Steel Mills

Stelco Files for Public Offering
Written by Sandy Williams
September 27, 2017
Canadian steel producer Stelco Holdings will go public with the sale of at least $150 million in shares. The company filed for an initial public offering on Wednesday with security regulators in Canada.
Stelco, the former U.S. Steel Canada, was acquired out of bankruptcy by Bedrock Industries in June. The restructuring relieved Stelco of $3 billion in debt and $1.4 billion in pension and benefit obligations.
The funds raised from the offering will be used to develop new products and enhance production capabilities. The funds will also be used to make early payments to pension benefit trusts and general corporate purposes, said Stelco.
Goldman Sachs & Co. and BMO Capital Markets will lead the underwriting for the company. The price and number of shares offered has yet to be determined.
“We believe we own the newest and one of the most technologically advanced integrated steelmaking facilities in North America,” Stelco said in its filing with regulators. “We aim to grow our shipments of galvanized and galvanneal products that are primarily used for construction and automotive applications.”
“Our operations currently have substantial excess capacity, and we believe this excess capacity is accessible with limited capital investment,” said Stelco.
Stelco has two fully integrated facilities in Ontario, Hamilton Works in Hamilton and Great Lakes Works in Nanticoke, that produce high-quality steel used primarily in the North American automotive, construction, infrastructure, appliance, manufacturing, and pipe and tube industries. The 80-inch hot strip mill at the Lake Erie works can process 3.7 million metric tons per year, while the Hamilton facility has a steel production capacity of 2.8 million ton annually. Stelco plans to supplement Lake Erie Works with purchased slabs.
The company is focused on expanding technical capabilities to produce AHSS and UHSS grade steels for the automotive industry.
The prospectus lists a number of risks that Stelco could incur in its course of business. Two of those risks are directly tied to trade initiatives in the United States—potential changes to NAFTA and the Section 232 investigation.
“In particular, with the ongoing negotiations on NAFTA, it remains unclear what specifically the new United States administration and United States Congress will or will not do in this respect and what impact the outcome of the negotiations will have on the steel import/export market,” said Stelco in the prospectus.
“Section 232 allows the president of the United States to impose restrictions on imports into the United States for reasons of national security. If such investigation results in significant import duties on Canadian steel products being imported into the United States, that could have a material adverse effect on our business, financial condition, results of operations or cash flows.”

Sandy Williams
Read more from Sandy WilliamsLatest in Steel Mills

August US mill shipments slip but still higher than last year
The American Iron and Steel Institute reported a decline in the monthly shipments of US mills from July to August.

TransPod, Algoma, Supreme Steel linkup anchors Canadian steel in high-speed transit build
The three Canadian companies have announced a strategic partnership to support the development of an ultra-high-speed transit line from Edmonton to Calgary.

Metallus, USW agree to tentative four-year labor deal
Metallus and the United Steelworkers (USW) have agreed to a tentative four-year labor contract.

ArcelorMittal Dofasco resumes cokemaking after emergency maintenance
The Canadian steelmaker reported on Sept. 30 that “urgent maintenance” was needed in its coke plant off-gas systems. The work required coke oven gas from the No. 2 coke plant to be flared for most of that week.

AISI: Raw steel production ticks back down
US raw steel output declined last week after increasing the week prior, according to the latest data from the American Iron and Steel Institute (AISI). Output has see-sawed from week to week since mid-August. Still, it has remained historically strong over the past four months and has held near multi-year highs since June. Domestic mills […]