CMC plans new steel micro mill to serve eastern US

Commercial Metals Co. said Jan. 10 it plans to construct a state-of-the-art "rebar-centric" micro steel mill geographically situated to primarily serve regions in the eastern US.

"The new micro mill will fortify our position in the large construction markets within the region and optimize CMC's existing eastern US operational footprint through enhanced production flexibility, improved service capabilities and logistical efficiencies," CEO Barbara Smith said in a statement.

The long steel producer said it is currently exploring several suitable locations for the new mill, and construction will take about two years to complete once all necessary permits and approvals are acquired.

Plans for the new mill were motivated by an influx of infrastructure spending and demand that is expected in the regions where sales will be targeted, including the Northeast, Mid-Atlantic and Midwest.

"The recent enactment of the Infrastructure Investment and Jobs Act should provide an additional tailwind to what was already an attractive expected return on investment for the project," Smith said. "We anticipate the legislation will stimulate substantial incremental demand for construction steel, particularly in the targeted geographies where core infrastructure is among the oldest in the US."

The micro mill will be among the most environmentally-friendly steelmaking operations in the world with technology that will lower energy consumption and greenhouse gas emissions compared with traditional steelmaking processes, the Texas-based company added.

"CMC was the first in the world to adopt the innovative micro mill steelmaking process, and today's announcement further solidifies our position at the forefront of this revolution in long steel production," Smith said. "Once the project is completed, we expect that nearly a third of our North American steel output will be produced in a micro mill, giving CMC the most operationally efficient and environmentally friendly plant network of any long steelmaker globally."

On an earnings call with investors Jan. 10, Smith said the new plant will be "rebar-centric with additional capabilities under consideration."

"Until we conclude our analysis and our site selection, we're not prepared to give further specifics," Smith added when asked about the estimated capacity and capital expenditure for the project.