Nucor Corp. announces acquisition of Longview, Texas steel plate mill

HOUSTON (Scrap Monster): Nucor Corporation- the country’s largest steel producer announced yesterday that it has reached an agreement with Joy Global Inc. to acquire its steel plate mill in Longview, Texas for a sum of nearly $29 million. The sale is expected to close within 60 days. Nucor will continue to supply Joy Global with heavy steel plates that are used in manufacturing various mining equipment.

According to press release issued by Joy Global, the sale is part of its restructuring strategy to focus on core mining equipment and services business by monetizing non-core assets. Rodney Bull, vice president and general manager noted that the transaction will offer great opportunities for the mill employees, who have already been informed about the sale agreement.

Meantime, John Ferriola, Chairman, CEO and President of Nucor Corp stated that the acquisition of the Texas mill will serve as a valuable addition to the company’s plate product offerings and is expected to complement the capabilities of its two existing plate mills in North Carolina and Albama. Incidentally, these two plate mills account for a combined capacity of 2.9 million tons per year. The acquired mill with annual production capacity of 180,000 tons produces specialty carbon and alloy plate products with thickness ranging from 1 to 12 inches and width up to 138 inches.

Recently, the Charlotte, North Carolina-headquartered steel producer has signed a 50:50 joint-venture deal with Japanese JFE Steel Corp to build a new steel plant in central Mexico, aimed at producing around 400,000 tons per year of galvanized sheet steel, which will be supplied mainly to Mexican automotive market. The company had announced that the project is estimated to cost around $270 million and the operations are expected to commence in 2019.

The joint venture will help both the companies to tap the growing automotive demand in North America. The NAFTA region countries constitute the world’s second largest auto market. Many leading automakers own plants in Mexico, mainly due to its easy logistical access to the US and many other parts of the world. According to forecasts, automotive production in Mexico is likely to increase significantly from 2.3 million vehicles in 2010 to 4.8 million by 2020. Growth in light vehicles market is likely to continue at a rate of around 2.1% per year to 2021.

Nucor is scheduled to announce its second quarter results today. As per analysts’ consensus, the company is expected to post revenue of $4.49 billion for the quarter. The company in its Q2 2016 results guidance released last month had predicted improved performance by steel mills segment during the quarter on account of higher average selling prices and improved volumes. The company had noted that the average sheet product pricing has seen significant improvement during the quarter. Consequently, the profitability of sheet, bar and plate mills are expected to improve during the quarter.

About Nucor Corporation

Nucor Corporation is the largest steel producer in the United States and is the largest "mini-mill" steelmaker. Nucor is North America's largest recycler of any material and recycled 16.9 million tons of scrap in 2015. The company manufactures steel and steel products. The Company also produces direct reduced iron (DRI) for use in the Company’s steel mills. It also processes ferrous and nonferrous metals and brokers ferrous and nonferrous metals, pig iron, hot briquetted iron (HBI) and DRI. Nucor operates in three segments: steel mills, steel products and raw materials.

About Joy Global Inc.

Milwaukee, WI-based Joy Global Inc. is a worldwide leader in high-productivity mining solutions. It supplies high-productivity mining equipment and supports mining companies worldwide through full service programs including technical support, on-site maintenance and remote health monitoring. The company has 135 locations spread across 20 countries.