U.S. Steel Powers Through Pricing Pressures, Domestic Demand Holds Strong Despite Global Challenges

United States Steel Corporation X shares are trading higher on Thursday.

The company provided third-quarter 2024 adjusted net earnings per share guidance of $0.44 to $0.48 versus an estimate of $0.39.

In the third quarter of 2024, adjusted EBITDA is expected to be approximately $300 million, compared to the prior outlook range of $275 million to $325 million. In the second quarter, adjusted EBITDA was $443 million.

“Adjusted EBITDA guidance of $300 million is in-line with our prior third quarter outlook and reflects resilient domestic flat-rolled steel demand amid a bottoming steel pricing environment,” said President and Chief Executive Officer David B. Burritt.

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The CEO noted that challenging pricing dynamics are being somewhat mitigated by the diverse order books in the North American Flat-Rolled segment.

However, he mentioned that Europe is experiencing softening demand, leading to the temporary idling of Blast Furnace #1 after a planned 30-day outage due to weak customer demand.

Additionally, the CEO highlighted ongoing pressure in the Tubular segment from a weak pricing environment.

The CEO also indicated that pricing headwinds are anticipated to be partially alleviated by lower metallics costs. He also mentioned that about $40 million in expected start-up and one-time construction costs are factored into the segment’s adjusted results, primarily reflecting the new Big River 2 mini mill, which is expected to begin operations in the fourth quarter of 2024.

Burritt concluded, “We continue to progress through the U.S. regulatory reviews of the pending transaction with Nippon Steel, and are confident in our ability to achieve these approvals. We continue to work towards closing the transaction by the end of the year.”

Price Action: X shares are trading higher by 2.47% to $37.69 at last check Thursday.

Photo by Dennis Diatel on Shutterstock

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