Rating Manual section 6 part 3: valuation of all property classes

Section 540: iron and steelworks

This publication is intended for Valuation Officers. It may contain links to internal resources that are not available through this version.

1. Scope

1.1 History of the Industry

The extraction of metallic iron from iron ore is a chemical process in which carbon is used to reduce iron oxides and generate a high temperature by being burned in air.

There is evidence that iron smelting was practised as long ago as 1400 BC.

For many years charcoal was used as a source of carbon but since 1709 coke has been the chief blast furnace fuel.

The scale upon which iron smelting is practised has expanded continuously over the past 250 years and is still expanding. Blast furnaces have developed from a 9 metre shaft of about 0.6m diameter to stacks over 30 metres high with hearth diameters of 14m. The principal technical improvements over that period have been:-

1.The use of limestone to combine with the impurities in the iron ore and coke to form a fluid slag which could be run off independently from the molten iron.

2.Hot air blast to reduce the consumption of coke per ton of iron made.

3.The use of water cooling of furnace walls.

4.Bell and hopper and more recently a valve system for charging to enable the gas to be taken off from the top of the furnace shaft.

5.The integration of the blast furnace with a steel conversion process to form a single production unit.

Prior to 1740 there was no metal having properties such as are found in the material we now call steel. The nearest equivalents, known as blister steel or shear steel, were in fact a form of re-carbonised iron, ie a process which induced carbon free iron to take up carbon, thus forming a much harder product. This operation was known as cementation.

In 1740 Benjamin Huntsman, a clockmaker, dissatisfied with the quality of his clock springs, perfected the first proper steelmaking process by bringing cemented iron into a condition of complete fusion so that the carbon in it could diffuse evenly. It was known as the crucible steelmaking process and more sophisticated versions of this process still survive particularly in the cutlery industry.

The foundations of the modern steel industry were laid in 1856 when Sir Henry Bessemer showed how steel could be made from molten iron in one operation and in large quantities. He discovered that a blast of air alone could remove carbon and silicon from pig iron. However, his first converter was built with a silica (acid) lining which did not remove the phosphorous, resulting in a weak, brittle and unmalleable metal. In 1878 Sidney Gilchrist Thomas solved this problem by using a converter lined with calcined dolomite and a lime slag. This became known as the “basic” process. The open hearth steelmaking process dates from 1865 when Sir William Siemens first operated a regenerative furnace which resulted in a tremendous saving of fuel and saw the use of steel scrap which today has become one of the most important new materials in the British economy.

These two major “tonnage” processes became firmly established. As late as 1950 some 90% of the world’s output of steel was still made in the open hearth furnace and Bessemer converter. The remaining 10% was for the most part produced in the Electric Arc furnace.

The following decade saw the introduction of the oxygen conversion process where oxygen is blown down on top of the charge in the converter and the violent chemical action so caused results in a low nitrogen steel particularly suitable for motor car bodies and structural steel. A current variation is to introduce the oxygen through the bottom of the furnace and up through the charge.

Electric steelmaking commenced in a small way at the beginning of the 20thcentury but gradually increased in popularity.

The High Frequency Induction furnace is really a modern variation of the old crucible process and is used to produce relatively small quantities of high quality steel.

Steel production in 1972 was 25.32 million tonnes of which 44% was produced by converters, 36% by Open Hearth furnaces and 19% by Electric Arc furnaces with the remaining 1% by High Frequency Induction furnaces.

Agreement was reached in December 1972 by the Government and the British Steel Corporation on a strategy to 1982. This included an investment of £3000 million concentrated at Port Talbot, Llanwern, Ravenscraig (Scotland), Teesside and Scunthorpe to increase capacity to 35 million tonnes in the late 1970s and to 38 million tonnes in the first half of the 1980s.

By March 1980, however, production of liquid steel was only 11.9 million tonnes and total deliveries to the UK market were the lowest since 1951. BSC embarked on a major restructuring programme involving closing several plants, rationalising working practices and scaling down the workforce.

The result was that by April 1988 production had increased to 14.7 million tonnes (78% of UK crude steel production) and productivity measured in man hours per tonne of liquid steel produced had improved from 14.5 to 5. The bulk of this steel was produced at five integrated steelworks, Llanwern, Port Talbot, Ravenscraig, Scunthorpe and Teesside, all using the BOS (basic oxygen steelmaking) method. Indeed 95% of BSC’s production was by the BOS method with the remaining 5% by the electric arc furnace method (all production by open hearth furnaces had ceased).

