Metinvest says mulling purchase of Stelco

At the beginning of June, Stelco said they were looking for a buyer.

Late last week, this hit the news, but I didn’t get around to reporting it until this week.

Ukraine’s Metinvest confirmed on Friday that it is considering acquiring, or investing in, steelmaker Stelco Inc., but said it has made no firm decision.

Metinvest’s statement followed a report in the Globe and Mail newspaper, citing unnamed sources, that said officials from Metinvest have toured Stelco facilities in the weeks since the steel company put itself up for sale last month.

Stelco is the only big steelmaker in Canada that is still Canadian-owned.

The Globe’s Report on Business, in addition to reporting more or less the same content, had this interesting few paragraphs part way down their article:

Consolidation has swept aside Stelco’s neighbour Dofasco Inc., Essar’s deal for Algoma closed last month, and shareholders will vote on a $7.7-billion (U.S.) buyout of Ipsco Inc. by Svenskt Steel AB later this month.

Those transactions have helped reduce the number of mid-sized, relatively cheap North American steel assets to three.

They are Stelco, AK Steel Holding Corp. of Middletown, Ohio, and a mill near Baltimore, Md., that Mittal Arcelor, the world’s largest steel maker, has been ordered to sell by the U.S. government.

Of course, consolidation of steel suppliers means lack of competition on the supply side, and makes it very hard for small metal stampers to have a say in their own input costs.

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