X, CLF, & STLD are dirt cheap with market caps ranging from 1-2 time annual EBITDAs. Any of these could be privatized at these prices or acquired by a larger company.
All four major steel CEOs foresee a stronger 2022.
Scrap steel prices that are the primary input for EAFs rose 67% in 2021 to $508/ton for NUE. Scrap prices will continue to dramatically rise and there are strong incentives for the 100% EAF steel producers (NUE and STLD) to secure alternate input sources in the form of DRI/HBI or pig iron to supplement scrap. Russian pig iron imports could also stop at any time.
Wouldn’t be surprised to see an NUE / X merger. NUE is already reported to be the yet unnamed partner funding a pig iron production faculty at an X facility. Similarly, but much less likely, a CLF/STLD merger is a possibility.
It will be interesting to see who or what team bids on the Nashwauk leases, since the size of the project could well be $3-$5 billion (mine, HBI/DRI, steel production facility).
