Steel Mills

Nucor upbeat on progression of flat rolled expansions
Written by Laura Miller
October 22, 2024
Nucor Corp. isn’t overly concerned with low utilization rates or an oversupplied market, as its investment strategy is for the long term, executives reminded investors this week.
Leaders of the Charlotte, N.C.-based steelmaking and manufacturing conglomerate expressed optimism about the company’s expansion projects and its market position on a conference call on Tuesday to discuss its third-quarter earnings results.
“I love where Nucor sits. I love our growth strategy and the markets that we’re going to serve, because they’re underserved,” Leon Topalian, Nucor chair, president and CEO, commented on the call.
Sheet mill group
Topalian cited as an example the company’s newest sheet mill being constructed in West Virginia. Nucor has a low market share in the Northeastern US, he said, so the 3-million-short-ton-per-year mill will allow it to bring its products to markets where it’s currently underrepresented.
Nucor broke ground on the mill in Apple Grove, W.Va., a year ago. It expects to begin operations there by the end of 2026, with “really meaningful volumes” in 2027, Topalian said.
He also revealed updates on other steel sheet investments, including the commissioning of a new continuous galvanizing line and prepaint line at its sheet mill in Crawfordsville, Ind., planned for next year.
The $290-million investment, first announced in 2022, will add 300,000 short tons per year (stpy) of construction-grade galvanizing capacity and 250,000 stpy of prepaint capabilities.
The company also plans to complete the construction of two utility tower manufacturing facilities next year. One is located adjacent to the Crawfordsville sheet mill, and the other is next to its sheet mill in Decatur, Ala.
Additionally, a new automotive-grade galvanizing line at Nucor Steel Berkeley in Huger, S.C., is expected to be commissioned mid-2026, Topalian said.
Plate group and Brandenburg mill
As you may recall, Nucor reorganized its plate mill group last year, closing its Longview, Texas, mill and shifting production to its new 1.2-million-short-ton-per-year plate mill in Brandenburg, Ky.
“In general, we’re incredibly optimistic about our plate group, the things that are going on against the backdrop of the plate market, and in particular, Brandenburg, as it’s continued to ramp up,” Topalian said on Tuesday’s call. He noted that “Brandenburg has achieved EBITDA positive.”
While the utilization rate of the Brandenburg mill was ~20% last quarter, there have since been, and will continue to be, utilization and quality improvements, according to Brad Ford, EVP of plate and structural products.
He said Nucor will “continue to ramp up Brandenburg thoughtfully and methodically,” and reminded those on the call that the mill “was built to expand the capabilities of the plate group portfolio.”
Customers are enthusiastic about the added capabilities for Nucor’s plate mill group, Ford said, as Brandenburg can produce certain grades and sizes that its other plate mills in Hertford County, N.C., and Tuscaloosa, Ala., cannot.
He added that customers are “excited about sourcing a domestic sustainable product out of Brandenburg.”
Capital expenditures
Topalian noted that, “While it can take time for large projects like these to reach their full earnings potential, our team has a strong track record of safely doing whatever it takes to get there.”
“Moving forward, we’ll continue to seek ways to further diversify by investing in higher-margin businesses that are less cyclical and more aligned with secular growth trends,” he added. “We have seen this play out in 2024 as returns from our steel product segment have shown more resilience than our steel mills.”
The company lowered its 2024 capital expenditure projections by $300 million to $3.2 billion, with about two-thirds of that total slated for growth projects, according to CFO and EVP Steve Laxton. He estimated the company will continue to have elevated capex “somewhere around that $3 billion level, maybe a little bit above” that for the next year or two.

Laura Miller
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