Steel Dynamics Weighs West Coast Mill

According to a report by Bloomberg, Steel Dynamics Inc. is considering building a steel mill on the West Coast to compete with rivals such as Korea's Posco as a weaker dollar deters imports and the company seeks to exploit its access to raw materials.

The mill would produce about 1.5 million tons a year of flat-rolled steel, said Keith Busse, SDI’s CEO. The project would challenge companies including Posco and Russia's Evraz Group SA in the West Coast's 4-million-ton-a-year market.

"We are strategizing right now about how to expand steelmaking and are refocused on flat-rolled steel," Busse said.

On the West Coast, where prices are higher than elsewhere in the U.S., "there's room for a low-cost producer in the flat-rolled arena," he said.

The new plant could use raw materials from the company's U.S. units, instead of buying more expensive semi-finished products or raw materials from abroad.

Steel Dynamics said in September it would invest $85 million in an iron-making venture in Minnesota with Kobe Steel Ltd. Iron nuggets from the plant in Hoyt Lakes will be used in Steel Dynamics' minimills, which use less energy than traditional blast furnaces.

Steel Dynamics has been boosting output of steel used in construction, such as special bar-quality steel, to reduce its dependence on flat-rolled. Flat-rolled output probably will increase next year from about 2.7 million tons in 2007, Busse said.