Released June 04, 2008 | SUGAR LAND
en
Researched by Industrial Info Resources (Sugar Land, Texas)--After a series of high profile steel industry losses, beginning with the failure and closure of American Iron Reduction LLC in 1999 and ending with 2006's loss of the ThyssenKrupp steel project to Alabama, Louisiana could be on the verge of an economic coupe with the recently announced plans for an integrated pig iron and steel manufacturing complex by Nucor Corporation (NYSE:NUE) (Charlotte, North Carolina) in Convent, Louisiana. An investment that could exceed ThyssenKrupp's $3.7 billion steel mill project, which is being constructed north of Mobile, Alabama, Nucor's project involves a multi-phased development that could reach $4 billion if all three phases of the project are built.
The Nucor project faces numerous hurdles to jump before it becomes reality. First and foremost, Nucor's board has to approve the project and site selection has to be finalized. Nucor will be looking for similar incentives that Louisiana offered to ThyssenKrupp before Alabama trumped all competition with an $800 million incentive/tax abatement package. The Louisiana site near Convent, Louisiana, will compete against unnamed international sites that Nucor is evaluating. Mississippi River access is a plus for siting the project in Louisiana, especially since the project will annually require millions of tons of iron pellets and coal for the coke making process.
Nucor, the master of scrap steel minimill technology, has been studying alternative iron feedstock options for years, but this would be the company's first foray into pig iron production in North America. Nucor sold interest in a Brazilian pig iron joint venture with Vale in 2007. In 1997, American Iron Reduction LLC built an iron reduction plant in Convent and subsequently closed the plant in 1999 due to the high cost of natural gas, which would have accounted for 90% of operating costs, if the plant were still in operation. In 2004, Nucor purchased the shuttered 1.4 million ton per year DRI plant from American Iron Reduction and shipped the equipment to Port Lisas, Trinidad, where it is now operating. For details view related April 18, 2005 news article - Nucor Relocates Louisiana Iron Plant to $225 Million Start Up in Trinidad.
Convent, Louisiana has a long history of failed iron and steel related projects. Prior to American Iron Reduction, in 1990, Quebec Iron & Titanium evaluated an iron reduction plant in Convent. Also in 1999, Berg Steel Pipe Corporation evaluated constructing a steel plate mill in Convent, but later cancelled the project.
According to Joseph Govreau, VP Metals & Minerals for Industrial Info, "Just the fact that Nucor is considering such a project is heartening for the American steel industry, which recently has been dominated by foreign investors. It's good to know that home grown companies like Nucor are pushing the envelope moving forward with projects that will insure U.S. position as a leader in steel manufacturing."
Foremost on steelmaker's minds these days is how to manage escalating energy and feedstock costs. By building a pig iron plant in Louisiana Nucor hopes to shore up feedstock concerns for its U.S. mills, which are heavily reliant upon the scrap steel market.
Nucor isn't alone in its North American steel manufacturing plans. There are a good number of metallurgical coke, cogeneration, alternative and traditional iron projects and grassroot steel mill construction projects being evaluated, by companies like U.S. Steel, Severstal, and ArcelorMittal. Industrial Info is tracking more than $22 billion worth of active projects at steel mills in North America.
Nucor's project is conceived as a 3-phase project, beginning with a pig iron plant utilizing coal-fired blast furnace technology.
Industrial Info Resources (IIR) is a marketing information service specializing in industrial process, energy and financial related markets with products and services ranging from industry news, analytics, forecasting, plant and project databases, as well as multimedia services.
The Nucor project faces numerous hurdles to jump before it becomes reality. First and foremost, Nucor's board has to approve the project and site selection has to be finalized. Nucor will be looking for similar incentives that Louisiana offered to ThyssenKrupp before Alabama trumped all competition with an $800 million incentive/tax abatement package. The Louisiana site near Convent, Louisiana, will compete against unnamed international sites that Nucor is evaluating. Mississippi River access is a plus for siting the project in Louisiana, especially since the project will annually require millions of tons of iron pellets and coal for the coke making process.
Nucor, the master of scrap steel minimill technology, has been studying alternative iron feedstock options for years, but this would be the company's first foray into pig iron production in North America. Nucor sold interest in a Brazilian pig iron joint venture with Vale in 2007. In 1997, American Iron Reduction LLC built an iron reduction plant in Convent and subsequently closed the plant in 1999 due to the high cost of natural gas, which would have accounted for 90% of operating costs, if the plant were still in operation. In 2004, Nucor purchased the shuttered 1.4 million ton per year DRI plant from American Iron Reduction and shipped the equipment to Port Lisas, Trinidad, where it is now operating. For details view related April 18, 2005 news article - Nucor Relocates Louisiana Iron Plant to $225 Million Start Up in Trinidad.
Convent, Louisiana has a long history of failed iron and steel related projects. Prior to American Iron Reduction, in 1990, Quebec Iron & Titanium evaluated an iron reduction plant in Convent. Also in 1999, Berg Steel Pipe Corporation evaluated constructing a steel plate mill in Convent, but later cancelled the project.
According to Joseph Govreau, VP Metals & Minerals for Industrial Info, "Just the fact that Nucor is considering such a project is heartening for the American steel industry, which recently has been dominated by foreign investors. It's good to know that home grown companies like Nucor are pushing the envelope moving forward with projects that will insure U.S. position as a leader in steel manufacturing."
Foremost on steelmaker's minds these days is how to manage escalating energy and feedstock costs. By building a pig iron plant in Louisiana Nucor hopes to shore up feedstock concerns for its U.S. mills, which are heavily reliant upon the scrap steel market.
Nucor isn't alone in its North American steel manufacturing plans. There are a good number of metallurgical coke, cogeneration, alternative and traditional iron projects and grassroot steel mill construction projects being evaluated, by companies like U.S. Steel, Severstal, and ArcelorMittal. Industrial Info is tracking more than $22 billion worth of active projects at steel mills in North America.
Nucor's project is conceived as a 3-phase project, beginning with a pig iron plant utilizing coal-fired blast furnace technology.
Industrial Info Resources (IIR) is a marketing information service specializing in industrial process, energy and financial related markets with products and services ranging from industry news, analytics, forecasting, plant and project databases, as well as multimedia services.
