SteelOnTheNet Insights Podcast

Introduction (00:00-04:00)

Welcome to SteelOnTheNet Podcasts. I'm Dr Andrzej M Kotas, and today is Saturday 6th December 2025. Today we're examining a topic that doesn't get the attention it deserves: the hidden value in EAF by-products and how electric arc furnace operators can turn what many treat as waste streams into significant profit centres.

Now, when most people think about EAF steelmaking, they focus on the obvious economics: power costs, scrap prices, electrode consumption, productivity. And yes, these are all critically important. But what many mills overlook is that their operations are generating valuable materials every single day that could be generating revenue rather than costing money to dispose of.

I'm talking about EAF dust containing valuable zinc; slag that has commercial applications; waste heat that's literally going up the stack, and opportunities for energy recovery through scrap preheating.

The numbers here are not trivial. We're talking about improvements of three to eight euros per tonne of steel produced. For a mill making 500,000 tonnes a year, that's 1.5 to 4 million euros annually. For a million-tonne operation, we're talking 3 to 8 million euros.

And here's what's interesting: many of these opportunities require relatively modest capital investment, or in some cases, no capital investment at all. It's simply about recognising value where others see problems. Over the next 20 minutes, we'll examine four key areas: EAF dust and zinc recovery, scrap preheating systems, slag monetisation, and some additional opportunities that often get overlooked. We'll look at real economics, investment requirements, and payback periods.

Let's start with probably the single biggest opportunity in most EAF operations: the dust your baghouse is capturing.

Technical Background: For detailed coverage of EAF operations, dust collection systems, slag handling, and process optimisation, see our Steel Plant Equipment Essentials.

Section 1: EAF Dust and Zinc Recovery (04:00-09:00)

Every EAF operation generates dust. It's collected in your baghouse or scrubber system. And for many operations, this dust is treated as a waste disposal problem. They're paying someone to haul it away and dispose of it as hazardous waste.

But here's what they're missing: that dust contains zinc. Lots of it. Typical EAF dust contains 15 to 25 percent zinc by weight.

Where does this zinc come from? Primarily from galvanised scrap. When you melt galvanised steel, the zinc coating vaporises at around 900 degrees Celsius, well below steel's melting point of 1,500 degrees. That vaporised zinc oxidises in the furnace atmosphere, gets carried out with the off-gas, and ends up in your dust collection system.

Now, let's talk about volumes. A typical EAF operation might generate 15 to 20 kilograms of dust per tonne of steel produced. So a 500,000 tonne per year mill is generating 7,500 to 10,000 tonnes of dust annually. A million-tonne operation? 15,000 to 20,000 tonnes.

The traditional approach is to pay for disposal. In Europe, hazardous waste disposal costs typically run 50 to 100 euros per tonne, sometimes more depending on your location and the specific regulatory requirements. So our 500,000 tonne mill is spending perhaps 375,000 to 1 million euros per year just to get rid of this material.

But there's an alternative. That dust can be sold to specialised processors who extract the zinc. These are typically Waelz kiln operations. The Waelz process involves heating the dust in a rotary kiln to about 1,100 to 1,200 degrees Celsius in a reducing atmosphere. The zinc vaporises, is oxidised in a separate chamber, and recovered as crude zinc oxide. This material is then either further refined or sold directly to zinc smelters.

The economics of this depend heavily on zinc prices and transportation costs. Zinc recovery processors typically pay 50 to 120 euros per tonne for EAF dust, depending on zinc content and current zinc market prices. So instead of paying 500,000 euros for disposal, you might be receiving 375,000 to 1.2 million euros in revenue. That's a swing of 875,000 to 2.2 million euros for our 500,000 tonne per year mill.

Now, why doesn't every mill do this? A few reasons. First, logistics. You need sufficient volume to make transportation economical. If you're generating only 2,000 or 3,000 tonnes of dust per year, and the nearest Waelz processor is 800 kilometers away, the transportation costs might consume most of the value.

Second, there's the question of dust quality. If your dust is contaminated with oils or other materials, processors may reject it or pay significantly less. Proper baghouse operation and dust handling are essential.

