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Commercial Metals Faces Antitrust Lawsuit Over Alleged Market Manipulation

By  |  July 2, 2024
Commercial Metals Faces Antitrust Lawsuit Over Alleged Market Manipulation

U.S. District Judge Haywood Gilliam Jr. has ruled that Commercial Metals Company, a leading manufacturer of steel reinforcing bar (rebar), must face an antitrust lawsuit alleging it hindered a potential competitor’s efforts to establish a mill in Southern California, leading to inflated rebar prices. The ruling, unsealed on Friday, denied requests for summary judgment from both Commercial Metals and the plaintiff, Pacific Steel, setting the stage for a trial later this month.

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    The lawsuit, filed in 2020 by San Diego-based Pacific Steel, accuses Irving, Texas-based Commercial Metals of engaging in conduct that forced rebar purchasers to overpay by approximately $50 million annually. Pacific Steel asserts that it had partnered with Danieli Corp to build a rebar mill that would have supplied rebar to most of California and parts of Arizona, Nevada and Utah. However, Pacific Steel claims that Commercial Metals’ actions thwarted this venture, thereby maintaining higher rebar prices in the market.

    According to Reuters, Commercial Metals has denied any wrongdoing. The company, a significant player in the U.S. construction materials industry, reported net earnings of nearly $860 million for the fiscal year 2023.

    Steel reinforcing bar, commonly known as rebar, is essential for reinforcing concrete structures, making it a critical component in the construction sector. The allegations in the lawsuit against Commercial Metals suggest that its practices not only stifled competition but also had broader implications for the construction industry by driving up material costs.

    Pacific Steel, founded in 2014, aims to challenge Commercial Metals’ market dominance by establishing its own production capabilities. Despite the setback in establishing the Southern California mill, the ongoing legal proceedings highlight the competitive tensions within the rebar manufacturing industry.

    Both Commercial Metals and Pacific Steel did not immediately respond to requests for comment on Monday.
    Source: Reuters