Introduction: How Is Steel Made?

As the backbone of modern industry, the steel production process embodies both precise scientific principles and grand industrial logic. Whether it's the structural steel supporting skyscrapers or the special steel used in precision instruments, their creation begins with two key raw materials—pig iron and scrap steel—and is given life through two core processes: Basic Oxygen Furnace (BOF) steelmaking and Electric Arc Furnace (EAF) steelmaking. Understanding these fundamentals is crucial for grasping the current state and future direction of the global steel industry.

Chapter 1: The "Grain" and "Nutritional Supplements" of Steel—Analyzing the Sources of Pig Iron and Scrap Steel

Pig Iron: The Primary Path from Ore to Metal

Pig iron is the starting point of steel production. It is a primary product obtained through blast furnace ironmaking. This process essentially involves the chemical reduction of iron from its oxides:

Core Raw Material Chain:

Iron Ore: Primarily provides iron. Common types include hematite (Fe₂O₃) and magnetite (Fe₃O₄).

Coke: Produced by dry distillation of coking coal. It plays a dual role in the blast furnace: as a reducing agent (generating CO to reduce iron ore) and as a heat source.

Flux: Typically limestone (CaCO₃), used to remove gangue impurities from the ore, forming slag.

Production Process Overview:
Inside a blast furnace—a massive reactor often tens of meters high—raw materials are loaded from the top, and hot air is blown in from the bottom. Coke reacts with the air at high temperatures to produce carbon monoxide. This carbon monoxide flows upward, reducing the downward-moving iron ore, ultimately producing molten pig iron (with a carbon content of 2%-4.5%). This continuous process functions like a giant chemical reactor, capable of producing tens of thousands of tons of hot metal daily.

Scrap Steel: The Flowing Mine Within Cities

Unlike the primary nature of pig iron, scrap steel is the core carrier of the steel circular economy—a veritable "urban mine." Its sources can be categorized into three main types:

Home Scrap (Accounts for ~20-25%)

Generated within the steel production process at steel plants.

Examples: crop ends from continuous casting, edge trim from rolling processes.

Characteristics: Highest quality, known composition, typically returned immediately to the steelmaking process.

Prompt (or Industrial) Scrap (Accounts for ~25-30%)

Generated during the manufacturing and fabrication of steel products.

Examples: stamping scrap from automotive plants, machining turnings from machinery factories, plate offcuts from shipyards.

Characteristics: Relatively clear composition, less contamination, short recycling cycle.

Obsolete (or Post-Consumer) Scrap (Accounts for ~45-55%)

Comes from steel products that have reached the end of their service life.

Major sources: End-of-life vehicles, demolished buildings and infrastructure, discarded machinery and equipment, obsolete appliances.

Characteristics: Complex composition, requires professional sorting and processing, long recycling cycle (linked to societal steel stock).

Strategic Significance Comparison:

Pig iron supply relates to national resource security, reflecting industrial foundational capability.

Scrap steel utilization reflects the level of circular economy development, measuring societal maturity.

Chapter 2: The Dual Titans—A Face-off Between BOF and EAF Processes

Basic Oxygen Furnace (BOF) Steelmaking: The Monarch of Scale and Efficiency

Process Characteristics:
BOF steelmaking employs the long "Blast Furnace-BOF" route, using molten pig iron as the primary raw material (70-90% of the charge), supplemented with a smaller amount of scrap steel (10-30%) as a coolant. Its core technology involves blowing high-pressure oxygen into the hot metal. The enormous chemical heat released from the oxidation of elements like carbon, silicon, manganese, and phosphorus in the hot metal maintains the refining temperature, requiring no external heat source.

Technical Advantages:

Extremely High Production Efficiency: A single heat takes only 40-50 minutes.

Significant Economies of Scale: A single BOF can have an annual capacity of 3-4 million tons.

Excellent Cost Control: Lowest unit cost under large-scale production conditions.

Mature and Stable Process: Suitable for mass, continuous production.

Environmental Challenges:
Due to its reliance on coal as both a reductant and energy source, the long route has high carbon dioxide emission intensity, producing approximately 1.8-2.2 tons of CO₂ per ton of crude steel, facing severe pressure for carbon reduction.

Electric Arc Furnace (EAF) Steelmaking: The Vanguard of Flexibility and Green Production

Process Characteristics:
EAF steelmaking employs the short "Scrap-EAF" route, using scrap steel as the main raw material (80-100% of the charge). The metal is melted and refined using the intense heat from an electric arc (exceeding 3000°C) generated between graphite electrodes and the charge. The entire process is compact, with a short time from raw material to finished product.

