US Steel Looking to Restructure Canadian Operations

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United States Steel Corp. is taking a series of measures to insulate itself from any debt default by its Canadian operations, raising concerns that it plans to restructure the Canadian unit.

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The steel maker has reached deals with one set of lenders and the purchaser of its receivables to exclude a default by U.S. Steel Canada Inc. on debt of more than $100-million from triggering a general default, according to regulatory documents filed last week.

At the same time, U.S. Steel is asking holders of its 2.75-percent senior convertible notes to agree to a similar change. It is offering them an incentive of $2.50 for every $1,000 worth of debt to help convince them to vote in favor.

US Steel acquired then-Stelco Inc. in 2007, after what had been one of Canada’s blue-chip companies for almost a century emerged from a protracted and acrimonious restructuring under the Companies’ Creditors Arrangement Act.

The latest filings came after the company asked representatives of the United Steelworkers union at its Hamilton and Nanticoke, Ont., operations to engage in confidential negotiations about restructuring the Canadian operations

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Chinese steel prices were flat for the day. The price of iron ore 58% fines from India hit a high price of CNY 840.00 ($135.60) and a low price of CNY 830.00 ($133.99) per dry metric ton. The price of Chinese HRC remained essentially flat at CNY 3,380 ($545.63) per metric ton. The price of Chinese coking coal was unchanged at CNY 1,390 ($224.39) per metric ton.

The cash price of steel billet continues hovering around $420.00 per metric ton on the LME for the fifth day in a row. The steel billet 3-month price held steady on the LME at $425.00 per metric ton.

The US HRC futures contract 3-month price was unchanged at $642.00 per short ton. The US HRC futures contract spot price saw little movement at $670.00 per short ton.

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