Steel Mills

Buyers Ponder Merger of Major Integrated Mills
Written by Tim Triplett
September 29, 2020
Cleveland-Cliffs’ purchase of ArcelorMittal USA took many steel buyers by surprise this week. Initial reactions from some Steel Market Update readers ranged from “a major development” to “business as usual.” Here are some of their comments:
“Quite surprised by this development. Initial reaction is this gives them an incredibly strong position with automotive. Not sure about other end-use markets. This additional consolidation does not guarantee pricing power as there is still plenty of competition in the North American market.”
“Consolidation should overall be a net positive for the market. We are curious to see if this will materially change Mittal’s approach to the market. Do they become more focused on higher-value products and less concerned about the core HR market and more specifically the service center customer base? Or is that simply a result of some capacity rationalization? With the auto companies seeing their buy consolidated, does this further open the door for Nucor, SDI and Big River to gain market share in the automotive segment? Does this materially change their cost structure and allow them to compete more effectively with the EAF mills? My personal belief is that integrated mills will continue to lose share over time. The service/performance of these mills leaves a fair amount to be desired (at least from a service center perspective) and proof will be in the pudding if that changes.”
“This was an expected consolidation. However, it potentially creates a monopoly issue and I’m hearing automotive companies may not be happy with it. Cliffs acquiring old technology is concerning and the deal leaves out Calvert, which is getting a new EAF. That doesn’t make sense to me.”
“Lourenco’s [Cliffs CEO Lourenco Goncalves’] MO is to dominate. AK’s MO was to dominate. AMUSA’s MO was to dominate. What changes except for the ownership and size of the predator?”
“Nothing like going all in on BOF technology. It creates a downstream customer for Cleveland-Cliffs. And we believe auto and appliance sectors will see some steep increases in cost for 2021 and beyond as this new venture was dominant in those areas. We expect the sales percentage to distribution to be less in 2021 with the new company.”
“It was a surprise to many. Kept under wraps very well. Can’t help but wonder if Goncalves had dialogue with USS also. I don’t think it’s ‘business as usual’ at the new company.”

Tim Triplett
Read more from Tim TriplettLatest 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 […]