Nucor Corp. is making its third purchase of this year, spending $37 million to acquire the 500,000 ton/year Qualitech Steel SBQ. With its earlier $615 million purchase of barmaker Birmingham Steel and the $120 million buyout of the Trico Steel Co. flat-rolled mini-mill, the Charlotte-based company will have 21 million annual tons of pro forma capacity by year end.

The Qualitech Steel SBQ (special bar quality) facility in Pittsboro, Ind., has annual capacity of 500,000 tons. The Trico sheet steel mill in Decatur, Ala., has an annual capacity of 1.9 million tons. Alabama-based Birmingham has five steel bar mills, a service centers in Florida (Port Everglades Steel) and a steel recycling company.

Analysts expect to see more consolidation in the steel sector besides Nucor's purchases and U.S. Steel Corp.'s proposed takeover of National Steel Co. Analyst Michelle Applebaum at Salomon Smith Barney says "the Bush administration supports consolidation within the steel industry because of the weak steel-market environment" that drove some 30 producing, processing and distributing firms into bankruptcy in the past two-plus years.

This year, there has been a domestic capacity crunch resulting from a string of corporate bankruptcies and lower steel imports since President Bush slapped 30% tariffs on foreign-made steel. That appears to be benefiting International Steel Group Inc. (ISG)—what had been the integrated steel assets of bankrupt LTV Corp., which New York investment banker WL Ross & Co. bought for $325 million. ISG executives say the facilities located in Cleveland; East Chicago, Ind.; Hennepin, Ill. and Warren, Ohio, expect to be operating at a 3 million ton/year rate in August and a 6 million ton/year rate after Labor Day. "Bottom line, a healthy order book in the marketplace is controlling our re-entry," says John Mang III, vice president of operations at ISG's Cleveland plant (and former LTV senior vice president of steel operations).