Commercial Metals Faces Antitrust Suit for Alleged Market Manipulation

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

The lawsuit, filed in 2020 by San Diego-based Pacific Steel, accuses Irving, Texas-based Commercial Metals of actions that caused rebar buyers to overpay by about $50 million annually. Pacific Steel says it partnered with Danieli Corp to build a rebar mill that would supply rebar to most of California and parts of Arizona, Nevada and Utah. But Pacific Steel says Commercial Metals’ actions thwarted that effort, keeping rebar prices higher in the market.

According to ReutersCommercial Metals has denied any wrongdoing. The company, a major player in the U.S. building materials industry, reported net income of nearly $860 million for fiscal 2023.

Steel reinforcing bar, commonly known as rebar, is essential for strengthening 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 the cost of materials.

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

Neither Commercial Metals nor Pacific Steel immediately responded to requests for comment Monday.