Nucor Corporation is set to acquire a majority ownership position in California Steel Industries, in a move that will strengthen the company’s presence on the West Coast.
A flat-rolled steel converter, California Steel Industries is able to produce more than two million tonnes of finished steel and steel products annually with its five product lines.
To acquire majority ownership, Nucor is purchasing a 50% equity interest for a subsidiary of Vale S.A. and a 1% equity ownership from JFE Steel Corporation (JFE).
Leon Topalian, President and CEO of Nucor Corporation, said, “Acquiring a majority ownership stake in California Steel Industries expands our geographic reach in sheet steel and gives us a strong presence on the West Coast.”
“This acquisition will grow our portfolio of value-added sheet products, provide opportunities for increased internal shipments and enable us to provide our downstream businesses in the region such as Verco and Hannibal Industries with sheet steel products. We look forward to continuing to grow with our partners at JFE.”
According to gasworld Business Intelligence, if you were to talk about the market of technical gases in relation to the metallurgical industry with the US, in general and in Southwest in particular, oxygen accrues about 18% of the US gas market in value while about 7% of the US total gas market value falls on metallurgical clients. As for the West Coast region, oxygen gets some about 14% of the gas market revenue and about 4% falls into the oxygen used in metallurgical sector.
Oxygen producing tonnage capacities in the West Coast totals to about 4,100 tonnes per day, including both onsite/pipeline supply and captive production facilities. Nitrogen production for Metallurgical industry is lower and total to about 700 tonnes per day.
Karina Kocha, Business Intelligence Manager at gasworld, continues, ”According to gasworld Business Intelligence forecasts, we would expect some moderate annual growth of 2-4% in the gas segment related to Metallurgy in South of the West Coast within 2021-2025 time frame while North part of West Coast will grow slower with 2-3% annually.”
Once the acquisition is complete, it will mark Nucor’s second joint venture with JFE.
Since 202, the two companies have been operating an automotive steel joint venture in Mexico, through which 400,000 tonnes of galvanise steel can be produced for the automotive sector annually.