Gerdau sells Texas wire mill

Brazilian steelmaker sells EAF mill to Florida investment group.

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February 21, 2018

Brazil-based Gerdau S.A. has agreed to sell its Beaumont, Texas, wire rod mill to Optimus Steel LLC for $92.5 million. The sale also includes “two downstream facilities," according to a statement released by Gerdau.

The Beaumont mill has electric arc furnace (EAF) melt shop capacity of approximately 700,000 tons annually and is capable of producing wire rod and coiled rebar, Gerdau indicates.

Pending further approvals and regulatory clearances the sale is expected to close before the end of 2018. It is the second sale of U.S. steelmaking assets by Gerdau in the first quarter of 2018. In early January it announced the sale of four EAF mills and several downstream facilities to Texas-based Commercial Metals Co. (CMC).

Optimus Steel LLC did not contribute comments to the Gerdau statement, although a report from American Metal Market indicates the newly formed company is affiliated in some way with Florida-based Wire Mesh Corp. (WMC). According to the Gerdau statement, the downstream facilities sold to Optimus are known as Beaumont Wire Products and Carrollton Wire Products.

Gustavo Werneck, CEO of Gerdau, says the company remains committed to the North American market. “The strategy in North America, a key market for us, is to improve our profitability, focus on more value-added products and better serve our customers, positioning Gerdau as one of the most innovative steel companies worldwide. We remain committed to strengthening our position in the US in the next years and we see a great growth potential in the markets that Gerdau will continue to operate.”

After selling five mills with EAF melt shop capacity in early 2018, Gerdau continues to melt scrap at 13 other mills in North America, including three in Canada.