Steel Mills
Cliffs Closes Deal for FPT, Seeks to Boost Closed-Loop Model
Written by Michael Cowden
November 18, 2021
Cleveland-Cliffs Inc. has completed its $775 million acquisition of scrap recycler Ferrous Processing and Trading (FPT).
Cliffs Chairman, President and CEO Lourenco Goncalves said the deal could change the way the scrap business has traditionally worked by creating more “closed-loop” transactions.
Such deals would mean more scrap – and especially prime scrap, FPT’s specialty – goes directly from manufacturers such as automakers back to steelmakers such as Cliffs. That could knock out the need for middlemen along the way.
“With our closing of the FPT acquisition today, we are now immediately focused on amplifying the value of what we believe is the next precious metal,” Goncalves said in a statement on Thursday, Nov. 18.
“To drive this, we have already begun the dialogue with our steel customers with a focus on increasing our scrap offtake from them under a real closed-loop proposition,” he said.
Detroit-based FPT processes roughly three million tons of scrap a year, half of which is prime scrap, Cliffs said.
Cliffs announced the deal in October after Goncalves said at SMU’s August Steel Summit conference in Atlanta that the company, traditionally a steelmaker and iron ore miner, would soon be entering the scrap business as well.
Demand for prime scrap is expected to increase sharply as new electric arc furnace (EAF) capacity is added. That trend is colliding with expectations of limited or no growth when it comes to prime scrap supplies.
By Michael Cowden, Michael@SteelMarketUpdate.com
Michael Cowden
Read more from Michael CowdenLatest 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 […]