Steel Mills
ArcelorMittal to Acquire CSP in $2.2 Billion Deal
Written by David Schollaert
July 30, 2022
ArcelorMittal SA has agreed to buy Brazilian steelmaker Companhia Siderúrgica do Pecém (CSP) from Brazilian iron ore miner Vale SA and shareholders.
The deal is worth $2.2 billion and is expected to be completed late this year.
CSP is a joint venture between Vale, which holds a 50% stake in the company, and South Korean steelmakers Dongkuk and Posco, which hold 30% and 20% stakes, respectively.
The Luxembourg-based company said the move would expand its position in the high-growth Brazilian steel industry and capitalize on a clean electricity and green hydrogen hub in Pecém.
“CSP … further enhances our position in Brazil and adds immediate value to ArcelorMittal,” CEO Aditya Mittal said in comments released with the company’s second-quarter earnings results last week. “There is significant potential to decarbonize the asset given the state of Ceará’s ambition to develop a low-cost green hydrogen hub and the huge potential the region holds for solar and wind power generation. CSP produces high-quality slabs and is cost competitive, ensuring its products are competitive domestically and for export.”
CSP began producing steel slabs in 2016 and has a capacity of 3 million tons of slabs per year, according to the company’s website. It makes a range of slabs including American Petroleum Institute (API) grade material used in the energy sector and peritectic steels necessary for certain defense and automotive applications.
Brazil is the largest slab supplier to the United States despite being subject to a Section 232 quota. The US imported 2.89 metric tons from Brazil in 2022, up 19.4% from 2.42 million in 2021, according to Commerce Department figures.
Slab imports are of significant value to the US market. They are the raw material needed to make flat-rolled steel for US re-rollers such as California Steel Industries (CSI), Evraz North America, NLMK USA’s Pennsylvania operations, and AM/NS Calvert, a joint venture between ArcelorMittal and Japan’s Nippon Steel.
By David Schollaert, David@SteelMarketUpdate.com
David Schollaert
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