The State Bank of Pakistan (SBP) has reported a massive decline of net foreign investment for local industries, including cement and construction, between July 2018-May 2019. According to a central bank report, total foreign direct investment (FDI) into the country fell by 49.2 per cent YoY during the first 11 months of FY18-19.
A breakdown of SBP data shows that the net total FDI in the cement and construction sectors decreased 36.4 per cent YoY in the 11-month period. Out of the country’s total, Pakistan’s construction and cement industry reported US$437.6m of FDI, compared to US$688.5m in the year-ago period.
The construction industry received net FDI of US$393.1m and cement US$44.5m, representing a fall of 38 per cent and 17.9 per cent, respectively.
Pyroprocessing and Kiln Operation
Dr SB Hegde, Professor, Jain University, Bangalore, talks about pyroprocessing and the role of preheater, rotary kiln and clinker cooler in the cement manufacturing process. In the concluding part of the two-part series, we will learn more about the various factors aiding pyroprocessing.
False Air in Pyro Processing
India is the second largest cement producer in the world in terms of cement capacity. Therefore, it is deciphered that the amount of energy being consumed in cement production process and its wastage attributed to non-availability of proper technology to plug the leakages.
There are several research papers/case studies discussing the effect of different factors on energy consumption in cement manufacturing and are well documented. There are some studies that discuss this issue with the help of mathematical models. However, all studies reveal the fact that the ‘false air’ may be one of the factors for higher energy consumption in cement plants. Further, based on the several studies in the field of operational audit, it can be concluded that production level can be improved and energy consumption reduced by reduction of ‘false air’.
False air is any unwanted air entering into the process system. The exact amount of false air is difficult to measure. However, an indicator of false air can be increase of per cent of oxygen between two points (usable for gas streams containing less than 21 per cent of oxygen). Due to unwanted air, the power consumption increases and the system’s temperature decreases. Therefore, to maintain the same temperature fuel consumption has to be increased.
Impact of False Air in a Cement Plant
• Increase of power consumption
• Increase the fuel consumption
• Unstable operation
• Reduction in productivity
• Higher wear of fans
False Air Ingress Points
In cement plants, generally false air intrudes in the kiln section through the kiln outlet, inlet seal, TAD slide gate, inspection doors and flap box. Similarly, in mill section false air intrudes through rotary feeder at mill inlet, mill body, mill door, flaps, expansion joints, holes of ducts and tie rod entry point. In the power sector, as margin is very less, cost- effectiveness plays an important role. Generally false air intrudes in the CPP section through air pre-heater casing, boiler main door, fan casing, inspection doors, ESP main doors, ESP hopper doors, expansion bellows and ducts. Similarly, in the GPP section false air intrudes through main holes, hammering, bellows, rotary air locks, damper casing, expansion bellow, etc.
Checking of Heat balance
Heat balance on a kiln can offer extremely useful information on the thermal performance of the system. Heat balance shows where or how the fuel heat is consumed based on the simple principle of input = output.
Unnecessary energy losses can be easily detected, the principle of heat balance may be easily transferred to another system such as preheater, cooler and drying system. Various reasons or circumstances may cause a need for a heat balance measurement. The following situations may justify a heat balance:
- Performance test,
- Recoding of kiln performance before/after a modification,
- Unusually high heat consumption or abnormal kiln operational data,
- Kiln optimisation endeavours.
Although the specific heat consumption proper could also be determined by measuring nothing but fuel heat and clinker production, a complete heat balance does offer considerably more information and security.
The consistency of the measured data is proved much better, and the balance shows clearly where the heat is consumed. A heat balance is obviously a very efficient tool assessment of thermal efficiency. A heat balance does not only mean calculation of heat balance items.
Kiln Operation Problems Using Pet Coke
- The consequence of using pet coke is dusty conditions and a kiln inlet ring. Even though there is no CO (carbon monoxide) in the kiln inlet, the large amount of SO3 introduced by the pet coke may not be properly balanced by alkalis (Na2O and K2O) in the kiln feed. This will result in a high SO3 re-circulation and a reduction of the liquid phase surface tension and viscosity. This will produce poor clinker nodulation and a corresponding increase in the dust load in the kiln and rings near the kiln inlet.
- The possible solutions are:
- Ensure that the high SO3 input is balanced with the appropriate percentage of alkalis.
