Steel Mills
BlueScope to Buy MetalX as Mills' Scrap Acquisition Spree Accelerates
Written by Michael Cowden
November 4, 2021
BlueScope Steel plans to acquire U.S. ferrous scrap recycler MetalX LLC for $240 million.
MetalX is the leading scrap supplier to North Star BlueScope, the Australian steelmaker’s electric arc furnace (EAF) sheet mill in Delta, Ohio.
The deal is expected to close by the end of December, BlueScope said in a press release.
MetalX operates facilities in Indiana and Ohio that are adjacent to the Delta mill. The company currently supplies approximately 20% of the scrap consumed by North Star BlueScope.
“The U.S. is a key focus for BlueScope’s future growth,” BlueScope Managing Director and CEO Mark Vassella said. “Moving upstream to acquire a scrap supply business helps underpin North Star’s supply chain and its great competitiveness.”
MetalX processes both prime and obsolete scrap. BlueScope’s acquisition of the company is the latest in a trend of mills buying scrap companies to secure what some fear could be increasingly scarce prime scrap supplies.
Two recent examples: BlueScope competitor Cleveland-Cliffs last month announced a $775 million acquisition of Detroit-based Ferrous Processing and Trading Co. (FPT). And Algoma has formed a joint venture with Triple M to source prime scrap.
Those developments are not without precedent.
The David J. Joseph Co. (DJJ), one of the largest scrap processors and brokers in the U.S., was acquired by Charlotte, N.C.-based Nucor for $1.44 billion in March 2008. That move came after Steel Dynamics Inc. (SDI) bought OmniSource Corp., a major Midwest scrap processor, in 2007 for slightly more than $1 billion.
By Michael Cowden, Michael@SteelMarketUpdate.com
Michael Cowden
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