Now that steelmakers are flush with cash, it's easy to forget that not so long ago they were shadows of their former selves, shedding assets at garage sale prices to survive.

ArcelorMittal's agreement to pay $160 million for Koppers Inc.'s Monessen coke plant is the latest in a slew of acquisitions steel producers are making to refortify themselves.

They are moving in two directions: upstream, purchasing assets that will assure them secure, reasonably priced raw materials; and downstream, acquiring businesses that convert their raw steel into finished products.

Since 2003, U.S. Steel, Nucor and Steel Dynamics have spent more expanding their upstream and downstream operations than they have invested in their core steelmaking business, said Tony Taccone of First River, a Pittsburgh-based industry consultant.

"The real strategic imperative that is driving corporate behavior is upstream and downstream acquisitions," Mr. Taccone said.

A number of factors are driving the behavior. A global shortage of iron ore and coal used to make coke, a baked coal that fuels blast furnaces, has driven up prices for those commodities. Producers who can't pass along the higher costs to customers are finding their profit margins squeezed.

After using global acquisitions to create the world's largest steelmaker, ArcelorMittal Chairman Lakshmi Mittal "is on every continent looking for raw materials," said Bob Richard, an analyst with Longbow Research in Independence, Ohio.

"It's page two of the Mittal playbook," Mr. Richard said. "They want to be able to control margins. They don't want to be whipsawed by anybody."

ArcelorMittal was the Koppers plant's only customer. Board member Sudhir Maheshwari called the acquisition "an important step towards increasing our upstream self-sufficiency."

The producer's other plays include: two West Virginia producers of metallurgical coal used to make coke; a large stake in a Brazilian iron ore and manganese miner; and increasing its stake in an Australian coal producer.

Nucor and Steel Dynamics, which make steel from scrap rather than iron ore, are strengthening their raw materials independence.

Fort Wayne, Ind.-based Steel Dynamics paid $1.1 billion for OmniSource, a scrap processing and trading company; Nucor, a Charlotte, N.C., producer, paid $1.4 billion for David J. Joseph Co., which brokered more than 20 million tons of scrap last year.

U.S. Steel has taken initiatives in both directions. Last year, it paid $2 billion for Lone Star Technologies, a Texas tube producer. Upstream, the Pittsburgh steelmaker is investing $1 billion in its Clairton coke plant and more than $300 million to expand production at its Minnesota iron ore operations.

Those investments come just six years after U.S. Steel said it would sell a majority stake in its coke and iron ore operations to Apollo Management in a $500 million deal. U.S. Steel's transportation services company would have been included in the transaction, announced in October 2002. It was killed four months later, giving U.S. Steel the critical support it needed from the United Steelworkers union to complete its purchase of bankrupt National Steel.

"We just thought it was like eating your seed corn," said USW Vice President Tom Conway, the union's top negotiator in recently completed contract talks with U.S. Steel.

Controlling raw materials seems like an obvious strategy for steel producers given current pricing and supply concerns.

But the industry's economics were much different during the upheaval that shattered the industry from the 1980s through the early part of this decade.

Depressed raw materials prices made the upstream businesses less attractive to steelmakers, who sold them to raise the cash needed to stoke their steelmaking furnaces.

"You really have to put yourself back in those days. Everybody was scrambling for cash," Mr. Conway said.

One of the buyers back then was Cleveland iron ore producer Cleveland-Cliffs, whose purchases included the Minnesota iron ore operations of bankrupt LTV Steel. Most of the acquisitions were made at attractive prices and worked out considerably better than Cliffs ever imagined, Mr. Taccone said.

More recently, Cliffs is countering the steel industry's bid for raw materials independence. Last year, it paid $600 million in cash and assumed debt for PinnOak Resources, the Canonsburg company that purchased U.S. Steel's coal mining operations in 2002. In July, it made a bid for Alpha Natural Resources, an Abingdon, Va., coal producer. The stock-and-cash offer was priced then at $10 billion, but is currently valued at about $8 billion since Cliffs' shares have fallen since the July 16 announcement.

Cliffs' largest shareholder is opposing the transaction. ArcelorMittal also may have something to say about it. Mr. Mittal has expressed interest in Alpha, which makes sense given his deal for Koppers' Monessen plant.

"I don't think they're going to buy a coke plant without having the [metallurgical] coal to run it," said Mr. Richard of Longbow.