Third, some mills have long-standing disposal contracts and haven't recently reviewed the market. I've visited operations where management simply didn't know that zinc recovery was a lucrative option. They'd been sending dust to landfill for twenty years and never questioned it.

There are also regional cooperative models emerging. In some areas, several smaller mills pool their dust to achieve the volumes needed for economical processing. This can work well if you're in a region with multiple EAF operations.

The strategic consideration here is that hazardous waste disposal regulations are getting stricter globally, and disposal costs are rising. Meanwhile, as we transition to more EAF steelmaking driven by decarbonisation, the volume of galvanised scrap in the system is increasing. More coated products in the scrap stream means more zinc in your dust. This trend makes zinc recovery increasingly attractive.

Let me give you a specific example. I worked with a mini-mill in Central Europe that was generating about 10,000 tonnes of EAF dust per year. They were paying 75 euros per tonne for disposal—that's 750,000 euros annually going out the door. We identified a Waelz processor 300 kilometers away who would pay 85 euros per tonne for the dust.

Transportation costs were about 25 euros per tonne. So instead of paying 750,000 euros out, they received 600,000 euros in revenue, after transportation. That's a 1.35 million euro swing. On a 700,000 tonne per year steel production, that's about 1.90 euros per tonne improvement to the bottom line.

The implementation was straightforward. They modified their dust handling to ensure cleanliness—no oil contamination—and established a regular collection schedule with the processor. No capital investment required. Just a contract change and some operational discipline.

So that's EAF dust. If you're currently paying for disposal, this is absolutely worth investigating. But dust isn't the only energy-related opportunity. Let's talk about scrap preheating.

Section 2: Scrap Preheating and Energy Recovery (09:00-13:00)

Here's a simple fact: EAF off-gas exits your furnace at 1,400 to 1,600 degrees Celsius. In many operations, that heat goes straight up the stack. Some mills have basic heat recovery, perhaps generating steam. But there's a much more valuable application: using that heat to preheat your scrap before it enters the furnace.

The physics here is straightforward. It takes about 330 kilowatt-hours to heat one tonne of scrap from ambient temperature to 1,600 degrees and melt it. If you can preheat that scrap to, say, 800 degrees before it goes into the furnace, you're reducing your electrical energy requirement significantly.

Modern scrap preheating systems—and there are several technologies available including Consteel, Fuchs shaft furnaces, and the Quantum system—can typically achieve energy savings of 50 to 80 kilowatt-hours per tonne of steel. That's roughly a 15 to 20 percent reduction in specific power consumption.

Let's put some economics around this. If your electricity cost is 80 euros per megawatt-hour—that's 8 cents per kilowatt-hour—and you're saving 65 kilowatt-hours per tonne, that's 5.20 euros per tonne savings. On a 500,000 tonne per year operation, that's 2.6 million euros annually in reduced power costs.

But there's more. Scrap preheating also typically improves your metallurgical yield by about half a percent to one percent. Why? Because you're burning off oils, moisture, and some light organic contaminants during the preheating process rather than in the furnace itself. Less oxidation loss. That yield improvement is worth another euro or two per tonne.

You also often see improvements in tap-to-tap time. The furnace reaches temperature faster with preheated scrap, so your productivity improves. More heats per day means better asset utilisation and lower fixed costs per tonne.

So what's the catch? Capital investment. A scrap preheating system for a large EAF typically requires 15 to 25 million euros in capital investment. That includes the preheating equipment itself, modifications to your off-gas system, upgraded dust collection, and structural modifications to integrate the preheater with your existing EAF.

The payback calculation depends heavily on your electricity costs. In Turkey, where I've seen several recent installations, power costs are around 10 to 12 cents per kilowatt-hour. At those power prices, mills are achieving payback periods of 18 to 30 months. That's very attractive.

In regions with lower power costs—say 5 to 6 cents per kilowatt-hour—the payback extends to 4 to 6 years. Still acceptable for many companies, but it's no longer such an obvious decision.

There are also operational considerations. Scrap preheating systems add complexity. You need skilled operators. Maintenance requirements increase. And your scrap supply needs to be relatively consistent in terms of size and bulk density. If you're processing very heavy industrial scrap one day and light automotive shred the next, preheating becomes more challenging.

