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Tough market conditions push US Steel further into the red in Q1

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Tough market conditions push US Steel further into the red in Q1

Reflecting toughmarket conditions, U.S. Steel Corp.widened its net loss in the first quarter, but the company remains focused on reducingcosts and improving the quality and reliability of its operations.

The companybooked a net loss of US$340 million, or US$2.32 per diluted share, compared to aloss of US$75 million, or 52 cents per diluted share, reported in the year-ago period.

The figure includedsupplemental unemployment and severance costs of US$25 million, or 17 cents perdiluted share, the company said in an April 26 release.

Segment EBITwas at a loss of US$252 million, or US$70 per ton, compared to a segment EBIT lossof US$21 million, or US$5 per ton, in the first quarter of 2015.

Net sales, meanwhile,totaled US$2.34 billion, down from US$3.27 billion a year earlier.

Results forthe flat-rolled segment declined on a quarterly basis due to decreases in averagerealized prices for the company's contract business and slightly lower average spotprices compared to the fourth quarter. The favorable impacts of lower raw materialsand energy prices, lower spending and overhead costs, and increased operating efficienciesfrom the company's current operating configuration only partially offset the unfavorableitems.

European segmentresults also fell, which the company attributed to a decline in average realizedeuro-based prices and higher repair and maintenance costs.

Results forthe tubular segment, meanwhile, were comparable to the fourth quarter as lower averagerealized prices and shipments were offset by lower substrate, spending and operatingcosts.

U.S. Steel expects2016 adjusted EBITDA to be near US$400 million if market conditions remain at theircurrent levels.

Based on currentmarket conditions, the company expects about US$500 million of cash benefits fromworking capital improvements this year, primarily related to better inventory management,and it would expect to be cash positive for the year.

U.S. Steel declareda dividend of 5 cents per share, payable June 10 to shareholders on record as ofMay 11.

Earlier, thecompany filed a complaintwith the U.S. International Trade Commission against major Chinese steel producersand distributors over alleged illegal unfair methods of competition including pricefixing, theft of trade secrets and the circumvention of trade duties by false labeling.