U.S. Steel posts mixed Q1, BR2 ramp-up drives major volume gains

U.S. Steel delivered a mixed first quarter. Segment performances diverged sharply as winter weather, outage activity, and major capital projects weighed on results.

Company-wide financial overview

The Pittsburgh-based subsidiary of Japan’s Nippon Steel reported net sales of $3.7 billion in the first quarter, up 16% from Q1’25. There were increases across all its operating segments, according to financial documents and a presentation released on Wednesday, May 13.

However, the company recorded a net loss of $51 million, compared with a loss of $116 million a year earlier. USS said this reflected resilient performance in the Mini Mill and Tubular segments, steady results in Europe, and cost-driven pressure in Flat-Rolled.

Winter weather disruptions, outage activity, and higher raw material costs were the key headwinds. At the same time, stronger pricing and higher volumes in several segments provided partial offsets.

Flat-Rolled segment

U.S. Steel’s integrated Flat-Rolled segment posted a weaker quarter as higher operating and raw material costs outweighed pricing gains.

Shipments totaled 1.96 million tons, down 1% from the prior year. Capacity utilization of 66% was essentially flat vs. Q1’25.

Sales increased 2% year over year (y/y) to $2.23 billion, driven by higher average realized prices across most products. But this was partially offset by an unfavorable mix and a 22,000-ton decline in shipments.

Segment EBITDA fell to $-15 million, reflecting higher spending and labor tied to the Granite City restart and Clairton restart, winter storm impacts, and planned outages.

Raw material costs also increased due to higher pellet costs, grade mix, and elevated blast furnace fuel rates ahead of scheduled outages.

Mini Mill segment

USS’ Mini Mill segment delivered the strongest y/y improvement. The segment saw higher volumes, stronger pricing, and continued operational momentum at Big River 2.

Shipments rose to 1.12 million tons, up 43% from 782,000 tons a year earlier, with capacity utilization climbing to 83% from 62% last year.

Sales increased 74% y/y to $1.09 billion, with higher realized prices amid broad-based volume gains.

EBITDA rose sharply to $186 million, compared with $5 million in Q1’25, aided by lower metallics costs and the absence of outage-related expenses that affected Q4’25.

The ramp-up of Big River 2 in Arkansas remains on track. Endless strip production reached full annualized levels in February, with output planned at 2.5 million tons for 2026, up from 1.4 million tons last year.

Tubular segment

The Tubular segment continued to benefit from stronger pricing for higher-value products.

Shipments totaled 130,000 tons, down slightly y/y. But sales increased 5% to $261 million, driven by higher average realized prices.

EBITDA reached $32 million, supported by an enhanced suite of proprietary connections and seamless pipe products serving a diverse oil and gas customer base.

Operating costs were higher due to planned outage activity, but raw material costs remained stable.

U.S. Steel Europe (USSE)

USSE posted modest improvement despite a challenging demand environment in Europe.

Shipments reached 774,000 tons, slightly higher sequentially but lower y/y. Sales increased 9% y/y to $721 million, supported by a stronger euro and a favorable product mix. But this was partially offset by a shipment decline of 82,000 tons.

EBITDA came in at $44 million, reflecting strong earnings despite cost pressures and softer regional demand, the company said.

Capex update

U.S. Steel advanced several major capital projects during the quarter.

At Gary Works, construction on the $200 million hot strip mill upgrade reached 38% completion, with power-cooling technology and advanced automation central to the modernization.

A $350 million reline of blast furnace #14 at Gary Works continued progressing. A 3,200-ton ring crane entered final assembly, the company revealed. A spokesperson confirmed outage work is on schedule to begin this month.

At Mon Valley Works, the $100 million slag recycler project secured its final air permit and completed geotechnical work.

USSE transition

Nippon Steel, U.S. Steel’s parent company, announced it will assume direct ownership of U.S. Steel Kosice on Oct. 1, 2026. It plans to transition the Slovak operation into a core hub for its European strategy. The facility will be renamed Nippon Steel Slovakia.

The Japanese steelmaker plans to deploy advanced technologies, strengthen the mill’s business foundation, and pursue long-term investments, including decarbonization initiatives.

Nippon said the transition will allow U.S. Steel to concentrate management resources on its US operations and accelerate its domestic growth strategy.