The recent and somewhat “hostile” merger of Arcelor and Mittal Steel was primarily prompted by Mittal's desire to expand their role in the flat rolled segment of the steel industry, with a keen eye on the desirable automotive market, particularly in the US. However, it will have a very distinct impact on the long product market as well, especially on the value-added segment of the wire rod market. Mittal Steel is already the largest wire rod producer in the world. With the addition of the Arcelor rod mills in Spain, Argentina, and Brazil, Mittal Steel will be, by far, the most dominant player in the lucrative wire rod field for high quality grades. Here is a breakdown of the new rod empire:
Mittal Steel Trinidad: LC, HC, Weld* 800K mt (annual capacity) Indonesia: LC, HC 600K mt Germany (two mills): LC, HC, Weld, CHQ, Specia 1,800K mt France/Lux: LC, HC, Weld, CHQ 830K mt Czech R: LC, HC 570K mt So. Africa: LC, HC, Weld, CHQ 800K mt US, South Carolina: LC, HC, Weld 650K mt Canada: LC, HC, Weld, CHQ 450K mt Ukraine: LC 1,800K mt
Arcelor: Brazil (two mills): LC, HC, Weld, CHQ, Special 1,600K mt Argentina: LC, HC, Weld 650K mt Spain (two mills): LC, HC, Weld, CHQ, Special 650K mt
The mills in Brazil (Belgo Mineira), Spain (Aceralia), and Germany (Hochfeld) are highly regarded for their specialty grades such as tire cord, high tensile tire bead, and valve spring quality. With the exception of the mills in Czech Republic and Ukraine, the rest of these mills produce high carbon - and welding wire grades.
It will not quite be a monopoly for the value-added grades, though. After all, there are the Japanese mills, the Ternium Group (Hylsa and Sidor) and some mills that are still independent (e.g. Saarstahl in Germany), all of which are very good for the more demanding steel grades. Also, Chinese and Turkish mills, strong in the low carbon field, are making inroads into the more critical grades as well. But nobody will be able to match Arcelor-Mittal for the sheer volume of high quality wire rods.
* Estimated capacity in ’000 (K) mt for wire rod only, LC= low carbon, HC=high carbon, Weld = welding wire grades, CHQ = cold heading quality, Special = specialty grades