Gerdau S.A., one of the leading global producers of long steel, has announced a new investment program aimed at expanding production capacity at its electric arc furnace (EAF) mill in Midlothian, Texas. The project, valued at $51.5 million, is scheduled for implementation in the second half of 2026 and represents a key step in the company’s strategy to strengthen its presence in the North American market.

Focus on Recycled Steel and Sustainable Growth

The expansion at Gerdau Chaparral Mill will boost the plant’s ability to produce high-quality steel using recycled scrap as the main raw material. The project is expected to add around 150,000 tons of annual capacity, supporting growing demand for steel products in the construction, energy, and manufacturing sectors.

The Midlothian facility already operates one of the most advanced EAF lines in the United States, and the upcoming modernization will enhance energy efficiency, reduce CO₂ emissions, and further increase the share of secondary raw materials in Gerdau’s steel output. The company’s management emphasizes that the project aligns with its long-term goal to expand low-carbon steel production and transition toward circular manufacturing.

Strategic Shift Toward the U.S. Market

In parallel with the Texas expansion, Gerdau is adjusting its global investment portfolio, redirecting capital from less profitable projects in Brazil toward more resilient markets such as the United States. The company notes that strong domestic demand, predictable policy frameworks, and effective trade protection make the U.S. a favorable environment for sustainable steel production.

According to company executives, the American market offers consistent growth in infrastructure, data center, and renewable energy projects — all key drivers of long-steel consumption. By expanding local EAF capacity, Gerdau aims to secure a greater share of this demand while reducing dependence on volatile export markets.

Technology Partnerships and Modernization

The expansion plan in Midlothian is being developed in cooperation with leading engineering partners specializing in EAF technology and process optimization. The focus areas include improvements in furnace energy efficiency, automation, and real-time digital control of steelmaking parameters.

This new phase continues Gerdau’s modernization program in Texas, which in recent years included the commissioning of a new heat-treatment facility and upgrades to the bar rolling mill that raised the site’s overall output capacity to roughly two million tons per year.

Regional and Economic Impact

The Midlothian expansion will strengthen the local industrial base in Ellis County and create new jobs in construction, engineering, and operations. Local authorities have praised the company’s long-term commitment to the region, where Gerdau has been an anchor of heavy industry for decades.

In addition to employment growth, the project will increase the regional supply of domestically produced recycled steel — a critical factor as U.S. industries work to shorten supply chains and reduce their environmental footprint.

Industry Perspective

Analysts view Gerdau’s decision as part of a global trend toward EAF-based steelmaking, driven by decarbonization goals and regionalization of production. Electric arc furnaces, powered largely by scrap metal, are significantly less carbon-intensive than traditional blast furnaces and offer greater operational flexibility.

By investing in Midlothian, Gerdau positions itself at the forefront of this transition, expanding its U.S. footprint while reinforcing its role as a leader in sustainable, recycled steel production.

Outlook

The new EAF expansion in Texas marks a continuation of Gerdau’s evolution from a traditional steelmaker into a modern, sustainability-driven industrial group. Upon completion in 2026, the upgraded Chaparral Mill is expected to become one of the most efficient and environmentally responsible mini-mills in North America — a benchmark for the next generation of steel production.