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Not since the “United States Steel Hour” during the golden age of television has the Pittsburgh-based steelmaker had such drama like the firm’s current public relations fight with former bidder Cleveland-Cliffs over its proposed acquisition by Japan’s Nippon Steel Corporation.

In a May 21 press release, Cleveland-Cliffs Chairman, President and CEO Lourenco Goncalves said to U.S. Steel’s board,: “With a United Steelworks-represented facility, you are not entitled to sell to whomever you please.... My opinion remains the same: You cannot and will not close your announced deal with Nippon Steel.”

That same day, U.S. Steel said in its own press release, “The investment by NSC has been under attack since day one by one of our competitors and unsuccessful bidder—Cleveland-Cliff—who have been sowing misinformation to our stakeholders in a relentless and unbridled effort to derail the transaction.”

The $14.1-billion acquisition deal, announced in Tokyo and Pittsburgh in December, still requires regulatory approval and is expected to be ruled on later this year.

Several contractors were contacted for comment on what the deal could mean for structural steel and other related products, but all declined comment, with most saying that they use both Cleveland-Cliffs and U.S. Steel as suppliers and wish to remain neutral on the very public spat. Cleveland-Cliffs and U.S. Steel rank second and third, behind Nucor Corp., in steel produced by domestic manufacturers, at 17.27 and 15.75 million tons produced in 2023, according to the World Steel Association. Nippon Steel ranks fourth in the world, ahead of Nucor, with 43.66 mt produced last year. Combining its operations with U.S. Steel would create a much larger company with access to the U.S. market the Japanese steelmaker has never before enjoyed.

What Does This Mean for Construction?

The Associated General Contractors of America believes such an acquisition and its overall affect is still unknowable. “I don’t think there’s clear evidence one way or the other as to how the deal would affect steel prices,” says Ken Simonson, AGC chief economist. “If Nippon Steel invests more in modernization than Cliffs or an independent U.S. Steel would have done, that would be positive for steel buyers, but if they shut down capacity in certain types of steel—and imports aren’t allowed or available to make up the difference—that would be expected to drive up prices and, perhaps, lead times.”

The Associated Builders and Contractors of America supports the deal. “This potential deal would benefit both organizations and may lift steel production capacity in America or at least the supply of steel to the domestic marketplace,” says Anirban Basu, ABC chief economist. “Contractors and purchasers of steel should not be apprehensive about this deal,” adds Basu, saying the deal “may be necessary for U.S. Steel to survive and recapitalize some of its assets.”

As Electrical Goes, So Go Projects

While much of U.S. Steel’s production capacity comes from older blast furnaces in Southwestern Pennsylvania and Gary, Ind., its most modern plant is Big River Steel in Osceola, Ark, a LEED-certified “flex mill” acquired in 2020 by U.S. Steel, which offers products and services to the automotive, energy, construction and agricultural industries. It also produces non-grain-oriented electrical steel in a new line added in 2023. NOES is used in transformer construction for data centers, solar farms and other electrical-heavy projects. Cleveland-Cliffs is a competing producer of electrical steel.

“Nippon makes the best electrical steel in the world,” says Lisa Reisman, CEO of metal price analysis source MetalMiner.com. “It’s really a good thing for the United States of America to get some of this know-how brought to the west, and maybe leveraged in Big River Steel.”

On April 17, President Biden, speaking to the United Steelworkers, promised to block the Nippon Steel-U.S. Steel deal. Former President Trump, in February, also said he’d block the deal. However, Japan remains the largest foreign investor in the U.S., and both men would have to weigh the impact on other foreign deals such a block might create.