U.S. Steel Manufacturing Industry Evaluates $2.8 Billion in Active Capital & Maintenance Projects Going in 2006

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Houston-December 1, 2005-Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). The steel manufacturing industry in the U.S. is looking at 125 capital and maintenance projects scheduled to begin construction in December 2005 or beyond. These projects total more than $2.8 billion in total investment value. Ohio and Pennsylvania lead all states in future steel manufacturing project development.

Click on the image at right to view a chart showing the breakdown of future steel industry spending by state.

When compared with an August 2005 analysis (See August 30, 2005 news article - U.S. Steel Mill Project Activity Remains Strong with $4.4 Billion in the Works), the number of active projects is up from 110; however, the TIV is down from $4.4 billion. The reason for the decrease in the value of future steel mill industry project spending is the fact that a number of large steel mill projects have kicked off construction since the last analysis. For example, SeverCorr has begun construction on its new $700 steel mill in Columbus, Mississippi taking $700 million out of the future construction project pool. Mountain State Carbon LLC, a joint venture recently formed between Wheeling-Pittsburgh Steel Corporation and Severstal (Cherepovets, Russia) began construction on a $77 million rebuild of its #8 coke oven battery in Follansbee, West Virginia. Also, AK Steel began construction on the second phase of a baghouse addition at its Middletown, Ohio mill.

With these and other major projects reaching the construction phase during the past two quarters, we may be witnessing the peak of the steel industry spending boom, which was forecast in 2004 as a result of record steel company profits during that year. This spending surge seen over the last two quarters may be showing signs of tapering off a bit going into 2006. There is also a number of projects being deferred, canceled or reevaluated, such as metallurgical coke plant projects, which could further reduce spending in the industry in the short term.

For more information on steel industry trends check out Industrialinfo.com’s recently released 2006 Global Industrial Outlook.

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