British Steel OR expects to reopen negotiations
British Steel's official receiver (OR) today said that Turkish pension fund Ataer Group's period of exclusivity to carry out due diligence on UK steelmaker British Steel was coming to an end.
"While discussions with Ataer are continuing, discussions with other parties who have expressed continued and renewed interest in acquiring the whole British Steel business will now be possible. I have instructed the Special Managers to engage with these additional interested parties," the OR said.
Profitability could be an issue for the Turkish steelmaker, market participants suggested. Although the costs of raw materials are high because of British Steel's need to feed its blast furnace with iron ore, product pricing is often very low, a UK-based trader said.
"As the market-leading domestic producer that can offer prompt delivery, British Steel's products should command a premium," said the trader, adding that the steelmaker was missing out on the opportunity to price higher. At its highest point this summer, the Argus ICX iron ore fines index reached $125/dmt cfr Qingdao on 3 July.
As London-based metals group Liberty House and Chinese steelmaker Jingye Group re-enter the running, market participants cast doubt on the viability of these options.
The blast furnaces at Scunthorpe, known as the four queens, would not fit into Liberty's Green Steel policy, based on electric arc, scrap-fed furnaces, which tend to be more environmentally friendly. "In terms of Liberty, I don't think market participants would see this as progress," said one UK-based stockholder.
The OR added in its statement that selling the company as a whole, including its assets in the Netherlands and France, remains a priority. "We remain focused on achieving a sale of the business and assets of British Steel as quickly as possible to achieve the best possible outcome for the company's creditors," the OR said.
source: Argus Media
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