Steel Mills
U.S. Steel Offers Gloomy Guidance
Written by Sandy Williams
September 19, 2019
U.S. Steel is feeling the pain of falling steel prices and deteriorating market conditions. The company expects an earnings loss of 35 cents per diluted share for the third quarter of 2019 compared to a profit of 39 cents per share in the second quarter. The company followed Nucor and Steel Dynamics in lowering guidance for the quarter.
Declining steel prices in the second quarter and a larger than anticipated drop in scrap prices are expected to negatively impact earnings in the second half of 2019. As a result, U.S. Steel will extend the idling of two U.S. blast furnaces until at least the end of the year. The company’s U.S. flat-rolled shipments are expected to drop to 10.7 million tons.
U.S. Steel expects weakness in its Tubular segment to significantly impact earnings in the second half as negative market conditions and high import levels continue. Demand for oil country tubular goods has weakened, resulting in lower than expected shipments of 0.7 million tons, coupled with lower selling prices for seamless and welded pipe.
Market conditions in Europe continue to deteriorate as spreads between steel sales prices and raw material costs widen. The steelmaker expects shipments of approximately 3.6 million tons in 2019. U.S. Steel will not restart its idled blast furnace in Slovakia this year and plans to continue to reduce its headcount in Europe by 2,500 positions by the end of 2021. So far, 1,800 positions have been cut.
U.S. Steel expects adjusted EBITDA of approximately $115 million for Q3, which excludes a $53 million impact from restructuring charges and the December fire at the Clairton coke facility.
Sandy Williams
Read more from Sandy WilliamsLatest in Steel Mills
Cliffs plans to idle three mills, cut 950 jobs on ‘insufficient demand and pricing’
Cleveland-Cliffs plans to indefinitely idle its steel mill in Riverdale, Ill., as well as mills in Conshohocken, Pa., and Steelton, Pa. The Cleveland-based steelmaker said all three facilities would be idled on or around June 30. Approximately 950 jobs will be impacted, the company said.
CRU: Usiminas may reduce capex unless government strengthens protection
“The lack of effective measures to create fair competition, amid a surge in subsidized imports, is the main threat to the sustainability of Brazil’s steel industry and its value chain,” CEO Marcelo Chara said.
USS swings to loss in first quarter on N. American flat-rolled segment woes
U.S. Steel CEO praised the company’s resilience, “despite the seasonally low results driven by annual mining logistics constraints in our North American Flat-Rolled segment and lagging spot prices.”
Nucor gives updates on new capacity coming online
Nucor said several of its capital projects will start operations within the next year and provided an update on them.
Algoma swings to loss on ‘market challenges’ and ‘tariff uncertainties’
Canada’s Algoma Steel swung to a loss in the first quarter amid "market challenges," and the company now expects first steel production from its first EAF in the second quarter.