Steel Mills
USS Canada Losses Continue to Accumulate
Written by Sandy Williams
December 18, 2014
US Steel Canada cash flow improved in October with receipts totaling $360.8 million. A ten percent increase in production at Lake Erie Works and a willingness by vendors to extend credit to the troubled company were the primary factors in USSC results, according to a report by court appointed monitor Alex Morrison. Although cash flow improved since USSC entered credit protection, net losses continue to mount each month. In the first ten months of 2014, net loss for USSC totaled $198 million primarily due to the negative impact of Hamilton Works.
From January to October Hamilton Works generated $527.8 million compared to $1,286.7 million at Lake Erie Works. Net loss at Hamilton for the period totaled $228.8 million while Lake Erie showed net income of $30.5 million.
Steel making operations at Hamilton were idled in 2010 and permanently shut down in 2013. Coke production was stopped October 31, 2014 after providing enough supply to last Lake Erie Works through April 2015. Remaining operations at Hamilton consist of a cold reduction mill and two galvanizing lines.
Lake Erie Works operations include iron and steel making and finishing, a pickling line, and coke production (re-started in Sept. 2014).
In a revised forecast for November 22, 2014 through January 30, 2015, it was determined that USSC will not need to draw on the debtor-in-possession (DIP) funds from parent company US Steel. Morrison determined that USSC‘s cash position will dwindle from its current amount of $102.8 million to $33.2 million by the end of January. So far USSC has used $30 million of its $132 million cash on hand when it filed for creditor protection.
Morrison says the negative cash flow will mostly result from stockpiling raw material before the St. Lawrence Seaway freezes for the winter.
US Steel Canada was granted creditor protection by the Ontario Superior Court on September 26, 2014. Originally the company was to find a buyer for Hamilton and Lake Erie Works by Nov. 15. That deadline has been extended several times and the most recent one, December 16, expired on Tuesday. The credit protection for USSC currently expires on January 23, 2015.
Sandy Williams
Read more from Sandy WilliamsLatest in Steel Mills
Ternium pushes forward with growth projects despite slump in earnings and Mexican market
Ternium S.A. Fourth quarter ended Dec.31 2024 2023 Change Net sales $3,876 $4,931 -21.4% Net income (loss) $333 $554 -39.9% Per diluted share $1.43 $2.11 -32.2% Full year ended Dec.31 Net sales $17,649 $17,610 0.2% Net income (loss) $174 $986 -82.4% Per diluted share $(0.27) $3.44 -108% (in millions of dollars except per share) While […]
Kestenbaum, Ancora state their case in proxy fight for U.S. Steel
Ancora Holdings is moving forward with its proxy fight to oust U.S. Steel’s leadership and install a new board of directors and Alan Kestenbaum as CEO.
BlueScope shelves midstream facility but still upbeat on US
BlueScope Steel is pulling back on its expansion plans in the US for now but remains optimistic about the North American market.
Japanese PM cites ‘unjust political interference’ in Nippon/USS deal: Report
Japan’s Prime Minister Shigeru Ishiba said on Monday that former President Joe Biden’s decision to block Nippon Steel’s buy of U.S. Steel was “unjust political interference,” according to a report in Reuters. This comes after another Reuters report on Friday saying that President Trump would not object to Nippon taking a minority stake in the […]
Trump says Nippon will ‘invest heavily’ in USS rather than buy it
Nippon Steel has agreed to “invest heavily in U.S. Steel as opposed to own it,” President Donald Trump said on Friday during a press conference with Japanese Prime Minister Shigeru Ishiba. U.S. Steel is “a very important company” and was once “the greatest company in the world”. Of potential foreign ownership of the Pittsburgh-based steelmaker, Trump said, “the concept, psychologically, not good."