Steel Mills
October 12, 2021
Market Reaction: Cliffs’ Deal for FPT Could Shift Scrap Flows
Written by Tim Triplett
As “the next precious metal,” prime scrap is a growth opportunity and a logical fit for Cleveland-Cliffs, which announced Monday that it plans to acquire Detroit-based Ferrous Processing and Trading Co. (FPT). The $775-million deal, Cliffs’ first foray into scrap, comes as no big surprise to most market observers.
Cleveland-Cliffs is the largest producer of flat-rolled steel in North America with both blast furnace and electric arc furnace (EAF) steelmaking capacity. A mining company as well as a steelmaker, it also produces iron ore pellets and direct-reduced iron (DRI). Prime scrap is the third leg in the stool, giving Cliffs a solid base in low-carbon raw materials. It also puts Cliffs on a more even footing with rivals Nucor (David J. Joseph Co.) and Steel Dynamics Inc. (OmniSource), which both have their own captive sources in the scrap sector.
