Iron ore price rises on firmer steel outlook, but trade tensions cap gains
Lower Chinese steel product inventory driven by robust exports also supported iron ore prices above $100/t.
A top Nippon Steel executive and US Steel’s CEO are meeting with senior US officials on Wednesday in an effort to salvage Nippon’s $14.9 billion bid for US Steel, a person familiar with the matter said.
The meeting, including Takahiro Mori, a key Nippon negotiator on the deal, and US Steel CEO David Burritt, is also expected to include Treasury Deputy Secretary Wally Adeyemo and Commerce Deputy Secretary Don Graves among other officials, said the person, who declined to be named because he was not authorized to speak about the matter.
The Treasury Department, which leads the Committee on Foreign Investment in the United States (CFIUS), Nippon Steel and US Steel all declined to comment. The Commerce Department and the White House did not immediately respond to requests for comment.
Wednesday’s meeting comes amid opposition to the deal by both Republican presidential nominee Donald Trump and Democratic nominee Kamala Harris. They are vying to win the critical swing state of Pennsylvania, where US Steel is headquartered.
Burritt plans to discuss the merger at an appearance next week at the Detroit Economic Club. An unsolicited bid for US Steel last year by rival Cleveland-Cliffs that was rejected by US Steel had drawn concerns from US automakers.
Japan Business Federation Keidanren and a number of US business groups, in a letter to Treasury Secretary Janet Yellen on Wednesday, raised concerns that the Biden administration’s national security review of Nippon Steel’s planned acquisition of US Steel is being unduly influenced by political pressure. The review is being conducted by CFIUS.
CFIUS sent a letter in late August warning the companies that their proposed tie-up would threaten US national security by weakening the country’s steel supply chain, as first reported by Reuters, appearing to doom the proposed deal.
“CFIUS should never become a tool for political posturing and should not morph into industrial policy masquerading as national security,” the business groups said in their letter. “We fear that the CFIUS process is being used to further political agendas that are outside the committee’s purview and putting the US economy and workers at risk.”
The companies countered in a 100-page letter also reviewed by Reuters that the deal would actually strengthen US steel output by allowing a much-needed cash injection from a company in an allied nation into a struggling American company in a critical industry.
“It is essential for both Japan and the US to further strengthen economic relations including expansion of mutual investment,” Hideki Murai, a Japanese government spokesperson, said at a press conference on Thursday, while declining to comment specifically on the deal.
(By Alexandra Alper, David Shepardson and Kantaro Komiya; Editing by Chris Sanders, Leslie Adler and Christian Schmollinger)
Comments