Steel Markets

CMC looks beyond Arizona micro-mill woes to long-term viability of construction mart

March 21, 2025

CMC’s Arizona 2 micro-mill did not break even in the company’s fiscal second quarter, which ended Feb. 28. Still, the company sees long-term viability in the construction market beyond temporary headwinds.

The Irving, Texas-based company began ramping up the micro-mill expansion project in Mesa, Ariz., last year. It’s the first micro-mill in the world capable of rolling merchant bar quality products, according to the company.

“We had a challenging second quarter. Not only is it our weakest quarter seasonally … but we had two transformer outages, and we continue to have a few startup issues nagging us,” President and CEO Peter Matt said in an earnings call on Thursday.

“So we did not break even in the second quarter,” he noted.

As the company moves into its fiscal Q3’25, he said, “We are going to work really hard to get to that (break-even) level, but I think it’s probably more realistic that we cross that threshold in Q4.”

And moving into 2026, he expects the mill “to be continuously profitable.”

CMC continued to make progress at the Arizona micro-mill, including “producing an increased volume of merchant bar products during the quarter.”

“Looking ahead, we expect to achieve meaningful advancements in production volumes during the third and fourth (fiscal) quarters, with growth in both rebar and merchant bar output,” Matt said.

Construction viability

Despite the economic and geopolitical upheaval of the last five years, Matt pointed out that the construction market has been an essential element of the way forward.

“Governments and businesses have responded by undertaking massive investment programs to realign supply chains, rebuild infrastructure, increase energy production and transmission, and upgrade computing capabilities,” he said.

He noted that the common thread running through all of those is “construction.”

“We likely won’t be able to predict the next trend, but I’m confident that it will require construction solutions offered by our company,” Matt said. “That’s why I think it’s important to keep a sense of perspective and look beyond the temporary slowness.”

Trade policy boost?

Looking to trade policy, specifically trends like reshoring, Matt was upbeat on the potential boost for rebar demand.

“There’s been some really significant investment announcements in the US that are going to be leading to some substantial rebar demand,” he commented.

He gave the example of Apple talking about investing $500 billion to expand teams and facilities in Michigan, Texas, California, Arizona, Nevada, Iowa, Oregon, North Carolina, and Washington state.

Matt also mentioned significant investments in the US announced by Taiwanese chip maker TSMC, Indianapolis-based pharmaceutical company Eli Lilly, and Japanese automaker Honda mulling potential US reshoring investment.

“So these, I think, are, in part, consequences – maybe not directly — but certainly consequences of trade policy,” Matt said. “And I think they’re going to lead to a strong backdrop of demand for us over the next couple of years on that side of the equation.”

Ethan Bernard

Ethan Bernard is managing editor for Steel Market Update. He previously worked for American Metal Market as a copy editor in the New York office for two years, starting in 2008. Later, he copy edited AMM’s monthly magazine on a freelance basis from 2015 until 2017. With experience in financial copywriting and textbook publishing, he holds a BA in Comparative Literature from UC Berkeley, and an MFA. in Creative Writing from New York University. He can be reached at ethan@steelmarketupdate.com or 724-759-7871.