Steel Mills
Vale in 'Advanced' Talks to Sell Stake in CSI
Written by Michael Cowden
December 8, 2021
Brazilian iron ore miner Vale is in an “advanced stage of negotiations” to sell its stake in California Steel Industries (CSI), according to an investor day presentation.
The presentation did not say which company Vale was in talks with.
CSI is a Fontana, Calif.-based slab converter. It is also a 50-50 joint venture between Vale and Japanese steelmaker JFE – and an important supplier of sheet products and welded pipe to the West Coast.
Charlotte, N.C.-based electric arc furnace (EAF) steelmaker Nucor is the most likely candidate to acquire Vale’s stake in CSI, according to market participants.
An acquisition of CSI, or at least Vale’s stake in CSI, by Nucor or any other U.S-based mill would provide a presence on the West Coast. And M&A is probably the best means to acquire such a footprint given the high environmental and regulatory hurdles to any new heavy manufacturing projects in the region.
The relevant slide from the Vale presentation is here:
The slide also notes that Vale has in 2021 already successfully sold its stake in fertilizer producer Mosaic and its Vale New Caledonia (VNC) nickel operations.
CSI, approximately 50 miles east of Los Angeles, makes hot-rolled, pickled-and-oiled, cold-rolled and galvanized products as well as welded pipe.
The company could become an important supplier to infrastructure work on both the sheet and pipe sides if it were to have a source of domestically melted slab and hot band for pipe scalp, some sources said.
CSI currently relies primarily on imported slabs, which means it is not eligible for projects requiring that steel be melted and poured in the United States.
Nucor, Vale and CSI did not respond to requests for comment for this article.
By Michael Cowden, Michael@SteelMarketUpdate.com
Michael Cowden
Read more from Michael CowdenLatest in Steel Mills
Cliffs steadfast in commitment to Middletown decarb project
Cleveland-Cliffs Inc. on Monday reiterated its commitment to a major decarbonization project at its Middletown Works in Ohio, despite an earlier report suggesting otherwise.
Nucor expects lower steel prices to drive Q3 earnings decline
Nucor blamed lower steel prices for weaker third-quarter results in earnings guidance released on Tuesday.
SDI guides toward lower Q3 earnings on weaker flat-rolled steel prices
Steel Dynamics Inc. (SDI) expects lower third-quarter earnings on the heels of “meaningfully lower” prices at its flat-rolled steel operations. The Fort Wayne, Ind.-based steelmaker expects Q3’24 earnings of $1.94 to $1.98 per diluted share, according to figures released on Monday. That’s down from $2.72 per share in Q2’24 and down from $3.47 per share in Q3’23.
Stelco shareholders OK $2.5B sale to Cliffs
Stelco shareholders voted overwhelmingly on Monday to OK the $2.5-billion sale of the Canadian flat-rolled steelmaker to Cleveland-Cliffs. Indeed, 99.97% of those who cast ballots voted to approve the deal, according the Hamilton, Ontario-based steelmaker.
White House may delay decision on USS-Nippon deal until after election: report
The White House decision on blocking Nippon Steel’s play for Pittsburgh-based U.S. Steel might be pushed back until after the upcoming presidential election, according to a report in the Washington Post.