BSC was denationalised in 1988 and then traded as British Steel plc. Due to recession, by April 1993 production had fallen to 12.5 million tonnes, the Ravenscraig steelworks had been closed, but productivity had increased to 3.8 man hours per tonne of liquid steel produced.

In October 1999 British Steel merged with the Dutch steel/aluminium producer Hoogovens to form the Anglo-Dutch company Corus. Size is an important factor in controlling the market price and with an annual joint output of 23m tonnes in 1998 they were the 3rd largest producer worldwide. However, despite this, significant plant closures have arisen in the UK in 2000/1 as the company seeks to rationalise its manufacturing base.

In 2006 Corus was acquired by Tata Steel. At the present time Tata operate two integrated steelworks (producing the basic steel and some finished products). Port Talbot produces steel strip in coils and Scunthorpe produces “long” products (rail tracks, beams etc). Llanwern (formerly an integrated works) now operates as a strip mill and the iron making part of the plant has been demolished. Teesside continues to operate as an integrated works and was has been in the ownership of Sahaviriya Steel Industries (SSI UK) since 2011.

1.2 The Hereditament

For the purposes of these instructions the following categories apply.

Integrated Ironworks & Steelworks

A blast furnace plant and its ancillary undertakings producing molten iron and operated as part of a big production unit devoted to the manufacture of steel using the BOS process. At the present time (2015) there are three integrated plants in England and Wales :-

Teesside, Scunthorpe and Port Talbot.

Special Steelworks -

Mini-steelworks and those which are engineering orientated, particularly in and around Sheffield, producing high quality alloy and stainless steels by electric arc or electric induction furnaces.

1.3 Manufacturing Process

1.3.1 Ore Preparation

Home produced iron ores are seldom used today because of their low iron content (averaging 28% by weight) and because they require much crushing and screening. The major plants operate on the richer imported ores (averaging 70% by weight) which are usually received already crushed or in pellet form.

To produce end products having consistent pre-determined qualities, it is necessary to blend these raw materials and this is achieved by stacking out and reclaiming in a systematic manner. Blending is done on the ground by a practice known as ‘bedding’ where ores of varying but controlled qualities are laid out in horizontal layers by a boom conveyor to form long prism shaped piles. A reclaiming machine then removes these piles in vertical slices.

Enquiries must be made to establish the foundation works of the stocking and bedding plant areas particularly under the rails of the distributor and barrel reclaimer.

Primary and secondary crusher houses are now largely redundant and have been replaced by screening plant to take out the fines.

Heavy bunkerage and extensive conveyer systems will be associated with ore preparation.

1.3.2 Sinter Plant

Sinter is basically an agglomeration of iron ore fines, coke and limestone roasted together to form a clinker which not only has good physical characteristics to support the burden in a blast furnace but has also lost a proportion of unwanted volatile matter in the process.

Conventional sinter process is down draught sintering on a strand followed by hot screening, separate cooling and final cold screening and sizing.

The initial blending of ores, fuel and fluxes is usually done at the bedding plant with the final trimming and adjusting at the sinter plant. The blended mix is fed into a mixing/rolling drum which gives it some degree of granulation and there is a final moisture correction before it is spread on the sinter strand. The strand is a moving hearth composed of a series of pallets or pans in the form of an endless belt.

The mix passes under the ignition hood where the surface is ignited and the flame front moves down through the bed under the influence of air drawn down by powerful suction fans.

When discharged from the machine the sinter cake is broken up by a grizzly and spiked roll and passed to the hot screens.

Coolers are of similar type with air forced through the bed by axial flow fans.

Finally cold screening takes place and the fines are returned to the initial stages.

Sinter buildings are lofty, have several floors and there will be substantial foundations to both building and plant.

1.3.3 Blast Furnace

In simple terms a blast furnace consists of a vertical shaft made of steel plate and lined with refractory brickwork tapering slightly both above and below the widest part where in fact the actual melting of the iron takes place. Most, if not all, furnaces in the UK are free standing, located within a four column steel tower. The tower supports the superstructure, uptakes and downcomer, outrigger and platforms, charging gantry etc., and also the shell in an emergency should there be a failure.

The charge of iron ore, coke, sinter and limestone is admitted at the top through a double bell system or alternatively by gates and valves. Molten iron is extracted through tapholes at the bottom. Slag, which is formed by the limestone reacting with the earthy gangue around the ore and coke ash, floats on top of the iron and is removed from a separate slag notch.

