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Nucor (NUE) Set to Construct Rebar Micro Mill in Florida

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Nucor Corporation (NUE - Free Report) stated that it will build a rebar micro mill in Frostproof, FL. This $240-million investment will be Nucor’s second rebar micro mill. Nucor had announced a rebar micro mill project in Sedalia, MO in November 2017.

Nucor is building the mill in a market where demand is strong. This rebar micro mill project is in line with the company’s long-term strategy for profitable growth and strengthens its position as a low-cost producer. It will poise Nucor at a cost advantageous position over its competitors who are shipping rebar into the region from long distances.

Construction of the micro mill is expected to be completed in two years post the pending permit and regulatory approvals. It will have an estimated annual capacity of 350,000 tons and will create jobs for about 250 people.

Nucor’s shares have gained 6.4% over a year, underperforming the 16.2% growth of the industry it belongs to.

 



Nucor expects earnings in first-quarter 2018 to increase sequentially, excluding tax reform benefits recorded in fourth-quarter 2017. The company believes that there is considerable optimism in steel end-use markets. It is also encouraged by positive pricing momentum for its products in the steel mill unit.

However, the company expects first-quarter 2018 results to be adversely impacted by weather related interruptions at some of its sheet mills and higher scrap prices. It expects earnings in the steel products unit to decline owing to seasonality effect, while earnings in raw materials unit is expected to improve sequentially.

Nucor Corporation Price and Consensus

 

 

Zacks Rank & Stocks to Consider

Nucor has a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic material space are LyondellBasell Industries N.V. (LYB - Free Report) , The Chemours Company (CC - Free Report) and Kronos Worldwide Inc. (KRO - Free Report) , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

LyondellBasell has an expected long-term earnings growth rate of 9%. The company’s shares have moved up 21.4% in a year.

Chemours has an expected long-term earnings growth rate of 15.5%. The company’s shares have moved up 42.1% in a year.

Kronos has an expected long-term earnings growth rate of 5%. Its shares have gained 54.8% over a year.

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