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Researched by Industrial Info Resources (Sugar Land, Texas)--Nucor Corporation (NYSE:NUE) (Charlotte, North Carolina) will boost its growth capital expenditures for this year to $2 billion to fund key steel mill projects, executives with the steel producer said Tuesday. Market conditions are showing signs of improvement as the customer destocking that caused steel prices to plummet last year appears to be at an end, and order backlogs are growing, they said. Industrial Info is tracking nearly $4.5 billion worth of Nucor projects.
Click here for a graph showing Nucor's project activity by North American market region.
Nucor officials said during the company's fourth-quarter 2019 earnings conference call with industry analysts that they expect growth capital expenditures to be in the $2 billion range for both 2020 and 2021 as several projects are completed. Capital expenditures for 2019 amounted to $1.5 billion. For more information, see October 23, 2019, article - Nucor Lowers Capex Forecast for 2019.
Leon Topalian, who became Nucor's chief executive officer on January 1 following the retirement of John Ferriola, said several project milestones were reached during the fourth quarter.
"At our DRI (direct reduced iron) plant in (Convent,) Louisiana, the critical work of replacing the convection section for our process gas heater, as well as relining the reactor refractory, was completed in November," Topalian said. "The work was done safely, on time and in budget. We expect these projects will further improve the plant's reliability. The performance in 2019 there was the second-best year ever for up-time and output, despite the 70-day planned outage."
See Industrial Info's project report for more information on the Convent DRI upgrades.
Meanwhile, two growth projects, Nucor's 500,000-ton-per-year specialty cold mill in Blytheville, Arkansas, and a new 500,000-ton-per-year galvanizing line at its Gallatin mill in Kentucky, continued to ramp up production in the fourth quarter, Topalian said. See Industrial Info's project reports for the Arkansas specialty cold mill and Kentucky galvanizing line.
Projects that are expected to come on line this year include the company's 350,000-ton-per-year steel rebar micro mill in Sedalia, Missouri, and the Kankakee merchant bar-quality mill addition in Bourbonnais, Illinois, Topalian said. The Kankakee project experienced some permitting and equipment-related delays, but it is still expected to come in on budget, he added. See Industrial Info's reports on the Kankakee project and the Sedalia project.
"Finally, we are excited to report that we have teammates on the ground and begun excavation work for our new plate mill in Brandenburg, Kentucky," Topalian said. The $1.35 billion mill is the largest investment in the company's history, and the 1.2 million-ton-per-year facility is planned to begin operations in 2022. For more information, see Industrial Info's project report.
For the fourth quarter of 2019, Nucor reported $66.9 million in earnings, including non-cash impairment charges, compared with consolidated net earnings of $646.8 million in fourth-quarter 2018. For all of 2019, Nucor reported consolidated net earnings of $1.27 billion, compared with $2.36 billion in 2018.
The company's steel mill segment performed better than expected in December, Topalian said.
"We believe that inventory destocking concluded in the fourth quarter, when customers resumed more normal buying patterns," he said. Also, general business conditions improved as the fourth quarter progressed. Other recent favorable factors leading to a more optimistic outlook include a new labor agreement between the United Auto Workers (UAW) and General Motors (NYSE:GM) (Detroit, Michigan) , progress on U.S.-China trade relations, and the passage by Congress of the United States-Mexico-Canada Agreement, which Topalian said will incentivize the use of U.S. steel in automobiles and other items.
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.
Nucor officials said during the company's fourth-quarter 2019 earnings conference call with industry analysts that they expect growth capital expenditures to be in the $2 billion range for both 2020 and 2021 as several projects are completed. Capital expenditures for 2019 amounted to $1.5 billion. For more information, see October 23, 2019, article - Nucor Lowers Capex Forecast for 2019.
Leon Topalian, who became Nucor's chief executive officer on January 1 following the retirement of John Ferriola, said several project milestones were reached during the fourth quarter.
"At our DRI (direct reduced iron) plant in (Convent,) Louisiana, the critical work of replacing the convection section for our process gas heater, as well as relining the reactor refractory, was completed in November," Topalian said. "The work was done safely, on time and in budget. We expect these projects will further improve the plant's reliability. The performance in 2019 there was the second-best year ever for up-time and output, despite the 70-day planned outage."
See Industrial Info's project report for more information on the Convent DRI upgrades.
Meanwhile, two growth projects, Nucor's 500,000-ton-per-year specialty cold mill in Blytheville, Arkansas, and a new 500,000-ton-per-year galvanizing line at its Gallatin mill in Kentucky, continued to ramp up production in the fourth quarter, Topalian said. See Industrial Info's project reports for the Arkansas specialty cold mill and Kentucky galvanizing line.
Projects that are expected to come on line this year include the company's 350,000-ton-per-year steel rebar micro mill in Sedalia, Missouri, and the Kankakee merchant bar-quality mill addition in Bourbonnais, Illinois, Topalian said. The Kankakee project experienced some permitting and equipment-related delays, but it is still expected to come in on budget, he added. See Industrial Info's reports on the Kankakee project and the Sedalia project.
"Finally, we are excited to report that we have teammates on the ground and begun excavation work for our new plate mill in Brandenburg, Kentucky," Topalian said. The $1.35 billion mill is the largest investment in the company's history, and the 1.2 million-ton-per-year facility is planned to begin operations in 2022. For more information, see Industrial Info's project report.
For the fourth quarter of 2019, Nucor reported $66.9 million in earnings, including non-cash impairment charges, compared with consolidated net earnings of $646.8 million in fourth-quarter 2018. For all of 2019, Nucor reported consolidated net earnings of $1.27 billion, compared with $2.36 billion in 2018.
The company's steel mill segment performed better than expected in December, Topalian said.
"We believe that inventory destocking concluded in the fourth quarter, when customers resumed more normal buying patterns," he said. Also, general business conditions improved as the fourth quarter progressed. Other recent favorable factors leading to a more optimistic outlook include a new labor agreement between the United Auto Workers (UAW) and General Motors (NYSE:GM) (Detroit, Michigan) , progress on U.S.-China trade relations, and the passage by Congress of the United States-Mexico-Canada Agreement, which Topalian said will incentivize the use of U.S. steel in automobiles and other items.
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.
