North American steel buyers see fallout after Nucor and SDI's scrap purchases

摘要

Steel buyers expect significant changes in the North American steel market in the wake of the recent acquisition of scrap processors by major steel producers. One change they expect is that publicscrap indices will become much less important in scrap pricing practices. "I think the scrap market indices definitely will be affected," a mid west service centre source said. "They (electric furnace mills) now own a large chunk of the scrap supply. I believe they'll be able to manipulate the scrap price." That comment reflected the views of a number of steel buyers who reacted last week to the news that Nucor Corp had agreed to purchase scrap processor and broker David J Joseph Co, Cincinnati, in a 1.44-billion dollars deal. Nucor's buy, combined with the 1-billion dollars-plus purchase of Omni Source Corp by Steel Dynamics Inc(SDI), late last year, has North American steel buyers assessing the impact on the market, wondering what the fallout of those deals and additional scrap consolidations, such as the recent merger of Sims Group Ltd and Metal Management Inc, will mean to them in months to come.