Search
AMM.com Copying and distributing are prohibited without permission of the publisher
Email a friend
  • To include more than one recipient, please separate each email address with a semi-colon ';', to a maximum of 5

  • By submitting this article to a friend we reserve the right to contact them regarding AMM subscriptions. Please ensure you have their consent before giving us their details.


Independent rebar mill planned for Texas mart

Keywords: Tags  rebar, Texas, steel, long products, concrete reinforcing bar, construction, Tondu, Joe Tondu Texas Steel


NEW YORK — An independent 200,000-ton-per-year rebar mill is planned near Waco, Texas, AMM has learned. Construction could begin by next spring.

The micro-mill would sell primarily to regional rebar fabricators, taking market share from imported rebar, project principal Joe Tondu of Houston-based Tondu Corp. told AMM.

The project, Texas Steel LLC, has filed an air permit application with the Texas Commission on Environmental Quality, state records show. The proposal is now open to public comment and a potential public hearing.

If the project develops smoothly, construction could begin in spring 2015, with the mill producing rebar around mid-2016, Tondu said.

"The infrastructure demands of the Gulf Coast are growing rapidly," Tondu told AMM in a telephone interview. "We see a large demand and a large need for supporting materials."

The site could span 45 acres near Waco. Although Tondu has yet to purchase the land, he owns options to buy the property. Tondu also has yet to obtain full financing for the $100-million project and has spent minimally on development costs to date.

Still, Tondu said he has found strong "expressions of interest" from about two dozen regional customers and also has met with several independent scrap dealers to secure raw material.

One Texas-based scrap dealer who has met with Tondu several times over the past 18 months called the project a "workable business plan" and dubbed it a "boutique mill" in an e-mail to AMM.

Other scrap dealers who have held meetings with Tondu reacted less positively, with one declining to invest and others expressing uncertainty over the project’s timeline and viability.

The equipment lineup serving the proposed mill includes an induction furnace, a natural gas pre-heat scrap system and a continuous caster, Tondu said. The plant could employ about 100 people and  produce rebar efficiently relative to industry standards, he added.

News of the planned micro-mill has drawn a variety of reactions from participants in the rebar market.

Booming construction in Texas, which alone could consume more than 1 million tons of rebar this year, means the regional rebar market is bright there, said one rebar market source familiar with Tondu’s project. "If there were enough capacity in (the Texas) market by itself, perhaps it wouldn’t be such an attractive landing destination for all that foreign steel. That alone may be evidence of an opportunity for a new, specialized micro-mill."

Conversely, a source at a national rebar distributor was openly skeptical that Tondu’s project could survive in a market with significant existing rebar capacity. "You can’t operate a mill down in that area creating only 200,000 tons a year. There’s just too much pressure from imports," he said. In addition, "Gerdau has a mill there, (Commercial Metals Co.) has a mill there, ArcelorMittal (SA) has one there and Nucor (Corp.) has a mill there. They will absolutely crush him."

However, Tondu said the project doesn’t aim to compete with domestic mills, pointing out that much of the rebar produced in Texas by major steelmakers is sold to their downstream mill-owned fabricator shops.

"We think there’s a market out there for a small customer who wants to buy a small amount of rebar," he told AMM. "That market is underserved, and I think that shows up in the fact that there’s so much imported rebar coming into the country."

Sean Davidson, New York, contributed to this article.


Have your say
  • All comments are subject to editorial review.
    All fields are compulsory.



Latest Pricing Trends