North American Steel Industry Bets on Future with $19.9 Billion Project Development

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Researched by Industrial Info Resources (Sugar Land, Texas)--With demand for steel improving, steel mill capacity utilization rates have risen to more than 70%, driving North American steel manufacturers to invest in capital expenditures this year. Steel producers are positioning themselves for growth after a significant decline in sector activity during the past two years. Notable companies involved in big expansions in the U.S. include Nucor Corporation (NYSE:NUE) (Charlotte, North Carolina), United States Steel Corporation (NYSE:X) (Pittsburgh, Pennsylvania) and Steel Dynamics Incorporated (NASDAQ:STLD) (Fort Wayne, Indiana). "We've noticed a significant uptick in project activity, both capital and maintenance expenditures, in the U.S. steel manufacturing sector since the beginning of the year," said Joseph Govreau, VP Metals & Minerals for Industrial Info.

Industrial Info is tracking more than 180 active capital and maintenance projects at steel mills. These projects equate to about $19.9 billion in total investment value. Half of that amount, about $8.4 billion, is for projects under construction.

Click on the image at right to view a chart showing the breakdown of active steel manufacturing projects by project activity in North America.

A number of "big ticket" projects are under way this year, including a $1.6 billion, 84-inch, hot strip steel-rolling mill addition at the Brackenridge Specialty Steel Mill, which is owned by ATI Allegheny Ludlum Corporation (Natrona Heights, Pennsylvania) in Pennsylvania. Site preparation, demolition and clearing activity at the site are nearing completion.

After losing a big ThyssenKrupp project to Alabama a few years ago, Louisiana has attracted Nucor Corporation (NYSE:NUE) (Charlotte, North Carolina) to build an iron and steel complex on the Mississippi River in southern Louisiana. Site work is under way for an iron-making plant, the first phase of the project.

Like other resource sectors in the Metals & Minerals Industry, steel is experiencing merger and acquisition activity as companies try to position themselves in the driver's seat for growth in global resource demand. In one of the big steel industry moves this year, RG Steel LLC (Sparrows Point, Maryland), an affiliate of Renco Group Incorporated (New York), looks to put a new face on established integrated steel-making capacity in the Eastern U.S. by acquiring 7.5 million tons per year of steel-making capacity from SeverStal US Holdings LLC. The acquisition impacts nine steel mills and associated facilities in Maryland, Ohio and West Virginia. RG Steel has been working with the United Steelworkers Union and hopes to reopen the Sparrows Point mill in May 2011.

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Industrial Info Resources (IIR) is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. IIR'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.