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
Nucor’s Jellison set to retire, Spicer tapped for EVP role
Nucor said EVP Douglas J. Jellison plans to retire on June 8 after more than 33 years with the company. Randy J. Spicer will be promoted to EVP effective May 12.
Republican Senators demand Biden block USS sale to Nippon
Three vocal Republican senators are demanding that President Joe Biden block the sale of U.S. Steel to Japan’s Nippon Steel.
Stelco reports solid Q1, plans to up value-added output
Stelco reported a positive start to 2024 in its first-quarter earnings report on Thursday. And with steady demand and a stable market, the Canadian flat-rolled steelmaker is optimistic for the remainder of the year.
AISI: Raw steel production inches higher
US raw steel output ticked up last week, according to the latest American Iron and Steel Institute (AISI) data.
Nucor surprises with $65/ton price drop for HRC
Nucor started off May with a bang, dropping its weekly base spot price for hot-rolled (HR) coil by $65 per short ton (st) this week.