Bloomberg reported that Austrian steelmaker Voestalpine AG said on December 19 it may construct a EUR 500 million factory in the US to benefit from cheap gas. Nucor Corp also plans to start up a USD 750 million Louisiana project in mid 2013. They’re among at least five US plants under consideration or being built that would use gas instead of coal to purify iron ore, the main ingredient in steel.
The newest group of steel projects are called direct reduced iron plants, which account for the first stage of steelmaking.
Ms Michelle Applebaum managing partner at consulting firm Steel Market Intelligence in Chicago said “That technology has been around 30 years, but for 29 years gas prices in the US were so high that the technology was not economical. This is how steel will be built moving forward.”
Hydraulic fracturing of shale rock formations from Texas to West Virginia has boosted supplies of gas and sent prices plunging by as much as half in the past two years.
