Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Commercial Metals Company (CMC) is permanently closing its steel plant, CMC Steel California, by the end of December 2020.


A spokesperson for the company provided additional details on the closure Friday, following the October 15 release of its full-year fiscal 2020 and Q4 results that touched on CMC’s decision to cut melt operations at its plant in Rancho Cucamonga. 


The steelmaker indicated that its North American segment performed well in Q4 FY 2020 mainly due to the replacement of billet supply from its other, lower-cost plants after reducing operations at its California mill.


The Texas-based company first announced its plans for the closure during an earnings call with investors in March 2020 but did not provide a timeline for the shutdown at that time. Specifics on employee layoffs are still uncertain at this time.


According to media reports, the decision was made due to the current high cost of doing business in California, along with excessive environmental regulations enacted by the state. CMC has already recorded cost-savings benefits and anticipates the decision will lead to savings of more than $10mn annually. 


Operations at the plant in Rancho Cucamonga has changed ownership twice in the past 10 years. CMC bought the plant with six other steel mills and 33 rebar fabrication centers from Gerdau in November 2018 who purchased it from TAMCO Steel in 2010.


The company will maintain its California operations in Fresno, Fontana, Etiwanda, Napa, San Diego, Tracy, San Bernardino, and Santa Fe Springs. CMC has global operations in over 60 locations with the capacity to process 4mn nt of scrap per year and a yearly fabricating capacity of almost 3mn nt.

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