Nucor Slates Extended Outage at Gallatin, Sees $$$ in Green Steel

“Startup will continue into the first quarter, and then we will be producing product through the mill,” said Rex Query, Nucor’s executive vice president of sheet and tubular products.

The $650 million expansion – once fully ramped up – is expected to increase Gallatin’s hot-rolled coil capacity from approximately 1.6 million tons per year to 3 million tons per year.

But the 1.4 million tons per year of additional hot-rolled coil capacity won’t come online all at once. Gallatin is forecast to make 800,000 to 1 million tons more in 2022, Query said.

Nucor’s overall sheet volumes should see only a “minimal impact” from the extended outage at Gallatin because the company has stocked material ahead of it. Also, Nucor has five other sheet mills.

“We are able to support a plant that may have an extended outage … We’ll shift supply between our plants to accommodate that,” Query said.

Nucor added a hot-rolled galvanizing line to Gallatin that started up in mid-2019, and most of the additional hot-rolled coil capacity at the mill is expected to feed into downstream coated products.

The company is also underway with the commissioning of a Gen-3 flexible galvanizing line at its sheet mill in Hickman., Ark. Production from the new line is expected in December, Nucor CFO James Frias said.

As for new mills, Nucor expects to finalize site selection for its $2.7 billion, 3 milllion ton per year EAF sheet mill by the end of the year, company President and CEO Leon Topalian said.

The company has said that it would build the mill in either Pennsylvania, West Virginia or Ohio. Market participants have speculated that the mill will be located along the Ohio River.

On the plate side, Nucor’s new mill in Brandenburg, Ky., remains on track to start up in late 2022 and should be in a good position to supply the wind tower market, company executives said.

One thing Nucor won’t be doing is building a new blast furnace. There had been speculation years ago that the company might add blast furnace capacity on the site of what became its direct-reduced iron (DRI) plant in Convent, La.

The company had at one point considered building two blast furnaces in Louisiana, but opted instead to go the DRI route. “At this point, there is zero chance Nucor is going to build a blast furnace,” Topalian said.

If there is something to keep an eye on, it is potential investments in cutting-edge green technologies such as hydrogen or CO2 sequestration, he said.

That’s in part because Nucor has seen keen interest in its Econiq “net zero” steel – especially since Detroit-based General Motors, the largest U.S.-based automaker, said that it would purchase the low CO2 steel from Nucor to help meet its own carbon emissions targets.

“Demand for that product and that family of products has been significant,” Topalian said, noting that interest in Econiq has hardly been limited to the automotive sector.

And Nucor expects to be able to charge a premium for low CO2 steel, he added.

By Michael Cowden, Michael@SteelMarketUpdate.com