Core Advantages:

Green and Low-Carbon: Using scrap as feedstock saves about 60% energy and reduces emissions by about 70% per ton of steel compared to the BF-BOF route.

Investment Flexibility: Shorter construction period, capital intensity about 1/3 to 1/2 of the long route.

Production Flexibility: Can be started and stopped as needed, suitable for diverse, small-batch orders.

Strong Raw Material Adaptability: Can flexibly use scrap, Direct Reduced Iron (DRI), and other materials.

Economic Challenges:
Production costs are highly sensitive to electricity and scrap prices, limiting competitiveness in regions with scarce scrap resources or high electricity costs.

Chapter 3: The Future Landscape of the Steel Industry—Green Transition and Synergistic Development

Trend One: Green Transformation Becomes an Irreversible Mainstream

The Rise of the Short Route:
Globally, the share of EAF steel continues to rise. The EAF share exceeds 40% in the EU and over 70% in the US. As a later developer, China is actively promoting this shift through policy and technology, planning to increase its EAF share from the current ~10% to 15-20% by 2025, with higher long-term targets. This shift is driven by:

The imperative of carbon neutrality commitments.

Scrap accumulation reaching a critical mass.

The declining cost of renewable energy.

The Self-Reinvention of the Long Route:
BOF steelmaking is not standing still but is transforming through technological innovation:

Technologies to Increase Scrap Ratio: Methods like enhanced oxygen blowing, fuel injection, and scrap preheating aim to increase the scrap charge in BOFs from the traditional 10-15% to over 30%.

Breakthroughs in Hydrogen Metallurgy: Replacing coke with hydrogen as the reductant eliminates carbon emissions at the source (e.g., Sweden's HYBRIT project has produced "green steel").

Carbon Capture, Utilization, and Storage (CCUS): Installing CCUS systems at unavoidable emission points.

Trend Two: Digital Intelligence Empowers the Entire Industry Chain

Both BOF and EAF processes are undergoing profound digital and intelligent transformation:

Smart Smelting: AI and big data-based endpoint control improves hit rates for composition and temperature.

Smart Logistics: Dynamic optimization of raw material mixes lowers overall costs.

Smart Quality Control: Full-process quality tracking and predictive maintenance.

Trend Three: Restructuring the Raw Material Security System

Modernizing the Scrap Steel Industry Chain:
Establishing standardized, large-scale scrap processing and distribution centers. Advanced shredding, sorting, and baling technologies improve scrap quality and stabilize supply. This is not just an economic issue but a resource strategy issue.

The Enhanced Role of Direct Reduced Iron (DRI):
In regions with abundant natural gas or as green hydrogen production costs fall, DRI will become a "green bridge" connecting long and short routes, serving as both a high-quality feed for EAFs and a low-carbon charge material for blast furnaces.

Trend Four: Specialization and Division of Labor in Product Markets

A clearer market structure will emerge:

BOF Route: Leveraging scale advantages, dominating mass production of high-end flat products and long products.

EAF Route: Utilizing flexibility, specializing in special steels, quality steels, and regional markets.

Hybrid Models: Forming EAF clusters in regions with rich scrap resources and power advantages; optimizing long-route layouts in regions with ore resources and port advantages.

Conclusion: Toward a Sustainable Steel Future

The steel industry stands at a crossroads of transformation not seen in a century. The shift from a linear economy dependent on mineral resources to a circular economy embracing recycled materials; from high-carbon, coal-based processes to low- or even zero-carbon, electricity-based processes—this change concerns not just the survival of an industry but the achievement of global climate goals.

For steel enterprises, whether choosing the BOF route, EAF route, or a hybrid configuration, the core strategy should be: to produce steel that meets societal needs with the lowest possible carbon footprint. This requires the coordinated advancement of technological innovation, business model innovation, and supply chain innovation.

For society, understanding the scientific principles and industrial logic behind steel helps us view this "traditional" industry's renewal more rationally and actively participate in the steel circular economy. Every piece of steel product correctly recycled lightens the burden on our planet and stores energy for the future.

The story of steel is far from over; its green transformation has just begun.

This article was authored by a team of industry experts to popularize basic knowledge of steel manufacturing and analyze industry development trends. For more professional content or business cooperation inquiries, please contact us through the following channels.

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