The blast is in fact hot air (about 1350°C) blown into the furnace through the bustle pipe and its tuyeres at a point just above the slag line.

There has been a tendency for furnace diameters to increase through the 20th century but the 14 metre hearth diameter built in 1979 at Redcar has not been equalled since. This furnace has a working volume of 3628m3 and a nominal capacity of 10000 tonnes per day.

Around the blast furnace will be the cast house with a heavy brick surfaced and channelled floor some 7 to 8 metres above ground level.

There will be extensive raw material bunkers constructed in steel or concrete adjacent to the tail end of the furnace charging conveyor, and their stocks will in turn be supplied by feeder conveyors.

Also within the immediate vicinity there will be three or four “hot stoves”. These are upright cylindrical structures with two refractory lined chambers, one being a combustion chamber which burns blast furnace gas and the second to contain the grid packed chequer brickwork. A regenerative system is employed by first heating up the chequers and then blowing cold air through them thus extracting the heat before entry into the furnace - when one is on ‘blast’ the others are being heated up. The hot blast mains are lined with refractory bricks laid to a high standard in order to contain large volumes of very hot air under pressure.

At the end of the downcomer pipe will be found a gas cleaning system which incorporates primary and secondary dust catchers, then electrostatic precipitators followed by settlement tanks.

Each blast furnace complex will also include a power/blower house, boilers, steam turbines and probably turbo alternators for the generation of electricity.

As a matter of interest there are a number of plants throughout the world and particularly in South America, that are currently producing a material called ‘sponge iron’. It is a system of direct reduction and involves passing natural gas through the ore which in turn produces a spongy substance which can be up to 90% metallic and can then be refined into steel in electric arc furnaces thereby eliminating virtually the whole of the blast furnace route.

1.3.4 Coke Ovens

See Section 6: Part 3:270 for instructions on this type of plant.

1.3.5 Melting Shops

Melting Shop design usually follows the same pattern i.e. Scrap Bay, Charging Bay, Furnace Bay, Ladle Bay and Casting or Teeming Bay. All bays except the Scrap Bay will have very heavy frames and massive foundation work.

Fume cleaning plant will be evident and usually in two forms, firstly direct from the furnace and secondly in an indirect form at ridge level. A great deal of money is spent protecting the environment from fume and dust and much of the plant is rateable.

Electric Arc Furnaces

All electric arc furnaces are of a similar design consisting of a circular shallow bath with the hearth being acid or basic brick lined. Modern furnaces have removable roofs which lift and swing clear for charging purposes. Small and old furnaces may be encountered with a fixed roof and are side charged. The whole furnace is mounted on rockers or trunnions enabling it to be tilted in two directions, one for slagging off and the other for teeming. Melting is achieved by lowering carbon electrodes through holes in the roof on to the charge thus forming a circuit. When raised slightly the current jumps the gap and the arc so formed produces a temperature of about 3400°C.

Refining of the steel can be done in the furnace with the current switched off by the introduction of oxygen by lance into the steel and causing an exothermic reaction. The trend is to do this operation in the ladle and thereby increasing the possible number of melts.

Electric Induction Furnaces

See Section 6: Part 3:430 for description.

1.3.6 Steel Plant

Converter bays have a central core and in the three UK plants are almost identical in size measuring 122 metres in length, 55 metres in width and 67 metres in height each housing 3 vessels.

The area of a BOS (basic oxygen steel) plant building is approximately 23,500 square metres and comprises the very heavy steel framed converter core with platforms and stagings and very heavy steel framed scrap and charging bays each side of the centre section.

Fume extraction and cleaning to each converter is expensive and consists of a water cooled hood with a water cooled skirt which is lowered over the vessel during the “blow” - this is coupled to a water cooled flue up to the top level of the flue system. The fume is further cooled by water sprays, flue demist chambers, venturi scrubbers and finally flared off at the stack as it contains combustible carbon monoxide.

Basic Oxygen Furnace

The furnace (or converter) is essentially an open topped steel pot lined with refractory bricks and mounted on trunnions. It is fitted and charged first with scrap (about 30%) and then hot metal. The furnace is returned to the vertical position and a water cooled lance is lowered into it and high purity oxygen is blown at approx 14 BAR (200lbs per sq in) pressure, thereby rapidly raising the temperature to around 2500°C. The oxygen combines with carbon and other unwanted elements, thus eliminating these impurities from the molten charge. During the “blow” lime is added as flux to help carry off the oxidised impurities as a floating layer of slag. No heating is required as the reaction is exothermic.

