U.S. Steel Back in Black in Q2 as Big River Steel Shines

“We are bullish that today’s strong market environment can continue. Our business is firing on all cylinders,” Burritt said.

All told, U.S. Steel recorded net earnings of $1.01 billion in the second quarter of 2021 after posting a loss of $589 million in the year-ago quarter on sales that more than doubled to approximately $5.03 billion, according to data released after the close of markets on Thursday, July 29

The gains were driven in large part by U.S. Steel’s flat-rolled steel operations, which recorded earnings before interest and taxes (EBIT) of $579 million in the second quarter of 2021 following an EBIT loss of $329 million in the second quarter of 2020.

The company’s minimill division – effectively Big River Steel’s electric arc furnace (EAF) operations in Osceola, Ark. – posted EBIT of $284 million. There are no 2020 comparisons for Big River because U.S. Steel did not fully acquire the EAF steelmaker until January of this year.

Higher steel prices helped to drive profits higher.

U.S. Steel’s flat-rolled steel segment recorded average selling prices of $1,078 per ton ($53.90 per cwt) in the second quarter of 2021, up 49.5% from $721 per ton in the year-ago quarter on shipments that rose nearly 30% to 2.33 million tons.

Big River’s performance was stronger. The EAF mill recorded average selling prices of $1,207 per ton in the second quarter. It also operated at 91% capacity utilization compared to the 59% rate at U.S. Steel’s other flat-rolled steel facilities.

U.S. Steel said it would use its abundant second-quarter profits to pay down another $1 billion in debt on top of the $2.2 billion in debt reduction it has already committed to or delivered.

Cleveland-Cliffs, its primary integrated competitor, has said it too will aggressively pay down debt.

By Michael Cowden, Michael@SteelMarketUpdate.com