Key points
- The contract ceiling is $995 million over five years
- For scale, that exceeds Metallus's $781 million market value
- It's a sole-source award to keep a supplier available
- Rio Tinto and Elmet contracts were announced alongside it
Metallus (MTUS) has won a five-year Defense Logistics Agency contract worth up to $995 million to supply steel used in Army artillery and mortar shells. The ceiling exceeds the company's approximately $781 million stock-market value, though it does not represent guaranteed revenue.
The Pentagon announced the award September 25, identifying the material as High Fragmentation 1 steel. The firm-fixed-price contract runs through September 24, 2031, with no option periods. The announcement did not disclose how much funding was committed at the award. As with the Hudson Technologies contract we covered in August, the ceiling sets a maximum rather than guaranteeing that amount in revenue.
The market-value calculation uses Friday's $18.84 closing price and the 41.45 million shares outstanding reported as of July 31 in Metallus's second-quarter filing. The company had not issued its own announcement as of Friday evening. Shares traded at $20.20 in after-hours trading at 7:52 p.m. ET, 7.2% above the close.
Why it was sole-source
The Defense Logistics Agency skipped competition under 10 U.S. Code 3204(a)(3)(A). That exception allows a single-source award "to maintain a facility, producer, manufacturer, or other supplier available for furnishing property or services in case of a national emergency or to achieve industrial mobilization." In other words, the award is meant to keep a domestic supplier of shell steel available.
The award follows an Army-backed expansion of Metallus's shell-steel capacity. In February 2024, Metallus agreed to receive up to $99 million from the Army to add capacity for artillery shell steel. In its latest 10-Q, the company said it had received $102.8 million in government funding through June 30, including $99.75 million from the Army, against $117.6 million in total spending. Metallus said on August 26 that the new furnaces at its Gambrinus facility in Canton, Ohio, had been commissioned.
Two other metals contracts announced the same day
The same Defense Logistics Agency office in Columbus, Ohio, announced two other five-year metals contracts on September 25. All three list the same five military branches as customers, including the Space Force.
Rio Tinto (RIO), through Rio Tinto Services Inc., doing business as Rio Tinto Logistics, received a contract worth up to $995 million for high-purity aluminum. It was a competitive award with three responses. The contract was awarded May 28, 2026, about four months before it was announced.
Elmet Technologies of Lewiston, Maine, received a sole-source contract worth up to $35.6 million for refractory metal wires, under the same industrial-mobilization exception as Metallus.
Together, the three ceilings add up to about $2.03 billion by our arithmetic. The announcement doesn't name a program tying them together.
