Steel Mills

Nucor Louisiana DRI Plant Exceeding Expectations
Written by John Packard
April 27, 2014
A large portion of the recent Nucor 1st Quarter earnings conference call with analysts was devoted to the progress of the company’s DRI (direct reduced iron) project which is called Nucor Louisiana. First Quarter 2014 was the first full quarter that the equipment was up and running. Nucor Louisiana is home to the largest single DRI furnace in the world at 2.5 million tons per year.
Management gushed about the 455,000 tons of DRI produced by Nucor Louisiana during the quarter. According to Nucor’s CEO John Ferriola, the facility was able to attain peak operating rates above 90 percent during the quarter. More importantly, the company reported metallization rates of 96 percent (Fe) and carbon content exceeding 4 percent. The high Fe target rates were achieved after in one week. To put that into perspective, the Trinidad plant took five weeks to reach the same targeted Fe metallization rate. It took LA 11 weeks to reach their nameplate targeted production rate while Trinidad took 26 weeks to reach theirs.
Mr. Ferriola told the analysts on the call that the performance of the equipment “exceeded expectations” and is a major step forward in the company’s long term raw material strategy.
Why is the product important for Nucor? The high quality iron units are needed for Nucor to expand their market share in higher value flat rolled sheet, SBQ bar and plate markets.
During the question and answer period with analysts, Mr. Ferriola pointed out that their mills were already using a 30 percent to 40 percent charge of DRI into their furnaces which was resulting in energy savings, extended life to the furnace lining and their electrode consumption has been reduced. Without identifying the mill he reported one mill had taken the charge up to 50 percent with no issues.
Nucor reported they were now focusing on reducing the yield loss which was running approximately 3 percent higher than what they have been able to achieve at their Trinidad facility. When asked what kind of yield loss would he like to see in a DRI plant Mr. Ferriola said, “I would say that somewhere in the neighborhood of 2% to 3% is probably a good goal. Now, of course, when I talk to our team in Trinidad and Louisiana, I will be saying I made a mistake on the call and what I’m really looking to achieve is 1.5% to 1%.”
The Nucor CEO was asked if the company was ready to commit to the second DRI furnace in Louisiana. He responded no, and then explained that they wanting to get the first furnace “up and running and stabilized” before they consider all the factors in order to make a decision as to when it would be appropriate to move forward.
During the conference call Mr. Ferriola reported that their iron ore supply comes from one source in Brazil, one in Canada and one in Sweden. Iron ore pricing to Nucor is based on a three month contract. Their source of supply is “…not subject to any weather issues. We don’t need to buy an icebreaker.”
Nucor had $20 million in start-up losses associated with the new DRI facility. Most of the losses were related to conversion costs (taking iron ore to DRI).

John Packard
Read more from John PackardLatest in Steel Mills

Steel Summit: Burritt says USS and Nippon are fast-tracking modern steelmaking
U.S. Steel President and CEO David Burritt told audiences at SMU's Steel Summit 2025 that the iconic American steelmaker’s partnership with Nippon Steel is fast-tracking smarter steel production.

Nucor moves to stop HRC price slide with $10/ton hike
Nucor is attempting to halt the decline in hot-rolled coil prices with the announcement of a $10-per-short-ton increase in its weekly consumer spot price on Monday.

Explosion rocks ArcelorMittal’s DR plant in Mexico
ArcelorMittal reported a "strong" explosion at the direct reduction part of its massive Lazaro Cardenas mill in Mexico.

SDI to acquire remaining stake in New Process Steel
Steel Dynamics Inc. (SDI) announced that it has agreed to acquire the remaining 55% equity interest in New Process Steel.

North Star results improve despite buyer caution as tariffs drive prices higher
North Star BlueScope said it is optimistic that US tariffs will bolster selling prices and tighten the spread the Australia-based steel maker suffered in 2025.