Even as surging steel prices continue to create ripples throughout the U.S. economy, Steel Dynamics
As Fool contributor Rich Smith has written, tight steel supplies have resulted in a near-term profits bonanza for steel makers including Schnitzer Steel Industries
As so often happens, though, technology is poised to add another variable to the equation. Back in March 2002, Steel Dynamics formed a joint venture with mining concern Cleveland-Cliffs
By all accounts, the initiative has been a huge success. Itmk3 technology yields iron nuggets composed of 96% to 98% iron. At this level of purity, the Mesabi iron can be used by the growing steel mini-mills, such as Steel Dynamics, which are traditionally fed by recycled scrap steel.
Faced with soaring pig iron and scrap prices, Steel Dynamics is rushing to build a 500,000-ton per-year Itmk3 facility in the U.S. The company estimates that producing the Itmk3 iron nuggets will cost $150 to $160 per ton. With finished steel sheets currently selling for north of $400 per ton, the plan seems to make a lot of sense.
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Fool contributor Brian Gorman is a freelance writer living in Chicago, Ill. He does not own shares of any companies mentioned here.