Esmark makes offer for Mittal's Sparrows Point steel mill
Sources close to Illinois-based Esmark confirmed to Platts Friday that the company has submitted a bid for Mittal USA's Sparrows Point mill in Maryland, and indicated it's the only US-based company to make an offer. Sparrows Point, located on the Chesapeake Bay, is a rarity-a US steel mill with direct ocean access.
Mittal has reportedly also received bids from more than a dozen global players, including Brazil's CSN, Russia's Evraz and Severstal, and India's Tata.
Last month, the US Department of Justice ruled that Mittal must sell Sparrows Point in order to satisfy an earlier consent decree calling for the divestiture of one of three Mittal mills that supplied tin mill products to the eastern US. Most observers thought the DOJ would select West Virginia's Weirton mill for divestiture, and Esmark even had a memorandum of understanding in place with Mittal to acquire that mill.
But Sparrows Point may also be a good fit with the Esmark footprint, which now covers primary steelmaking, finishing and downstream steel-service outlets from Missouri and Illinois to Indiana and Ohio, and now into Pennsylvania with its recent acquisition of galvanizing operation, Winner Steel. With Sparrows Point, Esmark would probably set its sights on buying an East Coast service center operation. One of Sparrows Point's key competitors is Wheeling-Pittsburgh, which Esmark now controls, so there's some immediate benefit.
Sparrows Point serves the construction, container, automotive and appliance markets. Built originally by Bethlehem Steel, the mill's raw steel production capacity is now about 3.5 million st/year. Other competitors are AK Steel, US Steel, Nucor and Steel Dynamics. Its product mix consists of slab, hot-rolled coil, cold-rolled coil, galvanized sheet, and tin plate. The mill employs about 2,400 people, most of whom belong to the United Steelworkers of America.
<< Home