C_LA Steel Market Analysis_2011Mar10-FINAL

Proprietary & Confidential

Carbon & Low Alloy Steel

Market Description & Sales Opportunities for Handheld XRF

March 10, 2011

White Paper

Proprietary & Confidential 2

Table of Contents

Market Overview . 3 Competing/Incumbent Technology 3 Application of Handheld XRF in LAS. 5 Surface Condition Challenges 6 Surface Preparation ... 6 Instrument Filter Settings .... 8

Conclusion .. 9

Appendix 1 Low Alloy Steel Market Segments & Sub-Segments . Appendix 2 Thermo Scientific Niton Handheld XRF LODs . Appendix 3 Low Alloy Steels in Thermo Scientific New Alloy Library..

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13 14


Market Overview

Carbon and Low Alloy Steel (LAS) is a classification of ferrous metal that typically contains less than five percent nickel (Ni) or chromium (Cr). Other major elements in this classification are carbon (C) and molybdenum (Mo) with low levels of additional elements added to make minor modifications to the physical properties of the metal. Carbon content is very important but requires more complex instruments, sample preparation, and testing time. Therefore, most companies limit themselves to testing for variations in manganese (Mn), nickel, chromium, and molybdenum. Unlike stainless steel, which has higher levels of chromium and/or nickel, these alloys are prone to oxidation (rust) so in many situations preparing the surface is required to improve the accuracy of the test.

A variety of carbon and low alloy steel market areas are well-suited for handheld XRF (HHXRF) (see Appendix 1). Within these market segments, two product groups have been selected that provide the most relevant, immediate application of HHXRF:

Bar and rod products (SBQ Special Bar Quality)

Oil country tubular goods (OCTG) and refinery applications

With only a few exceptions, steel grades are well defined, with several of the most popular already introduced into the Thermo Scientific Niton standard library. Approximately 20 additional grades have been verified and are being incorporated into the library of both the Thermo Scientific Niton XL2 GOLDD and the Niton XL3t GOLDD+ instruments (see Appendix 3).

A variety of segments exist within these market areas, including primary producers, processors, distributors, service centers, and end users. While all of these sub-segments may have a use for HHXRF, it is believed that distributors and service centers pose the greatest short-term opportunity due to their sheer number, the variety of materials they handle (including stainless, LAS, etc.), and the ROI potential due to missed/mixed shipments and liability. One example is Ryerson in Edmonton, Alberta Canada where many of their customers require material certification from a Thermo Scientific Niton analyzer prior to shipment. Please, however, do not ignore possibilities with primary producers since we have already sold systems into many of these types of customers.

Competing/Incumbent Technology

Optical emission spectroscopy (OES) instruments have been the overwhelming choice for carbon and low alloy steel testing for over 25 years. There are two main modes for OES testing:

Arc mode, which is a quick test

Spark mode, which is longer yet more accurate

In the arc mode the test is fast (3-5 seconds), is more resistant to adverse surface conditions, and does not require a skilled operator. Early mobile instruments were very large and heavy, but today there are a few smaller handheld OES instruments. The majority of these instruments, however, are still relatively large in comparison to HHXRF. With the introduction of the argon shielded spark test, analysis of C, phosphorus (P), and sulfur (S) are possible and


the accuracy has improved; however careful surface preparation and a skilled operator are needed to achieve good results. To date, no one has successfully introduced a spark-capable system in a handheld package.

Numerous customers have chosen OES instruments over the years, so many companies may have from 5 to 20 instruments that are well over 10 years old at one location. These instruments are difficult to move within the plant because of their size, and they are becoming very unreliable. Further, the original manufacturers often can no longer supply replacement parts and their service technicians are not trained to service the instruments. Customers will be looking for replacement equipment that is more dependable, easier to use, and is more cost effective (less expensive).

Tables summarizing the advantages and disadvantages of OES technology are below.

