U.S. Steel Producers Show Improved Results

Researched by Industrial Info Resources (Sugar Land, Texas)--U.S. steel producers showed improved financial results for the second quarter of 2016 compared to last year. While cheap steel imports from China and other countries have flooded the market in the past, this has been somewhat alleviated by a series of trade cases that has helped reduce certain types steel imports to the U.S., although other cases remain pending. In a press release regarding the company's second-quarter earnings, United States Steel Corporation (NYSE:X) (Pittsburgh, Pennsylvania) President and CEO Mario Longhi said "The steel industry continues to face challenging conditions as a result of global overcapacity and unfair trade practices. We remain focused on improving our trade laws and their enforcement, and we are encouraged that final affirmative determinations in recent trade cases have been a catalyst for increasing steel prices."

AK Steel Holding Corporation (NYSE:AKS) (West Chester, Ohio) also touched on recent positive outcomes of trade cases. In the company's conference call, Chief Executive Officer Roger Newport said, "After extensive investigations, the Department of Commerce has since announced positive final determinations in the cold-rolled and corrosion-resistant carbon cases. Despite the significant harm that was caused to our industry by unfair trade, and while import levels are still higher than they have historically been, we have seen a reduction in unfairly traded imports and improved domestic steel prices." However, while China has been in the sites of trade regulators, Newport noted that imports were rising from other countries, including Vietnam, Australia and Turkey.

Companies including U.S. Steel, Steel Dynamics Incorporated (NASDAQ:STLD) (Fort Wayne, Indiana), AK Steel Holding and Nucor Corporation (NYSE:NUE) (Charlotte, North Carolina) all reported improved financial results when compared with the second quarter of 2015, helping pave the way for increased project activity from these companies, despite still-present challenges. Industrial Info is tracking more than 460 active North American steel sector projects with a combined total investment value of $19.8 billion.

In May, Nucor announced that its Vulcraft/Verco group is expanding into Canada and is constructing a new production facility at a brownfield site near Hamilton, Ontario. Construction of the $25 million site kicked off this summer and Nucor says that it expects product fabrication to begin later this year. In June, Nucor announced that it was forming a joint venture with Japan's JFE Steel Corporation (Tokyo) to construct a plant in central Mexico to supply the company's automotive market. Nucor reports that the companies are "working to secure required conditions to move to completion, including but not limited to regulatory approvals" for the estimated $270 million project, which is expected to begin operations in the second half of 2019.

Steel Dynamics also gave a brief update of its $100 million paint line and galvanizing equipment addition at its mill in Columbus, Mississippi, which will provide 250,000 tons of annual coating capability to the plant, saying that the project is "on budget and on schedule, with expectations for painted product shipments to begin in the first quarter of 2017."

AK Steel Holding provided some color on its capital projects, including the electrostatic oiling process addition at its steel works in Dearborn, Michigan. CEO Newport said "We expect to complete the installation early in the fourth quarter and expect to produce initial trial material for our customers shortly thereafter."

In the U.S., one of the largest steel projects under way is Tenaris Global Services (USA) Corporation's (Bay City, Texas) construction of a grassroot seamless oil country tubular goods (OCTG) steel pipe mill in Bay City. Construction of the 1.3 million-square-foot manufacturing facility, which has a price tag of more than $1 billion, began in 2014 and is expected to be completed in the first half of 2017. When completed, the facility will have a production capacity of 600,000 tons per year of seamless OTCG steel pipe.

On the whole, reports from the U.S. steel industry were generally upbeat, as steel trade issues are resolved by the government, providing a more level playing field for U.S. steel producers and paving the way for the further expansion and upgrade activity throughout the country.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.