or “breakouts”), the maximum production potential will be affected for a period of time. This problem tends to be less common with modern plant maintenance methods, especially when “proactive” preventive maintenance methods are applied, compared to facilities using “reactive” maintenance practices. However, it should be remembered that in some parts of the world rolling mills may be 50 years old or more.In this case, frequent failures can have a very significant impact on capacity
• capacity creep: This term in the steel industry refers to the tendency of a particular facility to produce greater production year over year as small bottlenecks are alleviated, small productivity-related investments are made (which may affect planned downtime), operator understanding increases, etc. Trends may increase plant capacity by no more than 1% per year; but the overall impact on production potential over a 10- or 20-year period is clearly significant.

common sense approach?

All that said, it’s clear that capacity isn’t always what it seems.When in doubt, our recommendation is to first check the Nameplate capacity Provided by equipment supplier to review recent maximum production and discuss findings with local management where possible. This approach should at least give a consistent answer, and one based on actual performance.

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