Scrap Processors
July 30, 2024
Nucor targets scrap recovery in growth plan
Written by Stephanie Ritenbaugh
Nucor is upping its game to enhance its scrap recovery rates as it executes its long-term growth plan.
“In raw materials, we’re investing in new technologies to enhance our scrap segregation and recovery rates, while reducing our carbon footprint,” Leon Topalian, chair, president and CEO said.
The Charlotte, N.C.-based steelmaker has three business units: raw materials, steel mills, and downstream steel products. The plan also includes increasing Nucor’s product mix to higher-margin products in its Steel Mills segment, as well as investing in downstream platforms for steel-adjacent businesses.
“The next two years will likely be our most capital-intensive with several active construction projects occurring simultaneously,” Topalian said.
Recall that the steelmaker announced in June that it plans to add a $20 million rebar fabrication facility adjacent to its new micro-mill in North Carolina. The micro-mill in Lexington, N.C. will have an annual capacity of 430,000 short tons of rebar. Startup is slated for 2025.
In February, Nucor also said it plans a $860 million rebar micro-mill in the Pacific Northwest. That facility will have annual capacity of 650,000 short tons.
Those mills, and other micro-mills in the company’s portfolio, produce rebar made from nearly 100% recycled metals.
As for raw materials, Nucor touted its low-copper shred production and how it uses it in the mix.
“What we’re aiming to do is create competitive advantage by supplying our mills with the most cost-effective stream of inputs, and to do that while minimizing the embodied carbon in our finished products,” Alan Behr, executive vice president of Plate and Structural Products said last week during the company’s second quarter call.
“You have seen recently a renewed investment and some newer investments in low-copper shred as we see the demand for high-quality metallics going up,” Behr noted. “And we’re responding to that by making additional investments in low-copper shred to add to the flexibility that’s so key to our strategy.”
Today, Nucor processes about 1.4 million tons of low-copper shred and is adding another 750,000 tons, bringing its capacity to about 2.1 million tons.
“As we look out another couple of years, I’d expect us to add another 3.5 million to 4 million tons of additional capacity, landing us somewhere in the 5.5 million to 6 million ton range for low-copper shred,” Behr said, adding that the company also produces about 4 million tons of DRI.
“It puts us at about 10 million tons of metallics that we control, which is about two-thirds of our needs,” Behr said. “That’s a sweet spot for us, because it gives us incredible control, while at the same time allowing us the ability to be very flexible and very opportunistic in the market and how we serve the rest of our needs.”
During the second quarter, Nucor recorded average prices for scrap and scrap substitutes of $396/gt. That’s down 6% from $421/gt in Q1’24 and down 13% versus $455/gt in Q2’23.