Arc Test (Quick)

Advantages Disadvantages

Rapid testing (


Requires large argon tanks

Need temperature control

Longer test time (~15 s)

High maintenance (brush electrode, daily head disassembly, and optics cleaning)

Burns the sample surface2

Application of Handheld XRF in LAS

Historically, we have not specifically targeted these markets with our HHXRF offerings due to the high sensitivity required for accurate testing of chromium, nickel, and molybdenum at concentrations levels below 0.10%. Now, with the enhanced Niton XL3t GOLDD+ analyzer and the new Niton XL2 GOLDD analyzer, we can achieve limits of detection well below the 0.10% level. Some potential customers may have already been exposed to our instruments for applications in stainless steel or other alloys, but other customers will be new to us.

HHXRF analysis has steadily improved its performance over the years, so today we have detection limits that rival OES for most elements except carbon, silicon, aluminum, and magnesium. Yet, a clear advantage of HHXRF over Arc testing is its ability to detect P and S in 5 seconds or less with geometrically optimized large area drift detector (GOLDD) technology, not to mention its comparative maintenance-free usage. OES would require the spark mode, which is bulky equipment requiring approximately 15 seconds of test time.

Handheld XRF

Advantages Disadvantages

Rapid testing (


Easily test small diameters & turnings

P and S detection with GOLDD

Surface Condition Challenges

Since carbon and low alloy steel develop heavy oxide/rust surfaces over time and often have a protective coating of oil to prevent oxidation, sample preparation may be required in some situations. There are three general classifications of surface conditions than must be addressed.

Oxidation

Surface oxidation/rust is the most common problem associated with this class of steel. Rust occurs very rapidly on the surface of carbon and low alloy steel, which we can easily recognize by its reddish-brown color. The elemental results using HHXRF can be lower than anticipated if you try to perform a test without first removing the oxidation layers. In some cases, one or more elements may even be much higher than expected.

Scale

Scale is a heavy coating found on the surface of most large unfinished ingots in steel mills and forges. During the rolling or forming process, scale develops due to the high surface temperatures and exposure to oxygen in the air. This layer is very difficult to remove once the material has returned to ambient temperature.

Oil

A protective coating of oil is common on the surface of finished bars or rods that are being warehoused before final fabrication. This oil is normally used to prevent rust/oxidation of finished bar or rod products. Since oil can contain several of the elements that we are trying to analyze in the steel product (e.g., silicon (Si), S, Mo), we must remove them prior to testing. These coatings need to be removed prior to testing using HHXRF.

Surface Preparation

Correct analytical results are only possible if the rust or oil is removed before testing the metal. Remember, anything on the surface becomes part of the final chemistry. A general rule of thumb is that you want the surface of the material to be shiny and free of any oils. A dull, gray finish might also indicate surface conditions that might compromise the analysis.


Removing Scale

To remove scale, you will need a high-powered (18-volt Li-ion) cordless right-angle grinder with a course (24-grit) grinding stone to remove the contaminated surface. As with rust layers, always grind through the scale until a shiny metal surface appears before attempting an analysis. The images below show a typical angle grinder, grinding wheel, and sanding disc appropriate for sample preparation.

Removing Rust

The recommended method for removing rust is to grind the surface using a cordless right angle grinder (see operation manual for further details). If the rust coating is light you can use a sanding disc, but a course grinding wheel might be needed if the surface is coated with a heavy layer of rust. Before attempting an analysis, always sand or grind through the rust layers until a shiny metal surface appears.


Removing Oil

The simplest method for removing oily preservatives is wiping the surface clean with a disposable alcohol impregnated cloth. You can purchase a container of these cloths inexpensively in local stores. It is prudent to use one or more cloths per sample and then dispose of them to prevent oils from being wiped back onto the surface.

If the surface is free of oil, but one or more elements are still higher than normal, a light grind may be needed. This type of grinding is best done using the same right angle grinder. Since only a small amount of surface material needs to be removed, remove the grinding wheel and install the rubber back plate and a 50 grit disc. As the disc becomes contaminated, it will be necessary to remove the oily disc and install a fresh disc.

