Steel Producers in U.S. to Complete Nearly $4 Billion in Projects This Year Despite COVID-19, Economy Woes

Researched by Industrial Info Resources (Sugar Land, Texas)--Big River Steel announced this week the startup of the second phase of its scrap metal recycling and flat-rolled steel production facility in Osceola, Arkansas, saying the expansion came in under budget and ahead of schedule. It is one of several steel mill projects to reach the finish line this year in the U.S. despite an industrywide slowdown in steel shipments amid the COVID-19 pandemic and resulting economic downturn.

Industrial Info is tracking nearly $4 billion worth of U.S. capital steel mill projects that have been completed this year, or will be completed by yearend.

Click on the image at right for a graph showing the top companies for capital project completion activity this year at U.S. steel mills.

Big River Steel said the expansion, budgeted at $716 million, will double its production capacity to 3.3 million tons per year. Commissioned more than two months earlier than originally planned, the expansion includes a second electric arc furnace, ladle metallurgical station, thin-slab continuous caster, tunnel furnace and hot mill downcoiler. The company said it plans to ramp up production to reach rated capacity in less than five months. For more information, see Industrial Info's project report.

Big River Steel is 49.9% owned by U.S. Steel Corporation (NYSE:X) (U.S. Steel) (Pittsburgh, Pennsylvania), which plans to acquire the remaining 50.1% at a later date. For related information, see November 2, 2020, article - U.S. Steel Focuses on Positive Outlook for Flat-Rolled Steel After Harsh Third Quarter.

COVID-19 and the economic downturn have taken their toll on steel producers. According to the American Iron and Steel Institute (AISI), steel shipments for the first nine months of this year were 60.4 million net tons, a 16.7% drop from shipments during the same period of 2019. Still, some flat-rolled steel producers are seeing positive signs due to an uptick in the automotive market. For related information, see October 27, 2020, article - Cleveland-Cliffs' Quarterly Results Improve on Automotive Demand.

After Big River Steel, Nucor Corporation (NYSE:NUE) (Charlotte, North Carolina) has the largest amount of project completions this year by total investment value.

During Nucor's earnings conference call for the just-ended third quarter, Nucor Chief Executive Officer Leon Topalian noted the commissioning and ramp-up of new and expanded facilities.

Among others, he said the ramp-up of Nucor's 350,000-ton-per-year rebar micro mill in Sedalia, Missouri, "continues to exceed our expectations." The $250 million project was completed in January. For more information, see Industrial Info's project report.

Nucor also expects to complete commissioning of a new merchant bar-quality (MBQ) rolling mill at its Kankakee, Illinois, facility during the fourth quarter.

"While the commissioning schedule was slightly extended due to COVID-related disruptions, customer acceptance of the new products has been extremely strong. This new capability at Kankakee will allow us to provide our customers with a full range of MBQ, light shapes and structural angles and channels out of one location in the heart of the Midwestern market," Topalian said. The 500,000-ton-per-year mill was completed in September. For more information, see project report.

Meanwhile, construction on a flexible galvanizing line addition at Nucor's Hickman steel sheet plant in Arkansas continues to progress, Topalian said. Equipment installation began in the third quarter and the team anticipates a startup in the second half of 2021. For more information, see Industrial Info's project report.

Other major investment projects remain on track, Topalian said, with the startup of a $240 million rebar micro mill in Frostproof, Florida, expected late this year. For more information, see Industrial Info's project report.

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.