Steel Mills

Stelco Surprised by Strength of Second Quarter
Written by Tim Triplett
August 3, 2018
Stelco is enjoying an unaccustomed perspective, the view from the catbird’s seat in the North American steel market. The once-troubled Canadian steelmaker reported operating income of $161 million on sales of $711 million (Canadian dollars) for the second quarter as steel shipping volumes increased by 49 percent over the prior-year quarter. Sales were up 67 percent and income was up 544 percent year over year. With its sales primarily in Canada, Stelco stands to benefit from tariffs on imports of steel into the U.S. and Canada, which have boosted steel prices in both countries.
“Our second-quarter results substantially exceeded the high-end of our previously issued guidance range, with adjusted EBITDA of $175 million, representing a 25 percent adjusted EBITDA margin despite incurring approximately $11 million of tariff-related costs,” said Alan Kestenbaum, the company’s executive chairman and CEO. “Our second-quarter performance reflects shipping volume at nearly three million tons annually and an average selling price of $898 per net ton, which is still below current market prices. We achieved this as a direct result of the successful implementation of enhanced shipping logistics including our newly repurposed dock and newly leased railcars that have reduced our dependency on trucks. The sharp improvement in our financial results year-over-year and sequentially reflects the improved efficiency of our operations, continuous efforts to drive down costs, strong demand throughout North America, and higher steel prices.”
The mill operations in Hamilton and Nanticoke, Canada, once owned by U.S. Steel and under CCAA bankruptcy protection, produce flat-rolled value-added steels, including premium-quality coated, cold-rolled and hot-rolled steel products, serving the construction, automotive and energy industries in Canada and the U.S.

Tim Triplett
Read more from Tim TriplettLatest in Steel Mills

U.S. Steel sues Algoma over iron pellet shipments
U.S. Steel is suing Algoma over the Canadian flat-rolled producer's rejection of iron pellet shipments, arguing it has breached its contract.

August US mill shipments slip but still higher than last year
The American Iron and Steel Institute reported a decline in the monthly shipments of US mills from July to August.

TransPod, Algoma, Supreme Steel linkup anchors Canadian steel in high-speed transit build
The three Canadian companies have announced a strategic partnership to support the development of an ultra-high-speed transit line from Edmonton to Calgary.

Metallus, USW agree to tentative four-year labor deal
Metallus and the United Steelworkers (USW) have agreed to a tentative four-year labor contract.

ArcelorMittal Dofasco resumes cokemaking after emergency maintenance
The Canadian steelmaker reported on Sept. 30 that “urgent maintenance” was needed in its coke plant off-gas systems. The work required coke oven gas from the No. 2 coke plant to be flared for most of that week.