Please be aware during demonstrations that some companies may not want the surfaces of rod and bar stock to be damaged. In this case, it may be best to do analysis on the end of pieces where grinding will not impact the outside dimensions of the materials.

Instrument Filter Settings

Filter time settings can be changed based on the sensitivity of the elements needed to identify an alloy. Elements such as Mn, Ni, and Cr are added in carbon and low alloy steel at levels well above their limits of detection. When these are the only elements necessary to identify the alloy, the main filter time can be rather short. Some alloys, requiring the analysis of light elements (P, Si, and S) for positive identification, have levels much closer to their detection limit; therefore they require longer test times to derive a good reading.

The Niton XL2 GOLDD instruments will need a minimum main filter time of 5 to 10 seconds to provide accurate analysis of elements such as manganese, nickel, chromium, and molybdenum. The alloys that contain only variations of those elements will show the grade identification very quickly. The light filter testing for P, s, and Si should be approximately 10 seconds or more of additional time.

Shiny areas, good for analysis

Heavy scale removed, but still dull. More grinding required

Heavy scale/rust


The Niton XL3t GOLDD+ will produce excellent elemental analysis for the main filter elements, using times as short as 3 to 5 seconds. The majority of the low alloy steel alloys have low P and S specifications, but they are identified by other elements like Mn, Ni, Cr, and Mo. In addition to the main filter, adding 10 seconds or more will be needed for light element (P, Si, and S) analysis.

The grade library has been designed to control the use of additional filters beyond the main filter. Within the filter selection of the software (Element Range) there is a check box "Autoswitch on Time Only." To verify this setting, return to the main menu and select advanced. Next select element ranges and the software screen displayed below will appear. The "Autoswitch on Time Only" box should remain unchecked to allow the grade library to control the use of additional filters.

Conclusion

Thermo Scientific Niton handheld XRF analyzers provide the customer with a wide selection of instruments that can address many segments of the Low Alloy Steel markets that have been historically served by OES instruments. New technologies and advancements in HHXRF present customer with a new alternative to meet their needs while providing greater value in many applications.

The following Appendixes provide more detail on the C and LAS products and market segments as well as LODs and Thermo Scientific Niton Alloy Library entries for LAS. Some classifications of products, such as flat rolled coils will generate few sales since they generally do not have high-liability issues when product mixes occur. In contrast, bar and rod products may have a much higher cost or liability associated with shipment of mixed or incorrect alloys. Steel wire has a high price for mixed or incorrect alloy shipments, but there are technical challenges associated with surface coatings and limits of detection for some elements.


Appendix 1: Low Alloy Steel Market Segments and Sub-Segments

1. Prime Carbon & Low Alloy Steel Markets a. Bar & Rod Products or Special Bar Quality (SBQ )

i. Definition:

Rod is approximately to (6-13 mm) in diameter and 10 to 20 feet (3-6m) Long. Bars are from up to over 6 (13-150 mm) in diameter and 10 to 20 feet (3-6 m) in length. Bars can be in the form of round, square, hexagon and numerous other shapes

ii. End Use: Gears, Steering Knuckles, Brake Cams

iii. Elements: C, Mn, P, S, Ni, Cr, Mo, Pb, vanadium (V)

iv. Customers: 1. Service Centers AM Castle, Ryerson 2. Mini Mills Nucor, Cascade, MacSteel 3. Large Mills ArcelorMittal, US Steel, Republic 4. Processing Mills Bar Processing Corp, Steel Dynamics

v. Need for elemental analysis: High

b. Oil Country Tubular Goods (OCTG) & Refinery Pipe

i. Definition:

Large diameter tubing that is intended for use in oil field drilling operations or for transportation of oil or gas products. Smaller diameter pipe used within a refinery has different physical and chemical properties then oil country pipe.

ii. End Use: Oil or gas drilling companies, suppliers

iii. Elements: Mn, Si, Ni, Cr, Mo, V, tungsten (W)

iv. Customers: 1. Refineries Shell, Exxon Mobile, Conoco Phillips, BP 2. Inspection Companies MISRAS/Conam, GCT, Inspection