When the process is complete the steel is tapped off into a ladle and finally the converter is turned upside down to remove the residual slag.

Refined steel was then cast into ingots in the past and though this process is still found in some works, 90% of all steel is now formed into slabs, blooms or billets in a continuous casting machine (Concast). This is equally true of the Electric Arc Furnace route of steel melting. Extensive platforms, foundations, cellars and run-out basements are usually found under a Concast plant.

1.3.7 Hot Mills

Hot mills are basically of two types:

Primary mills rolling ingots but now largely replaced by Concast machines.

Secondary mills rolling re-heated slabs, blooms and billets.

1. Primary mills

These comprise a stripper bay, soaking pit bay, primary or cogging mill, re-heat bay, roughing mill bay, finishing mill bay, cooling banks and possible shear and cut up lines.

Foundations are again important - a ground based mill train rolling 16/20 tonne ingots will be at least 3 metres under the primary stands and nowhere less than 1.5 metres deep. There will also be underground oil cellars, service tunnels, flumes, cable ducts and a useful guide is that there is more money spent below ground than above.

Modern practice is to build the mill floor at first floor level and infill the ground floor level with support services and buildings.

2. Secondary Mills

Although not as heavy as (1), the component parts are similar and the same considerations apply. Blooms and slabs require re-heating for further rolling.

Blooms may be re-heated and finish rolled into rails, sections and beams providing they do not weigh less than 50 kg/m, also rounds over 100mm in diameter - these items being of sufficiently large cross section to hold their heat up to the last pass.

Slabs may also be rolled into plate (ie. flat steel 3mm to 76mm), in one stage and by the use of continuous mills, which are very fast in operation. It is possible to roll wide strip (8mm to 5mm thick over 457mm wide) without intermediate re-heating.

Re-heating furnaces are either batch type, continuous or walking beam. The latter are more common, often very sophisticated and invariably expensive - they may be single chamber, multi-chamber or zoned and consequently of some length.

Means of moving the charge will be in a number of different forms; examples are shaker hearth, monorail traypusher, disc hearth, roller hearth, rotary hearth, walking beam, saw tooth beam, link belt conveyor, mattress conveyor, chain conveyor, screw conveyor and slat conveyor.

At the end of the mill tables are cooling beds or racks which often consist of a series of horizontal rails supported on concrete piers above a pit. The product cools as it is moved across the bed to the discharge point.

After rolling some products are given heat treatment in furnaces that may look similar to re-heats. Bogie hearth will be met on the batch variety, also types where the whole furnace body is lifted clear for loading and unloading.

Heat treatment takes many forms eg annealing, blueing, carbonising, hardening, malleablising, normalising, stress relieving and tempering.

1.3.8 Cold Mills

The purpose of cold rolling is to produce a regular thickness and a finished surface. For sheet this may be polished and suitable for coating and for strip the finish is perfect enough for direct forming by manufacturers of tableware etc. Reduction in thickness will be in the order of 2% for cold rolled sheet but considerably more for strip.

Cold reduction is preceded by descaling and pickling lines and the rateable items may include softening furnaces, pits, chambers, and some structural steelwork.

Sheet is invariably rolled on hand mills but strip is rolled by high speed reversing mills or automatic mills of very sophisticated design and with great precision. Particularly in stainless mills, rolling is performed in air conditioned and temperature controlled buildings so that the atmosphere is completely dust free.

Soluble oil is used for cooling purposes and is constantly being sprayed over the rolls and strip during rolling. The oil recovery cooling and filtration plant is quite extensive and elaborate and often sited below the mill floor in a labyrinth of basement chambers.

1.3.9 Rod/bar Mills

Rods, bars and light sections must be rolled rapidly because of heat loss and continuous mills are invariably used. Rods that are rolled to wire emerge at speeds in excess of 190 km per hour and have to be coiled before cooling in order that it can be handled.

1.3.10 Tube Mills

Steel tubes are of two main types, welded tubes and seamless tubes - the former are produced from plate and strip by bending to tubular form and welding the edge and the latter are produced from ingots and billets by piercing and elongating or from discs by cupping and drawing. The methods employed in these two processes are varied and beyond the scope of these instructions but the usual lines of re-heating, process finishing and despatch will be followed.

