Argus Media Limited

09/20/2021 | News release | Distributed by Public on 09/20/2021 10:09

Nucor to build new 3mn st/yr sheet mill in US

US steelmaker Nucor plans to build a new 3mn short tons/yr electric arc furnace (EAF) flat-rolled steel mill, the second such mill announcement in as many weeks as US steel producers capitalize on record high steel prices.

The $2.7bn mill will be built in Ohio, Pennsylvania or West Virginia to supply the Midwest and northeast regions, with production expected to begin in 2024, the company said today. Nucor will target the automotive industry, in part by including an advanced high-end automotive galvanizing line with full inspection capabilities.

The new mill is envisioned as part of the company's growth strategy and will not replace existing older sheet production, Nucor chief executive Leon Topalian said.

"Even after the expansions and greenfield projects come on line in the coming months, the North American sheet steel base is still down almost 10pc from where it was several years ago," Topalian said. "We believe that there are several million more tons that are vulnerable and may become obsolete in the coming years due to cost position and carbon intensity."

The mill will have 84-inch wide capabilities with a 76-inch tandem cold mill and two galvanizing lines. The sheet mill will be Nucor's sixth, adding to its existing mills in South Carolina, Alabama, Arkansas, Kentucky and Indiana.

The planned product mix would be 1.1mn st/yr of galvanized steel, 800,000 st/yr of cold rolled-coil (CRC), 750,000 st/yr of hot-rolled coil (HRC) and 350,000 st/yr of pickled and oiled steel sheet.

The new mill will complement an ongoing 1.4mn st/yr expansion at Nucor's Gallatin sheet mill in Kentucky that is targeting the structural automotive market, Nucor executive vice president Rex Query said.

Nucor has been working to double its tonnage to the automotive industry to 3mn st/yr, up from 1.5mn st/yr today.

Nucor plans to shift its internal consumption of direct-reduced iron (DRI) to supply the mill, Query added. Nucor produces more than 4.5mn metric tonnes/yr of DRI from plants in Louisiana and Trinidad and Tobago.

"We are consuming some of that capacity at plants that, from a quality perspective, do not necessarily need that DRI," Query said.

Nucor's recycling arm, David J Joseph, has also been working on reducing copper content in shredded scrap to use more to make higher-quality sheet steel.

Nucor's announcement comes after integrated steelmaker US Steel last week said that it would build its own 3mn st/yr sheet mill for $3bn at a yet-to-be-determined location. That mill is expected to also start up production in 2024.

The new projects come as steel prices and profits have rebounded sharply from pandemic-related lows in 2020. US HRC prices have nearly hit $2,000/st, up from a low of $450/st in August 2020, blowing out spreads to ferrous scrap costs and ballooning profits.

EAF steelmaker Steel Dynamics (SDI) is building its own 3mn st/yr EAF sheet mill in Sinton, Texas, that is expected to start melting in mid-November. Ohio-based North Star BlueScope is building a 937,000st/yr expansion at its sheet mill that is set to come on line in 2022, while ArcelorMittal and Nippon Steel are working to complete their 1.65mn st/yr EAF at their rerolling plant in Calvert, Alabama, in 2023.

By Rye Druzin