Steel Mills
USS anticipates Q4 loss on weak demand, BR2 start-up
Written by Laura Miller
December 19, 2024
Amid a challenging pricing and demand environment, and with the ongoing ramp-up of the Big River 2 (BR2) mill, U.S. Steel expects to post a loss in the fourth quarter.
The Pittsburgh-based steelmaker said in earnings guidance released on Thursday that it expects adjusted net earnings of -$0.29 to -$0.25 per diluted share for Q4. That equates to a net loss attributable to U.S. Steel Corp. of ~$115 million.
It noted that adjusted EBITDA, at ~$150 million for the quarter, will be below previous expectations.
“Steel prices remained depressed and BR2 ramp-related costs exert pressure on the quarter, while the Big River team works towards increasing prime ton production in our new mill,” President and CEO David B. Burritt explained.
US operations
The steelmaker expects adjusted EBITDA from the Flat-Rolled segment to decline sequentially due to lower selling prices and volumes, and increased maintenance and outage activity.
The Mini Mill segment will likely see lower EBITDA as well. This is mainly due to lower volumes, and includes ~$30 million in start-up and one-time construction costs and $20 million in ramp-related impact from BR2.
“We look to steadily ramp to full capacity in 2025,” the company said of BR2. The project rolled its first coil on Oct. 31 and began shipping material to customers this month.
Meanwhile, the Tubular segment has seen increased volumes in Q4 and is the only one expected to see a sequential rise in EBITDA.
European operations
U.S. Steel’s European operations continue to be impacted by weak demand. “Lower volumes, average selling prices, and volume inefficiencies” are driving the segment’s adjusted EBITDA lower, the company said.
“In Europe, the demand and pricing environment remains weak,” Burritt commented. “To meet production volume requirements after unplanned downtime from a fire at the #1 Caster, we are temporarily operating three blast furnaces beginning Dec. 7, but expect to return to two blast furnaces by January.”
Laura Miller
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