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Released August 17, 2023 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--If you didn't know it, United States Steel Corporation (U.S. Steel) (NYSE:X) (Pittsburgh, Pennsylvania) is on the market. In a move that surprised many, a $7.3 billion offer by Cleveland-Cliffs Incorporated (NYSE:CLF) (Cleveland, Ohio) to take over U.S. Steel has been declined and a subsequent offer by Esmark Incorporated (Pittsburgh, Pennsylvania) for $7.8 billion has been levied. At the same time, U.S. Steel has said it is conducting a strategic review to consider selling all or part of the company, but offered no timeline as to when that would happen. Other offers are likely to be on the table. The United Steelworkers have said that they back only the Cleveland-Cliffs offer.
Certainly, the landscape of the U.S. steel industry, which has heavily consolidated in recent years, will change once again if the iconic U.S. Steel is acquired in whole or part.
A combination of U.S. Steel and Cleveland Cliffs would create the largest steelmaker in the U.S., surpassing Nucor Corporation (NYSE:NUE) (Charlotte, North Carolina), and create the 10th largest steel producer in the world. Nucor produced more than 20 million tons in 2022, while Cleveland-Cliffs produced 16.8 million and U.S. Steel produced about 14 million tons.
The acquisition also would create the last remaining integrated steel producer in the U.S., combining the only companies using blast furnace technology. A combined company would also have a monopoly on iron ore mining, as well as electrical steel production, and be a majority supplier to the automotive/transportation sector.
The U.S. steel industry has been consolidating for years and currently has four main players; U.S. Steel, Cleveland-Cliffs, Nucor and Steel Dynamics Incorporated (NASDAQ:STLD) (Fort Wayne, Indiana). Other steel producers in the U.S. include Carpenter Technology, Commercial Metals Company, EVRAZ, Gerdau, and JSW Group.
The market for the U.S. steel industry has improved over the past decade with the Trump era tariffs helping to stop unfairly traded steel coming into the U.S. At the same time, steel demand shot up due to numerous reshoring projects and growth in automotive and other industries. As a result, the industry has experienced an increase in capital spending in recent years with more than $25 billion being spent and another $22.6 billion currently on the books.
Click on the image at right to view a map showing the distribution of project activity in the U.S. steel industry.
U.S. Steel is the largest company for project activity in the U.S. with $6 billion currently planned, while Cleveland-Cliffs has $600 million on the books.
Cleveland Cliffs is back in acquisition mode having acquired AK Steel and ArcelorMittal USA prior to the pandemic and spending $700 million on a new direct reduced iron manufacturing plant in Toledo, Ohio, which opened in 2021. On a recent earnings conference call, Cleveland-Cliffs said its annual capital expenditures (capex) would be around $700 million in 2023-2025, down from $900 million in 2022. U.S. Steel also has been in acquisition mode, acquiring Big River Steel and its state-of-the-art mill in Arkansas.
The market for steel in the U.S. is seen as favorable with recent government stimuli in the form of the Infrastructure Investment and Jobs Act and Inflation Reduction Act, along with the energy transition leading the way, which is expected to boost demand for steel going forward.
Cleveland-Cliffs currently has seven blast furnaces operating, and U.S. Steel also operates seven blast furnaces including one at the Kosice steel mill in Slovakia. Subscribers to Industrial Info's Global Market Intelligence (GMI) Metals & Minerals Plant Database can click here for a list of related Cleveland-Cliffs plant profiles and click here for a list of related U.S. Steel plant profiles.
U.S. Steel and Cleveland-Cliffs have numerous blast furnaces that have been closed or shuttered for various reasons.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 Trillion (USD).
Certainly, the landscape of the U.S. steel industry, which has heavily consolidated in recent years, will change once again if the iconic U.S. Steel is acquired in whole or part.
A combination of U.S. Steel and Cleveland Cliffs would create the largest steelmaker in the U.S., surpassing Nucor Corporation (NYSE:NUE) (Charlotte, North Carolina), and create the 10th largest steel producer in the world. Nucor produced more than 20 million tons in 2022, while Cleveland-Cliffs produced 16.8 million and U.S. Steel produced about 14 million tons.
The acquisition also would create the last remaining integrated steel producer in the U.S., combining the only companies using blast furnace technology. A combined company would also have a monopoly on iron ore mining, as well as electrical steel production, and be a majority supplier to the automotive/transportation sector.
The U.S. steel industry has been consolidating for years and currently has four main players; U.S. Steel, Cleveland-Cliffs, Nucor and Steel Dynamics Incorporated (NASDAQ:STLD) (Fort Wayne, Indiana). Other steel producers in the U.S. include Carpenter Technology, Commercial Metals Company, EVRAZ, Gerdau, and JSW Group.
The market for the U.S. steel industry has improved over the past decade with the Trump era tariffs helping to stop unfairly traded steel coming into the U.S. At the same time, steel demand shot up due to numerous reshoring projects and growth in automotive and other industries. As a result, the industry has experienced an increase in capital spending in recent years with more than $25 billion being spent and another $22.6 billion currently on the books.
U.S. Steel is the largest company for project activity in the U.S. with $6 billion currently planned, while Cleveland-Cliffs has $600 million on the books.
Cleveland Cliffs is back in acquisition mode having acquired AK Steel and ArcelorMittal USA prior to the pandemic and spending $700 million on a new direct reduced iron manufacturing plant in Toledo, Ohio, which opened in 2021. On a recent earnings conference call, Cleveland-Cliffs said its annual capital expenditures (capex) would be around $700 million in 2023-2025, down from $900 million in 2022. U.S. Steel also has been in acquisition mode, acquiring Big River Steel and its state-of-the-art mill in Arkansas.
The market for steel in the U.S. is seen as favorable with recent government stimuli in the form of the Infrastructure Investment and Jobs Act and Inflation Reduction Act, along with the energy transition leading the way, which is expected to boost demand for steel going forward.
Cleveland-Cliffs currently has seven blast furnaces operating, and U.S. Steel also operates seven blast furnaces including one at the Kosice steel mill in Slovakia. Subscribers to Industrial Info's Global Market Intelligence (GMI) Metals & Minerals Plant Database can click here for a list of related Cleveland-Cliffs plant profiles and click here for a list of related U.S. Steel plant profiles.
U.S. Steel and Cleveland-Cliffs have numerous blast furnaces that have been closed or shuttered for various reasons.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 Trillion (USD).
