Jan. 3, 2018

Major Deal Kicks Off New Year

It took less than 36 hours for 2018 to deliver big news to the metals supply chain. Commercial Metals’ acquisition of Gerdau’s rebar facilities in the United States is a transformative one for the domestic rebar market. CMC, already a major player in rebar, is adding 2.5 million tons of production capacity, plus 33 fabrication facilities across the country.

This past fall, Metal Center News sat down with executives from the North American Steel Alliance, the buying cooperative for service center companies. An edited transcript of that discussion will be featured in the January issue of MCN. During the course of the conversation, several executives who specialize in the long products business spoke of the existing difficulty of operating within that space.

Nucor’s enormous downstream presence had already made bidding on jobs difficult for smaller players. Now, another major vertically integrated rebar producer has just expanded its domestic footprint in the fabrication business, which can only challenge the service centers even more.

“It used to be the 500- to 2,000-ton jobs, the mill shops were impossible to beat. Now, it’s almost any level,” Sabel Steel Service President Keith Sabel said during the conversation.

On the other hand, the increased concentration of the rebar business in the hands of a smaller number of producers leaves the market open to an independent rebar producer to join the field.


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Wednesday, January 17, 2018