CHICAGO As various global steelmakers consider acquiring ThyssenKrupp AGs assets in the Americasparticularly the rolling mill complex in Calvert, Ala.steel buyers are weighing the potential impact of such a sale.
Analysts have pointed to Pittsburgh-based U.S. Steel Corp., Luxembourgs Ternium SA and ArcelorMittal SA, Charlotte, N.C.-based Nucor Corp. and Brazils Cia. Siderúrgica Nacional (CSN) as potential suitors for the facility, among others (amm.com, May 18).
Under any new management, the Calvert facility will supply everyone down South and will shoot steel up north. Theyll operate at such a (favorable) number because their investment is going to be so much less than the original owners spent, $4 billion, Bill Feniger, president of Universal Metals LLC, Toledo, Ohio, said during an AMM-led roundtable Jan. 24 at the Association of Steel Distributors meeting in Detroit.
ThyssenKrupp lost so much money (on the Alabama mill), and its still not ramped up where they can make money, said Mike Dallek, president of MD Metals Inc., Bedford Park, Ill. Plus, thats an enormous amount of extra supply thats been weighing on the market.
Its one of the most modern, unbelievable mills Ive experienced, Feniger said. Someone will run that mill and make it effective. But it will only be profitable if somebody puts the hot end (melt shop) in front.
Even if slabs were sourced locally, rather than shipped from Brazil, it wont run that great, he argued. Whoever buys itNucor-Louisiana, ArcelorMittal or U.S. Steeleventually the only way that mill runs right is when they put the hot end on.
The addition of a melt shop would be ideal, but that mill could run properly if it were managed to its capacity, said Lisa Goldenberg, president of Delaware Steel Co., Fort Washington, Pa. Its like Disney World there. Ive never been to a more magical place.
However, the German parent and the U.S. operators have hit obstaclesputting the moving parts in place, proper communication between systems and people, recording and analyzing accurate data that operators can work within trying to make good decisions, she said.
Anyone buying it will buy it with the thought process that they are going to have to put a hot end on, Feniger said. That is why youll get a $1.5-billion or $1.8-billion bid on it.
No matter what, he added, That mill is going to run.