Steel Mills

Eyeing Renewables, Nucor Urges Passage of Infrastructure Bill

Written by Michael Cowden

One of the largest expansions in Nucor’s history – its $1.35 billion plate mill in Kentucky – is poised to come online at an opportune time should Congress pass a bipartisan infrastructure spending bill.

The Charlotte, N.C.-based steelmaker anticipates the mill will be commissioned in late 2022 despite some delays in equipment deliveries, company executives said.

NucorAnd the mill’s location in Brandenburg, Ky., just across the Ohio River from Indiana, means it’s well positioned to serve not only traditional plate-intensive markets in the Midwest but also growth sectors such as offshore wind energy – a potential focus of infrastructure spending.

“We urge Congress to make good on the recent bipartisan framework reached in the Senate and to come together to pass a significant infrastructure funding bill,” Nucor President and CEO Leon Topalian said during an earnings conference call on Thursday.

Nucor estimates that every $100 billion in infrastructure spending equates to approximately five million tons in increased steel demand in the U.S.

An attempt to pass a $1 trillion infrastructure bill in the Senate failed by a narrow margin, 51-49, on Wednesday.

“We are encouraged that the president and members from both parties continue to focus on this issue,” Topalian said.

As for other big projects on the flat rolled side, Nucor aims to complete a hot-rolled coil expansion at its sheet mill in Gallatin, Ky., by the end of the year. It also plans to complete within the same timeframe upgrades to its sheet mill in Hickman, Ark., that will make the facility the first electric-arc furnace (EAF) mill to offer a full suite of generation three, advanced high-strength steels for the automotive sector, company executives said.

Nucor sees automotive as a growth market in the medium term as automakers catch up to production lost because of the chip shortage, as automotive dealers look to replenish “staggeringly low” inventories, and as rental car companies try to rebuild fleets liquidated during the pandemic. Longer term, the company sees opportunity from auto OEMs looking to source greener steel.

“Our performance today is what many of our competitors around the global are aspiring to achieve by 2030, ‘40, ‘50 and beyond. And compared to many of our integrated competitors, our starting point is already better than their near and intermediate goals,” Topalian said.

Nucor currently sells approximately 1.5 million tons per year into the automotive sector, and the company wants to double that figure in the next few years, he said.

And Nucor isn’t looking to grow just in the traditional steel markets it has targeted for the last 50 years. It’s also looking to gain a foothold in growth markets – such as renewable energy and climate-controlled warehousing. The latter market critical to the booming e-commerce and data storage sectors.

“It’s a focus on moving into markets that are truly growing,” Topalian said. “Steel is a cyclical industry. And what we see in the renewable space, what we see in the green economy and the digital economy, is a fast growing … market opportunity.”

That’s the logic behind Nucor’s recent $370 million acquisition of Hannibal Industries as well as its $1-billion acquisition of Cornerstone Building Brand’s insulated metal panels (IMP) business. Both businesses are key suppliers to the warehouse sector.

“Our mission is to grow the core, expand beyond and live the culture,” Topalian said.

The questions about potential M&A came after Nucor reported second quarter earnings of $1.51 billion, a new all-time record for the company.

By Michael Cowden,

Michael Cowden

Read more from Michael Cowden

Latest in Steel Mills