U.S. Steel Industry Planning $10 Billion in Project Spending

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Researched by Industrial Info Resources (Sugar Land, Texas)--Global overcapacity in the steel industry remains a major influencer for capital spending in the steel manufacturing sector; however, in the U.S., demand has improved, and steel manufacturers are increasing finished product prices and are ramping up capacity to meet regional demand. Steel mill capacity utilization is up slightly in 2017. This is mainly due to improvement in demand for non-residential construction and an uptick in oil & gas development, including drilling rig activity.

While capital expenditures remain muted, some steel firms are moving forward with capital expenditures. Steel manufacturers are developing $10 billion worth of projects in the U.S., according to Industrial Info's Global Project Intelligence Platform.

Charter Steel Company (Saukville, Wisconsin) is planning to construct a $150 million Steel Bar Quality (SBQ) mill at the company's steel mill in Cuyahoga Heights, Ohio.

JSW Steel USA is in the middle of about $80 million in improvements to its steel mill in Baytown, Texas. Earlier in the month, the company's chief executive officer announced that the company is evaluating a new steel-making furnace and caster at the mill. That project would be at least $150 million.

The steel industry is waiting for details on a proposed $1 trillion infrastructure spend, lasting more than 10 years, as promised by the Trump administration. This could boost U.S. steel consumption by approximately 5 million tons per year. Companies like Nucor Corporation (NYSE:NUE) (Charlotte, North Carolina) and Caterpillar Incorporated (NYSE:CAT) (Peoria, Illinois) would benefit greatly from the proposed infrastructure spend.

The industry outlook in North America has improved significantly since 2016. For additional information, see May 26, 2016, article - Challenged by Global Glut, U.S. Steel Manufacturers Slow Capital Expenditures.

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