Chesterton Tribune

 

 

USS to idle Gary Works blast furnace as the market softens

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U.S. Steel Corporation (USS) has announced the idling of two domestic blast furnaces--including the south blast furnace at Gary Works--and one European in the wake of a softening market.

“In response to current market conditions, we are taking actions aligned with our strategy by adjusting our global blast furnace footprint,” USS said in a statement released on Tuesday. “We are idling two blast furnaces in the U.S. and one blast furnace in Europe to better align our global production with our book order.”

The Gary Works southern blast furnace will be idled temporarily, while the Great Lakes Works B2 blast furnace in Ecorse, Mich., will remain idled following a planned maintenance outage which began last week, USS said.

“As a result of these footprint actions, we expect to decrease monthly blast furnace production capacity by approximately 200,000 to 225,000 tons beginning in July,” USS said. “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 11.0 million tons. We will resume blast furnace production at one or both idled blast furnaces when market conditions improve.”

Meanwhile, the No. 2 blast furnace at U.S. Steel Europe (USSE) will also be idled, as “USSE continues to be negatively impacted by increasing levels of imports and continued market headwinds related to raw material costs and demand.”

“If No. 2 blast furnace remains idled for the remainder of the year, we expect full-year USSE shipments to third-party customers to be approximately 3.6 million tons,” USS added. “We will resume No. 2 blast furnace production when market conditions improve.”

In an accompanying second-quarter 2019 guidance, USS said that--though it initially projected a higher adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) for flat-rolled--results are being “negatively impacted by decreasing steel prices and softening end-market demand.”

In addition, second-quarter shipments of flat-rolled are “lower than we expected due to flooding in the southern United States, which has limited the availability of barges and our ability to ship finished product to customers over the past few weeks.”

Similarly, second-quarter adjusted EBITDA for both the company’s USSE and tubular segments will likely be lower than first-quarter. “In Europe, market headwinds have increased while tubular margins are under pressure due to lower selling prices,” USS said.

 

 

Posted 6/19/2019

 
 
 
 

 

 

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