Steel Mills

CMC’s Arizona 2 micro-mill shifts focus on West Coast rebar glut

Written by Laura Miller

A temporary surplus of rebar on the West Coast is forcing CMC to alter the planned ramp-up of its Arizona 2 micro-mill, the company’s leader said on Thursday.

CMC’s Arizona 2 micro-mill is an expansion to the Irving, Texas-based company’s existing micro-mill in Mesa, Ariz. Commissioning of the expansion began in January.

As CMC said in its fiscal second-quarter earnings report, the micro-mill became the first in the world to roll merchant bar quality (MBQ) products during the quarter ended Feb. 29.

CMC’s president and CEO, Peter Matt, said on Thursday’s earnings call with analysts that historic rainfall in California in recent months has delayed construction projects and caused a temporary excess of rebar in the West Coast markets.

As a result, Matt said the Arizona 2 micro-mill will focus on the ongoing commissioning of its MBQ production. He said it will “return to rebar when the market is in better balance.”

While this approach will deviate from the original schedule, Matt noted that it will not extend the overall timeline for the mill’s ramp-up.

However, he added, it will impact the company’s ability to provide a volume forecast for the current fiscal year.

Commenting on additional rebar capacity announcements by various companies, Matt said CMC believes there is going to be a difference between the capacity additions that have been announced vs. the capacity that is actually going to be built.

“We’re very comfortable with our estimates on how much capacity actually gets built. The market will manage that capacity,” he commented.

CMC is extremely bullish on future steel demand in North America. Matt said the “once-in-a-generation investment cycle” at present, boosted by government infrastructure spending, “will power construction activity for years to come.”

Laura Miller

Read more from Laura Miller

Latest in Steel Mills