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Nucor to build 3 mil st/year sheet steel mill for US Midwest, Northeast markets

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Nucor's board of directors has approved plans to construct a 3 million st/year sheet mill to serve the US Midwest and Northeast markets, the steelmaker said Sept. 20.

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The company is evaluating locations in Ohio, Pennsylvania and West Virginia, it said. The facility, expected to cost about $2.7 billion, is to include an 84-inch sheet mill with a 76-inch cold mill and two galvanizing lines, according to the company.

Galvanizing capabilities will include an advanced high-end automotive line with full inspection capabilities as well as a construction-grade line, Nucor said. Once state and local incentives, permitting and other regulatory approvals are received, construction is expected to take two years.

"For Nucor, this is a growth initiative," CEO Leon Topalian said in a conference call Sept. 20. "We are not replacing antiquated, inefficient assets, we are adding additional steelmaking to capture more share of the domestic market for higher-end sheet steel."

Nucor plans to build the new capacity in the heart of the two largest steel sheet consuming markets in the US where demand is the greatest, he said.

"These important markets need new, modern and sustainable steel production capacity in order to meet future demand, both from an environmental and capability perspective," he said.

Topalian noted the growth in electric-arc furnace, or EAF-based, steelmaking in the US over the past three decades and said this trend is expected to continue to accelerate amid the global push to limit carbon emissions.

"With this investment we expect to continue to take share and accelerate the market transition to more environmentally friendly, EAF-produced steel," he said.

Nucor, which currently ships roughly 1.5 million st/year of steel to the automotive industry, has set a goal of increasing this contribution to 3 million st/year.

US sheet mill capacity expansions

The news of Nucor's expansion follows an announcement by US Steel Sept. 16 that it has started a site selection to build a new, 3 million st/year flat-rolled mini-mill in the US.

Additional flat-rolled capacity expansions in the works include Steel Dynamic Inc.'s 3 million st/year mini-mill in Sinton, Texas, and the 1.4 million st/year expansion at Nucor's Gallatin mill in Kentucky, with both expected to come online in 2021.

An additional 900,000 st/year expansion at NorthStar Bluescope's mill in Ohio and a 1.5 million st EAF under construction at ArcelorMittal and Nippon Steel's AM/NS Calvert joint venture in Alabama are set to add additional flat-rolled capacity to the US market in 2022.

Since 2013, US sheet mill capacity has shrunk from 80 million st/year to a current 65.4 million st/year in 2021 as older blast furnace capacity has been idled, according to Nucor. With the addition of projects set to come online in 2021-2022, it takes US sheet mill capacity to 72.2 million st, according to the company.

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

With more US steelmaking shifting to EAF-based production, Nucor executives said they are confident they will have enough raw materials to support the new mill as it currently has 4.5 million st of direct-reduced iron production in-house, with some of that DRI being currently consumed at Nucor facilities that do not require it from a quality standpoint.

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