Nucor is the largest steel producer in the US, the largest mini-mill in the US and the largest recycler in North America. The firm runs 23 scrap-based steel manufacturing facilities.
Over the last 20 years, Nucor has grown both organically and through acquisition, enabling to now have one of the most diverse steel product portfolios in the world.
Nucor is not, by definition, an integrated steel manufacturer. An integrated steel manufacturer creates steel from its basic metallurgical components via a blast furnace, which melts iron ore to create pig iron. Pig iron is then put through a process of adding and subtracting specific elements to create liquid steel. Liquid steel is then cast into a variety of different shapes. Thus, "integrated" steel manufacturers begin production with mined iron ore and end with a steel product.
Nucor begins its processes where consumer use of existing steel items ends. Instead of iron ore, Nucor's use of a "mini-mill" process melts down existing steel and recasts it into useful materials. Steel can be melted and reused an endless number of times, and this is how Nucor and other mini-mill operations create their products.
In regards to vertical integration as a business strategy, Nucor has taken steps to backward vertically integrate in order to control the cost and supply of its primary resource, scrap metal. The biggest of these integration moves was in 2008 when Nucor bought the David J Joseph company for $1.4 billion. At the time, DJJ was the largest scrap recycler in the US. In making this backward integration decision, Nucor was following the first two propositions of integration based on transaction-cost economics:
1) exchanges subject to high threats of opportunism due to high transaction-specific investments should be vertically integrated
2) exchanges subject to high threats of opportunism due to uncertainty and complexity should be vertically integrated
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