SunCoke looks to expand reach to EAF steelmakers as Q2 profits slide

SunCoke Energy reported a steep year-on-year drop in second-quarter earnings, weighed down by weaker coke sales and logistics volumes. Still, the company reaffirmed its full-year outlook and moved closer to acquiring Phoenix Global.

The Lisle, Ill.-based coke producer reported net income of $1.9 million in Q2’25, down from $21.5 million a year earlier. Revenue fell 7.8% to $434.1 million. Adjusted EBITDA declined 31% to $43.6 million.

“Our results were hit by the mix of contract and spot coke sales and lighter logistics volumes,” CEO Katherine Gates said on July 30. She expects stronger EBITDA in the second half, helped by improved margins and a new coal handling deal at Kanawha River Terminal.

The company maintained its full-year EBITDA guidance of $210 million to $225 million, and revised its net income forecast to $40 million to $59 million, citing acquisition costs and new tax rules.

Coke and logistics weigh on earnings

The Domestic Coke segment’s EBITDA dropped to $40.5 million from $57.9 million last year. Sales volumes fell 3% to 943,000 short tons.

SunCoke blamed lower margins at Haverhill, Ohio, and unfavorable terms under its extended Granite City contract with U.S. Steel.

The logistics segment EBITDA fell to $7.7 million from $12.2 million due to weak transloading volumes at the Convent Marine Terminal in Louisiana. Handled tonnage sank 21% to 4.8 million tons. SunCoke expects a rebound in Q3’25 and upheld its $45 million to $50 million logistics EBITDA target.

Granite City pig iron project

The Granite City pig iron project remains a top priority for SunCoke, though Gates again noted delays tied to the USS-Nippon deal.

“There’s been no change in our focus,” she said on an earnings conference call, reiterating the project’s strong fundamentals, including access to low-cost iron ore, the strategic location, and the ability to supply Big River Steel.

Recall the plan calls is for SunCoke to purchase the two blast furnaces at the USS Granite City Works in Illinois and convert them to pig iron production.

Gates confirmed SunCoke is in active talks with USS regarding the project, though no new agreements have been finalized.

Phoenix acquisition on track

SunCoke will close its $325-million purchase of metals and mining services firm Phoenix Global earlier than expected, on Friday, Aug. 1, having secured all regulatory approvals.

The deal expands SunCoke’s reach to more steelmakers, including EAF producers.

“What I can say in terms of drivers going forward is that we’re very excited about having the EAF exposure, which really diversifies our customer base,” Gates noted.

The unit will join SunCoke’s Logistics business to form a new Industrial Services segment.

Phoenix posted $61 million in adjusted EBITDA for the year ended March 31. SunCoke expects $5 million to $10 million in annual synergies.

The purchase is being funded through cash and a draw from the company’s newly extended credit facility, now maturing in 2030.

Outlook

SunCoke held its annual Domestic Coke production forecast at 4 million tons. Operating cash flow is pegged at $165 million to $180 million. Free cash flow should come in between $103 million to $118 million, and capex was trimmed to $60 million.

The company ended Q2’25 with $186.2 million in cash and full access to its $325-million credit line.