Steel Mills
U.S. Steel to Idle Three Blast Furnaces
Written by Sandy Williams
June 18, 2019
U.S. Steel Corp. announced today that it will idle two blast furnaces in the United States and one in Europe to align with current market conditions.
The B2 furnace at Great Lakes Works was idled last week for planned maintenance. U.S. Steel plans to keep the furnace idled following repairs, as well as temporarily idling the south blast furnace at Gary Works. The measures will reduce monthly blast furnace capacity by approximately 200,000-250,000 tons beginning in July. If the two furnaces remain down for the remainder of the year, annual shipments will be reduced to 11.0 million tons. Blast furnace production will resume when market conditions improve, said U.S. Steel.
High input costs and weak demand is negatively impacting U.S. Steel’s European division. U.S. Steel will idle its #2 furnace at U.S. Steel Kosice in the Slovak Republic. The furnace has a capacity of 125,000 tons per month and, if idled for the remainder of the year, will reduce shipments to 3.6 million tons for 2019.
In its guidance remarks for the second quarter, U.S. Steel said that although it expects improved EBITDA for its flat rolled division, the divison has been negatively impacted by declining steel prices and softer demand. Flooding in the southern U.S. has also been an issue for the company, limiting barge availability and the ability to ship finished products.
The tubular and U.S. Steel Europe divisions are expected to post lower earnings in the second quarter due to market headwinds in Europe and margin pressure on tubular sales from lower selling prices.
The Dec. 24 fire at the Clairton coke works will result in a $15 million charge in the second quarter related to outage and repairs. Adjusted EBIDTA, excluding the Clairton charge, is expected to be approximately $250 million. Earnings will be around $0.40 per diluted share.
Sandy Williams
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