Specialists 3. Pipe Suppliers US Steel, Rocky Mountain Steel, Wheatland Tube

v. Need for elemental analysis: High


2. Secondary Carbon & Low Alloy Steel Markets a. Forging

i. Definition:

Forging uses high pressure or heavy impact hammers to form a billet into its final shape. This process modifies the grain structure to improve product performance in certain high stress applications.

ii. End Use: Drive shafts, combustion crank shafts.

iii. Elements: C, Mn, Ni, Cr, Mo, V

iv. Customers: Jorgenson Forge, Meadville Forge, Scot Forge, Dayton Forge, Ellwood City Forge

v. Need for elemental analysis: Medium to High

b. Scrap

i. Definition:

Metal components that are defective or have come to the end of their useful life. They are reclaimed, processed and remelting into new metal.

ii. End Use: Remelted into new steel products

iii. Elements: Mn, Ni, Cr, tin (Sn), lead (Pb)

iv. Customers: 1. Large Steel Mills Outside contractors such as Tube City and

Multi-Serve 2. Mini Mills Nucor, Cascade 3. Scrap Yards Miller Compressing, OmniSource, ELG

v. Need for elemental analysis: Medium

3. Other Carbon & Low Alloy Steel Markets a. Wire

i. Definition:

Steel wire is a coil which is hundreds of feet in length and from 1/8 up to over 1 inch in diameter.

ii. End Use: Pins, bolts and other fasteners.

iii. Elements: C, Mn, Ni, Cr, Mo, niobium (Nb),


titanium (Ti), boron (B)

iv. Customers a. Electric furnace mills b. Processing mills c. Fastener manufacturers

v. Need for elemental analysis: High but surface conditions and LOD requirements may make HHXRF unreliable.

b. Plate and Sheet

i. Definition:

Sheet steel is approximately 1/8 to (3-6mm) in thickness, and several feet or meters in length and width. Steel plate is usually up to several inches (6mm to several cm) in thickness.

ii. End Use: Heavy equipment and structural components.

iii. Elements: C, Mn, Si, aluminum (Al), Nb, Ti, B

iv. Customers 1. Integrated Steel Mills-ArcelorMittal, US Steel 2. Electric Furnace Mills - Nucor, 3. Service Centers 4. Processing Mills

v. Need for elemental analysis: Low to medium

c. Flat Rolled Coil

i. Definition:

Thin gauge rolls which are 1-3m wide and can be over 100 meters in length. Often these coils are galvanized (zinc (Zn), Zn/Al Coating) to prevent oxidation or rust.

ii. End Use: 1. Automobile Body Parts 2. Appliance Exteriors

iii. Elements: C, Mn, Si, Al, Nb, Ti

iv. Customers: 1. Integrated Steel Mills ArcelorMittal, US Steel 2. Electric Furnace Mills Nucor, etc. 3. Service Centers 4. Processing Mills


v. Need for elemental analysis: Low to medium

Appendix 2: Thermo Scientific Niton Handheld XRF Limits of Detection

XL2 GOLDDC N/A

Mn 0.022Ni 0.022Cr 0.011Mo 0.025Cu 0.011Nb 0.024Ti 0.025V 0.015

Sn 0.009Pb 0.008Al 0.300 0.220 0.065 *Si 0.043 0.035 0.018 *P 0.020 0.011 0.007 *S 0.010 0.009 0.006 *

