U.S. Steel Industry Looks at $3.3 Billion in Future Planned Project Development

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). Although much maligned in recent history, the U.S. steel industry has made a remarkable comeback and is gathering momentum for increased capital spending in 2005 and beyond. Right now, there are 111 steel industry projects being developed in the U.S. These projects, representing more than $3.3 billion are scheduled to begin construction between now and the end of 2006. Hands over the fist, the largest steel mill project in the U.S. is John Correnti's $700 million SteelCorr Incorporated project, which is in the site study phase. The company is studying sites along the Mississippi River in Arkansas, Louisiana, and Mississippi. Mississippi government officials are proposing a $25 million incentive package to lure the new venture to Lowndes County, Mississippi.

Click on the image at right to view a chart showing future U.S. steel industry spending by state.

Recently, capital spending plans have been tapered somewhat by the continuation of consolidation in the industry. The biggest news impacting the industry in 2005, was the announcement in October 2004 of the creation of the biggest steel making entity on the planet, Mittal Steel, through the merger of Ispat International and International Steel Group (NYSE:ISG ). When that deal is finalized at the end of March 2005, expect to see several large capital projects approved at the company's steel mills and metallurgical coke making operations in Riverdale, Illinois, Sparrow's Point, Maryland, Chicago, Illinois, and Cleveland, Ohio, as part of the company's planned $425 million in capital expenditures for 2005. ISG produced 15.5 million tons of steel in 2004, making it the second largest steel producer in the U.S. behind Nucor.

Expect both of the other Big-Three U.S. steel makers, Nucor Corporation (NYSE:NUE ) (Charlotte, North Carolina), and United States Steel Corporation (NYSE:X ) (Pittsburgh, Pennsylvania), to be in the news this year with acquisitions. Nucor is rumored to be in the mix for purchasing Marion Steel Corporation (Marion, Ohio), a 450,000 ton per year capacity minimill steel bar producer.

Nucor produced about 19.7 million tons of steel in 2004 making it the number one steel producer in the U.S. Nucor is also studying sites for a second Castrip line in the U.S. as well as an overseas Castrip venture.

U.S. Steel has announced approximately $475 million in domestic capital spending for 2005, including the rebuild of the No. 13 blast furnace at the Gary Works. This project was initially reported by Industrialinfo.com in 2002, as part of its North American Plant Database. The rebuild is currently scheduled to begin construction during the third quarter of 2005.

The U.S. steel industry includes those facilities that make steel (SIC code 3312 also include metallurgical coke manufacturing), integrated steel mills, or recycle steel to make steel products, such as Electric Arc Furnace minimills, as well as steel rolling mills (SIC 3316), foundries (SIC codes 3324 and 3325), pipe mills (SIC 3317), wiredrawing plants (SIC 3315), and forging operations (SIC 3462). For the purposes of this analysis it does not include downstream steel fabricators or stamping operations.

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