TPT November 2007

From the AmericaS

The projected landfill would have a liner to keep the sludge from contaminating groundwater. Mittal also would be required to monitor the landfill for 30 years after it is closed and capped with native grasses. Indiana Dunes has attracted fierce protective sentiment since 1899. The environmental movement in the US frequently makes reference to this comment by the late Senator Paul H Douglas, of Illinois: “When I was young I wanted to save the world. In my middle years I would have been content to save my country. Now I just want to save the Dunes.” Canadian steelmaker Stelco finds a buyer in Pittsburgh: United States Steel Corp In the second major acquisition for US Steel this year, the big producer said on 26 August that it would purchase Canadian steel maker Stelco for US$1.1 billion and retire most of Stelco’s US$760 million in debt. As reported by Len Boselovic of the Pittsburgh Post- Gazette, the move, which will boost the annual production capability of the largest domestically owned integrated steel producer in the US to about 33 million tons, is expected to produce annual pre-tax synergies of more than US$100 million in 2008. The acquisition follows on the heels of US Steel’s $2 billion purchase on 14 June of Lone Star Technologies Inc (Dallas, Texas), the producer of welded pipe for oilfield applications. Now, with Stelco, the American steel giant will strengthen its position in the automotive sector. Slabs produced at Stelco’s Lake Erie and Hamilton plants, in Ontario, will support USS facilities producing both flat-rolled steel for the auto and appliance industries and tubular steel. Charles Bradford, an industry analyst with Bradford Research/Soliel Securities in New York, told the Chicago Tribune that the deal will also likely increase US Steel’s exposure in the construction market and reduce its reliance – as a percentage of total business – on warehouse stores that buy in bulk. Mr Bradford noted that the cross- border connection makes good sense geographically, as Stelco’s Lake Erie Works is near a US Steel facility in Detroit. US Steel chairman and chief executive officer John P Surma made plain that the company intends to capitalize on this aspect of the Stelco purchase. He said, “With major facilities located on both sides of the Great Lakes, this acquisition will significantly increase our ability to respond to market demands and our customers’ needs.” The purchase, which requires the approval of US and Canadian regulators, was expected to close in the fourth quarter. Of related interest . . . › Sounding a sour note two days after US Steel’s announcement of its acquisition of Stelco, Standard & Poor’s on 28 August revised its outlook on USS to negative from stable (a negative outlook is generally taken to indicate that the rating will be lowered further over the ensuing two years.) The ratings agency now gives US Steel a ‘BB-plus’, one level below investment grade. The Standard & Poor’s statement read: “Although the acquisition [of Stelco] enhances [US Steel’s] position in the North American steel market, where market conditions remain relatively favorable, we are concerned that the company is further depleting its cash cushion, adding meaningful additional debt to its balance sheet, and taking on significant additional pension and OPEB liabilities in an uncertain economic environment.” (NB: OPEB is defined as ‘other post-employment pension’ obligations).

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N ovember /D ecember 2007