ROSEMONT, Ill. Despite
the bankruptcy and sales of RG Steel LLCs assets,
significant parts of the former steelmakers capacity
could still be restarted, steel analysts said.
"Until (the Sparrows Point, Md.,
facility) is shipped to China or melted down to scrap, somebody
will open it," John Anton, manager of steel services for IHS
Global Insight Inc., said Monday during a question-and-answer
session at Steel Market Updates third annual Steel Summit
in Rosemont, Ill. "If it takes $2 billion to build it, and you
can buy (it) for $100 million ... someone is going to buy it
for $100 million and try to run it. That is just the way the
industry tends to work."
Bank of America Merrill Lynch
analyst Timna Tanners largely agreed.
"I think some of that capacity
will show up again. Sparrows seems to me that its spent
its nine lives, but I wouldnt put any money (against
it)," Tanners said during the session.
RG Steels Sparrows Point
complex was sold to Hilco SP LLC and Environmental Liability
Transfer Inc. for $75.2 million (
amm.com, Sept. 14), just a fraction of what RG
Steel originally paid for the assets when it acquired them from
Dearborn, Mich.-based Severstal North America Inc. in 2011. The
new owners put the operations back up for sale (
amm.com, Sept. 26).
In the Northeast, some steel
buyers and traders are "ecstatic" as Brazilian imports are
"doing better than they were before" in the wake of RG
Steels sale, Tanners said. But she questioned how much
impact the bankruptcy has had outside the region, where it
might be less dramatic.
Meanwhile, the potential sale of
ThyssenKrupp AGs Steel Americas operations doesnt
mean buyers are champing at the bit to acquire them, Tanners
Analysts have suggested that
Charlotte, N.C.-based Nucor Corp.; U.S. Steel Corp.,
Pittsburgh; South Koreas Posco Ltd.; Cia.
Siderúrgica Nacional (CSN), Rio de Janeiro; and other
companies could be among the potential suitors for either of
the German steelmakers rerolling assets in the United
States, its slab production facilities in Brazil or both (
amm.com, May 18).
"Its been public that
there is some interest out there. But I would say from my
conversations generally with Nucor, Posco, U.S. Steel, CSN, the
interest level is a little more muted than what the
publications might imply," Tanners said. "When you really dig
in and start asking these companies, Hey, do you want to
own this and at what price? they are not jumping up and
She declined to comment further,
citing confidentiality agreements.
Anton also declined to comment
on the subject of ThyssenKrupp.