Stacking steel at a plant in the US

Nucor is America’s leading steel company with steel mill and steel products facilities throughout the country. Nucor produces about 15 million tons of steel per year including hot and cold rolled steel, steel joists and metal buildings. They have a production capacity of over 26 million tons. Nucor also is North America’s largest steel recycler and saves about 19.2 million tons of steel from landfills every year. The company favors the new and controversial steel tariffs and has always been an agile competitor in the challenging steel industry. Nucor has both raw steel processing and select finished products utilizing 3D printing. They may be able to use the new tariff protection environment to continue innovating.  Nucor’s product and process innovation are eligible for U.S. R&D tax credits.

The Research & Development Tax Credit

Enacted in 1981, the now permanent Federal Research and Development (R&D) Tax Credit allows a credit that typically ranges from 4%-7% of eligible spending for new and improved products and processes. Qualified research must meet the following four criteria:

  • Must be technological in nature
  • Must be a component of the taxpayer’s business
  • Must represent R&D in the experimental sense and generally includes all such costs related to the development or improvement of a product or process
  • Must eliminate uncertainty through a process of experimentation that considers one or more alternatives

Eligible costs include US employee wages, cost of supplies consumed in the R&D process, cost of pre-production testing, US contract research expenses, and certain costs associated with developing a patent.

On December 18, 2015, President Obama signed the PATH Act, making the R&D Tax Credit permanent. Beginning in 2016, the R&D credit can be used to offset Alternative Minimum tax for companies with revenue below $50MM and for the first time, pre-profitable and pre-revenue startup businesses can obtain up to $250,000 per year in payroll taxes and cash rebates.

The Commerce Department’s tariff suggests a 25% tariff on steel imports from all countries. This tariff could potentially restrict imports by up to 20 to 25 million tons which is more than half of the total EU imports of 2017. Trump’s goal is to boost the American steel industry which has been affected by the loss of jobs over the last few years. In fact, the US steel industry employment has dropped 35% since 1998. The proposed high tariffs on the steel imports is hoped to increase steel production in the States.

Nuclear 3D Printing Activities

For Nucor’s new steel products business, 3D printing is an excellent design tool and eventually part of the production process. Nucor has a large fastener plant in Indiana which is a product line suitable for 3D printing, as stated in our article, R&D Tax Aspects of 3D Printed Fasteners. Fasteners are a growing 3D printer product category.

Nucor built a steel testing lab which introduced 3D printing of certain materials. They plan to work with steel making teams to identify and create cost efficient solutions to assist the development of recyclable materials. Also, with 3D printing, Nucor can supply a larger variety of steel products to the automotive industry and produce parts that are lighter and more durable.  The extent of Nucor’s US operations is presented below and excerpted from their 2017 SEC Form 10K filing.

Nucor is a company that pays on performance and the quality tons that are being produced. The pay and total compensation of the employees is directly related to utilization in the industry. In the last several years the utilization has been lower than usual due to the high level of imports entering into the US. Normally, in the steel industry, utilization should be about 85% which can make it economical and sustainable. Nucor is hoping that the tariff will help compensation of their employees and then also improve the business’ utilization as a whole. As stated by Nucor CEO John Ferriola, the steel tariffs will increase jobs and also will allow the company to increase investments.

Nucor’s Basic Plant Expansion Process

Nucor’s construction acquisitions and plant expansions are projected at about $2 billion. The company has multiple plant expansion projects planned for the next few years. Firstly, they plan to build a $250 million micro–mill in Sedalia, Missouri. Nucor is spending $85 million to update their Mason, Ohio plant. They also disclosed that their plant expansion investment in Illinois will be about $180 million. This growth project provides Nucor with an exciting opportunity to expand its business.

Nucor steel imports

In Arkansas, a cold mill complex project will expand Nucor’s capability to produce high strength and low alloy steel products. It is estimated that the mill will cost $230 million and is expected to be operational in about two years. In 2025, about four million tons of advanced high-strength steel will be used in the automotive market which gives Nucor an opportunity to produce finished products that the company currently does not make. Updating its product portfolio will help the company differentiate its products and be competitive as the leader in the steel industry. By leveraging the company’s operating abilities, these projects will maintain the company’s position as a low-cost steel producer that better serves their customers.


Nucor is America’s largest steel company; they have facilities throughout the United States and are engaged in a major expansion program. Nucor is embracing 3D printing for metals at a time when the technology for 3D printing for metals is improving rapidly. Presumably, steel tariffs will enable Nucor to continue innovating more metal 3D printing applications.

Discuss this and other 3D printing topics at or share your thoughts below. 

Charles Goulding and Alize Margulis of R&D Tax Savers discuss steel tariffs.


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