Nucor Corp. says it will build a $2.7 billion sheet steel plant, targeting low-carbon production for automotive steel to serve car manufacturers in the South and Midwest.
Nucor (NYSE: NUE) is eyeing sites in Ohio, Pennsylvania and West Virginia. The Charlotte steelmaker plans to start construction next year on the plant, which will have an anticipated capacity of 3 million tons, and put it into operation in 2024. It would be the largest construction project in Nucor’s history.
The move comes among rising fears of excess capacity in the U.S. industry. Just last week, many major steel producers, including Nucor, saw stock prices fall as U.S. Steel Corp. (NYSE: X) announced its own plans for a 3 million-ton sheet mill plant. Even before Nucor’s announcement today, that would make for 12 million tons of new sheet steel capacity in the works in the country.
Nucor CEO Leon Topalian attempted to address that issue head on in his conference call about the plan, even before analysts asked.
“We expect that many of you listening … will be thinking about this project and what it means to the broader industry landscape of North America,” he said.
“The market needs a steelmaking facility of this caliber, built and operated by the industry leader,” he said. “And we believe that there are several million more tons that are vulnerable and may become obsolete in the coming years due to cost position and carbon intensity.”