CMC announces new Arizona EAF capacity

Irving, Texas-based Commercial Metals Co. (CMC) has announced it will build its third electric arc furnace (EAF) steel micromill, and it will be adjacent to one of CMC’s existing micromills in Mesa, Arizona.

CMC says the $300 million facility will be the first in the world to produce merchant bar quality (MBQ) products through what it calls “a continuous-continuous production process.” The new mill will replace what CMC calls “higher cost rebar capacity,” referring to the Rancho Cucamonga, California, EAF melt shop CMC idled in October 2019.

“We are excited by the tremendous promise of CMC’s third micro mill,” states Barbara R. Smith, president, CEO and board chair of CMC. “This is a smart growth initiative that feeds the large underlying West Coast demand for rebar and merchant bar, replacing inefficient existing rebar capacity with environmentally friendly technology. By monetizing the significant value associated with our Southern California real estate, this lowers the project’s capital requirements and increases its returns. Offering bottom-line growth and significant environmental benefits, this project is a win for our customers, employees, the local community, and shareholders.”

The new scrap-fed EAF capacity will be installed on property adjacent to CMC’s current Mesa facility, which CMC says “will enable the company to leverage its existing infrastructure and the significant micromill expertise of its engineering and operating personnel.” (CMC’s other micromill is in Durant, Oklahoma.)

CMC says the new micromill is expected to begin operating in early 2023 and will have an estimated annual capacity of 500,000 tons, including 150,000 tons of merchant product.

The announcement likely brings an end to steelmaking at the Rancho Cucamonga complex, which CMC acquired from Gerdau in January 2018.

In January 2020, CMC announced in comments accompanying an earnings report that it had ceased melt shop operations in Rancho Cucamonga in the fourth quarter of 2019.

CEO Smith’s comments that the steelmaker intends to “monetiz[e] the significant value associated with our Southern California real estate” points to the likelihood that CMC does not anticipate a prospective buyer for the mill assets to stay in place in California, so instead will explore real estate redevelopment options.

Steel has been made at the Rancho Cucamonga site since 1957, when it opened as Etiwanda Steel Producers, according to a 2017 article by the Rancho Cucamonga-based Inland Valley Daily Bulletin. The same article refers to the EAF facility as “California’s last big steel mill.”

In addition to CMC and Gerdau, the TAMCO joint venture between California-based Ameron International (Etiwanda Steel, with a new name adopted in 1970), Tokyo Steel and Mitsui & Co. (U.S.A.) Inc. owned the mill from 1974 until 2010, when Gerdau bought the mill from TAMCO.

Regarding the future Arizona micromill capacity, Tracy Porter, CMC executive vice president and chief operating officer, comments, “Representing another first in North America, this new micromill, which we are calling Triple M, will employ the latest technology in EAF power supply systems provided by Danieli, our equipment provider.”

Porter says Danieli was chosen in part because its “Q-One technology allows us to directly connect the electric arc furnace and ladle furnace to renewable energy sources such as solar and wind, and we intend to construct a solar array on our plant site to provide a meaningful portion of the facility’s power. With this new advanced technology, coupled with the continuous steelmaking process, we will be one of the most efficient steel producers in the world.”