Steel Mills

US Steel Mitigates Losses in Q3

November 3, 2015

US Steel Corp. reported a net loss of $173 million for third quarter 2015. Results included a $53 million loss due to shutdown of the blast furnace and associated operations at Fairfield Works. It also included a charge of $10 million for pension obligations to US Steel Canada and $7 million in restructuring costs.

In comparison, the company posted a net loss of $207 million in Q3 2014 and $261 million in Q2 2015. US Steel attributed Carnegie Way savings for mitigating losses.

Third quarter net sales totaled $2.8 billion compared to $4.6 billion a year ago, and $2.9 billion in second quarter. Total steel shipments were 3.85 million tons, down nearly 25 percent from 2014. Shipments of flat-rolled steel from U.S. facilities totaled 2.67 million tons.

Raw steel production in the U.S. was 3.24 million tons, up from 2.8 million tons in Q2 but down from 4.68 million tons in Q3 2014. US facilities operated at 66 percent capacity, improved from 58 percent in Q2, but well below the 86 percent level in 2014. In contrast, US Steel Europe was at 90 percent capacity in Q3 2015.

Commenting on results, US Steel President and Chief Executive Officer Mario Longhi said, “Total segment EBIT improved as compared to the second quarter as we continued to take action to address our cost structure. We remain focused on our Carnegie Way transformation efforts to weather the continued difficult market environment. These efforts will better position our Company to generate stronger operating margins and respond to changing market conditions.”

Flat-rolled pricing decreased in third quarter by approximately $20 per ton to an average of $674 per ton. Dumped and/or subsidized flat-rolled imports kept negative pressure on pricing, averaging more than one million tons per month in third quarter.

The tubular segment loss of $50 million was an improvement from $66 million in second quarter due to focus on reducing operating costs. Low energy prices, high import levels of tubular products, and reduced drilling activity adversely impacted the segment.

In the outlook for 2015, US Steel expects significantly lower shipments and average realized prices than previously projected for the year. Adjusted EBITDA is forecast to be approximately $225 million for FY 2015.