FIRST PERSON - Alex Magno (The Philippine Star) - October 1, 2019 - 12:00am

The country won the world’s admiration when we asked Canada to take back the trash it exported to us. Then we banned altogether the importation of refuse. We will not be the dumpsite for other countries.

Soon many other countries followed suit. The rich nations lost the convenience of simply shipping out their industrial wastes to poorer countries that were willing to accept the great ecological costs for accepting trash. Now that seems to be a most ignoble way to eke out a few dollars for taking garbage.

But there are other ways trash could be dumped on our soil.

One of these ways is to sell off obsolete technologies at dirt cheap prices to developing economies. The trash products produced by these obsolete pieces of manufacturing commitment are then sold to unsuspecting consumers.

The entire Southeast Asian region is now in arms over the entry of equipment producing steel using the obsolete induction equipment. The equipment may be had for next to nothing, but they are a curse on the environment and a plague on consumers who are sold substandard products.

Recently, the ASEAN Iron and Steel Council issued a statement of concern over the transfer of steel manufacturing plants from China to several Southeast Asian countries. These plants were energy inefficient, highly polluting and produce substandard products.

As early as 2002, China began shutting down factories using induction furnaces. There are about 600 of these plants all over China with a combined production capacity of 120 million tons.

China now has a steel production overcapacity of about 300 million tons. It makes good economic and ecological sense to shut down these plants. They contributed the dense industrial smog that besieged many Chinese cities and they victimized consumers with substandard products.

A few years ago, China declared these induction furnaces illegal. Having been banned from operating, these induction furnaces now had zero economic value.

But while China banned these antiquated furnaces, they did not ban their exportation. For this reason, the banned furnaces were sold cheaply to neighboring countries to opportunistic businessmen using old technology to supply our consumers with what Chinese authorities called “ground steel.”

San Simon

Ask the residents of San Simon, Pampanga how life has become after three antiquated induction furnaces imported from China set up shop in the town. Residents began to suffer from respiratory illnesses and tin roofs corroded because of acid rain.

The three induction furnaces in San Simon are owned and operated by Real Steel Corp., Wan Chiong Steel Corp. and Melters Steel Corp. Along with two other induction furnace mills – Metro Dragon Steel Corp. in Caloocan City and Davao Mighty Steel Corp. in Davao City – these five manufacturers have formed a lobby group called the Philippine Induction Smelting Industry Association (PISIA).

PISIA’s first chairperson is former senator Nikki Coseteng. Last year, the group supported a public information campaign that actually claimed steel products produced by induction furnaces are actually superior to more modern, more economical manufacturing technologies. Numerous technical studies arrived at conclusions contrary to that claim.

In November 2017, DENR Secretary Roy Cimatu ordered an investigation into the five manufacturers using induction furnaces disposed from China. Last January, the Department of Trade and Industry (DTI) ordered the confiscation of steel bars produced by Wan Chiong Steel for being substandard. Last May, the DTI issued a public warning against the purchase of steel bars produced by Wan Chiong. It is not clear if this particular manufacturer is still in operation.

For its part, the industry group Philippine Iron and Steel Institute (PISI) sent out technical teams to purchase and test steel products coming from those plants using induction furnaces. The PISI found that steel products from Wan Chiong and Real Steel had the most violations of Philippine standards.

Because they acquired obsolete plant equipment from China that had zero economic value due to the ban on their use, unscrupulous local manufacturers can undercut existing steel plants that invested in state-of-the-art technologies. But their products are substandard and will probably create high safety risks for the general public.

This is a concern that requires close coordination between the DTI and the DENR because these obsolete plants harm both consumers and the environment.

Ideally, industries should invest in cutting edge technologies that are economical to operate and safe for the environment. The reality of obsolete plants from China being exported cheaply to the region distorts all market calculations. The obsolete plants are sold at rock bottom prices – but only because they basically junk in their country of origin.

New technologies

If the use of induction furnaces were ideal, China would not have banned them.

The global steel industry, however, has abundant literature comparing the use of induction furnaces against the modern electric arc furnaces. On every count, induction furnaces are decisively inferior.

Electric arc furnaces use less than half the energy required by induction furnaces to produce the same quantity of products. Electric arc furnaces allow decarburization, the removal of slag and phosphorous from the steel product. Induction furnaces cannot effectively remove slag and impurity effectively, resulting in poor steel quality.

Electric arc furnaces allow precise control of the chemistry of molten metal. By contrast, 90 percent of steel products from induction furnaces in China were shown to be substandard. Too, induction furnaces have unsafe features that could result in their exploding during use – adding to the peril posed by their release of harmful gases into the atmosphere.

All over Southeast Asia, industry experts are urging a ban on the operation of obsolete steelmaking technologies.

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