U.S. Steel Manufacturing Industry Project Activity Reaching Fevered Pitch

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Researched by Industrial Info Resources (Sugar Land, Texas). Project activity at U.S. steel manufacturers is reaching highs not seen in years, as a number of large-scale steel mill projects are being developed to take advantage of the booming U.S. market for steel sheet, SBQ and tubing. Industrial Info is tracking 193 active capital and maintenance projects at U.S. steel mills worth close to $9 billion. According to Joseph Govreau, VP Metals & Minerals for Industrial Info, “Right now, we’re seeing an acceleration in the frequency and magnitude of projects in the steel sector, led by company’s such as ThyssenKrupp, Nucor, and Ipsco, to name a few, which have all recently announced evaluations of major new grassroot steel mills in the southern U.S.”

As a result of this new wave of grassroot steel mill project activity, the Southeast Region with planned projects totaling $4.8 billion in Total Investment Value (TIV) has surpassed usual sector leader Great Lakes Region, which has just under $3 billion planned.

Click on the image at right to view a chart showing the breakdown of planned steel mill projects by market region.

Mr. Govreau goes on to say, “Our Confidence Factor for the Metals & Minerals Industry is 66%, and the increase in project activity in the steel sector is a leading contributor to increased confidence in the industry. Other sectors that are performing well right now include cement and mining.” A high confidence factor means that more projects are proceeding to the construction stage. The Confidence Factor is internally generated by Industrial Info to express the health of project spending for an industry, and represents the percentage of forecast project activity that is expected to come to fruition based on analyzing project trends and history for the previous 54 months.

An example of the improving outlook for the North American market is German steel firm, ThyssenKrupp AG (Dusselforf, Germany), which recently approved $50 million to perform a feasibility study for a new $2.9 billion carbon and stainless steel mill complex in the southern U.S. Very much interested in the North American steel market, ThyssenKrupp’s first priority is acquiring Canadian integrated steel producer, Dofasco (Hamilton, Ontario). If the Dofasco deal falls through then a grassroot mill complex has a better chance of moving forward. ThyssenKrupp is developing an integrated steel mill in Brazil to produce low cost steel slabs, which would be the feedstock for a carbon rolling mill in North America.

Prior to this year's spurt in grassroot steel mill development, the industry was experiencing stronger than usual capital and maintenance activity for the past two years. This coming after years of bankruptcy, consolidation, and poor market conditions sent many steel manufacturers running for cover. Today, a leaner, meaner industry is capitalizing on the recent strong demand situation. Internationally, consolidation of the steel industry is continuing with mega-mergers. Take for example the recent mega-merger between the number one steel company Mittal and the number two steel company, Arcelor, creating a global mega-steel producer.

Industrial Info Resources (IIR) is a Marketing Information Service company that has been doing business for over 23 years. IIR is respected as the leader in providing comprehensive market intelligence pertaining to the industrial processing, heavy manufacturing, and energy-related industries throughout the world.