Cleveland-Cliffs Inc. has announced that it has entered into a definitive agreement to acquire Ferrous Processing and Trading Company (FPT) to optimise the productivity of its existing Electric Arc Furnace (EAF) and BasicOxygen Furnace (BOF).
Based in Detroit, FPT is processes and distributes prime ferrous scrap in the United States, representing approximately 15% of the domestic merchant prime scrap market. FPT currently processes approximately three million tons of scrap per year, approximately half of which is prime grade.
Lourenco Goncalves, Cleveland-Cliffs’ Chairman, President and CEO said,
“Cleveland-Cliffs is entering the scrap business as a major player through the acquisition of a large scrap company. Even more importantly, FPT has a very meaningful presence in prime scrap. With all the new flat-rolled EAF capacity coming online in our market over the next four years, prime scrap will only become more and more scarce."
Lourenco Goncalves, Cleveland-Cliffs’ Chairman, President and CEO
He continued,
“As the largest supplier of flat rolled steel in North America, Cleveland-Cliffs is the main source of the steel that generates prime scrap in manufacturing facilities. Furthermore, throughout our entire footprint, Cleveland-Cliffs also consumes a very significant amount of scrap in our EAFs and BOFs. The acquisition of FPT will enhance our ability to buy back prime scrap directly from our clients, cutting the middlemen and improving the margin contribution from scrap for both Cleveland-Cliffs and for the manufacturing and service center clients that will be able to sell scrap directly back to us.”
The acquisition has been approved by the board of directors of Cleveland-Cliffs and is expected to close in the fourth quarter of 2021.
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