* with He purge

0.0030.010

0.0040.005

0.0030.003

XL3t GOLDD+

0.018N/A

0.0020.0070.002


Appendix 3: Low Alloy Steels in New Thermo Scientific Niton Alloy Library

Alloy

Mn P S Si Ni Cr Mo Other

Low High Low High Low High Low High Low High Low High Low High El Low High

LA-C Steel 1.10 0.04 0.05 1.00 0.25 0.20 0.06 Pb 0.05

LA-1117 1.10 1.30 0.04 0.08 0.50 1.00 0.25 0.20 0.06 Pb 0.05

LA-11L17 1.10 1.30 0.04 0.08 0.50 1.00 0.25 0.20 0.06 Pb 0.10 0.50

LA-1141/44 1.35 1.65 0.04 0.08 0.50 1.00 0.25 0.20 0.06 Pb 0.05

LA-12L14 0.85 1.15 0.04 0.09 0.26 0.50 1.00 0.25 0.20 0.06 Pb 0.10 0.50

LA-1215 0.75 1.05 0.04 0.09 0.10 0.50 1.00 0.25 0.20 0.06 Pb 0.05

LA-1522 1.10 1.40 0.04 0.05 1.00 0.25 0.20 0.06 Pb 0.05

LA-300M 0.60 0.90 1.45 1.80 1.65 2.00 0.70 0.95 0.30 0.65 V 0.05

LA-1330/40/45 1.60 1.90 0.04 0.04 1.00 0.25 0.20 0.06

LA-3115 0.40 0.60 0.03 1.00 1.10 1.40 0.55 0.75

LA-3310 0.30 0.60 0.03 1.00 3.25 3.75 1.40 1.75

LA-4130 0.40 0.60 0.10 1.00 0.25 0.80 1.10 0.15 0.35

LA-4140 0.75 1.10 0.10 1.00 0.25 0.80 1.10 0.15 0.25 Pb 0.05

LA-4330V 0.60 1.10 1.00 1.65 2.00 0.75 1.00 0.35 0.50 V 0.05 0.10

LA-4340 0.60 0.80 1.00 1.65 2.00 0.70 0.90 0.20 0.30

LA-4615/20 0.45 0.65 0.04 1.00 1.65 2.00 0.20 0.30

LA-4820 0.50 0.70 1.00 3.25 3.75 0.20 0.30

LA-6150 0.70 0.90 0.04 1.00 0.80 1.10 V 0.15 0.50

LA-6418 1.20 1.50 1.30 1.70 1.65 2.00 0.20 0.40 0.35 0.45

LA-8620 0.60 0.95 1.00 0.35 0.75 0.35 0.65 0.15 0.25 Pb 0.05

LA-8822 0.75 1.00 0.04 1.00 0.40 0.70 0.40 0.60 0.30 0.40

LA-9310 0.40 0.70 1.00 2.95 3.55 1.00 1.45 0.08 0.15

LA-52100 0.25 0.45 0.03 1.00 0.30 1.30 1.60 0.10

LA-A193 0.45 0.70 0.04 1.00 0.80 1.15 0.50 0.65 V 0.25 0.35

LA-A485-1 0.95 1.25 0.03 0.45 0.75 0.25 0.90 1.20 0.10

LA-A710 0.40 0.70 0.03 1.00 0.70 1.00 0.60 0.90 0.15 0.25 Cu 1.00 1.30

LA-HY 80 0.10 0.40 0.03 1.00 2.00 3.25 1.00 1.80 0.20 0.60

LA-HY 140 0.60 0.90 0.03 1.00 5.00 6.00 0.40 0.60 0.20 0.60

LA-LF-3 0.90 0.04 1.00 3.25 3.75 0.10

LA-Nit 135 0.50 0.80 0.03 1.00 0.25 1.40 1.80 0.30 0.40 Al 0.95 1.30

Pyro 53 0.25 0.50 1.60 2.40 0.75 1.25 3.00 3.50 Cu 1.80 2.30

1.25Cr(P11) 0.65 0.50 1.00 0.90 1.50 0.42 0.65 V 0.10 2011 Thermo Fisher Scientific Inc. All rights reserved. All trademarks are the property of Thermo Fisher Scientific Inc. and its subsidiaries. Specifications, terms and pricing are subject to change. Not all products are available in all countries. Please consult your local sales representative for details.

Carbon & Low Alloy SteelMarket Description & Sales Opportunities for Handheld XRF/March 10, 2011/Market OverviewSurface Condition ChallengesSurface Preparation

C_LA Steel Market Analysis_2011Mar10-FINAL

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