An Illinois rebar finisher says that high demand for steel reinforcing bars in concrete construction is compelling it to expand its rebar production capacity. Nu Way Cos. is building a 35,000-sq-ft plant in Troy, Ill. Contractor Contegra Construction is building the facility that will have three cranes to handle various sizes of rebar, including up to 3.5-ton coils and straight lengths up to 60 ft.
It will more than quadruple the company’s rebar production tonnage, which was at a high of 3,100 tons in September and is expected to grow.
“E-commerce-driven warehouse construction coupled with a surge in infrastructure spending has created soaring demand for rebar, a critical element for tilt-up and road construction,” says Greg Rhomberg, president and chief operating officer of Nu Way. “On top of that, healthcare, schools and other concrete projects are also driving demand for reinforcing rebar.”
Rebar demand is up nearly 9% over the first seven months of 2022 compared to the same time period in 2021, according to Timothy Gill, chief economist for the American Iron and Steel Institute.
He attributes recent demand for rebar to nonresidential construction that is beginning to recover from the impact of the COVID-19 pandemic and the recession of 2020.
At the same time, a sharp downturn in the U.S. economy in the next year could have a negative impact on demand, but Gill thinks the Infrastructure Investment and Jobs Act (IIJA) will lead to more construction over the next few years by states, municipalities and others.
“Much of this investment, particularly road, highway and bridge construction, will make extensive use of rebar,” he says.
Kenneth Simonson, chief economist for The Associated General Contractors, also thinks federal dollars could increase rebar demand, even as the housing market cools.
“My impression is that demand from homebuilders and warehouse projects is cooling steeply,” he says. “I expect a big pickup, starting in 2023 and continuing for several years, from infrastructure, manufacturing, and power and energy projects, all of which are benefiting from the IIJA, Chips and Science Act, and the Inflation Reduction Act.”
Unclear When Demand Will Rise
It is less clear when demand will rise, as a consequence of the federal laws. “The federal awards and tax credits in those laws all come with significant new strings and lots of rules that have yet to be written or clarified," says Simonson. "The timing of any pickup in demand for materials for those projects remains very uncertain,” he adds.
Rhomberg anticipates increasing production to 15,000 tons of rebar annually at the Troy plant when it is completed in spring 2023.
The facility will customize rebar supplied by steel mills for construction. Plans call for a 31,000-sq-ft fabrication shop and 4,000 sq ft of office space, made from tilt-up concrete panels. The 21-ft clear height fabrication area would have three bays, each served by an overhead crane, including a 16-ton magnetic crane, a 10-ton crane and a five-ton crane.
Nu Way has recently supplied rebar for projects, including the new MLS Stadium in St. Louis, Phillips 66 Wood River Refinery in Roxana, Ill., and the Springfield Public School District in Springfield, Ill.