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Severstal provided a lively start to the week, announcing on Monday that it had reached a deal to sell its two plants in North America for $2.3 billion.
The Russian steelmaker’s sale of its Columbus, Mississippi mill to Steel Dynamics and its Dearborn, Michigan, plant to AK Steel means Severstal exits crude steel production in the USA after about a decade.
For the two US buyers and the US steel market, the move may have important implications, possibly including greater price discipline as the number of producers is reduced by one. Scrap market participants expressed concern that several brokers could be hurt by the move.
Steel Dynamics said it plans to produce more value-added steel at the Mississippi plant, but there were questions over anti-trust and financing issues for AK Steel.
The election of Joko Widodo as new president in Indonesia should bring greater clarity to the business environment, a leading steel industry official told Steel First.
Posco, a major steel investor in Indonesia, said its joint venture there would not make money until next year, but also said it expected the market environment to improve following the conclusion of elections.
In the iron ore market, prices drifted down by more than $2 from a week earlier. But there was a slight uptick on Friday as tugboat workers threatened to strike at Port Hedland, a major transit point for ore from West Australia.
China’s Rizhao Steel became the first steelmaker to sign a supply contract linked to prices at the Dalian Commodities Exchange, while Singapore's Neo & Partners Global has launched multi-asset ‘trading atrium’ .
Galex in the Americas
In our key interview feature of the week London-based steel trading firm Galex outlined plans to expand in North and South America.
An in-depth analysis looked at the significance of an earlier ruling from the European Commission that SSAB must sell off five business units if it is to merge with Rautaruukki...
...and Metal Bulletin Research, in its Steel First Outlook, examined the continuing troubles of the Italian steel industry.
Meanwhile, unions protested against ThyssenKrupp’s restructuring plan for the Terni stainless mill in Italy.
World steel output was up 3% in June, as China continues to grow and advanced economies recover.
New Steel First scrap price
Steel First launched a new scrap price for US-origin HMS 1&2 (80:20) scrap delivered to Turkey.
Steel First deputy editor Martin Ritchie reviews the main stories covered by Steel First over the past week.