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The Russians are coming to take over Oregon Steel Mills Inc. with a $2.3-billion (U.S.) bid that helped send shares of Regina-based steel maker Ipsco Inc. soaring.

Evraz Group SA, Russia's second-largest steel producer, announced the friendly deal with Oregon yesterday. Ipsco, also a mini-mill steel maker that competes with Oregon in the red-hot energy sector, soared $6.05 to $108.95 in trading on the Toronto Stock Exchange as investors searched for the next takeover target amid a global steel industry consolidation.

The Evraz-Oregon deal came just one business day after CSN of Brazil bid for Corus Group PLC of Britain, which had already agreed to a friendly deal with Tata Steel Ltd. of India. Also on Friday, a Russian newspaper reported that OAO Severstal, that country's largest steel maker, was preparing a bid for United States Steel Corp.

Shares of several North American steel makers jumped yesterday along with Ipsco, including U.S. Steel, which rose $ 2.18 (U.S.) to $72.75 in New York Stock Exchange composite trading. Algoma Steel Inc. shares rose $1.45 (Canadian) to $33.77, while Stelco Inc. stockclosed up 80 cents at $21.45 in TSX trading. "The Mittal-Arcelor merger has created a certain amount of angst among all steel producers about what is the appropriate size of steel globally," said Randy Cousins, who follows the industry for BMO Nesbitt Burns in Toronto.

The takeover of Arcelor by Mittal Steel Co. NV of the Netherlands will create the world's largest steel company, capable of cranking out more than 100 million tons of steel a year.

A combined Evraz-Oregon would still be small by comparison, capable of producing about 19 million tons annually. "In the current steel environment, it is important to gain scale and expand market presence through consolidation," Jim Declusin, Oregon's chief executive officer said in a statement.

Steel makers from Russia, China and elsewhere are looking for ways to enter the North American market, said industry consultant and observer Michael Locker, president of Locker Associates in New York.

Owning North American assets helps them avoid U.S. trade duties on steel imported from offshore.

Canadian companies, as relatively small players, are likely to be snapped up. Dofasco has already gone, purchased by Arcelor in January. Stelco and Algoma are unlikely to survive as independent companies, Mr. Locker said, although Algoma president Denis Turcotte has insisted that there is room for a small company that's nimble and close to its customers. Severstal made a bid for Stelco while the Hamilton-based company was under creditor protection, but was rejected. Algoma took a look at Stelco, but walked away.

"Ipsco is a prize," Mr. Locker said. It's profitable, operating in market segments that are booming and straddles the border with major operations in the United States as well as mills in Canada. He pointed to Nucor, Steel Dynamics Inc. of Butler, Ind., Baosteel of China and Brazil-based Gerdau Ameristeel Corp. as potential bidders for Ipsco.

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