SSAB Americas Says Iowa Plate Mill Not For Sale

SSAB’s U.S. operations are comprised of two plate mills – one in Mobile, Ala., and another in Montpelier, Iowa.

There has been long-standing speculation that the Iowa mill might be for sale. Such speculation has heated up more recently as mills have announced record profits, leading to questions about what they might do with all that cash.

Chatter about a deal for the Iowa mill has been fueled in part by SSAB moving the Mobile plate mill to its Specialty Steels division but not similarly transitioning over the Montpelier facility.

Some sources said that SSAB might have initially explored selling the mill in the face of future competition from Charlotte, N.C.-based Nucor’s new mill in Brandenburg, Ky.

Nucor in 2019 announced its $1.35 billion plate mill with anticipated capacity of 1.2 million tons per year. The mill is expected to start up approximately a year from now. It was located further north than Nucor’s other plate mills and along the Ohio River to provide better access to Midwestern markets.

Also, SSAB several years ago moved its headquarters from Lisle, Ill., a suburb of Chicago, to Mobile.

Nucor currently faces a significant freight disadvantage when it ships from its plate mills – two located in the South and one in Texas – to northern markets such as the Midwest, market participants said.

Rumored suitors include SSAB’s two primary competitors in the U.S. plate market: Nucor and Cleveland-Cliffs Inc. Any deal might also include scrap assets that feed the Iowa mill, sources said.

A deal would theoretically expand Cliffs’ reach in the Midwestern plate market. The Cleveland-based steelmaker already operates a plate mill at its Burns Harbor steelmaking complex in northwest Indiana.

Nucor would in theory gain access to Midwestern markets without having to wait for its new mill in Kentucky to come online.

“It is Cleveland-Cliffs’ policy to not comment on market rumors,” a company spokesperson said.

Nucor did not respond to a request for comment for this article.

By Michael Cowden, Michael@SteelMarketUpdate.com