Electric Arc Furnace (EAF) steelmaking has shown a phenomenal growth with an increase in steel production from 120Mt in 1960 to 319Mt in 2003. The proportion of crude steel equivalent produced by the EAF route rose from 7 percent in 1960 to 33.10 percent in 2003. This has been mainly due to the lower investment cost of the EAF compared with the integrated blast furnace - oxygen converter route and also because of its greater flexibility of product mix. In India, production of steel through the electric route increased from 25 percent of total steel capacity in 1982 to 45.6 percent in 2003. However, the cost per tonne of steel produced through the EAF is generally higher compared to the Basic Oxygen Furnace (BOF). The major cost contributors are the raw materials with the metallic charge accounting for 87 percent of this when charging 100 percent cold scrap. Hence, the scrap price is crucial to the economies of the EAF. A spurt in prices of steel scrap worldwide has occurred mainly due to increased steel production in China and South Korea leading to a high demand of scrap in these regions, which pushed up Rotterdam and USA scrap export prices. Also, due to export restrictions, the scrap flow has reduced from certain CIS countries. Such price increases have prompted EAF steelmakers to look for viable alternate sources of iron to charge. These conditions have paved the way for the evolution of sponge iron as a low-cost metallic feed substituting scrap to reduce the cost of production.
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