EoW November 2008

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Nucor will start steel bar production in Arizona by the second quarter of 2009

Nucor Corporation (Charlotte, North Carolina) has announced that it will revive its idle rolling mill in Kingman, Arizona, at a cost of about $30 million, and that steel bar production will resume there by April of next year. The company said on 26 th August that initial annual output of straight-length rebar, coiled rebar, and wire rod should be about 250,000 tons. Production capacity may later be raised to double that total. Nucor makes more steel at home than any other US company, and is already North America’s largest rebar producer. Nucor acquired the idled Kingman steel mill from North Star Steel in 2003 for approximately $35 million. In 2004, it was decided not to restart the melt shop and Nucor recorded a $13 million impairment charge for the shop’s assets, but the rolling mill assets have been held available for restart when market conditions warranted. According to Nucor, that time has arrived. The decision to roll rebar and wire rod products at Kingman was driven by growing demand in the south-western US market from both outside customers and the company’s expanding downstream rebar fabrication business. The restart announcement asserted that Kingman’s“very attractive” capital cost for rolling steel would be leveraged by excess low-cost melting capacity at existing bar mills. In other news of Nucor, the company announced plans to install a heat-treating ❈ ❈ facility at its plate mill in Hertford County, North Carolina. With an estimated annual capacity of 120,000 tons, the line will produce heat-treated plate from 3 / 16 " to 2" thick. Total cost of the project is expected to be approximately $110 million. The plate mill was started up in 2000, and annual capacity is approximately 1.6 million tons. Together with the Nucor plate mill in Tuscaloosa, Alabama, the Hertford County plant brings the company’s current annual plate production capacity to approximately 2.8 million tons. On 4 th September, Ford Motor Company announced that it is reopening the Essex Engine plant, in Windsor, Ontario, where production had been shut down for about a year. The news followed an announcement by Canada’s prime minister, Stephen Harper, that his government would provide up to C$80 million (about US$75 million) in assistance. Ford plans to spend C$420 million (US$394 million) on the project. The decision to help with the reopening represents a sharp turnabout for the Ottawa government. In January, the federal finance minister was quoted as saying that providing support to the plant reflected “the kind of old-fashioned thinking that’s proven to be a failure of short-term, Band-Aid fixes for specific companies.” Ford had already reopened part of the factory this year after it received C$17 million (about US$16 million) from the province of Ontario. Whether or not the reversal at the federal level derives from Canadian politics, “This is not money being thrown around on the eve of an election,” Mr Harper said. The reopening of the plant suggests optimism on the part of Ford. The company is well along in a retrenchment in response to the slowdown in the North American auto industry. It is not known what will be produced at Essex, although rumours favour 4-cylinder engines, possibly running on diesel fuel. The plant, which opened in the late 1970s, had made 6- and 8-cylinder engines for several Ford units, including Jaguar, and employed about 900 workers. Automotive In a surprise move, Ford will revive an engine plant in Canada

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EuroWire – November 2008