Mergers and acquisitions in European steelmaking could have important consequences downstream, with independent service centers increasingly nervous they will be squeezed out of the market. Investment bank Jefferies suggests ArcelorMittal will account for 40% of European coil market supply once it completes its acquisition of Italian producer Ilva, while a merged Tata/ThyssenKrupp would have a share of around a quarter. This increase in consolidation should be good for the mills and their pricing power, and potentially reduce the regional disparity that exists between the north and south of the continent as Ilva was often the cheapest player. While the industry has for years acknowledged the need for supply to be more consolidated, these two major players would also own a significant portion of the downstream sector. This is making independent businesses competing with these mill-tied distribution arms increasingly nervous. “The situation is not good for downstream independent operations. ThyssenKrupp, Tata Steel and ArcelorMittal have their own downstream operations, which make up almost 40% of the market,” a service center source in Iberia said. “We are very worried with these antidumping sanctions coming, [as] it means the sourcing opportunities are less and less. At the moment, more or less, we’ve been
Continue reading European mill consolidation concerns independent stockists, distributors. This article appeared first on CTRM Center.
Source: CTRM Center