Benzinga | Apr 15, 2021 04:32PM EDT

Steel Dynamics To Invest $225M In Two New Flat Roll Steel Coating Lines To Support Sinton Steel Mill; Plans To Invest $175M-$200M In New Flat Roll Steel Coating Lines In Midwest

Today Steel Dynamics, Inc. (NASDAQ:STLD) provided a strategic update concerning its ongoing and new flat roll steel growth initiatives.

"We are incredibly excited about the progress being made at our Sinton Texas EAF Flat Roll Steel Mill," stated Mark D. Millett, President and Chief Executive Officer. "Sinton represents transformational growth for Steel Dynamics and long-term value creation for our teams, communities, customers, and investors. Given the success of our Sinton construction team, we are planning to add two additional value-added flat roll coating lines more quickly than originally planned. The site is yet to be determined but it will be located in the Southern U.S., to provide Sinton with similar diversification and higher-margin product capabilities as our Butler and Columbus Flat Roll Steel divisions.

"We also plan to construct two more value-added flat roll coating lines to be located in the Midwest U.S. to support the growing demand for coated flat roll steel products and to further increase the diversification and cash generation capability of our Midwest flat roll steel operations. Our unique operating culture, coupled with our considerable experience in successfully constructing and operating highly-profitable EAF steel mills and flat roll steel coating lines, positions us well to execute these strategic initiatives and continue to grow," said Millett.

Two Southern U.S. Flat Roll Steel Coating Line Investments

The company plans to invest $225 million in two new flat roll steel coating lines to be located in the Southern U.S. to support its Sinton Steel Mill that is planned to begin production in late summer 2021. The lines will be comprised of a 300,000-ton flat roll galvanizing line with Galvalume(r) coating capability and a 240,000-ton paint line. Galvalume(r) products represent the fasted growing flat roll steel market in the United States, primarily serving the metal building industry. This market has historically sourced as much as 45 percent of their needs from foreign imports. Customers prefer the company's differentiated supply-chain. This has resulted in the company's existing lines consistently running at full capacity, through both increased consumption and market share gain.

Site location selection and engineering specifications are underway. The company currently expects the new Southern U.S. coating lines to begin production in the second half of 2022.

Two Midwest U.S. Flat Roll Steel Coating Line Investments

The company also plans to invest between $175 million and $200 million in two new flat roll steel coating lines to be located in the Midwest to support its regional flat roll steel operations, providing them with more value-added product diversification to serve customer needs and increase through-cycle cash generation. The lines will be comprised of a 300,000-ton flat roll galvanizing line also with Galvalume(r) coating capability and a 240,000-ton paint line. These lines will also benefit from the company's differentiated supply-chain.

Site location selection and engineering specifications are underway. The company currently expects the new Midwest coating lines to begin production in the second half of 2022.