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Marcegaglia Ceo Says Company Firmly Interested in Buying AST

Marcegaglia, the largest European steel re-roller and largest worldwide tube producer, reconfirmed its firm interest to acquire special steel producer Acciai Speciali Terni, or AST, Marcegaglia CEO Antonio Marcegaglia said, adding that the steel market had entered a supercycle.

“Our interest is serious and solid for Terni, it is based on good industrial synergies between our downstream operations and Terni upstream operations,” Marcegaglia said on April 13 during an online event organized by news portal Siderweb.

Marcegaglia said that the timeline of the sale process was dictated by the seller and that the companies were in the middle of the due diligence.

German steel maker Thyssenkrupp, owner of AST, put the company back in the market for sale in May 2020. In 2018, following a restructuring of Thyssenkrupp Materials, AST became one of the company’s core assets and was withdrawn from sale.

Marcegaglia produces around 550,000 mt/year of stainless-steel products and buys around 30% of its stainless steel feedstock from AST. If Marcegaglia buys AST, the company will not only have a primary production but will also increase its stainless market production.

Marcegaglia is not the only company interested in AST but there are other potential buyers as AST is a good performing mill, according to sources.

Marcegaglia said that overall the demand for coils continued to be strong and that the fundamentals were so good that there were expectations for prices to continue to increase in Europe as supply was low following mills implementing structural cuts in the past.

The margins between still very high raw materials costs and the steel products have “never been so good for years,” the company said.

The first quarter of 2021 for Marcegaglia was positive compared with the same period of last year, when the company still did well as the pandemic made an impact only at the end of March.

The first quarter of 2021 ended for Marcegaglia, which is not a listed company, with a 7.5% year-on-year rise in sales to 1.5 million mt of steel products. The company’s revenues rose 26.5% on the year to Eur1.460 million for the steel units.

European coils are at their historical highest level with the European hot-rolled coil steel and raw materials price spread surging in March to a new record high. This came as the record high spot steel prices outpaced iron ore, scrap and coking coal costs, S&P Global Platts reported earlier.

Northwest European HRC steel averaged Eur477/mt ($560/mt), more than a basket of raw materials costs in March, up from around Eur420/mt in February, according to estimates by Platts on April 1.

According to Platts data, European coils benchmark, Northwest European HRC, since the end of 2020, went up by Eur243/mt to Eur908/mt base ex-works as of April 13.

— Annalisa Villa