Some mills also worry about emissions. When you preheat scrap, you're burning off those oils and organics I mentioned. That creates additional emissions that must be captured and treated. Modern systems handle this well, but it requires proper environmental control systems.

Despite these challenges, the industry is seeing increasing interest in scrap preheating, particularly in regions with high electricity costs or where mills are adding EAF capacity. For new EAF installations, I'd say preheating should be seriously evaluated. For existing operations, if your power costs are above 8 cents per kilowatt-hour and you have sufficient production volume, it's worth running the numbers.

Let me give you another specific example. A Middle Eastern mill I'm familiar with installed a Consteel system on their 150-tonne EAF about three years ago. Capital investment was approximately 22 million euros. They're achieving 70 kilowatt-hour per tonne energy savings.

With their power costs averaging 11 cents per kilowatt-hour, that's 7.70 euros per tonne savings. Their annual production is 800,000 tonnes, so the annual savings are about 6.2 million euros. Add in some yield improvement and productivity gains, and they achieved payback in just under 20 months. They describe it as one of their best recent investments.

Now, not every mill can justify this investment, but if you're in a high power-cost region, it's definitely worth evaluating.

Let's turn now to slag.

Section 3: EAF Slag Monetisation (13:00-17:00)

EAF operations generate slag. It's an inevitable by-product. Typical slag generation is 100 to 150 kilograms per tonne of steel produced. So again, our 500,000 tonne per year mill is producing 50,000 to 75,000 tonnes of slag annually.

Historically, many mills treated this as a disposal problem. Slag was hauled to landfill. And yes, there are still mills doing this today, paying 8 to 15 euros per tonne for landfill disposal.

But slag actually has commercial value if processed properly. The primary applications are in construction: road base material, aggregate for concrete and asphalt, and in some cases as a substitute for natural aggregate. EAF slag has good strength characteristics and wear resistance, making it suitable for these applications.

However—and this is important—EAF slag is trickier to commercialise than blast furnace slag. BF slag is relatively consistent in composition and properties. EAF slag is more variable. It depends on your scrap mix, the fluxes you're using, your melting practice. This variability means buyers are more cautious.

The key challenge with EAF slag is free lime. If slag has high free lime content and isn't properly stabilised, it can expand when exposed to moisture. This causes problems in road construction or concrete applications. So proper slag processing is essential.

The typical approach involves several steps. First, the slag is cooled and allowed to weather for several months. This allows the free lime to react with atmospheric moisture and stabilise. Then it's crushed to the required size specification. During crushing, any metallic iron is recovered magnetically—there's usually 2 to 5 percent metallic content that can be returned to the furnace. The processed slag is then tested to ensure it meets construction material specifications.

The revenue potential depends on your local market. In regions with strong construction activity and limited natural aggregate, processed EAF slag can fetch 8 to 15 euros per tonne. In areas with abundant natural aggregate or weak construction markets, prices might be only 3 to 5 euros per tonne.

Compare this to landfill disposal costs of 8 to 15 euros per tonne going out, and you have a swing of 11 to 30 euros per tonne. For our 500,000 tonne per year mill generating 60,000 tonnes of slag, that's 660,000 to 1.8 million euros difference.

The challenge is that slag processing requires infrastructure. You need space for ageing and weathering. You need crushing equipment. And magnetic separation. And quality testing. This typically means either investing in your own processing capability or partnering with a specialist slag processor.

Some mills have established on-site processing. This makes sense if you have available land and sufficient volume. Capital investment for a basic slag processing facility might be 2 to 4 million euros, depending on capacity and the level of automation.

The alternative is to sell or give your slag to a merchant processor. They take responsibility for collection, processing, and sales. You might receive a nominal payment per tonne, or in some cases, they'll simply remove it at no cost—which is still far better than paying for disposal.

Geographic location matters significantly here. If you're near major construction projects or in a region where natural aggregate is expensive or scarce, slag has good value. If you're in a rural area far from construction markets, economics become challenging.

Environmental regulations are also relevant. Some jurisdictions have specific standards for slag used in construction. In the EU, for example, slag must meet REACH requirements and various national standards. Understanding your local regulatory environment is essential before developing a slag commercialisation strategy.

