Steel Dynamics (SDI), the parent company of Omnisource scrap recyclers, has entered into agreement to fully acquire Zimmer Recycling. The acquisition is part of SDI’s raw material procurement strategy to support its new Texas flat roll steel mill, which is expected to begin operations in mid-2021.
Through Zimmer, SDI plans to also grow its metals recycling presence in Mexico. Zimmer is headquartered in Monterrey, Mexico and operates six ferrous and non-ferrous scrap processing facilities that are strategically positioned near high-volume industrial scrap sources in Central and Northern Mexico. The 35-year-old company also provides total scrap management for several third-party scrap processing sites.
The combined facilities have an estimated annual processing capacity of approximately 2mn gt (1.968mn mt) and currently ship 25pc or about 500,000gt of scrap annually.
SDI’s upcoming $2bn Texas mini mill with an annual capacity of 3mn nt will integrate advanced hot-strip technology that will allow the plant to make steel with metallurgical qualities not available from traditional EAFs with limited strip production options. The new flat steel mill is expected to target the West Coast, Southeast and Mexican markets.
SDI is estimated to export about 275,000nt of finished steel to Mexico annually. SDI initially considered locating the new mill in Mexico according to some reports but settled for Texas. SDI’s Omnisource recycling division exports about 300,000nt of scrap annually to Mexico. Depending on the location of some of the sourcing sites, some of the previously exported scrap may be directed to the large Texas mill.