Nippon Steel is a better buyer for US Steel than another American company would be, one analyst explains. The latter would lead to higher steel prices in the US, which isn't helpful for efforts to bring manufacturing back to the country.
Nippon Steel is a better buyer for US Steel than another American company would be, one analyst explains. The latter would lead to higher steel prices in the US, which isn't helpful for efforts to bring manufacturing back to the country.
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For decades, the story of American steel had been one of job losses, mill closures and the bruising effects of foreign competition. But now, the industry is experiencing a comeback that few would have predicted even months ago.
Steel prices are at record highs and demand is surging, as businesses step up production amid an easing of pandemic restrictions. Steel makers have consolidated in the past year, allowing them to exert more control over supply. Tariffs on foreign steel imposed by the Trump administration have kept cheaper imports out. And steel companies are hiring again.
Evidence of the boom can even be found on Wall Street: Nucor, the country’s biggest steel producer, is this year’s top performing stock in the S&P 500, and shares of steel makers are generating some of the best returns in the index.
ArcelorMittal has strong prospects in the United States.
This is even after the group sold in 2020 almost 14 million tons of integrated crude capacity to
Cleveland-Cliffs.
“It is one of the major steel markets, even though many steel plants in the United States have shut down in the past 10 years,” one analyst said.
ArcelorMittal completed the sale of its US division to Cleveland-Cliffs in December. That came after concluding a $1.4 billion agreement earlier in September to sell six steelmaking plants to the Ohio-based company.
However, the Luxembourg-headquartered group did retain several sites in the country.
“They kept the top-quality assets,” a second source said of ArcelorMittal.