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Steel Dynamics to Build $1.9B Flat Roll Steel Mill Site

Tue August 13, 2019 - West Edition #17
Steel Dynamics Inc.

(Steel Dynamics Inc. photo)
(Steel Dynamics Inc. photo)

Steel Dynamics Inc. has announced the selection of Sinton, Texas, as the site for the company's previously announced new state-of-the-art, electric-arc-furnace (EAF) flat roll steel mill. Sinton is located approximately 30 mi. Northwest of the port of Corpus Christi, Texas, and is strategically located within the targeted Southwest United States and Mexico market regions, bringing numerous competitive customer and raw material advantages to the project. Final determination is still subject to the anticipated receipt of necessary permits and continued state and local government support, which the company expects to be forthcoming.

"We are extremely excited to announce our selection of Sinton as the site for our next-generation, new flat roll steel mill investment," said Mark. D. Millett, president and chief executive officer. "We are eager to join the Sinton community, and we appreciate the warm welcome and support that we have received from them, Governor Abbott and the state of Texas, as well as local leaders from San Patricio County, the city of Sinton and the Sinton Independent School Board. We thank them for their trust, shared vision and support for this important strategic investment. We anticipate the project will create approximately 600 well-paying positions, and abundant opportunities for indirect job growth from customers and other support service providers, bringing meaningful economic growth to the surrounding communities.

"We have been developing a flat roll steel business strategy for this region and Mexico for several years," said Millett, "and, the team is ready to execute. We have extensive experience and a proven track record for successfully constructing and operating EAF steel mills and downstream value-add finishing lines. Our planned new EAF flat roll steel mill will be the most technologically advanced facility existing today. Our team has selected a suite of technologies based on our proven history of success, that should allow us to achieve steel grades previously out of reach to thin-slab casting technology, while sustaining the low-energy and low-carbon footprint that is at the core of our steelmaking operations. Based on casting capability of up to 84 inches wide and up to a 5.5-inch cast thickness, it will be the world's largest thin-slab facility. The steel mill will also have a unique rolling mill configuration, providing the capability to produce advanced high-strength steel grades, including some energy sector products not available in the U.S. today. The mill also will have the capability to produce up to 52.5-ton coils, creating meaningful cost efficiencies for certain energy customers. These advances will further reduce the gap between existing EAF and integrated steel mill production capabilities. We have already placed orders for a majority of the equipment and filed for the required permitting.

"Our customers are eager for us to begin, as we have been discussing plans for several of them to co-locate onsite with us," said Millett. "We believe a majority of the customer base will experience a significant freight savings compared to their current supply-chain configurations. We also are making meaningful headway regarding regional prime ferrous scrap sourcing. We continue to grow increasingly excited about the expansive opportunities and long-term value creation our Southwest U.S. and Mexico growth strategy provides us."

The Sinton location brings numerous advantages, including:

  • proximity to the three targeted customer regions of the four-state Texas area, the Western U.S. and Mexico representing approximately 27 million tons of relevant flat roll steel consumption;
  • customer-centric logistic benefits, providing shorter lead times and meaningful customer working capital savings;
  • central to the largest domestic consumption of flat roll Galvalume and construction painted products, with the anticipated ability to effectively compete with excessive regional imports;
  • sufficient acreage to allow customers to locate on-site, providing logistic savings and steel mill volume base-loading opportunities;
  • proximity to prime ferrous scrap generation via the four-state Texas region and Mexico, and cost-effective access to pig iron through the deep-water port of Corpus Christi, as well as other alternative iron units;
  • excellent logistics provided by onsite access to two class I railroads, transloading opportunities with a third class I railroad, proximity to a major U.S. highway system, and access to the deep-water port of Corpus Christi; and
  • existing, mature and dependable power, natural gas, and water sources.

This investment will benefit from Steel Dynamics' focus on safety, its low-cost, highly variable operating framework and entrepreneurial performance-based incentive culture. The planned facility is anticipated to have an annual production capacity of approximately 3.0 million tons with the capability to produce the latest generation of advanced high-strength steel grades. The project will include value-added finishing lines, including a galvanizing line with an annual capacity of 550,000 tons, and a paint line with an annual coating capacity of 250,000 tons. The product offering is anticipated to include various flat roll steel products, including hot roll, cold roll, galvanized, Galvalume and painted steel, primarily serving the energy, automotive, construction, and appliance sectors.

The current estimated required investment is approximately $1.9 billion, which does not include the benefit of anticipated state and local incentives. Upon the receipt of required environmental and operating permits, the company expects to begin construction early 2020, followed by the commencement of operations mid-2021.

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