- Optimise the burnability of the raw meal in order to reduce the burning zone temperature.
- Optimise the flame shape to reduce the length of the burning zone.
- Increase the O2 at the kiln inlet even more to ensure enough oxygen is present to remove the increased amount of alkali sulphates from the kiln.
If chloride levels are high in the raw materials this can react preferentially with the alkalis in the bottom cyclones, reducing the percentage of alkalis available to remove SO3 from the kiln. In this case the only practical solution is to try and reduce the chloride input.
Pet coke sometimes needs more O2 at the kiln inlet than required. It is common in some plants to have to run with 6-8 per cent O2 at the kiln inlet to keep SO3 recirculation down to an acceptable level. Remember that just having a small excess of O2 in the kiln inlet (sufficient to ensure zero CO) may not be enough to control the high sulphur input from pet coke.
2K2O + 2SO2 + O2 = 2K2SO4
2CaO + 2SO2 +O2 = 2CaSO4
The molecular weight s is
2SO2 = 128
O2 = 32
Therefore, every 4 tonne of SO2 needs 1 tonne of O2 to be converted to SO4-2, no matter if there are sufficient alkalis or not. Calculate the percent of O2 required at the kiln inlet from the total input of SO2 from pet coke and the gas flow rate at the kiln inlet.
Burning softer (i.e., lower litre weight) is a good idea because it uses less fuel and lowers the sulphur input. Softer burning will reduce the sulphur volatilisation in the burning zone (ensuring oxidising conditions in the burning zone is critical since CaSO4 is more susceptible to thermal decomposition under slightly reducing conditions than alkali sulphates.).
Traditionally it is known that an excess SO3 content of some 300-700 gm per 100 kg clinker can be tolerated in the kiln system. Lower limit will be valid for hard to burn raw materials while the upper one refers to easy burnable raw meals. Apart from adjustment of the sulphur/alkali ratio it is possible by operational means to substantially reduce the sulphur evaporation in the burning zone. One can consume 1000 gm SO3 per 100 kg clinker by the following changes in burning operation.
- High Oxygen – levels in the kiln (around 5 per cent O2)
- High Flame Momentum
- Short residence time in the burning zone
- Improve chemical burnability
- Finer grinding of raw mix and pet coke
Significance of Liquid Content in Clinker
Liquid content of clinker is the fraction of the kiln feed that melts between the upper transition and burning zone. The liquid content has a critical role in clinker nodulisation and clinker phase development and properties. In the absence of liquid, the conversion of C2S and free lime to C3S would be almost impossible in the kiln.
Plant chemists and CCR operators are usually more concerned with the amount of liquid rather than with the rheological properties of the liquid. The latter is more important during clinkering reactions than the former.
Amount of liquid Content
The raw mix consists of only 4 oxides, i.e., CaO, SiO2, Al2O3 and Fe2O3, it would start melting at 1,338 degree C, the so-called eutectic temperature for the system C-S-A-F.
Industrial raw mixes contain impurities such as MgO, Na2O, K2O and SO3. At certain concentrations, these impurities reduce the eutectic temperature of the system to 1,280 degree C, thus promoting clinker formation. These oxides act as fluxes in the kiln, forming liquid as far up in the calcining zone.
Liquid percentage at 1,450 C=3XA+2.25XF+MgO+K2O+Na2O+SO3 (MgO<2).
For most commercial clinkers, the amount of liquid content is in the range of 26-29.5 per cent. Higher values can be damaging to most refractory bricks in the absence of stable coating. As the brick is infiltrated and saturated with liquid, its elastic modulus increases and so does its tendency to spall off.
The tendency to coating formation or the coataibility of clinker increases with the amount of liquid. However, more coating does not necessarily mean better coating. Coating refractoriness, texture and stability are by far more important than the amount of coating deposited on the lining.
Significance of liquid content
The most important clinker phase is C3S (alite) which requires the presence of liquid for its formation. In the absence of liquid, alite formation is extremely slow and it would render clinkering impossible. This fact also explains why alite is formed essentially in the burning zone, where the amount of liquid is at a maximum.
To understand why alite formation requires
liquid content, one must first understand the alite formation mechanism:
- C2S and free CaO dissolves in the clinker melt.