Let me mention one more operational issue: quality consistency. Buyers of slag for construction want consistent material. If your slag composition varies significantly from month to month because your scrap mix is changing, buyers become reluctant. So part of slag commercialisation is operational discipline in your melting practice.

I'll give you a final example on slag. A mill in Southern Europe I know of was landfilling all their slag—about 70,000 tonnes per year—at a cost of 12 euros per tonne. That's 840,000 euros per year. They had adequate land on site and were located 40 kilometers from a major city with active construction.

Consultants helped them develop a business case for on-site slag processing. Capital investment was 2.8 million euros for crushing, screening, and magnetic separation equipment. They're now selling processed slag at an average of 9 euros per tonne. So from paying 840,000 out, they're receiving 630,000 in—a 1.47 million euro swing. Payback was under two years.

Now, before we wrap up, let me briefly mention a few other value streams that are worth considering.

Section 4: Other Opportunities (17:00-19:00)

Beyond dust, preheating, and slag, there are several other areas where EAF mills can capture value.

First, scrap hot charging. If you have a captive scrap source—perhaps you're remelting your own production scrap or continuously cast slabs—charging this material while still hot can save significant energy. Every 100 degrees Celsius of temperature saves about 20 kilowatt-hours per tonne. If you can charge material at 800 degrees instead of ambient, that's over 150 kilowatt-hours saved. In integrated scrap-DRI operations, or where you're remelting crop ends from your own rolling mill, this can be quite valuable. The challenge is logistics and handling hot material safely, but where it's feasible, the energy credit is real.

Second, electrode consumption optimisation. Graphite electrodes are expensive—typically several thousand euros per tonne. Consumption rates vary from 1.5 to 3 kilograms per tonne of steel, depending on your operation. Optimising your electrical parameters, maintaining proper sidewall panel cooling, and minimising electrode breakage can reduce consumption significantly. Half a kilogram per tonne improvement on a 500,000 tonne operation, at 3,000 euros per tonne electrode cost, saves 750,000 euros annually. This doesn't require capital—just operational discipline and good maintenance.

Third, baghouse dust and fume—distinct from EAF dust. Smaller volumes but often with similar or higher zinc content. Don't overlook these secondary dust streams.

Fourth, refractory recycling. Used magnesia-carbon refractories from your EAF can sometimes be reclaimed or sold to refractory recyclers. This is a smaller value stream, but it's becoming more common as magnesia prices have increased.

And finally, if you have an on-site oxygen plant with excess capacity, merchant oxygen sales can be an option in some industrial regions.

None of these individually will transform your business, but collectively, they add up. The key principle is to look at everything your operation generates or consumes and ask: Are we capturing all the value here? Is there a better way?

Conclusion (19:00-20:00)

So let's summarise. EAF by-products represent real value that many mills are overlooking. EAF dust zinc recovery can swing from a disposal cost to a revenue stream worth 1 to 2 million euros for a typical mid-sized mill. Scrap preheating can save 3 to 6 million euros annually in high power-cost regions, though it requires significant capital. Slag monetisation can eliminate disposal costs and generate additional revenue. And a range of smaller opportunities around hot charging and electrode optimisation can each contribute several hundred thousand euros.

The total impact? For a well-run 500,000 tonne per year EAF operation that implements a comprehensive by-product value capture strategy, we're talking about 2 to 4 million euros per year improvement. For a million-tonne operation, 4 to 8 million euros.

Here's what's interesting about this topic: These opportunities don't require revolutionary new technology. They require systematic thinking and a willingness to challenge assumptions. Often, mills continue with practices established years or decades ago simply because "that's how we've always done it."

This is where an external perspective can be valuable. Someone who's seen similar operations in different regions, who knows what others are achieving, can quickly identify what you're missing. I've conducted numerous quick assessments—typically just 1 to 2 days on site—where we've identified several million euros in overlooked opportunities.

If you're interested in a systematic review of your by-product value capture, or if you'd like to discuss any of these topics in more detail, please visit our website at steelonthenet.com. You can find our contact information and details of our advisory services.

Thank you for listening. This is Dr Andrzej M Kotas for SteelOnTheNet.