1.3.11 Foundry

See Section 6: Part 3:430 for details.

1.3.12 Unclassified Other Activities

Associated activities are numerous, usually specialised and beyond the scope of these instructions to deal with in depth. Some that could be encountered are forging used to make highly stressed steel components. Hammers have been largely superseded by automatic forging machines and hydraulic presses range up to 10,000 tonnes pressure capable of producing up to 140 tonnes forged weight. All processes will be accompanied by re-heating and heat treatment furnaces. Foundations are extensive and carefully designed. Hydraulic and pneumatic installations could be rateable in whole or in part.

Refining

High quality steels require more than the initial refining done in the melting furnace and it will usually be done in vacuum conditions. A whole new technology has been developed around these ‘de-gassing’ operations and a number of processes have been evolved to extract the molten steel from the ladle into a vacuum chamber and then return it. Refining in the ladle is a popular method and some systems require expensive and rateable pitwork into which the complete ladle is lowered, then sealed and the air pumped out.

Re-melting by induction furnaces can be done in vacuum or in electroslag furnaces where a cast ingot is re-melted in a copper lined vessel under a layer of slag which excludes air from the remelt.

Coating

An old established process of dipping and plating now developed into high speed tinning lines and acrylic coatings.

1.3.13 Central Administration

Good quality office blocks will be evident usually air conditioned and well equipped with computer rooms and first class toilet accommodation.

1.3.14 Central Maintenance

Central workshops are essential to maintain such a complex industry and will include machine shops, electrical shops, blacksmiths, stores etc.

1.3.15 Central Water Services

A vast amount of water is needed on an iron/steel plant for cooling, boiler feed and process. Rateable plant will include reservoirs, clarrifloculators and thickeners, cooling towers, filters and various tanks.

2. List Description and Special Category Code

2.1 List Description: Steelworks and Premises

2.2 Special Category Code 142 should be adopted. Suffix V.

3. Responsible Teams

The NSU Industrial team is responsible for the valuation of steelworks.

4. Co ordination

Co ordination will occur between the specialists with responsibility for the valuation of steelworks within the NSU Industrial team.

There are no separate legal considerations for this class.

Relevant Case Law

Consett Overseers v Durham County Council (1922) 20 LGR 809.

Blast furnace plant. Whole hereditament may be in beneficial occupation although some parts (eg. individual furnaces that have to be relined from time to time) are normally out of action.

Cardiff Rating Authority and Cardiff Assessment Committee v Guest, Keen Bladwins Iron and Steel Co Ltd (1949) 1 KB 385 1 All ER 27 (CA).

Tilting furnaces, pipe mains and short life plant; test of whether any item is structural.

ICI v Owen (1954) 48 R & IT 43.

Plant used mainly in connection with the generation, primary transformation or main transmission of power.

Birchenwood Gas & Coke v Hampshire (VO) (1959) 52 R & IT 226.

Coke Ovens, rate per cent to be applied; also imminent and expensive repairs does not in itself warrant a reduction in rent.

Ind Coope Ltd v Burton-upon-Trent CBC and Thomas (VO) (1961) RVR 341.

Air compressors as ‘process’ plant: Boilers: Rent from year to year would not be on the basis of annual adjustment.

Chesterfield Tube Co Ltd v Thomas (VO) (1969) RA 395.

Hydraulic pumps, hydraulic accumulators, air compressors and receivers rateable within Classes 1A and 1B of the Plant and Machinery (Rating Order) 1960.

J W Thompson (Chesterfield) Ltd v Thomas (VO) (1970) RA 201

Silo as a Class IV item.

British Steel Corporation v Pittock (VO) (1970) RA 423.

Refractory brickwork and linings in steel furnaces may form part of the structure of the furnaces even though they have to be replaced when consumed.

Sheerness Steel Co PLC v Maudling (VO) (1986) RA 45

Steelworks with excess capacity due to production and sales quotas; obsolescence on relatively modern works.

6. Survey Requirements

6.1 A referencer’s guide is available for use by specialist referencers dealing with iron and steelworks. It has been prepared having regard to past practice and should therefore accord with the survey pattern of most companies or their agents. In addition to inspection advice it contains many valuation triggers.

6.2 Extensive Plant and Machinery is to be found at Iron and Steel Works. Enquiries should be addressed to the Plant and Machinery Valuer at NSU Industrial and Crown team.

