en als laatste.
However, with none of the players involved in the mooted deals indicating any intention to close plants, some analysts believe the benefit for the wider sector may be limited.India’s Tata and ThyssenKrupp of Germany are in the process of merging their European steel activities into a joint venture, but talks have dragged on for more than a year-and-a-half. Meanwhile ArcelorMittal’s deal to purchase the continent’s largest steelworks, the Ilva plant in southern Italy, has run into a political storm and is subject to an in-depth EU competition investigation.“Consolidation is very important,” says Mr Zoryk of Accenture. “Things need to happen to continue to stabilise the industry and strengthen its pricing position against automotive and construction companies.”China/US deal breaks new groundA Chinese stainless steel company and an American competitor are embarking on a joint venture to bring metal made overseas into the US for processing, in a deal said to be the first of its kind, writes Michael Pooler.Allegheny Technologies Inc. (ATI) of Pittsburgh will import slabs of stainless steel, made at an Indonesian plant owned by Tsingshan Group, the world’s largest producer of the rustproof alloy.It is the first such tie-up between a Chinese stainless producer and a western major, according to analysts. “It could be the first of many such arrangements, as China seeks to expand its stainless export business and increase its penetration of western markets,” says Adrian Gardner, an analyst at Wood Mackenzie.Stainless steel has a much smaller market than standard carbon steels, but its use is expanding as rising living standards in the developing world fuel demand for household appliances, medical goods and water treatment equipment.Mirroring the wider steel industry, China’s crude stainless output has grown almost fivefold since 2006 to represent close to 55 per cent of the worldwide total, according to the price consultancy MEPS. As part of the ATI-Tsingshan agreement, which is subject to regulatory approval, ATI will roll and further process the slabs into sheets. The 50:50 JV will see the US group reopen an idled mill, creating about 100 manufacturing jobs in Pennsylvania. Exporting from Indonesia means Tsingshan avoids US trade tariffs on cold stainless rolled products of Chinese origin. But the deal provoked a bearish attitude from investors towards the US stainless market, according to Jefferies. There is also scepticism in some quarters about the competitiveness of the model due to the additional logistics costs.