Posted August 11, 2023

Grupo Simec idles two steelmaking operations 

Grupo Simec, an international producer of special bar quality (SBQ) steel, steel wire, rebar, and commercial and structural steel long products, says it will indefinitely idle steelmaking operations at its Republic Steel mills in Canton, Ohio, and Lackawanna, New York.

During the idling, Republic Steel’s U.S. customers will be served by Grupo Simec’s state-of-the-art steel mill in Tlaxcala, Mexico. U.S. customers will experience no interruption in service. As a result of the consolidation, about 500 Republic Steel employees will be furloughed indefinitely.

According to Jaime Vigil, Republic Steel board member and executive advisor, Grupo Simec exhausted every additional potential option before deciding to idle the two operations.

“We’re facing an extremely challenging SBQ market in the U.S., with competitive market pricing and decreased demand,” said Vigil. “At the same time, we’ve had to deal with increasing input costs on all raw materials, consumables, and labor, all as a result of the inflationary environment in the U.S. over the past year.”

Vigil said there was hope that inflationary pressures would ease, and that Republic Steel would experience a bump in business following the passages of the Infrastructure Bill in 2021 and the Inflation Reduction Act in 2022. Unfortunately, neither came to fruition in a timely manner.

Grupo Simec and Republic Steel are the only producers of leaded steel in North America and have been committed to doing so in an environmentally responsible manner. In the United States, for instance, the company took many steps over the past several years to remain compliant with all environmental regulations, particularly the National Ambient Air Quality Standard for leaded steel production. During that time, the company invested approximately $10 million in its Canton facility to maintain compliance with existing regulations and to respond to the ever-changing obligations imposed upon it by local, state, and federal environmental regulators.

Although Republic Steel has, for the past two years, remained in strict compliance with the National Ambient Air Quality Standards for the production of leaded steel, ensuring future environmental compliance while producing steel in facilities that are up to 125 years old proved to be too challenging. As a result, Grupo Simec felt it would be most environmentally responsible to do so at its new, state-of-the-art mill in Tlaxcala.

“One of our core values at both Grupo Simec and Republic Steel is to always be environmentally responsible,” said Vigil. “As the only producers of leaded steel in North America, we also owe it to our customers, and their customers, to be a reliable supplier of such products.”

“This isn’t an easy decision,” said Vigil. “But we feel it’s the only way for us to continue to serve our U.S. customer base with an ongoing and reliable supply of product, including leaded steel, and to do so at a competitive price point. Ultimately, we’re responsible to our shareholders and our customers. We’re simply doing what needs to be done to meet our responsibilities.”

Vigil recognized Republic Steel employees for their tremendous efforts.

“Republic Steel employees are hard-working and dedicated,” Vigil said. “Their roots date back to the late 1800s. They’re an important reason this company has been a leader in this industry for so long. And we thank them for their important contributions.”

Republic Steel was acquired by Grupo Simec in 2005. Simec is one of the largest producers of SBQ in North America and a top producer of commercial and structural steel long products in Mexico.