Big Three Steel Makers Emerging as US Steel Industry Consolidates

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). The driving force of big American steel has changed drastically in recent years, as a combination of established and new leadership has taken its place at the top of US steel production. Riding a wave of bankruptcy acquisitions, revamped union contracts, and new technologies these companies are reinvigorating, re-shaping, and investing for the future of the US steel industry.

Today, there are three steel makers, which have succeeded in their quest to be leaders, and top producers in the industry. They are Nucor Corporation (NYSE: NUE) (Charlotte, North Carolina), International Steel Group (ISG) (Richfield, Ohio), and United States Steel Corporation (NYSE:X) (Pittsburgh, Pennsylvania). These three steel makers are on the brink of controlling greater than 50% of the U.S. steel making market. In 2002, the US produced approximately 101.7 million tons of steel. If US Steel closes on the National Steel acquisition, which it looks like it will, the big three will have control of close to 55 million tons per year of steel making capacity. This includes production from ISG's acquisition of Bethlehem Steel, which was finalized last week.

Click on the image to the right to view the Big Three US Steel Makers Table

The U.S. steel industry became smaller last week, as ISG officially absorbed bankrupt Bethlehem Steel Corporation. The acquisition of Bethlehem Steel is ISG's third major steel making move in just a short year and a half of existence. ISG was formed to acquire bankrupt LTV Steel in February of 2002. ISG acquired and restarted the former Acme Steel mill located in Riverdale, Illinois late last year. All three acquisitions have cost ISG $1.89 billion. Bethlehem Steel shipped 7.5 million tons of steel products in 2002. Including Bethlehem Steel's mills, ISG now operates twelve major steel mills in six states with approximately 17.5 million tons of annual capacity.

Nucor currently leads the group in steel production. In 2001 Nucor supplanted long time number one steel producer US Steel, as the nation's leading steel producer. After a series of successfully completed acquisitions and expansions, Nucor's steel making capacity has increased to over 19 million tons per year. In 2002, Nucor actually produced 13.6 million tons of steel. With the acquisition of Birmingham Steel in late 2002, Nucor's 2003 steel production could easily reach 16.5 million tons in 2003. Most recently, the company has acquired the North Star Arizona mill, which will give it another 650,000 tons worth of steel making capacity for future expansion.

Next on the list to finalize a major steel industry acquisition will be United States Steel Corporation (NYSE:X) (Pittsburgh, Pennsylvania). US Steel is acquiring bankrupt National Steel. If the company can close on the $850 million deal, which will add six million tons to its existing 12.8 million ton per year capacity giving the company 18.8 million tons per year of capacity by 2004. US Steel is projecting to produce close to 10 million tons in 2003, due mainly to the planned shutdown of a company blast furnace during the summer of 2003.

The Big Three US Steel Makers Table is a subset of Industrialinfo.com's larger North American Industrial Plant Database. If you are interested in details other portions of the market email us at metalsandmineralsgroup@industrialinfo.com