Much of Charlotte, North Carolina-based Nucor Corporation's conference call Thursday was dominated with discussion over new production upgrades planned at a number of its facilities. Dan DiMicco, Nucor's Chairman and CEO, said that the new heat-treat line at its Alabama plate mill has been sold out since March 2011 and more "value-added plate products are on the way."
More recently, Nucor's Board of Directors approved $290 million in special bar quality steel expansions in Tennessee, Nebraska and South Carolina that will increase SBQ capacity by 1 million tons. Currently, about 5 to 10 percent of Nucor's SBQ production goes into the automotive and appliance markets with about 10 to 15 percent directed toward the energy market, but those numbers are expected to increase following the mills' expansions.
DiMicco also said that Nucor's Berkeley flats mill in South Carolina will be able to produce wider and lighter-gauge hot rolled coil; the mill will produce hot rolled steel coils up to 74 inches in width and pickled and oil hot rolled coil and cold rolled coil at 72 inches that will allow Nucor to further penetrate the exposed automotive market, which requires wider and lighter steel sheet.
But during the question-and-answer portion of the conference call, Nucor executives said that investing in the oil country tubular goods (OCTG) market isn't a "pressing investment strategy at this point." Nucor supplies a lot of flat-rolled and SBQ steel to the pipe and tube market, and while some OCTG products Nucor could invest in without competing with its current customers, some products could create a problem. So while it's a market Nucor "could get into if we wanted to," any expansion into the pipe market isn't anticipated in the near term.