Tata Steel in talks with SSAB over IJmuiden site; starts separation of UK assets

Tata Steel has initiated discussions with Swedish steelmaker SSAB over the sale of its IJmuiden plant in The Netherlands, the company said on Friday November 13.

Tata Steel has also initiated the process of splitting its main European operations – Tata Steel Netherlands and Tata Steel UK – with the aim of pursuing separate strategic paths for the two businesses.

“Tata Steel continues its dialogue with the [British] Government on potential measures to safeguard the long-term future of Tata Steel UK and is also reviewing all options to make the business self-sustaining without the need for any funding support from Tata Steel India,” the steelmaker said.

In October this year, several reports appeared in the global media indicating that Tata Steel and SSAB were interested in the possibility of merging their European steelmaking operations.

The acquisition of the IJmuiden plant by SSAB would allow the Swedish steelmaker to increase its footprint by entering the Northern European market, including the Benelux countries and Germany, sources said.

“[Tata Steel] has also commenced discussions with the supervisory board and board of management of Tata Steel Netherlands and the process will move to the next stage, including due diligence and stakeholder consultations. The company is committed to deploy proceeds of any strategic restructuring toward additional deleveraging of the balance sheet,” the steelmaker said.

Tata Steel Europe has two integrated steelmaking sites equipped with blast furnaces: one at IJmuiden in the Netherlands and the other in the UK, at Port Talbot in South Wales.

Both plants produce slab, hot- and cold-rolled coil and galvanized coil. The IJmuiden site has capacity for 7.5 million tonnes per year, while Port Talbot can produce 4.9 million tpy.

SSAB is major steelmaker in the Nordic countries. The company has two blast furnaces in Raahe, Finland, with total capacity for 2.5 million tpy of pig iron. In Sweden, it has three blast furnaces, one in Lulea and two in Oxelösund, with combined capacity of around 4.4 million tpy.

SSAB’s Nordic assets produce hot-rolled, cold-rolled, galvanized and pre-painted coil and welded tubes.

Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Northern Europe, at €525.10 ($619.29) per tonne on Friday November 13, up by just €0.10 per tonne from €525.00 per tonne on Thursday.

The index was also up by €12.57 per tonne week on week and by €31.35 per tonne month on month.

The region’s steelmakers have been offering HRC at €540-550 per tonne, but this range was not included in the index because no deals were confirmed at that price.