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SDI, Nucor make strides on SBQ capacity expansions

Keywords: Tags  Steel Dynamics, Nucor, special bar quality, SBQ, capacity expansions, automotive grade, Mark Millett, Richard Teets John Ferriola

CHICAGO — Steel Dynamics Inc. (SDI) and Nucor Corp. have made progress on special bar quality (SBQ) product capacity expansions.

SDI is adding 325,000 tons of rolling mill production capacity in Pittsboro, Ind., bringing the facility’s annual output to 950,000 tons. The new mill will roll high-precision, small-diameter bar, president and chief executive officer Mark D. Millett said during an earnings conference call. "The project (will) be commissioned in the fourth quarter, with no material interruption of our current operations."

Fort Wayne, Ind.-based SDI had not been rolling much small-diameter bar "because we did not have a precision mill in line," said Richard Teets, president and chief operating officer for steel. "We could roll the small product before, but we didn’t have the necessary mechanical equipment in line to hold the tolerances that some of our competition did, so we basically avoided rolling those products."

From now on, though, SDI will "go after all the very critical components. We’ve been grooming our customers, soliciting grades and attempting to fill up (the second mill with orders)," Teets said.

Millett does not believe SDI is contributing to overcapacity in the small-diameter market. Bars below 35/8 inches account for about 50 percent of the market, and SDI wants to sell 325,000 tons into a market that typically consumes 4 million to 4.5 million tons. "It’s not a massive bite of the apple," he said.

Nucor’s Darlington, S.C., bar mill began production on its new rod block last month. Along with earlier investments in a coil line and roughing mill stands, the rod block will allow Darlington to produce 450,000 tons of wire rod and bar in coil form each year, president and chief executive officer John J. Ferriola said.

Charlotte, N.C.-based Nucor continues to seek "higher and higher applications" for its SBQ products, he said. "In Nebraska, we’ve been focusing on automotive with primary axle, camshafts, gearing, suspension and steering components." In Memphis, Nucor is supplying steel for crankshafts, hubs and several other automotive products.

Each investment is meant to improve steel quality, bar products executive vice president James R. Darsey said. Nucor is installing a new hot shear, cold shear, packaging line and quality instrumentation "that allows us to move up the value chain," he said, adding, "We are doing trials with Tier I and Tier II automotive suppliers to get qualified to produce automotive-grade material."

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