Nine days to go…
I don’t know about you but my cell phone is being lit up with political calls/texts from both parties – including states I don’t live in. November 4th can’t get here fast enough…
Steel Dynamics reported that their mills (all products) operated at 85 percent and their sheet mills achieved a 99 percent rate. AISI reported the average during 3Q as being around 64 percent. How can that be? The AISI data counts steelmaking facilities that are offline, but available to be restarted. So, the U.S. Steel and ArcelorMittal BOF’s that are waiting to be restarted (along with JSW EAF in Mingo Junction) all count as being available. In reality, the actual average capacity utilization rate was much higher than 64 percent, and currently it is probably well above 80 percent.
Key takeaways from Nucor earnings conference call with analysts late last week. Leon Topalian, President & CEO of Nucor, advised:
- Capacity utilization rates for their steel mills (all products) improved in 3Q to 83 percent from the 68 percent reported during 2Q at the height of the pandemic.
- Regarding demand, Topalian reported strength in construction – especially data centers and distribution centers. Automotive demand is expected to remain strong in 4Q perhaps matching or exceeding year ago levels. Topalian reported auto inventories are close to 10-year lows. Oil and gas markets continue to be challenged, however, orders are up 15 percent from the renewables market, which uses plate, tubular beams, fabricated rebar, sheet, piling and fasteners.
- The new cold mill in Hickman, Ark., continues to ramp up production. According to Mary Emily Slate, the mill is running about “90%” of capacity. Nucor shipped more cold rolled in 3Q than they did in 1Q prior to COVID.
- The new Gen 3 (AHSS) “flexible galvanizing line” at Nucor Arkansas is expecting equipment installation to begin in 3Q, and start up is expected during the second half 2021. The rated capacity of AHSS (advanced high strength steels) is going to be 500,000 tons per year. This line is meant for non-exposed internal parts for automotive.
- The plate mill in Brandenburg, Ky., is on schedule for late 2022. This plate mill will be able to produce plate 0.375” to 14” thick, out to 168 inches wide. Nucor actually broke ground for the new mill on Friday of this past week.
- Nucor’s exposure to the automotive market is 1.5-1.6 million tons a year. The company goal is to expand that to 3 million tons. They advised they can produce totally exposed automotive steels.
On Wednesday of this week we will have Dr. David Schultz, Distinguished Professor of Political Science and Legal Studies at Hamline University, an expert on elections, provide his insights into the conclusion of the presidential and congressional races. T.his will be part of our SMU Community Chat Webinar series. The free webinar will be held at 11 a.m. ET on Wednesday, Oct. 28. Prior to his comments, I will provide some insights into the steel market. To register please click here.
We produced our first virtual Steel 101 workshop last week and received high grades from the 30+ attendees. Our next virtual Steel 101 workshop will be held on Dec 8-9, 2020. You can learn more about what the workshop entails, costs and how to register by clicking here.
If you are interested in expanding the number of employees within your company who are able to receive Steel Market Update newsletters and have access to our website, please contact Paige Mayhair at 724-720-1012 or by email at Paige@SteelMarketUpdate.com
As always, your business is truly appreciated by all of us here at Steel Market Update.
John Packard, President & CEO
John PackardRead more from John Packard
Latest in Final Thoughts
Following the United Auto Workers (UAW) union strike, organized labor seems to be enjoying a moment.
I want to address a few things in this 'Final thoughts': the latest SMU survey results, the plate market, and the potential sale of U.S. Steel.
Sometimes a journalist’s life comes with unexpected perks. That is, beyond the day-to-day of writing stories, a wayward email can come across the Inbox with an attractive invite, and the promise of free food.
There has been almost an assumption that US mills would get the $950-1,000 per ton ($47.50-50 per cwt) they were seeking on HR base and $1,150-2,000 per ton ($57.50-60 per cwt) for cold-rolled and coated base. Recall that Cliffs initially announced an increase and said it was seeking $1,000 per minimum for hot-rolled coil. Nucor […]
United Auto Workers (UAW) members have ratified a new labor contract with Detroit-based General Motors, the largest US automaker. In other words, the UAW strike that began on Sept. 15 - and that rattled the steel industry in the months leading up to it - is almost in the rear-view mirror.