Steel Mills
US Steel Canada Musters on Through Sales Process
Written by Sandy Williams
February 9, 2016
Losses keep mounting at US Steel Canada but cash reserves are keeping the company alive for now.
In his 21st report, court Monitor Alex Morrison reported an operating loss of CAD$144 million for US Steel Canada in 2015 compared to a loss of $37.9 million in 2014. Shipments totaled 1.8 million tons, a year-over-year decrease of 22 percent.
The company ended 2015 with $151.3 million in cash, not including $44 million of raw materials that were received in December but paid for in January. Morrison says working capital has stayed relatively flat since the beginning of October 2015.
“Management has kept operations stable, while closely managing working capital levels, particularly inventories that are being matched to business conditions and reflect a seasonal build of raw material inventories to appropriate levels,” wrote Morrison.
Selling price per ton of steel was $595 per ton in December, compared to $694 per ton for full year 2015 and $763 per ton in full year 2014.
A positive note for USSC was an increase in gross margin in December to $3.5 million from a projected $1.7 million in the Independent Business Plan. Despite lower revenue from declining volume and prices, margins improved from higher than expected automotive volumes at Hamilton Works and lower operating costs at Lake Erie Works. Margins also benefited from the lower Canadian to USD exchange rate.
The sales process is in full swing with notices of the sale published in various newspapers. A list of potential bidders has been compiled and circulated to stakeholders for suggested additions. Morrison says the Financial Adviser has begun to approaching potential bidders and those who have signed nondisclosure agreements now have access to confidential data.
Non-binding letters of interest are due from potential bidders by February 29, 2016.
Sandy Williams
Read more from Sandy WilliamsLatest in Steel Mills
Cliffs unveils new hydrogen-powered stainless line in Ohio
CEO Lourenco Goncalves, flanked by state leaders and union reps, touted the project as proof that US manufacturing is not only alive, but also advancing.
Cliffs idles Steelton, Riverdale, and Conshohocken operations
Cliffs has idled facilities in Riverdale, Ill., and Conshohocken and Steelton, Pa.
Radius loss narrows, volumes climb in ‘healthy’ West Coast market
Stronger steel demand in the Western US, rising scrap flows, and improved rolling mill utilization drove sequential gains for Portland, Ore.-based Radius Recycling.
AISI: Raw steel production backs off multi-year high
US raw steel output edged lower last week after hitting a multi-year high in mid-June, according to the American Iron and Steel Institute (AISI).
Private equity firm Atlas Holdings to acquire Evraz North America
Atlas Holdings said it has signed a definitive agreement to acquire Evraz North America (Evraz NA). The Greenwich, Conn.-based private equity firm said it expects the deal for the Chicago-based steelmaker to close in the second quarter of 2025 subject to various closing condition.