Nucor Analysis

10 Pages 2482 Words

re. Leading corporations in competition with Nucor include: U.S. Steel, the nations largest producer of steel, Commercial metals, Oregon steel mills, Roanoke Electrical Steel, Steel dynamics and CAR International. ( need to put in the relative market shares of each of these if possible )
The steel industry has been a victim of depressed levels since strength began to diminish in the second half of 2000. Levels have been so depressed that the Nation’s third and sixth largest manufacturers, Bethlehem Steel and National Steel, both filed for bankruptcy, Bethlehem in 20001 and National in Early 2002. These bankruptcies were supplemented by the actual shut down and termination of the nations fourth largest producer, LTV Corp, and others such as Trico Steel and Northwestern steel following suit. This reduction of competitors in the steel industry has caused an approximate 12% decline in production in 2001 and its affects will continue into 2002 resulting in a tightening of the supply of domestic steel. Imported steel will not likely supplement this due to the imposition of tariffs by the Bush administration in relation to the section 201investigastion. These depressed levels and the subsequent elimination of steel producers coupled with an estimated increase in demand for steel in 2002, due to economic recovery, should create a favorable environment for the remaining steel manufacturers and especially Nucor as a low-cost leader in the production of steel.
An optimistic outlook is on the horizon for the sub industry of steel due to an estimated 5.5% gain for the industry as a whole in 2002. This should be the result of higher prices generated by the inventory supply shortage caused as a result of the destocking of distributors in 2001and also aided by new and increased tariffs and this legislations ability to focus purchasing to domestic suppliers. Although these conditions favor companies in 2002 the industry levels as ...