MSA COMMENTS ON NUCOR DEPARTURE FROM RMDAS
Charlotte, N.C.-based Nucor Steel’s decision to withdraw from Management Science Associates’ (MSA) Raw Material Data Aggregation Service (RMDAS) scrap pricing service has not changed MSA’s development of the program, according to two executives with RMDAS.
As reported in American Metal Market May 26, Nucor is no longer participating in RMDAS. The company had renewed its RMDAS contract twice before allowing it to expire this past February.
However, MSA, which is based in Pittsburgh, notes that RMDAS "still has 55 percent of the market reporting."
Patrick Gallagher, vice president of MSA’s metals and advanced manufacturing division, says RMDAS has 16 participants in the United States covering 54 melting shops, including electric arc furnace and integrated steel mills.
While American Metal Market’s report states that Nucor’s departure would have a $1-per-ton impact on pricing in the South, where the company is heavily represented, MSA has determined that the actual impact on average prices for No. 2 shredded scrap was 21 cents, with monthly deviations in different directions.
MSA also has determined that the average difference with or without Nucor in No. 1 heavy melting steel and prompt industrial composites in the South is less than $1 per ton if the two categories are weighted equally.
The company says it will continue to work to bring additional participants into the program, adding that several steel mills are considering participating.
While the initial focus of RMDAS has been to capture pricing information from the domestic steel industry, MSA’s Ralph Pinkert says the company is talking with foundries, scrap suppliers and offshore buyers to make RMDAS a stronger, more representative service.
METAL MGMT. ACQUIRES OMNISOURCE PLANT
Chicago-based Metal Management Inc. has announced the acquisition of a recycling facility in East Chicago, Ind., from OmniSource Corp. The financial details of the transaction were not disclosed.
Under the terms of the agreement, Metal Management has acquired the property, buildings and equipment of OmniSource’s East Chicago facility, including a 29-acre yard, an automobile shredder, two balers and a shear. The facility handles approximately 430,000 tons of ferrous scrap metal and approximately 10 million pounds of nonferrous scrap metal per year.
Metal Management has a prominent presence in the greater Chicago area, and with this addition the company now operates 15 processing facilities in that market. Metal Management says it expects the transaction to be immediately accretive to its earnings per share.
Metal Management is one of the largest full service metal recyclers in the United States, with approximately 50 recycling facilities in 16 states.
WHICH ARCELOR MERGER IS IN THE WORKS?
As of press time, shares of Luxembourg-based Arcelor have been suspended for trading while the company‘s board sorts out its merger options.
A surprise announcement that Arcelor is working with Russia-based Severstal on a merger followed months of maneuvering by Netherlands-based Mittal Steel to acquire Arcelor.
More recently, however, an anonymous source told the Reuters news agency that Arcelor may finally be ready to negotiate with Mittal Steel, which is largely owned by Indian Lak-shmi Mittal and his family.
According to Reuters, the source has indicated that talks could begin yet in June and that Arcelor managers may finally be willing to accept a slightly improved offer from Mittal without further resistance.
At a news conference, Lakshmi Mittal has also indicated positive movement on the negotiating front, telling attendees, " We have moved from a very negative involvement to a positive involvement today. We hope that this kind of dialogue can lead to a satisfactory conclusion for the shareholders of Arcelor as well as Mittal Steel," according to Reuters.
A deal between Mittal and Arcelor would create a European-based powerhouse with more than 100 million metric tons of annual steelmaking capacity—much of it in Europe but some of it also in other parts of the world.
However, if Arcelor merges with Severstal, the combined company would have sizable assets in several countries, including significant positions in Brazil and Russia, with sales of roughly EUR 46 billion and worldwide production capacity of nearly 70 million metric tons.
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