US Steel aims to buy rest of EAF-based Big River
Integrated steelmaker US Steel said it will prioritize buying the remaining shares of electric arc furnace (EAF) steelmaker Big River Steel, a day after its initial 49.9pc stake purchase closed.
Chief executive Dave Burritt today called the purchase of Big River "strategic priority number one," a day after the Pittsburgh-based steelmaker posted an $84mn third quarter loss.
"Ultimately acquiring 100pc of Big River is our number one strategic priority because mini mills make money in the trough and we need the ability to do the same," Burritt said today.
US Steel bought a 49.9pc stake in Big River, a flat-rolled mini mill in Arkansas, for $700mn in October as the company works to remain relevant among stiff competition from scrap-based flat-rolled steelmakers and volatile prices.
The company's strategy will be to adjust its capital spending on its other projects - namely its Mon Valley Works, Gary Works and European operations - in order to fund the purchase.
US Steel is planning to spend $950mn in capital expenditures in 2020, with $150mn to be spent to finish the 1.6mn st/yr EAF at its Fairfield Works near Birmingham, Alabama, by next year.
The company expects to push spending on its endless casting and rolling line at Mon Valley Works mill out further but said it does not expect that to impact the timeline of the project, which is expected to be completed in 2022.
US Steel said the company will delay some investment in a $130mn new electrical steel line at its Slovakia integrated steel mill, but that its timeline will not be impacted. The project is expected to be completed in the fourth quarter of 2020, and will have an annual capacity of 100,000t (110,000st).
source: Argus Media
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