May. 2024
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North American Steelmakers Relate Ups, Downs of First Quarter

In the space of less than a week, three big U.S. steel producers reported their quarterly earnings in late April. These included Cleveland-Cliffs (NYSE:CLF) (Cleveland, Ohio), Nucor Corporation (NYSE:NUE) (Charlotte, North Carolina) and Steel Dynamics Incorporated (NASDAQ:STLD) (Fort Wayne, Indiana). Typically, quarterly earnings reports and the subsequent earnings conference calls with investment analysts give corporate leaders a chance to give updates on various projects, and this time was no exception.


"Clearly, this was an eventful quarter for us," remarked Laurenco Goncalves, the chief executive officer of Cleveland-Cliffs, during the company's first-quarter 2024 earnings conference call.

Among other things, Cleveland-Cliffs executives discussed the company's selection by the U.S. Department of Energy (DOE) for award negotiations for two decarbonization projects in Ohio and Pennsylvania.

The Middletown Steel Works in Ohio would receive a $500 federal award to replace a blast furnace process with a state-of-the-art, hydrogen-ready direct reduced iron (DRI)-electric melter furnace structure to produce iron, resulting in lower carbon emissions. The total project cost has been pegged at $1.3 billion and would result in $450 million in annual cost savings, according to Cleveland-Cliffs. Subscribers to Industrial Info's Global Market Intelligence (GMI) Metals & Minerals Project and Plant databases can click here for the project report and click here for the plant profile. For related information, see March 26, 2024, article - U.S. Backs $6 Billion in Decarbonization at Metal, Chemical Plants.

The Butler Steel Works in Pennsylvania would receive a $75 million award from the DOE to replace two existing natural gas-fired slab reheat furnaces with four electrified induction slab reheat furnaces, also resulting in lower carbon emissions. The total project cost would be $100 million and result in annual cost savings of $80 million. Subscribers can click here for the project report and click here for the plant profile.

Both projects are expected to be completed in 2029.

"So this is really game-changing, in terms of the technology to produce steel, in particular to produce automotive-grade steel," Goncalves said. "But it's a combination of a lot of things that, one, we have full knowledge and full operational capability, and second, we are operationally proven in terms of how to use all these things."

The company reported a net loss of $53 million for the just-ended quarter, compared with a net loss of $43 million for the same three months in 2023. Revenues for the first three months of this year reached nearly $5.2 billion, compared with nearly $5.3 billion in first-quarter 2023. Revenues were buoyed by U.S. automotive production, according to the company, which cited projections that North American light vehicle production in 2024 is expected to be the highest level since 2019.

Included in this year's first-quarter results were charges and losses totaling $202 million related to the indefinite idling of the Weirton tinplate facility in West Virginia. The facility shut its doors after the International Trade Commission (ITC) ruled against the implementation of anti-dumping and countervailing duties on imported tin mill products from Canada, China, Germany and South Korea. The idling of the facility, which impacted 900 employees, became effective in April. During the conference call, Goncalves voiced the possibility of co-investing in a new plant in Weirton, "using our workforce there to produce transformers."

Also during the quarter, Cleveland-Cliffs applauded the DOE's final transformer efficiency rule that will provide for the continued use of Grain-Oriented Electrical Steel (GOES) in the steelmaker's current distribution transformer markets.

"The final rule ensures Cliffs' ability to continue producing highly-efficient GOES in the United States," Goncalves said in a press release. "Once this rule is enacted, we expect to actually see an increase in demand for our GOES, opening the possibility of future investments and expansion of our plants in Butler, Pennsylvania, and Zanesville, Ohio."

Industrial Info is tracking 32 active Cleveland-Cliffs projects, worth $2.56 billion. GMI subscribers can click here for a list of detailed project reports.


