SDI Buys Mexican Scrap Recycler Roca Acero

The agreement remains subject to customary closing conditions and regulatory approvals, SDI said.

“We look forward to adding Roca to the Steel Dynamics family to further solidify our Southwest US and Mexico growth strategy,” SDI chairman, president and CEO Mark D. Millett said in a statement on Monday, May 16.

“Combined with our existing North American metals recycling facilities, the addition of Roca significantly strengthens our raw material procurement strategy in the region,” he said.

Roca’s main operations are four scrap processing facilities located near “high-volume industrial scrap sources” in central and northern Mexico, SDI said.

Those operations currently ship approximately 575,000 gross tons of scrap annually. They have annual processing capability of roughly 850,000 gross tons per year, the company said.

The scrap will help feed SDI’s new EAF sheet mill in Sinton, Texas. The new mill, which officially started up in the first quarter, cost $1.9 billion and has capacity of three million tons per year.

Like all EAFs, its primary feedstock is scrap.

SDI has said that the new mill will target markets not only in the Southwestern US and along the US West Coast but also in Mexico.

The Sinton mill is near Corpus Christi, a port city in southern Texas, and approximately 300 miles from Monterrey, Mexico’s traditional industrial heartland.

The acquisition of Roca Acero is not SDI’s first foray into the Mexican scrap market. The steelmaker in August 2020 closed a deal for Mexican scrap recycler Zimmer SA de CV. The logic for that deal was similar: to provide raw materials to the Sinton mill.

North American sheet mills have been scooping up scrap assets at a rapid clip to ensure they have enough feedstock for their mills.

By Michael Cowden, Michael@SteelMarketUpdate.com