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'Today, tomorrow and for as long as it takes to win the fight'

Aug 03, 2017 | 08:00 PM | Nat Rudarakanchana


As the country’s largest steelmaker, based on capacity, ambitiously snapped up assets over the past year, competitors stood relatively quiet, biding their time.

Creating more than a splash, the four big buys notched by Nucor Corp. during 2016 totaled more than a tidal-wave-sized $929 million in outlays as the steelmaker dove deep into the hollow structural sections (HSS) market.

In pipe and tube alone, Nucor rapidly added almost one-million tons of capacity, lifting the Charlotte, N.C.-based steelmaker’s overall production capacity to a nation-leading 26.7-million tons by the end of 2016.
Nucor also expanded its presence in plate, buying Joy Global Inc.’s specialty plate mill in Texas, as the company upped its game in another key construction market.

Rival steelmakers, particularly electric arc furnace-based steelmakers, were comparatively tight-fisted when it came to acquisitions executed during the year.

Gerdau Long Steel NA remained cautious, still engaged in an asset review and disposal mode, while Commercial Metals Co. (CMC) focused on its greenfield plant in Durant, Okla.

Steel Dynamics Inc. (SDI) emerged as the sole mini-mill to rival Nucor in the race for assets in 2016. The largest dollar-volume deal SDI inked during the year—for Vulcan Threaded Products Inc.—came to $114 million, a far cry from Nucor’s $435 million game-changing purchase of Independence Tube Corp.

Even given its unrivalled M&A spend, Nucor ended the year with $2.2 billion in cash and equivalents, remaining among the best capitalized steelmakers in the U.S. The company finished 2016 with $796 million in net earnings during a year when others booked losses.

Actions taken during 2016 cemented Nucor’s enviable presence in the construction markets, where the steelmaker already leads in segments as diverse as rebar, beams, and fabricated products. Attempts by rival long product mills to lead price hikes during the year were repeatedly rebuffed, setting a pattern.

In June, 2017 and a yearly tradition, John Ferriola, Nucor CEO, delivered a keynote speech to a packed crowd at Steel Survival Strategies XXXII in New York. Before launching into the presentation and as is his habit, Ferriola asked his Nucor teammates in the audience to stand up and identify themselves, then thanked them for their work, especially in tough times.

In the worst of times, working in the steel industry can feel like a “slugfest.” Ferriola said, delivering a speech that riffed on Sylvester Stallone’s “Rocky” films. He went on to describe how the country’s mills should, could, and must fight back against unfair trade and government interference.

“If you’re in the room today, it means you’re one of the ones that have kept fighting,” Ferriola told conference delegates on June 27, only hours before Nucor was named the winner of AMM’s 2017 Steel Excellence Award for Steel Producer of the Year later that day. “I want to encourage you to keep fighting,” Ferriola emphasized. “Today, tomorrow, and for as long as it takes into the future, to win the fight.

“These are challenging times,” Ferriola, who is now well into his fourth year as Nucor’s chief executive officer, acknowledged. “Challenging times are the most important times to decide where you want to be tomorrow, where you want your company to be tomorrow.

“That kind of focus and dedication to achieving success is what Rocky Balboa called: The Eye of the Tiger,” Ferriola noted.

Aside from acquisitions, Nucor’s focus in 2016 centered on joint ventures, mill upgrades and trade suits. The steelmaker inked a joint-venture with Japan’s JFE Steel Inc. to construct a galvanized sheet mill in Mexico, all while putting the finishing touches on upgrades undertaken at its Nucor-Yamato Steel Co. mill and its Memphis, Tenn. special bar quality (SBQ) mill.

Automotive steel shipments climbed during the year to 1.4-million tons, marking an expanding presence in a market not traditionally served by Nucor. The Nucor-JFE joint venture should abolish any old-fashioned myths that mini-mills can’t make automotive steel, Ferriola told AMM in June 2016.

Nucor also participated in a series of major flat-rolled trade cases filed by U.S. producers on plate, and in rebar, where Nucor remains the largest domestic producer as measured by market share. Key decisions were issued in those cases in 2016 and 2017, providing market relief for Nucor and fellow U.S. producers.

Nucor notched gains in its’ raw material division, too. Nucor Steel Louisiana, a $750-million, direct reduced iron (DRI) plant, turned operating profits in 2016, after intermittent spates of operational uncertainty since its late 2013 startup. And by May 2016, Nucor’s DRI plant in Trinidad & Tobago was on track to achieve record output.

Last year also saw several changes among Nucor’s top brass. In August, 2016, R. Joseph Stratman, Nucor’s executive vice president for raw materials, was also named Nucor’s chief digital officer responsible for driving the adoption of digital technologies across the organization.

Two months later, the Brussels-based World Steel Association (WorldSteel) elected Ferriola to serve as its’ chairman for a one-year term, elevating the American steel executive to a global platform and role.