Why Nucor and Other Steel Stocks Are Falling After Trump Unveils Massive Project

President Donald Trump applauds as he arrives to speak during a visit to U.S. Steel Irvin Works in West Mifflin, Pennsylvania, in 2025. (Saul Loeb / AFP via Getty Images)

Key Points

• Mesabi Metallics announced plans to build an $18 billion fully integrated steelmaking facility in the U.S.
• The planned facility would be the largest steel plant in American history, turning Minnesota iron ore into steel in Iowa.
• Shares of U.S. steel producers fell following the announcement amid investor concerns that the new capacity could lead to oversupply.

A massive new steel plant might signal a renaissance in American manufacturing. It is also making steel investors a little nervous.

On Monday, Mesabi Metallics, alongside President Donald Trump in the Oval Office, announced plans to build an $18 billion fully integrated steelmaking facility in the U.S.

Integration, in this instance, means the new plant makes everything from pig iron to finished steel. Nucor , the largest U.S. steel producer, makes steel mainly by remelting scrap in a smaller furnace called a minimill. A minimill isn’t considered an integrated facility.

“Mesabi Metallics will be building the largest steel plant in American history,” said the president.

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That would make the planned facility larger than U.S. Steel’s Gary Works, which can make roughly eight million tons of steel annually.

Mesabi Metallics is developing an iron ore mine in Minnesota. That ore will be turned into steel in Iowa. The company didn’t immediately respond to a request for comment about size and funding, beyond what the president said, but $18 billion could easily result in eight-plus million tons of annual finished steel production.

That’s significant for the U.S. industry. America makes about 80 million to 90 million tons of steel annually and imports 20 million to 25 million tons.

Any new capacity can replace imports. It can also serve new demand from higher manufacturing output.

More commodity capacity, however, can lead to oversupply and drive down prices. Shares of U.S. steel producers Nucor, Steel Dynamics , and Cleveland-Cliffs were off about 1.5%, 1.5%, and 9% in midday trading, respectively.

The new capacity will take years to build. Citi analyst Alexander Hacking doesn’t expect capacity to hit markets until after 2030. Still, investors look nervous.

Indian conglomerate Essar controls Mesabi Metallics. ArcelorMittal acquired Essar’s Indian steelmaking operations in 2019.

Trump put 50% tariffs on base steel products in mid-2025. That helped benchmark steel prices rise from roughly $800 a ton to $1,300 a ton recently.

Higher prices have helped steel company earnings. Nucor, for instance, earned a 2025 operating profit of about $2.7 billion. Wall Street projects a 2026 operating profit of $6.2 billion.

Higher prices, however, also attract competition, which is why sector shares are down following the Oval Office announcement.

The Iowa plant “would likely bring prices closer to cost of production,” added Hacking in a Monday report. “But it is all quite long-dated, with most arriving post-2030 and a lot can happen between now and then.”

Write to Al Root at allen.root@barrons.com.

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