Nucor Corp. is moving to expand its steelmaking capabilities with a number of new projects. The metals giant announced September 20 it would build a new factory for wide steel sheets for $2.7 billion, and on September 21 the company added further plans to build a $100 million melt shop at one of its existing steel bar plants.
Nucor anticipates the new mill will have an expected capacity of 3 million tons, making it the biggest construction project in Nucor history. Construction is anticipated to begin in 2022, and the plant is slated to come online by two years later.
The new steel mill will be located in Ohio, Pennsylvania or West Virginia, Nucor said. In a conference call with analysts September 20, Nucor CEO Leon Topalian said the site would be ideal for sourcing automobile plants in the Midwest and Northeast of the country.
“We will build this mill in the heart of the two largest sheet-consuming markets in the United States, where demand is the greatest,” Topalian said. According to Business Journals, Nucor is currently working towards a goal of doubling its sales of sheet metal to the auto industry from 1.5 million to 3 million tons.
On the call, Topalian said he identified sheet metal as a prime focus for expansion when he became CEO in January 2020. According to Topalian, Nucor currently produces about 11 million tons of sheet metal a year in a 60 million-ton market.
In response to concerns that the new mill will contribute to steel overproduction, Nucor noted it won’t just make more steel, but also new products for Nucor. Rex Query, Nucor’s president of sheet and tubular products, said the plant will increase width of the sheets Nucor can make from 73 inches wide to 84 inches and 76 inches for hot-rolled and cold-roll steel, respectively.
Topalian also asserted that Nucor steel has an environmental edge over its competitors at a time when manufacturers and automakers in particular are focused on measures to improve sustainability. In addition to its steel-recycling operations, Nucor says it emits less greenhouse gas than the competition. The company’s greenhouse gas intensity—a non-absolute measure of the greenhouse gasses a company or country produces relative to GDP—"is less than one-third of the global average and nearly one-fifth of the average of integrated steel producers,” Topalian said.
The day after the announcement of the $2.7 billion new steel mill, Nucor said its board had approved another, smaller expansion project, a $100 million melt shop at one of the company’s bar mills.
Nucor didn’t specify precisely which of its steel bar plants will get the expansion, but it narrowed it down to a plant in the Western part of the country. According to Business Journals, that would place it in Arizona, Nebraska, Utah or Seattle, Washington. The expansion is expected to produce 600,000 tons annually and create about 140 new full-time jobs. The expansion, like the $2.7 billion plant, is anticipated to become operational in 2024.
