The steelmaker will take over Big River Steel, one of the largest electric arc furnace-based flat-rolled mills in North America after it expanded its production capacity to 3.3 million tons a year in November. It will be able to make 14 advanced high-strength steel grades, including the substrate for U.S. Steel XG3 grade of Generation 3 advanced high-strength steel.
U.S. Steel’s newest mill will be able to serve the automotive, energy, construction, and agricultural industries.
Mini-mills produce steel at a lower cost and in smaller batches than the integrated mills, such as those along Northwest Indiana’s lakefront, as they require far less capital and manpower. Instead of burning iron ore, limestone and coke in the superheated cauldron of blast furnaces to make new steel, they use electricity to melt recycled scrap metal.
While integrated mills have long dominated the automotive business, mini mills have been gaining market share for decades.
U.S. Steel and ArcelorMittal idled millions of tons of production capacity, including at Great Lakes Works near Detroit, in recent years as mini-mills have ramped up their production, investing millions of dollars in expansions of mostly non-union facilities in the south.
In 2019, U.S. Steel paid $700 million to acquire a 49.9% stake in Big River Steel, aiming to diversify to add mini-mills to its portfolio. The steelmaker forecasts an immediate boost to cash flow and said it would go over more details about the acquisition during its next earnings call.
