Steel Mills

Texas Hoping to Lure New Steel Mill

May 4, 2017

The State of Texas is attempting to lure a new flat rolled steel mill to the state. According to various press reports there appear to be two interested parties: Big River Steel and the E United Group out of Taiwan.

Is Big River Steel already planning to expand? That seems to be what the Port of Brownsville in Texas hopes. A recent article by the Brownsville Herald said that the region is one of two finalists for a $1.5 billion flex mill identical to Big River Steel’s plant in Osceola Arkansas. According to the Herald the project has been dubbed “Project America.”

Port director and CEO Eduardo Campriano told the Brownsville Herald that the proposed Big River mill would produce 1.6 million tons of steel annually and require about 2 million tons of scrap. Local recyclers could provide about 500,000 tons of scrap per year giving the Port the potential to see increased barge activity through scrap imports. The mill would serve automotive clients in Texas and Mexico.

The Port is hoping to lure Big River to Brownsville with the Chapter 313 Tax Code, or Texas Economic Development Act, which would give Big River an eight year partial deferment on school property taxes. Other incentives include land discounts and bond financing from the Port and OmniTRAX, a firm in charge of developing the Port’s industrial base; capital investment from The Broe Group; Brownsville Economic Development Council; and Greater Brownsville Incentives Corporation. Reportedly, Big River Steel wants incentives equal to at least 10 percent of the projects $1.5 billion construction cost. A

“We hope we get to that point,” said Alan Simon, vice president of Omni-TRAX. “We’re certainly going to do the best we can, and then the company will make their decision. We’ve been working just on the incentives piece of it for several months, and we’ve probably got another month of work to pull that all together.”

According to Port officials a decision on where to locate will be made by Big River Steel in the next few months.

In the meantime, Big River Steel is not offering information about any deals it may be making.

Big River Steel CEO Dave Stickler told Steel Market Update, “Big River Steel, like all growth-focused companies, continually evaluates market opportunities. Our focus is on the successful start-up of our mill in Osceola, Arkansas. That is where our attention will remain for the foreseeable future.”

Big River delivered its first hot rolled coil from its melt shop in December of last year. The company produced 63,000 tons of HRC in January, setting a record for tons produced by a SMS group-supplied flat-rolled mini mill during a first full month of operation. The BRS cold mill and galvanizing line are in the early stages of production.

Taiwan Steel Mill Possibility

Another potential steel mill for Texas may come from Taiwan’s E United Group. Taiwanese news sources are reporting that E United Group plans to visit the United States in May regarding the possibility of constructing a $1.64 billion EAF steel mill with production capacity of 2.3 million tons of carbon steel and 1 million tons of stainless steel. A second phase for the mill would include coated products.

E United Group abandoned a plan to set up a plant in Taiwan due to environmental problems, and recently scrapped a plan for a facility in Vietnam. A project is currently moving ahead in Indonesia. E Group founder Lin I-Shou says the companies steel investments in China had reached a saturation point and investment in the U.S. is based on a long term strategy for expansion and future sustainability.

One of Steel Market Update’s sources in Asia reported the E United Group is Yieh United and Yieh Phui. Both mills are well known to U.S. buyers of coated and painted products. “They have plenty of cash to burn for sure, and Mr. Lin does not do anything small scale,” said our source.