Nucor is planning to spend $3.5 billion this year as it focuses on a number of high-profile growth projects. The largest chunk of this year's capex ($1.2 billion) is earmarked for a grassroot steel sheet mill in Apple Grove, West Virginia. The 3 million-ton-per-year mill will produce hot-rolled sheet products and feature a tandem cold mill, annealing capabilities and two galvanizing lines. The galvanizing lines will include an advanced high-end automotive line and a construction-grade line.

The facility is expected to be completed in early 2026 and is planned to produce about 1.1 million tons per year of galvanized steel, 800,000 tons per year of cold-rolled coil, 750,000 tons per year of hot-rolled coil and 350,000 tons per year of pickled and oiled steel sheet. GMI subscribers can click here for the project report and click here for the related plant profile.

Nucor reported consolidated net earnings of $844.8 million and net sales of $8.14 billion for the just-ended quarter, compared with earnings of $1.14 billion and sales of $8.71 billion in first-quarter 2023. The company cited lower average selling prices, partially offset by increased volumes.

One topic of discussion during its earnings conference call was Nucor's $115 million acquisition of Southwest Data Products Incorporated (SWDP) (San Bernardino, California), a manufacturer and installer of data center infrastructure.

Topalian said: "In conjunction with this transaction, we're launching a new business unit, Nucor Data Systems to better serve the data center market. Southwest Data Products gives Nucor expanded capabilities in airflow containment structures, which help data centers run more efficiently by separating cold air from the heat generated by racks of server equipment."

He continued: "The rise of artificial intelligence and the growing reliance on cloud computing are driving strong demand for the next-generation data centers, and this market is expected to grow at double-digit annual rates through the end of this decade."

Industrial Info is tracking 59 active Nucor projects, worth $6.76 billion. Subscribers can click here for a list of detailed project reports.

Steel Dynamics

Steel Dynamics reported first-quarter net income of $584 million on net sales of $4.7 billion. This compares with year-earlier net income of $637 million and net sales of nearly $4.9 billion.

Chief Executive Officer Mark Millett said: "Underlying steel demand was steady in the quarter. However, we experienced some steel order volatility early in the quarter as customer inventories remain incredibly low and scrap prices declined month over month in the quarter."

The automotive, non-residential construction, energy and industrial sectors led demand during the quarter, according to a company earnings press release.

Looking forward, Millett said, "We believe North American steel consumption will increase in 2024, and that demand for lower-carbon emission, U.S.-produced steel products, coupled with lower imports, will support steel pricing."

He also voiced optimism that the "continued onshoring of manufacturing businesses, combined with the expectation of significant fixed asset investment to be derived from public funding related to the U.S. Infrastructure, Inflation Reduction Act, and Department of Energy programs, will competitively position the domestic steel industry."

Steel Dynamics has started commissioning and operating four new value-added flat-rolled steel coating lines, Millett continued. "The teams have produced prime quality galvanized and painted products on the first two lines in record times. We expect to begin benefitting from the additional 1.1 million tons of value-added steel products beginning in the second quarter of this year and fully in 2025." GMI database subscribers can click here for related project reports and here for the related plant profiles.

Millett also touched on Steel Dynamics' $1.9 billion Columbus Aluminum Flat Rolled Mill in Mississippi, construction of which began in second-quarter 2023, with commissioning expected in mid-2025. It will produce 650,000 tons of finished products annually to serve the sustainable beverage packaging, automotive and common-alloy industrial sectors. To support the mill, Steel Dynamics also is establishing two grassroot aluminum recycling plants, one in Mexico and the other in Arizona, to supply aluminum slab.

Subscribers can learn more by viewing the project reports on the rolling mill, Arizona recycling plant and Mexico recycling plant.

"We plan to begin operating the aluminum flat rolled mill mid-2025," Millett said. He added that "a significant number of our flat-rolled steel customers are also consumers and processors of aluminum flat rolled products."

Industrial Info is tracking 20 active capital Steel Dynamics projects, worth $2.83 billion. Subscribers can click here for a list of detailed project reports.

Subscribers can click here for a list of project reports mentioned in this article and click here for the related plant profiles.