US Steel plans to make near-term capacity cuts to deal with lacklustre market conditions, Kallanish learns from the company’s second-quarter guidance.
“In response to current market conditions, we are taking actions aligned with our strategy by adjusting our global blast furnace footprint,” the company says. “We are idling two blast furnaces in the United States and one blast furnace in Europe to better align our global production with our order book.”
US Steel’s B2 blast furnace at its Great Lakes works is already down for scheduled maintenance, and it will remain down “... based on current market conditions,” the company says.
US Steel also plans to idle the south blast furnace at its Gary, Indiana, facility. The blast furnaces have a combined monthly output of 200,000-225,00 short tons.
“If both furnaces remain idled for the remainder of the year, we expect full-year flat-rolled shipments to third party customers to be approximately 11 million tons,” US Steel says. “We will resume blast furnace production at one or both idled blast furnaces when market conditions improve.”
Additionally, US Steel plans to idle its Number 2 blast furnace in Europe, at a cost about 125,000 st/month (see related article).
The company expects to report second-quarter earnings before interest, taxes, depreciation, amortization of $250m. Mini-mill competitors Nucor and Steel Dynamics both said this week that they expect Q2 earnings to be below both Q1 and Q2 2018.