The world iron and steel industry and its impact on Indiana iron and steel and electric utility industries
Abstract
In this research, a large scale mathematical programming model is developed to represent steel production and distribution. This model is used to investigate how technological changes, environmental restrictions, and government trade policies will affect future production location and relocation, world energy consumption, environmental pollution, and international trade in steel. Future potential relocation of production capacity of the world iron and steel industry will have substantial impacts on the North American electric utility industry, especially in Indiana. Given that the iron and steel industry is among the most energy intensive industries in North America, the electricity consumption of Indiana in particular is expected to change significantly as the industry adjusts to the changing environment. This research models the iron and steel industry in its use of two types of mills: integrated mills and mini-mills. Integrated mills use complex and capital intensive production processes to produce steel from iron ore, using a combination of the blast furnace and basic oxygen furnace. Mini-mills use electric melters which convert mainly scrap or directly reduced iron to steel. The model can reflect the trade and energy consequences of a chosen pattern of steel production, as well as the constraints on the pollutant generation. It also reflects various government trade policies to protect domestic steel production, such as quotas and protective tariffs. In addition, the model minimizes the total cost of steel production and transportation by evaluating the geographic patterns of the following factors: (1) iron and steel production; (2) new facility construction; (3) trade patterns. These factors are each subject to various constraints, such as demands, environmental restrictions, and government trade policies, imposed on the pattern of production. Optimization is performed for a single target year far enough in the future to allow construction of new capacity. The model also captures the transitional competition between the existing and the new capacities. Results indicate how future technological changes, environmental concerns and restrictions, and government trade policies can influence the iron and steel industry and the electric consumption of Indiana.
Degree
Ph.D.
Advisors
Sparrow, Purdue University.
Subject Area
Industrial engineering|Environmental science|Management|Energy
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