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Nucor's (NUE) New Tube Mill in Midwest to Boost Product Offering

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Nucor Corporation (NUE - Free Report) recently announced that its board of directors has approved the construction of a tube mill in the Midwest. The products from the new tube mill will capitalize on investments already made by Nucor in the Midwest including a plate mill, galvanizing line and hot roll expansion.

The latest move reasserts the company’s focus on growth and dedication toward sustainability and environmental stewardship. This project, worth $164 million, is expected to commence operations in two years.

The tube mill is expected to have a manufacturing capacity of roughly 250,000 tons of hollow structural section tubing, mechanical steel tubing and galvanized solar torque tube. This will boost the product portfolio of Nucor for construction, infrastructure, and renewable energy in the expanding solar market in the United States.

The addition of a tube mill will also allow Nucor to leverage the recent investments made by it and further reinforce its market leadership position as a low-cost manufacturer of steel products. It puts the company in a strong position to serve the largest consuming regions of the United States for hollow structural section tubing and solar energy.

Shares of Nucor have gained 127.6% in the past year compared with 175.5% rise of the industry.

Nucor, last month, stated that it expects to record net earnings of more than $900 million in the first quarter of 2021 on the back of favorable economic trends and strong demand in its markets.

The company sees higher profitability in its sheet, plate, bar and structural mills in the first quarter on a sequential basis. It also expects higher realized prices and shipment volumes in its steel mills.

The performance of the company's downstream steel products segment is forecast to be in line with the fourth quarter of 2020. The company also expects profitability in its raw materials segment to significantly improve sequentially on higher raw materials selling prices.

Zacks Rank & Other Key Picks

Nucor currently sports a Zacks Rank #1 (Strong Buy).

Some other top-ranked stocks in the basic materials space are Fortescue Metals Group Limited (FSUGY - Free Report) , BHP Group (BHP - Free Report) and Impala Platinum Holdings Limited (IMPUY - Free Report) .

Fortescue has a projected earnings growth rate of 107.8% for the current fiscal. The company’s shares have surged 186.8% in a year. It currently flaunts a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank  stocks here.

BHP has an expected earnings growth rate of 76.8% for the current fiscal. The company’s shares have gained 136.4% in the past year. It currently sports a Zacks Rank #1.

Impala has an expected earnings growth rate of 197.6% for the current fiscal. The company’s shares have rallied 312.8% in the past year. It currently sports a Zacks Rank #1.

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