ArcelorMitall / Cliffs -- thoughts?

[Guest]

It does include AM Cleveland Mill

"Cleveland-Cliffs' acquisition will include ArcelorMittal's blast furnace steelmaking operations at Indiana Harbor and Burns Harbor, Indiana, its blast furnace operations in Cleveland, Ohio"

Source https://www.argusmedia.com/en/news/2145 ... eel-assets

Also see Investor presentation on Cliffs' website

[Guest]

The price is probably low because it reflects the poor business conditions in the integrated steel industry in the US.

I wouldn't worry about DOFASCO in Hamilton. Besides, it's not part of ArcelorMittal USA. It's one of the lowest cost steel producers in North America.

Arcelor-Mittal USA's Cleveland steel mill I would be very concerned about. The fact it was not included in the sale does not bode well for its future.

Nothing like a recession to shake out the least efficient blast furnaces, as happens every time we have one.

[Guest]

The article today didn't mention AM's mill in Cleveland. Was it part of the sale ?

The sale price for all those assets seems quite low given what they paid for AK.

I wonder what this means for the future of Dofasco in Hamilton.

[Guest]

All though I think it's highly unlikely, it would be neat to see Cliffs back on the lakes after a decades long hiatus. I see two possibilities for the CML boats
#1 Everything operates as it normaly does, with no changes
#2 Cliffs purchases the Joseph Block only, I don't see them wanting the Ryerson nor the Sykes. Just my two cents

[Guest]

Okay, so if I read this right it's just ArcelorMittal USA that was sold to Cleveland Cliffs and has no impact on DOFASCO in Hamilton.

On one hand I one can make a case that Cleveland Cliffs buying or merging with ArcelorMittal USA is just a renewal of vertical integration within the non-mini-mill steel producers, ala US Steel.

But on the other hand, they are increasing their risk. The integrated steel producers haven't exactly been singing since the 2008/2009 severe recession. More raw steel is now produced in the Southern US then the Great Lakes region.

The iron ore mines aren't exactly carbon-friendly and with the increasing likelihood of a change in government there will be a push to greatly reduce all forms of production that would produce carbon dioxide.

[Guest]

I am not 100% sure, but I believe that the old Inland ships (Block, Ryerson, Sykes) are owned by Central Marine Logistics, which operates under a cargo charter to Arcelor Mittal. I am not sure how much of a stake Arcelor Mittal has in the fleet, and how that will play out in the end. But, if the fleet is privately-owned aside from Arcelor Mittal, then the fleet could potentially continue to operate under cargo contract to Cliffs, or other suppliers/steelmakers.

[Mr Link]

Hopefully I'm proven wrong, but I think this is a huge misstep for Cliffs. Just about every time in their 170 year history that they diversified from mining iron ore, they lost their shirt. Plus the steel industry, as well as its big customer the auto industry, are going through major changes. Especially with younger people looking at options other than owning an automobile. Uber, leasing, pay by the hour car sharing...

Short term, this probably bodes poorly for Empire mine in Michigan. There had been talk about possibly re-opening it, but now with Cliffs to be owning Minorca and 85% of Hibbing Taconite, I think that ramping up production at the open, producing mines would be easier than re-opening a closed mine.

It is interesting that yesterday's article mentioned a merger, while today's implies a sale. If a sale is correct, that means no more access to the financial assets of the existing ArcelorMittal investors, and Cliffs will have to raise capital on their own.

[DCN]

I wonder if the minimill steel producers, the target consumers of the new Cliffs hot briquette iron plant in Toledo, will be willing to buy their raw materials from a company that is now a major competitor of theirs, or if Cliffs will now just consume all the product themselves once any existing contracts end.

What is certain is that we now have to start thinking of Cliffs as a steel company first and an ore supplier second, even more so than when they bought AK Steel earlier this year (or was it last year?).

DCN

[Chris M]

Highly doubt we'll see Cleveland Cliffs colors on any of the central marine vessels. Probably just sold to another company like what happened with ASC to Rand

[Orangeshirt]

Well, that should lead to all sorts of entertaining speculation regarding the disposition of the Block, Sykes and Ryerson. Return of the black and pea-soup green colors or sale to another fleet or continuing as is?

[Darryl]

My initial thought was - could have a negative effect on shipping, but after reading the article, maybe long term it could stabilize and possibly be good for American manufacturing. As they say, the devil's in the details, and what happens over the next few years.

[BigRiver]

ArcelorMittal USA sold to Cleveland-Cliffs in end-of-an-era merger

https://www.nwitimes.com/business/local ... a2bb1.html