Steel Mills

USS touts first coil at BR2 as Q3 earnings fall

October 31, 2024

U.S. Steel Corp.

Third quarter ended Sept. 30	2024	2023	% Change
Net sales	$3,853	$4,431	-13.0%
Net earnings (loss)	$119	$299	-60.2%
Per diluted share	$0.48	$1.20	-60%
Nine months ended Sept. 30
Net sales	$12,131	$13,909	-12.8%
Net earnings (loss)	$473	$975	-51.5%
Per diluted share	$1.88	$3.86	-51.3%

(in millions of dollars except per share)

U.S. Steel said it has produced the first coil at the Big River 2 (BR2) mill in Osceola., Ark., as the company reported lower profits on-year in the third quarter of 2024.

“We are very pleased to announce that we achieved first coil at Big River 2 (BR2), with the Big River team expecting to begin shipments to customers during the fourth quarter,” U.S. Steel President and CEO David B. Burritt said in a statement on Thursday.

He touted the Big River team’s ability to safely deliver more than $4 billion of growth capital investments. These include its non-grain oriented (NGO) electrical steel line and the dual Galvalume/galvanized coating line.

“Coupled with our enhanced commercial strategy and recent investments made in the North American Flat Rolled segment, we look forward to building upon our more resilient earnings with increasing free cash flow,” he added.

USS’ Big River 1 facility, also in Osceola, has a capacity of 3.3 million tons per year (tpy) of sheet products, according to SMU’s new mill capacity table. Big River 2 will add another 3 million tpy of capacity.

Q3 earnings

The Pittsburgh-based steelmaker reported net earnings of $119 million in Q3’24, off 60% from $299 million a year earlier. Net sales slid 13% to $3.85 billion in the same comparison.

The company reported 3,516,000 short tons (st) of total steel shipments in Q3’24, off 7% from a year earlier.

USS/Nippon deal

Burritt commented on the proposed $14.9-billion deal by Japan’s Nippon Steel to acquire USS. That deal has faced noted opposition from the United Steelworkers (USW), and is opposed by both parties’ presidential nominees, as well as the current president, Joe Biden.

“We continue to work towards closing by year-end,” Burritt said.

“Importantly, in September, the Board of Arbitration ruled in favor of U.S. Steel under our basic labor agreement,” he added.

He also lauded additional benefits of the deal, including USS’ access to innovations from Nippon Steel’s $500 million annual R&D spending.

“We look forward to delivering these benefits to all of our stakeholders, especially to our hardworking men and women in the Mon Valley and Gary plants, where Nippon Steel has committed to invest at least $1.3 billion, increasing the total capital commitment to at least $2.7 billion,” Burritt concluded.

Q4’24 outlook

The company expects fourth-quarter adjusted EBITDA in the range of $225-275 million.

Its North American Flat-Rolled segment results are anticipated to fall slightly, “driven largely by lower lagging average selling price expectations for the quarter.”

However, USS expects an improvement in its Mini Mill segment results in the quarter on an anticipated jump in average selling prices.

This is despite $25 million related to start-up and one-time construction costs at BR2.

Ethan Bernard

Ethan Bernard is managing editor for Steel Market Update. He previously worked for American Metal Market as a copy editor in the New York office for two years, starting in 2008. Later, he copy edited AMM’s monthly magazine on a freelance basis from 2015 until 2017. With experience in financial copywriting and textbook publishing, he holds a BA in Comparative Literature from UC Berkeley, and an MFA. in Creative Writing from New York University. He can be reached at ethan@steelmarketupdate.com or 724-759-7871.