- Calcium ions migrate towards C2S through chemical diffusion
- C3S is formed and crystallised out of the liquid.
Without liquid phase the diffusion of Ca ions towards C2S would be extremely slow, and that of C2S almost impossible at clinkering temperature. It is important to mention that Na2O and K2O decrease the mobility of Ca ions, whereas MgO and sulphates considerably increase it. That is why addition of gypsum in the raw mix promotes alite formation.
Properties of liquid phase Viscosity
Temperature has the most pronounced effect on liquid phase viscosity. Low viscosity liquid infiltrates the refractory lining faster, leading to its premature failure. MgO, alkali sulphates, fluorides and chlorides also reduce liquid phase viscosity.
Free alkali and phosphorous increase liquid phase viscosity, but this effect is offset by MgO and SO3. Only clinkers with S/A ratio lower than 0.83, low in MgO, would experience the negative effects of high liquid viscosity.
The liquid content viscosity increases linearly with A/F ratio. For a given burning temperature, high C3A clinkers tend to nodulise better than low C3A clinkers. Moreover, the liquid phase is considerably less damaging to the refractory lining when the liquid is viscous.
Another important property of the liquid phase is its surface tension, or its ability to ‘wet’ the lining. The surface tension has a direct impact on clinker fineness, coating adherence to the lining and clinker quality.
High surface tension values would favour nodule formation and liquid penetration through pores of the nodules. The resulting clinker contains less dust (fraction below 5 or 10 mm) and lower free lime content. A liquid phase with high surface tension has less tendency to adhere to the brick surface, therefore, reducing clinker coatibility or adherence to the lining.
Alkali, MgO and SO3 reduce liquid surface tension. So does temperature. Sulphur and potassium have the strongest effects, followed by sodium and magnesium. Therefore, MgO, SO3 and K2O to a certain concentration, are good coating promoters.
Unfortunately, the liquid properties that induce C3S formation are detrimental to the refractory lining and to clinker nodulisation.
Although the amount of liquid phase in the burning zones of the kiln is important to clinker formation and brick performance, the rheological properties of the melt are even more important. The rheological properties of the clinker melt control parameters such as clinker mineral formation, clinker coatability, clinker fineness, cement strength and refractory depth of infiltration.
It is then very important to keep fuel, raw material properties and flame temperature as steady as possible. Whenever introducing drastic changes in the raw material or fuel properties, the refractory lining must be changed accordingly to meet the differences in clinker coatability and burnability.
Material Balance of a Pyro Processing in Clinker Production
The following diagram illustrates an example of the mass flows in a cement plant and the mass balance of a kiln system from raw meal (RM) to clinker.
Figure 1: Schematic diagram of material and dust flows in a cement plant
The reporting of CO2 emissions from the calcination of raw materials depends on the principle choice of the method for determining the mass balance: from the input side (raw meal consumption).
Accordingly, we need to consider the reporting of the mass flows bypass dust, cement
kiln dust leaving the kiln system (and crossing the red boundary in the diagram) and additional raw materials), which are not part of the normal kiln feed, as follows:
Simple input method and detailed input method: The actual amount of raw meal consumed for clinker production can be determined by weighing the kiln feed and subtracting the dust return.
- Bypass dust leaving the kiln system is accounted for in the amount of raw meal consumed. Additional calculations may be required if the bypass dust is only partially calcined. This is implemented only in the detailed input method:
- CKD recycling remains within the mass balance and therefore does not need additional reporting.
- CKD leaving the kiln system (and crossing the red boundary in the diagram) needs to be quantified and requires additional reporting in the input methods.
- Additional raw materials (ARM), which are not part of the kiln feed are not accounted for by the amount of raw meal consumed. Thus, they require additional reporting in the input methods. However, the necessary calculations are only implemented in the detailed input method. The simple input method (A1) should therefore not be used if ARM is relevant for the complete reporting of the CO2 emissions.
Simple output method and detailed output method: The amount of clinker production can be determined from calculating the clinker mass balance or by direct weighing.
- Bypass dust leaving the kiln system requires separate reporting:
- CKD recycling remains within the mass balance. Thus, it does not need additional reporting.
- The mass flow of CKD leaving the kiln system (and crossing the red boundary in the diagram) needs to be accounted for additionally.
