CHICAGO Nucor Corp. and
Steel Dynamics Inc. (SDI) are working to boost special bar
quality (SBQ) production capacity despite weaker shipments in
2013 and no expectations of an immediate recovery.
SDI shipped 535,882 tons of
engineered bar last year, down 15.6 percent from nearly 634,964
tons in 2011, the Fort Wayne, Ind.-based company said Jan.
Charlotte, N.C.-based Nucor,
which doesnt break out hot-rolled bar sales from all
steel mill shipments, shipped 492,000 tons of cold-finished bar
last year compared with 494,000 tons in 2011.
Nucor plans to spend roughly
$150 million this year to expand production capacity at its bar
mills in South Carolina, Nebraska and Tennessee, chief
financial officer James D. Frias said during the companys
Jan. 29 conference call with investors.
The investments would yield an
additional 1 million tons of capacity, Frias said. "Well
be able to ship products that we dont make today," he
The expansion projects are
slated for completion this summer and fall, with others planned
to roll out in mid-2014, Nucor executive vice president of bar
products James R. Darsey said.
Demand has been consistent, if
muted, from the automotive, heavy truck and agricultural
equipment sectors, Nucor president and chief executive officer
John J. Ferriola noted.
At SDI, added production is
expected to come online at its Pittsboro, Ind., operations
before year-end, president and chief executive officer Mark D.
Millett said Jan. 29 during the companys quarterly
earnings call. The expansion will increase utilization at the
companys Columbia City, Ind., structural and rail
facility, which will supply billets and blooms for the
The Pittsboro mill is focused on
3- to 5-inch diameter bar, which Millett said makes up some 50
to 55 percent of the domestic SBQ market. The total market
equals 8 million to 10 million tons of U.S. consumption; SDI
could add market share of 300,000 to 350,000 tons.
Pittsboro had been shipping up
to 150,000 tons per quarter since 2011, but fourth-quarter 2012
shipments fell below 100,000 tons, so the facility is running
furnaces at off-peak hours and doing other things to contain
costs, SDI steel operations president Richard P. Teets
"(Melting and rolling schedules)
are not full, and I cant tell you what its going to
take to get there," he said.
One off-road equipment maker
told Teets that his business was "just more ho-hum" and expects
that to continue throughout 2013. The good news is that SBQ
inventories seem to be in line throughout the supply chain.
"We werent taking orders
in December ... that were really for January consumption,"
Teets said, "so there wasnt a wild
stock-up-at-the-end-of-the-year type of ride."
The move by producers to boost
SBQ capacity is in response to a quicker than expected ramp-up
in automotive and other end markets, and represented an
opportunity for producers to right-size melting capacity that
had been curtailed when the recession hit, as well as to
modernize and upgrade equipment.