IBJNews

Steel Dynamics buying Mississippi plant for $1.6B

Back to TopCommentsE-mailPrintBookmark and Share

OAO Severstal, the Russian steelmaker controlled by billionaire Alexey Mordashov, agreed to sell its mini-mill in northeast Mississippi to Fort Wayne-based Steel Dynamics Inc. for $1.6 billion in cash.

Severstal early Monday morning announced it was departing the U.S. market with that sale and by selling a plant in Michigan to Ohio-based AK Steel Holding Corp. for $700 million.

Severstal’s imminent departure from the U.S. comes amid heightened tensions between America and Russia over Ukraine, where pro-Russian separatists continue to control key cities. Mordashov and Severstal haven’t been targeted by U.S. or European Union economic sanctions. The billionaire’s companies as of April controlled a stake of about 6 percent in OAO Bank Rossiya, which has been targeted.

Steel Dynamics said the Mississippi plant it is acquiring, commissioned in 2007, is one of the newest and most technologically advanced mini-mills in North America. The mill has a production capacity of 3.4 million tons, boosting Steel Dynamics’ annual steel shipping capacity to 11 million tons.

Morgan Stanley analyst Dmitry Kolomytsyn said by phone from Moscow before the announcement that because Severstal has been looking for a buyer since December, “the agreement to sell those assets has nothing to do with the Russia-West tensions over Ukraine.”

On July 15, Severstal agreed to sell its U.S. coal unit to Canada’s Corsa Coal Corp. for $140 million.

The U.S. steel industry has been dogged by excess capacity and depressed prices since the financial crisis. As of July 14, 21 percent of its capacity was unused, according to data from the American Iron & Steel Institute. U.S. steelmakers have also fought a succession of legal battles to curb cheap imports.

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
ADVERTISEMENT