- Additional raw materials (ARM) do not need to be accounted for additionally in the output methods, which are based on the clinker production.
Pyro-processing in a cement plant comprises a preheater, rotary kiln and clinker cooler. Pyro-processing section is considered to be the heart of a cement plant as actual cement clinker production takes place in kilns.
The size of a cement plant is determined based on the pyro-processing section and the sizes of all other equipment are determined to match pyro-processing. Cyclones are basic units in a preheater system. Pressure drop and change of temperature of gas across each stage determines the efficiency of cyclones.
Introduction of Low Pressure drop (LP) cyclones has brought the pressure drop across each stage to around 50 mm WG from around 150 mm WG in conventional cyclones. This has resulted in more and more plants adopting 5 or 6 stages of preheater.
A typical 6 stage preheater with LP cyclones will have a preheater exhaust gas temperature of around 250°C and draught of around 500 mm WG. This in turn led to decrease in preheater fan
The reduced temperatures at preheater exhaust contribute to environmental improvement. Cyclone separators are used in preheaters on cement plants to separate the raw material for gases. Very tall preheater means more power is required to operate the plant.
It is always desired for a minimum preheater height to operate the plant economically. Due to the preheater arrangement and layout design, cyclones decide the height of the preheater. Pressure drop-in cyclones plays an important role in determining the cost of operation of a cyclone separator. High pressure drop means more power required to operate the cyclone.
ABOUT THE AUTHOR
Dr SB Hegde is currently a Professor at Jain University, Bangalore, Karnataka, and a Visiting Professor at Pennsylvania State University, United States of America. He has more than 30 years of experience in cement manufacturing both in India and abroad. He has occupied the ‘Leadership positions’ in reputed major cement companies both in India and overseas. He is also a recipient of ‘Global Visionary Award’ instituted by Gujarat Chambers of Commerce and Industry, Ahmedabad in 2020.
Structural Shift in the Cost Curve
The cost curve in the Indian cement industry has been on an upward trajectory. ICR delves into the causes behind it and its impact while endeavouring to answer the important question – how much of this is permanent?
If the financial year 2022 was the year of shipping costs soaring to the highest level, the financial year 2023 started with the coal and pet coke prices moving to the stratosphere in tandem, largely buoyed by the geo-political headwinds with the war in Ukraine, forcing a sanction of a large part of the oil, gas and coal from the Russian sources to the Western world. The fallout of this was a steep hardening of the coal futures, both New Castle and API4 Indexes shot up to the extreme levels it has never seen in the past. While these
were FOB prices, the shipping freight, albeit softening from the stratospheric levels, were still high by any standard.
The Indian cement industry was hugely impacted by the rise in power and fuel prices as this contributes to 30 per cent of the industry cost of producing and distributing cement, the logistics cost still remaining high at 40 per cent of the total costs. The first quarter of FY2023 saw an across the industry rise of above 60 per cent in the power and fuel cost as attached in the graph below (compiled from the quarterly reports of the key industry players).
This rise has however cooled down in the recent quarter, but a large part of the rise seems to be permanent and the total shift in the industry cost curve is expected to be 20 per cent higher on power and fuel cost together with the impact of logistics cost. How do we explain this structural shift in cost?
While most of the analysis is based on the spot prices of coal, both in the international and domestic market, which in turn influences the prices of pet coke as well, the private buyers of coal and pet coke do not trade on spot basis for the bulk of their portfolio, which is built on an optimised model for buying a mix of domestic coal (linkage auction, e-auction and market coal), imported coal (RB1,2,3, Indonesian, other sources, etc), domestic pet coke (Nyara, Reliance, IOCL, etc), imported pet coke (U.S. East Coast, Oman, LATAM, etc), such that the landed cost could be minimised on the basis of rupee per kcal (heat value) as the portfolio must be normalised over the range of GCV options.
Private sellers and buyers have experienced in their own way through tenured contracts that inter-dependence in a highly volatile market did demonstrate better results over the long run, but in the short term both sides have engaged in short term opportunism. This has put additional strains in the system and these postures have influenced the spot prices. While the FOB prices started to show distinct ‘out of bound’ movement, the shipping costs remained high throughout this period and only recently have shown a definitive downward trend.
