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Cliffs still seeks US Steel, pledges no closures

  • Market: Metals
  • 13/01/25

Cleveland-Cliffs chief executive Lourenco Goncalves said today that he remains open to buying US Steel, promising to keep all of the acquired assets open.

Goncalves said Ohio-based Cliffs still wants to buy Pennsylvania-based US Steel and would invest in the company's assets.

"Of course, we are going to keep [US Steel mills] open," Goncalves told reporters on Monday. "We are going to make them bigger, we are going to make them better, we are going to produce more."

His comments come 10 days after President Joe Biden blocked Japan-based Nippon Steel's agreement to buy US Steel for $15bn, citing national security concerns. Nippon had committed to invest $1.3bn in US Steel's mills and to not cut any of US Steel's production for 10 years without government approval.

Cliffs tried to buy US Steel for $54/share with half paid in cash and half in company stock before US Steel agreed to go with Nippon's $55/share all-cash offer.

Goncalves promise to not close any acquired assets comes as the US steel market remains oversupplied, according to market sources.

Goncalves said he cannot make a bid for US Steel until the company and Nippon cancel their merger agreement. He also dismissed antitrust concerns over Cliffs owning all US iron ore mines and all US blast furnace capacity. A combined company would have Cliffs running the mining side of the business and US Steel running the steelmaking operations, he said.

A US Steel-Cliffs merger would have 32.1mn short tons (st)/yr of flat rolled raw steel capacity, in addition to plate making and seamless tube production.

Goncalves did not say how he would finance such a purchase. Cliffs had $3.8bn in liquidity as of 30 September, including $39mn of cash, according to a third-quarter presentation. US Steel had $4.05bn in liquidity in the same period, of which $1.77bn was cash.

Nippon is trying to buy US Steel. Both companies have sued Biden and others in the government over the denial, and filed a separate lawsuit against Cliffs, Goncalves and United Steelworkers (USW) International president David McCall, who endorsed a takeover by Cliffs.


