Nucor To Build $370M, 400k tpy Galv Line at CSI

The project at the Fontana, Calif., mill will take approximately 30 months to build following receipt of regulatory approvals, the company said in a press release Monday, Dec. 19.

“With recent closures of galvanizing capacity in the western region, CSI is seizing an opportunity to provide the high-quality, value-added products that our customers have requested,” Nucor chair, president and CEO Leon Topalian said in a statement. He did not specify the closures by name.

CSI is a joint venture between Nucor and Japanese steelmaker JFE. Nucor holds a 51% stake in the mill, with JFE holding the balance following a $400-million deal that closed in February.

The mill has capacity of 2 million tpy. It does not have melting capacity, but instead converts semi-finished steel slabs to sheet. The plant makes not only hot-rolled, cold-rolled, and galvanized flat-rolled steel but also electric-resistance-welded (ERW) pipe.

The facility serves the construction, service center, and energy sectors. The construction sector is the dominant end-use market on the West Coast. That stands in contrast to the Midwest, where automotive is a bigger demand driver.

Nucor noted that it operates five other sheet mills in the US, with a sixth, a $2.7-billion EAF sheet mill in West Virginia, on the way. All those mills also sport, or will sport, galvanizing capability.

The company said it would have sheet production capacity of 14 million tpy once the West Virginia mill is complete, and that it would grow its galvanizing capacity to 6.4 million tpy.

Nucor and JFE also operate a joint venture galvanizing mill in Mexico. That mill, Nucor JFE Steel Mexico, was finished in 2020 and is seeking to qualify its products to serve the growing Mexican automotive sector, the company said.

Industry analysts have long warned of potential overcapacity in North America when it comes to hot-rolled coil. SMU estimates that nearly 25 million tpy of new sheet and plate capacity has come into the market over the last few years, or is on the way.

Wolfe Research analyst Timna Tanners in a Community Chat in November noted that there is also potential for “a galvanized glut” as more steelmakers look to expand downstream into value-added products such as galv. (See slide 20 in the presentation here.)

By Michael Cowden, Michael@SteelMarketUpdate.com