Nucor: La. iron-reducing facility will buttress company from global steel glut

As steel production increases globally, and prices and profits drop for steelmakers, Nucor Corp. says the $3.4 billion direct-reduced iron and steelmaking facilities under development in Convent will help reduce raw material costs for its steel mills. “The current excess of global steel capacity is putting downward pressure on steel prices,” says Nucor spokeswoman Katherine Miller. “We can’t control that situation. What we can have more control over is our raw material costs, and this project will help do that, which is very important, given current market conditions.” Steel mills around the world this year have a production capacity of 1.8 billion tons, but will take orders for only 1.5 billion tons. In Southeast Asia and South America, an estimated 100 new mills by 2016 are expected to be producing an estimated 350 million more tons of steel. “You see people wanting to build new facilities all the time, all over the world,” Dan DiMicco, CEO of Nucor, recently told The Wall Street Journal, calling for more consolidation. However, the final stage of Nucor’s project in St. James Parish is a $750 million steel mill on the east side of the Mississippi River, south of the Sunshine Bridge. Miller says recycled scrap is Nucor’s main raw material source for making steel, but direct-reduced iron is also used in the process. Charlotte, N.C.-based Nucor began construction in Convent in early 2011, and the first phase of the project is expected to be fully operational by mid-2013. —Adam Pearson