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11/02/25

Mexican steel faces few outlets in wake of US tariffs

Mexican steel faces few outlets in wake of US tariffs

Houston, 11 February (Argus) — Mexican steelmakers, facing sluggish domestic demand, could struggle to find outlets for production after the elimination of US steel tariff exemptions. US president Donald Trump on Monday revoked all exemptions from the 25pc steel import tariff, effective 12 March. Canada and Mexico as part of the US-Mexico-Canada Agreement (USMCA) were exempt from Section 232 25pc steel tariffs announced in 2018, along with Argentina, Australia, Brazil, the EU, Japan, South Korea and the UK. The renewed 25pc tariffs also include "derivative steel articles" — downstream and value-added products. Mexico also faces the potential imposition of a 25pc all-goods tariff in March by the Trump administration. Originally meant to be imposed on 1 February, the tariff was delayed by 30 days on 4 February. Should the tariff — which only included Mexico and Canada — be imposed at the end of the postponement, US buyers could face a 50pc tariff on Mexican steel. More Mexico capacity looms The gap left by the imminent exit of the US as a free trade partner leaves Mexican steelmakers with few obvious outlets as a slew of incoming capacity expansions are poised to bloat domestic inventories. Mexico produced 18.2mn metric tonnes (t) of steel in 2024 , down from 19.85mn t in 2023 as steelmakers pulled back production to counter weak demand, according to Mexican steel association Canacero. Mexico exported 3mn t of steel in 2024 — 2.3mn t of which went to the US, according to Canacero. That was followed by Canada, which imported just 118,000t in 2024, and Saudi Arabia, which imported 90,000t. Still, Mexican mills are expected to add more than 5mn t/yr of additional steel production by the first half of 2026. About half of that will come from steelmaker Ternium's slab mill in Pesquería, Nuevo León, which is expected in the first half of 2026. The Ternium slab mill's location in northern Mexico was meant to help supply steel to the USMCA region . Some in the market more recently told Argus that the new tariffs would have very little effect on Pesquería's strategy — positing that the slab produced there could be exported to Ternium's facilities in Brazil. Still, Mexico only exported 27,000t of steel to Brazil in 2023 and it was not listed as a top-10 export partner in 2024. Long steelmaker Deacero in 2023 also announced a $1bn expansion over three years to grow production by 1.2mn t/yr. Deacero's expansion, too, was aimed at meeting expected nearshoring-driven demand in the medium and long term. In 2023, long steelmaker Simec announced a new 500,000t/yr rebar mill and Brazilian steelmaker Gerdau in May announced it was exploring sites for a 600,000t/yr special steel mill in Mexico. Slow demand adds further pressure In the absence of overseas demand for steel, Mexican steelmakers could have to look to a shaky domestic market to offload production. Federally funded infrastructure projects like the Tren Maya, the Olmeca Refinery in Tabasco and the Felipe Ángeles airport near Mexico City either wound down or concluded by 2024. The projects took with them a boon in steel demand and production that faded further as buyers were reluctant to commit to tons before the general elections in June 2024. That demand has yet to recover. Mexican president Claudia Sheinbaum, who took office in October, campaigned partly on the construction of 1mn homes — which would require an uptick in rebar consumption. Sheinbaum is expected to announce her full infrastructure plan on 17 February. The market has few other options for Mexican-produced steel should the government not adopt publicly funded steel-consuming projects as the country faces expectations of slower economic growth this year. Nearshoring efforts, including plans for domestic production of electric vehicles (EVs) from both Chinese EV makers and US automaker Tesla, have stagnated. A wider count of new foreign direct investments in Mexico shrank last year to the lowest level since 2014 . Sheinbaum on Monday confirmed that the Mexican government learned of the steel tariffs from media outlets. Any previously discussed retaliatory measures would come after a clarification of the tariffs, Sheinbaum added. By Marialuisa Rincon Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Houston, 11 February (Argus) — The US' planned extension of 25pc import tariffs on steel set to go into effect on 12 March will wipe out existing import quotas, exclusions and agreements established during the first administration of President Donald Trump, essentially resetting the playing field for US steel imports. The proclamation signed by Trump on 10 February said the tariffs are intended to increase US steel capacity utilization to 80pc and close loopholes in the existing tariff scheme that have led to increased imports. This would mean certain products that had been excluded from past tariffs, including those not currently made domestically, would no longer be able to be exempted once existing exclusion orders expire or volume quotas are reached, whichever happens first. Trump's latest tariff push will also target a broader swath of downstream steel products, while setting up a dedicated process for US producers and industry groups to request products be subject to the 25pc tariff. The US will determine whether or not to include the product within 60 days of the request. The Trump proclamation cited increased imports of steel derivative products, such as fabricated structural steel and pre-stressed concrete strand, as signs of countries evading the existing tariff, which was implemented under Section 232 of the Trade Expansion Act. Market participants widely expected the reinforcement of the 25pc import tariff for steel. But many initially downplayed the possibility for the import tariff rate to increase to 50pc for Canada and Mexico, which would be the case if the US moves forward with proposed blanket 25pc duties for those two countries next month. Trump first imposed Section 232 national security tariffs of 10pc on aluminum and 25pc on steel imports in March 2018. Since then the tariffs have been partially rolled back on certain countries, while importers were allowed to ask for product-specific exclusions. Currently Australia and Canada can export any steel and aluminum they want to into the US without tariffs, while Mexico can export steel melted and poured in the US-Mexico-Canada (USMCA) agreement region into the US without tariffs, while any material with an origin outside of USMCA is subject to 25pc tariffs. Steel tariff rate quota (TRQ) systems were in place for Argentina, Brazil, the EU, Japan, South Korea and the UK for steel products, with specifics dependent on the country. Steel imports are heavily reliant on the nontariffed countries, with their volumes making up 80pc of the 26.2mn metric tonnes (t) of steel products imported in 2024, according to US Department of Commerce data. By Blake Hurtik Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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11/02/25

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11/02/25

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