U.S. Steel Industry is All Smiles with Strong Profits, $3.7 Billion in Fourth-Quarter Kickoffs

Researched by Industrial Info Resources (Sugar Land, Texas)--The U.S. steel industry is seeing a "renaissance," in the words of one company official, as leading players post record profits and steel prices approach a decade high. Whatever the sentiment among their downstream consumers, steel producers are upbeat about the Trump administration's tariffs and expect the growth to continue. Industrial Info is tracking more than $3.7 billion worth of active U.S. steel mill projects that are set to begin construction in the fourth quarter.

Click on the image at right for a graph detailing the top 10 U.S. states for steel mill project kickoffs in the fourth quarter, by investment value.

The single largest project that is has a good chance of beginning construction as currently planned, according to Industrial Info's project database, is Big River Steel LLC's $1.2 billion expansion of its steel minimill and scrap-recycling facility in Osceola, Arkansas. The project would more than double the plant's capacity from 1.6 million to 3.3 million tons per year of hot-rolled steel, including electrical steel that would be used in growing industries such as energy-efficient power generation and electric cars. For more information, see Industrial Info's project report.

Amid the recent upswing in the domestic steel and aluminum industry, a Big River spokesperson told Talk Business & Politics that the company was fielding funding offers and reviewing "strategic alternatives." Bidders that have submitted proposals to Big River include Nucor Corporation (NYSE:NUE) (Charlotte, North Carolina) and Steel Dynamics Incorporated (NASDAQ:STLD) (Fort Wayne, Indiana). "Big River Steel is in the midst of a historic ramp up in terms of both product capability and profitability," the spokesperson said. "This success has attracted the attention of the world's steelmaking and financial communities, resulting in some looking to align with Big River Steel."

For more on improving fortunes in the domestic steel industry, see September 13, 2018, article - Steel Production, Projects Rise in U.S. in Response to Import Tariff.

In Pennsylvania, the heart of domestic steel production, Carpenter Technology Corporation (NYSE:CRS) (Philadelphia, Pennsylvania) is preparing for a $100 million addition to its specialty steel mill in Reading. The company expects to spend about a year installing a new precision-strip hot-rolling mill at the 500,000-ton-per-year facility, to boost overall capacity and alloy processing. For more information, see Industrial Info's project report.

"We are confident that this investment coupled with our already impressive soft magnetics capabilities will unlock significant growth opportunities in the aerospace, consumer electronics and electrical vehicle markets," said Tony Thene, the chief executive officer of Carpenter, in a recent quarterly earnings-related conference call.

Northwestern Indiana is home to a pair of mill upgrade projects: United States Steel Corporation's (NYSE:X) (Pittsburgh, Pennsylvania) $750 million modernization program at its steel plant in Gary, and ArcelorMittal S.A.'s (NYSE:MT) (Luxembourg) $18 million of relining and repairs at its Indiana Harbor West Plant in East Chicago. Both companies are sprucing up their facilities in preparation for increased demand, with U.S. Steel Chief Executive Officer David Burritt crediting Trump's tariff policies with spurring a "renaissance" for the company. For more information, see Industrial Info's reports on the Gary and East Chicago projects.

Similarly, Attala Steel Industries (Kosciusko, Mississippi) expects to begin construction on a $15 million cooling bed addition at its structural steel mill and galvanizing plant in Kosciusko, Mississippi. The walking beam, hydraulic cooling bed will improve the length, yield and straightness of the product and shorten its cooling time. For more information, see Industrial Info's project report.

In addition to capital projects, including the above-mentioned, Industrial Info is tracking $30 million in maintenance projects at steel mills across the U.S. that are scheduled for the fourth quarter.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.