Analysis: Peabody/ArcelorMittal bet on steel growth |
| Reuters - Aug 30, 2011 |
The world's biggest steelmaker and America's largest coal producer could pay top dollar for Australia's Macarthur Coal (MCC.AX), but they are likely to reap a benefit if the surging Asian steel business keeps growing, according to analysts.
"It's a bet on the future of (steelmaking) met (metallurgical) coal," analyst Brett Levy, of Jefferies & Co, said of the sweetened bid by U.S. miner Peabody Energy (BTU.N) and Europe-based steelmaker ArcelorMittal (MT.N) (ISPA.AS).
"It's a belief that met coal is a scarce resource."
Macarthur is the world's biggest producer of pulverized, cleaner-burning coal (PCI) and was a takeover target as Asia's rapid industrialization created an insatiable appetite for the commodity used to fire blast furnaces.
However, metallurgical coal prices have dropped recently while the steel industry in Europe and North America is recovering from the recession at a much slower pace than Asia.
Read Full Article from Reuters
- Posted: 2011-08-30 12:18:04
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