7. Survey Capture

Survey data for steelworks is recorded manually in binders in the custodianship of the NSU Industrial team at Leeds.

For valuation purposes the survey data has been included in spreadsheets held on the Non Bulk Server.

8. Valuation Approach

The primary method of valuation for steelworks is the Contractor’s Basis – this reflects the highly specialist nature of the occupation. It will incorporate a significant proportion of rateable plant and machinery and this is likely to include specialist process plant.

9. Valuation Support

Valuations for steelworks are held on the Non-Bulk Server (NBS).

All valuations are dealt with by the NSU Industrial team.

Practice note: 2017: Iron and steelworks

1. Market Appraisal

UK Steel Annual Review 2014

At page 1 the Chairman’s review states 2014 demand was +11.8% compared to 2013 but * A strong £

  • Stagnation in European economies

  • A high level of imports from China

  • Falls in iron ore and coking coal prices

“meant that steel companies’ margins remained tight”.

The Director said:

Globally * “The global steel industry had an eventful year in 2014 characterised by weakening demand growth, deteriorating capacity utilisation, falling iron ore and steel mill product prices and a surge in Chinese export volumes”.

  • World crude steel production reached a record high of 1,662 million tonnes

  • Although the growth rate fell to <1%

  • Excluding 2008/2009 growth has been around 8% for the last 10 years.

  • Crude steel production capacity has increased at a greater rate than demand with the result that capacity utilisation fell to 76%.

EU market

  • The EU steel market remained subdued
  • Despite a 1.7% overall increase in crude steel production this level is -20% on the peak year of 2007.
  • Market prices for steel mill products in general fell steadily during the year.

UK market * Crude steel production increased 1.7% in 2014 following 24% achieved in 2013 (largely due to mill improvements).

  • Apparent demand levels were +11.8% on 2013, although gains of 24% in the first half of the year were tempered by a fall of 10% in the second half of the year.

Tata Steel is the major producer in the UK. Its Annual Report 2014/15 describes the position for European steelmaking as “challenging” although there are positive statements made about the future when compared to the low point of the recession which began in 2008.

  • Page 12 – “Europe steel demand saw moderate growth last year but it continues to remain well below sustainable levels for steelmakers. Steel demand in Europe was the worst hit due to global economic downturn and is still 25% below the pre financial crisis level. This coupled with higher import levels squeezing margins means that the growth trajectory will be gradual…”

  • Page 19 - “[Tata Steel Europe]…Despite lower turnover, the business made a significant improvement in its financial performance with EBIT turning positive at £103 Million”.

  • Page 31 – “European steel demand is expected to return to modest growth in 2015. At 150 m tonnes it will still be 25% down on the pre crisis peak and 10% below the pre crisis norm of 165 mtpa…2015 steel margins can be expected to remain under pressure”.

It would seem therefore that the market for steelmaking in the UK remained “challenging” and that profit margins would be tight. Imports of excess production from other parts of the world is a concern. Nevertheless the outlook for the future would appear to be one of gentle improvement in economic prospects.

2. Changes from the last Practice Note

The Practice Note for the 2000 Rating List included co-ordination arrangements which are now dealt with in the Rating Manual section for the class.

3. Ratepayer Discussions

There have been no discussions with the Iron and Steel Works Industry.

4. Valuation Scheme

This is a class mainly dealt with by the NSU Industrial and Crown team and Unit Specialists. Those steelworks are valued on the contractor’s basis.

All 3 integrated Iron and Steel Works in England and Wales are dealt with by the NSU I&C.

All other works are ‘down stream’ (meaning further processing of the basic steel produced in integrated works) and vary greatly in size and complexity.

The relatively few steelworks dealt with in Business Units will be non-specialised and valued by reference to rentals/rentals comparison.

Where specialist equipment exists in a non-specialised steelworks the caseworker should consult with NSU I & C team.

Potential “state of industry” allowances

It is considered that the underutilisation issue highlighted in section 1 will normally reveal itself in unused or underused facilities on site. Allowances could potentially be made by considering a modern substitute hereditament capable of producing the reduced output.

It is not considered that the economic situation is sufficiently bad to warrant an allowance for “economic” issues at Stage 5 of a contractor’s basis valuation.

In cases of difficulty please refer the matter to NSU Industrial and Crown Team.

Appendix 1

Appendix 1: The steelmaking process