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Nucor (NUE) to Build $2.7B Sheet Mill for Producing Clean Steel

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Nucor Corporation (NUE - Free Report) recently announced that its board has approved its plans to construct a state-of-the-art sheet mill having an annual capacity of 3 million tons. It is evaluating locations in Ohio, Pennsylvania, and West Virginia for the construction. The geographic position of the mill will allow it to serve Midwestern and Northeastern customers and ensure a significantly lower carbon footprint than nearby competitors.

The cost has been estimated at roughly $2.7 billion. The mill will be able to produce hot-rolled sheet products with features like downstream processing, a tandem cold mill, annealing capabilities, and initially two galvanizing lines. The construction is expected to take two years after the required regulatory approvals are obtained.

Nucor noted that the new sheet mill is harmonious with its present operations and enables it to create substantial value for shareholders and customers. Clean steel is gathering steam in its utility in the new greener digital and automotive spaces as there is a rising demand for superior steel with a low carbon footprint. Nucor has the potential to leverage unique opportunities and cater to changing demands.

Shares of Nucor have appreciated 116.1% in a year, outperforming the industry’s rise of 99.9%. The estimated earnings growth rate for the company for the current year is pegged at 489.2%.

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Nucor recently announced guidance for third-quarter 2021. It expects the quarter’s earnings between $7.30 and $7.40 per share. The company is gearing up to report the highest quarterly earnings in its history, surpassing its record earnings per share (EPS) of $5.04 in second-quarter 2021. This will also mark a significant improvement from EPS of 63 cents reported in the third quarter of 2020.

This upbeat outlook is backed by strong demand across most of Nucor’s end markets and higher average selling prices, which is driving strong profitability in all of the three segments. The steel mills segment is expected to witness a sequential improvement in third-quarter earnings.

Zacks Rank & Other Stocks to Consider

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

Other top-ranked stocks in the basic materials space include ArcelorMittal (MT - Free Report) , Ternium S.A. (TX - Free Report) , and Aperam S.A. (APEMY - Free Report) , each flaunting a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

ArcelorMittal has a projected earnings growth rate of 1,731.2% for the current year. The company’s shares have shot up 136.3% over the past year.

Ternium has a projected earnings growth rate of 425.8% for the current year. The company’s shares have appreciated 141.6% over the past year.

Aperam has a projected earnings growth rate of 429.8% for the current year. The company’s shares have climbed 106.2% over the past year.


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