BlueScope Steel Limited (ASX: BSL) shares are dipping lower today, down 1.38% in early afternoon trade to $20.76 apiece.
The broader S&P/ASX 200 Index (ASX: XJO) is under pressure today as well, down 0.48% at the time of writing.
That's today's price action.
Now we look at how BlueScope – the third largest manufacturer of painted and coated steel products in the world – is planning to expand its footprint in the United States.
What are the company's US expansion plans?
With an eye on the huge US steel market, BlueScope announced earlier this month it will acquire the ferrous scrap steel recycling business from MetalX LLC for US$240 million (AU$328 million).
BlueScope's purchase will see it take ownership of 2 of MetalX's operating sites. The sites are situated in the US states of Indiana and Ohio. Both are in proximity to BlueScope's North Star facility, in Delta, Ohio.
The transaction is on a cash-free and debt-free basis and includes working capital.
Commenting on the acquisition, BlueScope's CEO Mark Vassella said:
The US is a key focus for BlueScope's future growth. The MetalX ferrous acquisition adds to BlueScope's extensive US asset footprint of over $3 billion, which spans steelmaking, steel coating and painting, engineered building systems and industrial property development. And we have current and intended expansion projects totalling up to $1.5 billion, including the North Star expansion project…
North Star will soon move from a 2 million tonnes per annum mill to almost 3 million tonnes per annum, and as the business expands, securing scrap is the right play.
Addressing the ever-increasing importance of sustainable operations and emissions reductions, Vassella added, "As a steel-recycling electric arc furnace producer of hot rolled coil, utilising low emissions electricity, North Star is highly carbon-efficient. This acquisition further enhances BlueScope's sustainability profile by bringing in-house part of North Star's scrap collection."
BlueScope expects the acquisition from MetalX to be completed by the end of December.
How have BlueScope shares been performing?
BlueScope shares have gained 18% in 2021, well ahead of the 11% year-to-date gains posted by the ASX 200.
Over the past month, the BlueScope share price is essentially flat.
The company pays a 1.5% dividend yield, unfranked.
