Nucor Corporation announced Tuesday that it will restart bar production at its idle rolling mill in Kingman, Arizona.
The company expects capital improvements necessary to restart operations will total about $30 million and estimates that rolling operations will begin in Kingman by the second quarter of 2009. Initial annual output of straight-length rebar, coiled rebar and wire rod should total 250,000 net tons, though the mill will have the capacity to increase annual production to over 500,000 nt.
Nucor acquired North Star Steel's idled Kingman steel mill in 2003 for a purchase price of approximately $35 million. In 2004, Nucor decided that Kingman's melt shop would not be restarted and recorded a $13 million impairment charge for the melt shop assets.
The company said in its press release on the Kingman restart that its decision to start rolling rebar and wire rod products at this location is driven by growing demand in the southwestern US market from both its outside customers and its expanding downstream rebar fabrication business. Nucor says that Kingman's very attractive capital cost for rolling steel will be leveraged by excess low-cost melting capacity at the company's existing bar mills.
Dan DiMicco, Nucor's Chairman, CEO and President, commented: "Startup of our low-cost rolling mill in Arizona is an exciting growth project in the very attractive southwestern US market for rebar and wire rod. Nucor Steel Kingman, LLC will build upon Nucor's position as North America's largest rebar producer. The restart of this facility expands our highly successful vertical integration business model."