A bankruptcy reorganization for the Radnor firm Phoenix Services is threatening U.S. steel production, writes Joseph N. DiStefano of The Philadelphia Inquirer.
Phoenix Services recycles molten slag that accumulates during steel production at the nation’s largest steel plants. The company is in its sixth month of bankruptcy reorganization and tons of waste it normally handles are piling up at its clients’ plants.
Phoenix has 1,700 machines that clear hot waste at mills owned by Nucor, U.S. Steel, ArcelorMittal, Cleveland Cliffs and other big steelmakers. It then sells the recycled waste for construction and road materials to buyers like PennDOT.
Phoenix lawyers said the company needs to charge the steel mills higher prices because of inflation, Fed rate hikes, the Ukraine war and other factors.
But some are arguing that Phoenix and its financiers, led by private equity owner Apollo Global Management, are using economic conditions to break contracts and pass rising financial costs to the steelmakers.
The largest U.S.-based steelmaker, Nucor, is refusing Phoenix’s higher pricing proposals.
If a reorganization plan isn’t in place soon, Nucor said the growing slag backlog could force production cuts, threatening shortages or price hikes on carmakers and other manufacturers. Read more about bankruptcy proceedings between Phoenix Services and U.S. steelmakers in The Philadelphia Inquirer
