Looking back at the major news events of the year reveals that industry consolidation continues at a fast pace—especially among producers and fueled in large part by foreign investment. Is it only a matter of time before foreign mills begin to acquire captive distributors in North America, the model many are accustomed to in their home countries?

Among notable mill transactions on the world stage in 2007, ArcelorMittal, which is controlled by India’s Mittal family, expanded its lead as the industry’s largest steelmaker with the $1.4 billion acquisition of Mexico’s Sicartsa. Other big moves by Indian investors included Tata Steel’s acquisition of the Corus Group for $8.1 billion, creating the world’s fifth-largest steel producer, and Essar Steel Holdings’ purchase of Canada’s Algoma Steel Inc.

IPSCO Inc. was purchased by Sweden’s SSAB in a $7.7 billion deal that followed closely on the heels of IPSCO’s acquisition of the NS Group, making the company one of the world’s leading suppliers of tubular products.

Russian and German steelmakers have staked a claim to America’s growing manufacturing base in the South. SeverCorr, a partnership between Russia’s Severstal and steel industry veteran John Correnti, began steel production at its new mill in Columbus, Miss., this year. (SeverCorr’s strategy includes a hybrid form of distribution with New Process Steel and Heidtman Steel, which are setting up shop on-site with the mill—a close partnership that stops short of shared ownership.) Meanwhile, Germany’s ThyssenKrupp has announced plans to build a new carbon and stainless mill nearby in Mount Vernon, Ala.

Another Russian company, the Evraz Group, acquired Oregon Steel Mills, creating a global player in rail, pipe and plate production.

In the structurals market, Gerdau Ameristeel Corp., whose majority owner is Brazil’s Gerdau S.A., acquired Chaparral Steel Co., the second largest producer of structural steel products in North America and also a major producer of steel bar.

Domestic mills such as U.S. Steel, SDI and Nucor are also actively investing both up and down market within North America to secure their positions as the competition shifts around them. Transactions of a similar scale have recast the competitive dynamics in the global markets for aluminum and copper, as well.

Metals USA President and CEO Lorenço Gonçalves believes it’s only a matter of time before distribution companies like his are the target of foreign mills. Major players in the industry will stake new positions up and down the supply chain, he commented during a last month’s third-quarter conference call, and not just to capture a steady stream of demand.

“Mills need more visibility. They don’t know where demand is going; they are too far removed from the customers. Service centers can bring that to them,” he said. “At the end of the day, they don’t have to give away as much as they give to some [distributors]. They are leaving money on the table by not owning service centers, in my opinion. I believe this is the next important trend you will see.”