NEW YORK Nucor Corp.
executive chairman Daniel DiMicco will spearhead a "proactive"
effort by the domestic steel industry to battle what it
believes are unfairly traded imports.
"Obviously, the way that
its worked in the past has been a very reactive program.
We take action after the damage has been done, after steel
companies go out of business, after American workers have lost
their jobs. Were going to be much more proactive," Nucor
president and chief executive officer John Ferriola said during
the companys earnings conference call. DiMicco "is going
to remain focused on that, and Ive got great confidence
in his ability to get it done."
The company said previously that
it was working with the U.S. government to develop a response
to low-priced imports (
amm.com, Nov. 13).
The surge of imports has hurt
the steel sectors recovery, according to Ferriola.
"Importswhich are being dumped, in many
instancescontinue to represent a serious challenge to the
U.S. steel industrys recovery," he said, citing
preliminary U.S. Census figures indicating that imports last
year were up 17 percent from 2011 and 38 percent from 2010. "By
contrast, U.S. steel mills increased their production by less
than 10 percent over the same two-year period."
The Charlotte, N.C.-based
steelmaker is expecting a "challenging" first quarter, partly
due to high import levels (
amm.com, Jan. 29).
"After four years of recession
and modest growth, we can still not see signs of a full
economic recovery. Steel market conditions remain very
challenging," Ferriola said, pointing to an industry capacity
utilization rate of 75 percent.
The company continues to see
strength in the automotive, energy and heavy equipment markets,
but such sectors as nonresidential construction have yet to
show a significant upturn.
"Our best guess would probably
be maybe two more years of slow growth before we see any
significant improvement," Ferriola said.
Nucor expects U.S. automotive
production to reach 15 million vehicles in 2013, up from 14.5
million in 2012.
Demand for flat-rolled sheet is
"stable," although existing overcapacity is expected to lead to
"another challenging year," Ferriola said. Nucors lead
times for hot-rolled sheet are between two and four weeks,
while cold-rolled, galvanized and plate lead times are between
four and six weeks.
Scrap prices are expected to
remain relatively flat in the near term. "We see it not
changing very significantly from where it is today. Its
going to stay within a band, at least for the next month,"
The steelmaker expects its
direct-reduced iron (DRI) facility in Louisiana to be running
at its full capacity of 2.5 million tons by the end of the
year, Ferriola said during the conference call.
The company is investing $260
million in two natural gas drilling programs in 2013. "The
drilling of natural gas wells resulting from these two programs
is expected to provide enough natural gas to equal Nucors
usage at all of our steel mills plus the usage of two DRI
facilities or, alternatively, three DRI plants," chief
financial officer James Frias said.
Editors note: This
story was updated Jan. 31, 2013, to recharacterize Nucors
comments on the automotive industry.