Cleveland Cliffs AK Steel

FILE - This Jan. 26, 2009, file photo shows an AK Steel Holding Corp. plant in Middletown, Ohio. Cleveland-Cliffs is buying AK Steel in a stock deal valued at about $1.1 billion. (AP Photo/Al Behrman, File)

CLEVELAND (AP) — Cleveland-Cliffs will buy AK Steel in a stock deal valued at about $1.1 billion.

The companies say the tie-up will create a vertically integrated company that pairs Cleveland-Cliff’s iron ore pellet production with AK Steel’s rolled and stainless

steel operations.

Cleveland-Cliffs is the largest producer of iron ore pellets in North America.

After a brief spike in prices, U.S. steel producers have struggled since the Trump administration put a 25% steel tariff into place last year. Domestic demand has slumped as oil and gas drillers pull back on purchases of steel pipe, with prices for natural gas tumbling 45% over the past 12 months.

U.S. Steel in its last quarter reported its first loss since early 2017, and the division that makes pipes for energy companies lost $25 million. It has laid off workers and shut down some of its blast furnaces.

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