Market cheers SDI move, frets about AK Steel
Jul 21, 2014 | 04:52 PM
| Michael Cowden
CHICAGO The sale of OAO Severstals U.S. mills to Steel Dynamics Inc. (SDI) and AK Steel Corp. means further consolidation of the domestic market and could lead to more-disciplined pricing, market sources said.
"Consolidation is greatone less rogue mill chasing prices down," a Midwest service center source said.
While sources were optimistic about SDIs acquisition, concerns were raised over AKs move. Reflecting this, SDIs shares ended July 21 at $20.76 apiece, up 11.7 percent from the previous close, while AKs shares fell 4.2 percent to $8.46 in the same comparison.
Analysts generally praised SDIs buy of Columbus as transforming it into one of the biggest mini-mill steelmakers in the country and making it owner of some of the newest steelmaking capacity in the United States.
"In both cases, its good for the domestic steel market in that you have good buyers that are existing players in the market and probably would be the least-disruptive owners," said Christopher Plummer, managing director of West Chester, Pa.-based Metal Strategies Inc.....
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