During Nucor Corporation's Q1 2013 conference call Thursday, President and CEO John Ferriola noted that the flat rolled steel market is poised for a difficult year. Ferriola said that the "amount of overcapacity is phenomenal right now," and the US is "clearly an oversupplied market [which is being] amplified by a heavy level of imports."
Demand, he said, while not stellar has been improving quarter over quarter and the automotive/energy sectors are doing well. But as long as the US market remains oversupplied, "it's going to be a very, very challenging sheet market."
With regard to the Big River Steel mill that may soon be built in Arkansas, Ferriola reiterated "we have a tremendous overcapacity situation in US...and there's absolutely no need for additional capacity." If the mill is built, it will take a while from the groundbreaking to when steel production actually begins. If and when Big River Steel does initiate production, Nucor will "compete fiercely and we'll compete successfully."
Ferriola also answered questions with regard to the upcoming OCTG projects in the US and whether Nucor will find opportunity in being the sheet steel supplier to these mills. "[The mills] will create opportunity for flat rolled and we're pursuing it," he said. Still, OCTG faces headwinds such as significant import penetration, but Nucor is "working with that industry to take action."