Innovative steelmaker Nucor Corp. is pioneering steel technology again—field-testing continuous production of rolled steel directly from molten metal. The second largest steelmaker has installed new Castrip technology to make thin-strip sheet steel at Crawfordsville, Ind., where it pioneered thin slab casting process technology in the late 1980s. Buyers won't see commercial quantities of UCS (ultra-thin cast strip) steel until year end, though, according to Randy Charles, sheet steel sales manager. Nucor is learning how to economically cast, roll, coat and fabricate UCS in various carbon and stainless grades.

Castrip LLC is building the strip casting operation. Castrip is a joint venture of Nucor, BHP of Australia and Ishikawajima-Harima Heavy Industries (IHI) of Japan. Nucor is the lead partner since it is using excess steelmaking capacity from the Crawfordsville melt shop to supply the strip facility's 500,000-ton/year throughput. Essentially, strip casting involves the direct casting of molten steel into final shape and thickness without further hot or cold rolling, allowing lower investment and operating costs, reduced energy consumption and smaller scale plants than can be economically built with current technology.

Market mavens say the beleaguered U.S. steel industry will get a boost from the commercial debut of this technology because it will enable companies to produce thin-gauge sheet steel products in micro-mills only one-twentieth the size of big integrated blast furnace mills and about one-eighth the size of conventional electric furnace mini-mills.

The Castrip plant has been designed to produce coils ranging from 27.5 to 44 tons of strip that range from 39-79 inches in width and from 3/10-8/10 of an inch in thickness. The machinery can cast at speeds of up to 492 feet per minute. Such sheet steel is used to manufacture tools, appliances, tubing and packaging. Construction firms use it for roofing and decking.

Wall Street is very excited about Nucor's involvement in the Castrip process—and in the technology itself. "This technology, which bypasses the continuous casters and the hot-strip mills of conventional steel-making facilities, is reminiscent of Nucor's move into thin-slab casting back in the late 1980s, when the firm revolutionized the steel industry," says analyst Aldo Mazzaferro at Goldman Sachs & Co. in New York.

Engineers insist Castrip has tremendous potential but a key question clearly is whether Nucor can commercialize the process. "If commercialization testing is successful, the Castrip micro-mill definitely will change the dynamics of the steel sheet business," suggests analyst Daniel Roling at Merrill Lynch & Co. in New York. "For one thing, they'll require only around 10% of the capital investment needed to build a new integrated mill but will turn out steel 20 times as fast." The Castrip partners believe the micro-mill technology can produce cold-rolled sheet for $200/ton, which costs $300-310/ton to make today. The key question, according to analyst Michael Gambardella at J.P. Morgan Securities in New York is: "Will Nucor will be able to produce cold-rolled-quality material at the same production costs as hot-rolled sheet?"

With their small size and low capital investment cost, micro-mills are likely to be built where environmental restrictions and a lack of suitable real estate would make it impossible to build bigger mills today. Steel producers will be able to locate micro-mills nearer to big customers, whose freight costs will nosedive. "Logistics are a very significant cost to steel users, and they can save up to $20/ton in transportation costs by being near a mill," says Charles Bradford, president of consulting firm Bradford Research in New York. That's why major steel users such as auto and appliance makers' plants are located near large integrated steel mills. He and other analysts expect that micro-mills like Castrip and steel users will be able to operate side-by-side in hundreds of locations across the U.S.

John Ferriola, executive vice president of Nucor's sheet mill group, says the goal of the facility is to produce cold-rolled sheet suitable for construction-grade products, no-slip structural decking, motor lamination stock, coated and painted coil suitable for culvert, framing and housing stud applications, transformation into mechanical tube, and fabrication into powder-coated racking and shelving products, electrical control boxes and vents.

Nucor has compiled an enviable track record of plowing through several technical barriers since the 1970s, and Ferriola says the firm "remains focused on leading the industry in new and innovative applications." Nucor's Charles says the Castrip organization also plans to produce medium and high-carbon grades, as well as 409 stainless for automotive applications. "The end-point of our first 10 months or so in the market with UCS products will be the very light gauges because that's where we see tremendous cost advantages for our customers."