On Thursday, the biggest mover was the steel billet cash price, which saw a 2.8 percent decline on the LME to $350.00 per metric ton, as a former top French steel producer went into administration, a process similar to bankruptcy protection in the US.
(Meanwhile, the 3-month price of steel billet showed little movement yesterday on the LME at $355.00 per metric ton.)
Ascometal, whose roots lie in the former French steel firm Usinor that was later absorbed by steel giant ArcelorMittal, has been hurt by an economic downturn in Europe, particularly in the automotive sector. It entered administration today, putting at risk up to 2,000 jobs in a fresh headache for the nation’s Socialist government as it tries to bring down unemployment from record levels, Reuters reported. Ascometal, which operates six plants in France and had sales of 969 million euros in 2011, supplies specialist steel products to the auto-making, engineering and oil sectors.
Declining demand in Europe, where Ascometal generates most of its sales, undermined a 2011 takeover attempt by U.S. investment fund Apollo Global Management, and put Apollo at odds with banks that helped finance the deal, Reuters reported. Today’s decision by a commercial court near Paris to put the company in administration came after Apollo failed to reach an agreement with the banks on a debt restructuring. France’s industry minister said the government would aim to find a long-term industrial solution for Ascometal and had already received expressions of interest.
Meanwhile, On The Daily IndX…
Chinese steel prices closed flat for the day. The price of iron ore 58% fines from India barely fluctuated. The price of Chinese HRC showed little movement yesterday as well. The price of Chinese coking coal held steady.
The US HRC futures contract 3-month price rose 0.5 percent. The US HRC futures contract spot price remained essentially flat.