The individual cement players within the industry have very different portfolio of their own, built through the years on an optimisation programme that takes into account the kiln characteristics as well, in accepting a mix of coal or/and pet coke from a myriad of sources, where logistics cost becomes a very dominant factor; with shipping costs soaring, the negative results have been more pronounced for those who have an over-exposure to importation.
One of the important points to be noted is that the Indian coal prices have also gone up by 75 per cent on an average across a range of grades, those who have long term auction linkages still alive, are the outliers benefitting the most. The future direction of the domestic coal prices does not seem to portray a large change as most of the mines have a rising cost to contend with, as stripping ratios continue to rise every year, followed by logistics cost.
Taking on Challenges
The question of power and fuel cost rise should be seen in the long term rather than in the short term, although finding the most optimised mix in terms of cost has remained the area of focus all along. Two of the biggest challenges that urgently require solutions from the industry are as follows:
- Cement industry cannot continue to increase the use of fossil fuel in the mix of inputs: Apart from the emission issue that weighs on the situation (potential abatement costs included), the economics of higher fuel usage weighs far more menacingly on the cost curve. As every linkage auction quantity allocated to the cement industry has been steadily going down, it is expected that the prices will be moving up. The overall allocation still remains highly skewed to the power sector (where cement CPPs also become strong contenders), the overall situation after factoring in logistics issues still show that the domestic coal cost per MW of output has been rising steadily.
- Captive coal mines have remained a challenge in terms of overall cost: The only solution for the long term is to look for captive coal mines that have logistics advantages and where the costs over the long term can be found as a viable option when compared with other sources of coal or pet coke. But the actual progress on the ground is low due to the challenges of stripping ratios for the mines that are on offer.
- Pet coke prices have reasons for moving up: The US refineries have stopped all further investments and the portfolio is also getting transformed as far as their waste outputs are concerned. In the hierarchy of waste outputs, the total cost including the future abatement costs are increasingly being considered. In this regard, pet coke costs are likely to almost double if these considerations are factored in.
The structural shift of power and fuel price hypothesis can be tested in the next two quarters when the India cement industry would showcase their alternate hypothesis (use of Russian coal, Venezuelan pet coke). But the rise would still be significant over the long-term power and fuel prices that the industry witnessed, which used to hover around Rs 1000/T. Today, this is around Rs 1700/T for the industry, a shift which has happened in just two years’ time.
The question then shifts to whether the industry could create a structural pass-through of these costs in prices. With the current trajectory of prices, it does not seem to be happening. However, the industry is moving through a spate of consolidations and the recent entry of Adani could change the picture further. Its strong network advantages stemming from logistics consolidation across the entire geography of India could be a strong contender to challenge the current hypothesis.
– Procyon Mukherjee
The maxim ‘after rain, comes shine’ holds true of the Indian cement industry as it witnesses speedy corrections in demand. The fall in demand, lower realisations and considerable increase in operating costs led to a rather dismal year ending. The third quarter of 2022 had to bear the brunt of a sharp decline in demand, pushing the fourth quarter into the aftermath. The New Year brings with it renewed optimism as we see recovery in prices and drop in fuel costs. The price hike has neither been uniform nor steady as demand kept fluctuating. But thanks to the Government of India’s endeavours in infrastructure, there has been a spurt in prices as well as margin improvement, towards the end of the fourth quarter, making January 2023 a month of recovery for the industry. This revival is reverberated in the stock market, too, as shares of UltraTech, Dalmia Bharat and JK Cement climb steadily upwards. As we progress further into the new year, demand from the infrastructure sector is likely to be supported by real estate developers, too.
With the Union Budget 2023-24 round the corner, trade pundits are banking on infrastructure to boost cement demand. Analysts foresee 30 per cent more fund allocation towards infrastructure growth in the Union Budget, with a majority of these funds finding their way towards the building of highways.
This development will translate into sustainable growth for the cement players, both big and small, and offer them an opportunity to consolidate their expansion plans. Capacity expansion is high on the cards for cement companies with 33 MT likely to be added in FY23. Given the history of political impact, construction speeds up in a pre-election year as the government increases its spendings. This will definitely make 2023 a profitable year for the cement industry. This opportunity has to be supported with strategic expansion, stable cash flow, alternative fuels and a strong performance in the stock market.
We wish all stakeholders of the Indian cement industry a New Year of sustainable growth and improved margins.