Steel Mills
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/media/k2/items/src/426cfea560560e0bdaf1530d51ec056c.jpg)
BlueScope Steel Surprised by Dramatic Chinese Slowdown
Written by Sandy Williams
February 25, 2014
Australian company BlueScope Steel announced EBIT of AUD$48.7 million ($44 million) for its Hot Rolled Products North America segment for the first half of FY 2014 ending December 31, 2013. EBIT increased 48 percent from the same period in FY 2013. The segment includes a 50 percent interest in US-based North Star BlueScope Steel Ltd (NSBSL) and a 47.5 percent interest in Castrip, LLC, a thin strip casting technology joint venture with Nucor and IHI Ltd. Improved results were attributed to improved margin spread driven by strong volume, higher hot rolled coil prices (partially offset by higher scrap costs) and favorable exchange rates from a weaker Australian to US dollar.
The BlueScope share of shipments in the first half of FY 2014 for NSBSL was 489.9 thousand tonnes (540,000 net tons) and sales revenue was AUD$360.1 million ($325 million).
In the BlueScope Steel conference call, Managing Director and CEO Paul O’Malley commented on business activity in China.
“We are at least expecting a stable China. Over the last twelve months the Chinese market activity has dropped quite dramatically. That certainly wasn’t factored into our plans at the time. What we are seeing is still the growth in our global accounts business.”
“Activity in China, perhaps just a little more insight, we’ve always had strong market share for foreign direct investment and for large scale SOEs. Their investment is definitely slowing down. Foreign direct investment is shifting a little bit. US firms that were looking at China as a cost space can now look internally at the US. From our business perspective, we have a broader exposure to that [?] activity in China. European firms are slowing down in China at the moment because of concerns about the market. Japan is focused a little bit on Japan. So the growth in China is perhaps more Southeast/Taiwanese investment, where we have slightly lower market shares.”
The North Star BlueScope Steel is a 50-50 venture between BlueScope Steel Ltd. and Minnesota based Cargill, Inc. The company is located in Delta, Ohio and produces hot rolled coil by electric arc furnace. North Star sells 80 percent of its production in the Midwest to an end market mix of 45 percent automotive, 25 percent construction, 10 percent agricultural and 20 percent manufacturing/industrial applications. Using the Bluescope numbers (Cargill is a privately held company) we can assume total production at North Star Bluescope Steel for the last six months 2013 was 1,080,000 net tons.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/2023/04/sandy-williams.jpeg)
Sandy Williams
Read more from Sandy WilliamsLatest in Steel Mills
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/Nucor.png)
Nucor lowers 2024 output estimate for Brandenburg plate mill
Nucor has lowered the 2024 production estimate for its Brandenburg, Ky., plate mill due to soft market conditions.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/SSAB.png)
SSAB adjusts output in weak Q3, readies for Q4 rebound
SSAB said lower plate prices in the US were the primary reason for reduced results in the second quarter. With a dismal Q3 outlook, the Swedish steelmaker is adjusting production across its facilities. That includes moving up its annual US mill outage in anticipation of a better Q4. SSAB Americas Revenues in the Americas segment […]
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/Nucor.png)
Topalian puts focus on “unfair” trade, eyes USMCA partners
Nucor’s top executive expressed concerns over unfair trade practices, highlighting increased steel imports from Mexico and Canada.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/Cliffs_logo2.2.png)
Cliffs sees close of Stelco buy, bottom to steel tags, and Mexico out of USMCA
Cleveland-Cliffs expects its acquisition of Canada’s Stelco to close later this year, which will help the the Cleveland-based steelmaker as a bottom to steel tags nears.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/Nucor.png)
Nucor posts lower Q2 earnings, predicts tough Q3 too
Nucor recording lower second quarter earnings on falling steel prices. And the Charlotte, N.C.-based predicted that profits would be lower still in the third quarter, primarily because of weaker results from its steel mills divisions.