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Steel Makers to Take Advantage of Cheap U.S. Natural Gas

24/7 Wall St.

close-up of red hot iron beamsLow prices for natural gas have led to lower demand for coal as a fuel for electricity generation and to wider margins for chemical products makers. Now it looks like the U.S. steel industry could catch a break from the low prices.

Nucor Corp. (NYSE: NUE) is building a new plant in Louisiana that will use natural gas to fire a direct-reduced iron (DRI) plant. The company signed a long term deal with a division of Encana Corp. (NYSE: ECA) to carry out an onshore drilling program that will keep the steelmaker’s natural gas supply available at low cost for more than 20 years.

An Austrian steelmaker has also said that it is considering a new $660 million U.S. plant to take advantage of the abundant and cheap supply of U.S. natural gas. Bloomberg News reports that a DRI plant produces steel for about 20% less…

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