CMC to Build New 'Micro Mill', Eyes Infrastructure in Eastern U.S.

The new mill is also expected to benefit from the Infrastructure Investment and Jobs Act, also known as the Bipartisan Infrastructure Bill, signed into law by President Joe Biden in November.

“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 U.S.,” Smith said in a statement.

The Irving, Texas-based long products steelmaker and scrap recycler said it was looking at several potential sites. Construction of the planned mill is expected to take approximately two years after permits, various approvals, and state and local incentives are received.

Once it is completed, CMC will make approximately one-third of its steel in North America from micro mills.

Micro mills have less capacity than traditional rebar mills and are targeted to serve specific locations, giving them a leg up on freight costs compared with competing mills farther away.

And CMC has been a trailblazer when it comes to building micro mills.

CMC commissioned the world’s first micro mill in Mesa, Ariz., in 2009. The company in 2018 commissioned a second micro mill in Durant, Okla., that it had begun work on in 2015. And it is now building a second micro mill at Mesa.

Other steelmakers have since adopted the micro mill approach.

Case in point: Nucor Corp. plans to build a new, $350 million rebar “micro mill” in the South Atlantic region of the U.S. That mill will also target the East Coast and demand resulting from infrastructure spending. Nucor also started up rebar micro mills in Sedalia, Mo., and Frostproof, Fla., in 2020.

Rebar is more closely tied to construction work than the sheet products for which SMU tracks prices and lead times.

The American Iron and Steel Institute (AISI) estimates that the infrastructure bill President Biden signed into law authorizes funding for $850 billion in steel-containing infrastructure, which equates to as much as 40-45 million tons of steel demand in total. But that figure drops to $450 billion – or 20-25 million tons of new steel demand – once existing trust funds are considered.

By Michael Cowden, Michael@SteelMarketUpdate.com