Scrap brokers split on Severstal NA sale impact
Jul 21, 2014 | 05:38 PM
| Sean Davidson
NEW YORK OAO Severstals sale of its North American assets to Steel Dynamics Inc. (SDI) and AK Steel Corp. could hurt several scrap brokerage businesses, according to market participants.
SDI procures scrap through its own scrap company, OmniSource Corp., while AK Steel secures its scrap needs through an exclusive arrangement with Tube City IMS LLC.
"For open market traders, this acquisition erodes open market opportunities. If you are an independent dealer or broker it shrinks the market a bit as SDI will always use the OmniSource yards as a positioning tool against the open market. Tube City is less effective, but they too lock out people in favor of their own brokerage and scrap options. Both Omnisource and Tube City will continue to make it more difficult for the independents to do business. That hurts the market," one broker said.
A second broker said the effects of the asset sale will be much greater in the South than in Detroit.....
To access AMM's full content, please log in below. If you do not have an AMM account, we invite you to take a free trial or subscribe below.
Already a registered amm.com user?
Access to amm.com editorial content is granted only to paid subscribers and trialists. If you do not have an active account in your own name, please either subscribe or take a trial and you will have instant access to amm.com content. Sharing your login credentials with individuals who are not subscribers represents a violation of AMM copyright.
Every morning, every minute no matter how often you follow the markets, there's an AMM subscription to fit your needs.
Not sure if you are ready to invest in a subscription right now? Take a free, no-obligation trial. Start your free trial today.