Search Copying and distributing are prohibited without permission of the publisher
Email a friend
  • To include more than one recipient, please separate each email address with a semi-colon ';', to a maximum of 5

  • By submitting this article to a friend we reserve the right to contact them regarding AMM subscriptions. Please ensure you have their consent before giving us their details.

RG assets could restart, analysts say

Keywords: Tags  RG Steel, Sparrow's Point operations, Nucor, U.S. Steel, slab, steel, Posco, ThyssenKrupp Timna Tanners Bank of America Merrill Lynch

ROSEMONT, Ill. — Despite the bankruptcy and sales of RG Steel LLC’s assets, significant parts of the former steelmaker’s 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 Update’s 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 it’s spent its nine lives, but I wouldn’t put any money (against it)," Tanners said during the session.

RG Steel’s Sparrows Point complex was sold to Hilco SP LLC and Environmental Liability Transfer Inc. for $75.2 million (, 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 (, 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 Steel’s 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 AG’s Steel Americas operations doesn’t mean buyers are champing at the bit to acquire them, Tanners said.

Analysts have suggested that Charlotte, N.C.-based Nucor Corp.; U.S. Steel Corp., Pittsburgh; South Korea’s Posco Ltd.; Cia. Siderúrgica Nacional (CSN), Rio de Janeiro; and other companies could be among the potential suitors for either of the German steelmaker’s rerolling assets in the United States, its slab production facilities in Brazil or both (, May 18).

"It’s 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 down."

She declined to comment further, citing confidentiality agreements.

Anton also declined to comment on the subject of ThyssenKrupp.

Have your say
  • All comments are subject to editorial review.
    All fields are compulsory.

Latest Pricing Trends


Are you stocking more inventory today than 18 months ago?


View previous results