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Released November 02, 2020 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--United States Steel Corporation (NYSE:X) (Pittsburgh, Pennsylvania) knew it was in for a rough quarter, and expectations for a fifth consecutive quarterly loss did not go unfulfilled. The company reported a net loss of $234 million for third-quarter 2020, compared with a net loss of $84 million in the same period last year, with overall sales down 24% and steel shipments down 16%. But executives remain optimistic about the near term, pointing to growing demand for its flat-rolled products across key industries. Industrial Info is tracking about $2.5 billion in active projects from U.S. Steel, including $1.26 billion worth that are set to begin construction in the next six months.
Click on the image at right for a graph detailing U.S. Steel's active domestic projects, by U.S. state.
U.S. Steel expects capital spending for full-year 2021 expected to total about $675 million, down from this year's estimated $750 million. But David Burritt, the chief executive officer of U.S. Steel, said that the company's third-quarter results actually exceeded the company's expectations and that a market recovery is beginning to take hold. In a quarterly earnings-related conference call, Burritt pointed to recent gains in steel prices as a major factor.
U.S. Steel's Gary Steel Works plant in Gary, Indiana, is home to one of the company's highest-priced and longest-running projects: an estimated $750 million modernization program, which is designed to overhaul and upgrade the 7.5 million-ton-per-year facility over a five-year period. Within that amount is about $80 million for upgrades to the hot strip mill, which one executive said is expected to be spend next year. For more information, see Industrial Info's project report.
"At Gary Works, we plan to leverage the flexibility that we built in to our execution plan to invest about $80 million on the hot strip mill capability upgrades, in conjunction with some of the planned outages that we have for next year," said Christie Breves, the chief financial officer of U.S. Steel, in the conference call.
However, U.S. Steel was forced to put on hold $5 million in repairs and upgrades for Gary's Vessel No. 4, which processes 4,200 tons per day, but has been idled amid the pandemic. "When it comes to the blast furnace at Gary... we continue to evaluate the order book," Burritt said in the conference call. "We continue to configure the operations to best meet the order book and the needs of our customers. At this point in time, we don't we haven't made a decision on Gary No. 4. That's currently not in our restart plans, but we'll continue to evaluate it moving forward." For more information, see Industrial Info's project report.
Alabama is home to the company's steel mill and seamless steel pipe plant in Fairfield, which recently started up its $150 million addition of an electric arc furnace, which will replace an aging blast furnace and produce 1.6 million tons per year of raw steel. The complex also is undergoing a $65 million caster modernization, which will produce 742 million tons per year. According to U.S. Steel, flat-rolled products produced at Fairfield primarily serve the metal building components, automotive and appliance industries, while its tubular products primarily serve the oil and gas market. For more information, see Industrial Info's reports on the arc furnace and caster projects.
Flat-rolled steel products were the biggest bright spot in U.S. Steel's gloomy quarter. Executives noted in a quarterly presentation that the company's automotive order book remains strong and auto production remains high, with North American vehicle sales expected to increase for a sixth straight month. They also noted domestic construction spending is actually exceeding pre-COVID levels, with U.S. Steel's construction-related customers not expecting any slowdowns going into the winter months. Low customer inventories, particularly in the appliances market, also are expected to boost demand.
The COVID-19 pandemic has forced U.S. Steel to delay a pair of improvements at its Edgar Thomson Steel Works plant in Braddock, Pennsylvania: the estimated $1.5 million relinings of Basic Oxygen Furnace F and Basic Oxygen Furnace R. The 2.6 million-ton-per-year facility performs these overhauls of the 250-ton furnaces every five years to improve operations and extend the units' lives. The blast furnaces produce liquid iron, which is then refined into steel slabs that are later rolled into a number of different sheet products for the appliance, automotive, metal building and home construction industries, according to U.S. Steel.
Furnace F's relining was expected to begin this March, but was pushed back one year to March 2021 in response to COVID-19 precautions. Furnace R's relining will not begin until March 2022, at the earliest. For more information, see Industrial Info's reports on the Furnace F and Furnace R projects.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 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.
Click on the image at right for a graph detailing U.S. Steel's active domestic projects, by U.S. state.U.S. Steel expects capital spending for full-year 2021 expected to total about $675 million, down from this year's estimated $750 million. But David Burritt, the chief executive officer of U.S. Steel, said that the company's third-quarter results actually exceeded the company's expectations and that a market recovery is beginning to take hold. In a quarterly earnings-related conference call, Burritt pointed to recent gains in steel prices as a major factor.
U.S. Steel's Gary Steel Works plant in Gary, Indiana, is home to one of the company's highest-priced and longest-running projects: an estimated $750 million modernization program, which is designed to overhaul and upgrade the 7.5 million-ton-per-year facility over a five-year period. Within that amount is about $80 million for upgrades to the hot strip mill, which one executive said is expected to be spend next year. For more information, see Industrial Info's project report.
"At Gary Works, we plan to leverage the flexibility that we built in to our execution plan to invest about $80 million on the hot strip mill capability upgrades, in conjunction with some of the planned outages that we have for next year," said Christie Breves, the chief financial officer of U.S. Steel, in the conference call.
However, U.S. Steel was forced to put on hold $5 million in repairs and upgrades for Gary's Vessel No. 4, which processes 4,200 tons per day, but has been idled amid the pandemic. "When it comes to the blast furnace at Gary... we continue to evaluate the order book," Burritt said in the conference call. "We continue to configure the operations to best meet the order book and the needs of our customers. At this point in time, we don't we haven't made a decision on Gary No. 4. That's currently not in our restart plans, but we'll continue to evaluate it moving forward." For more information, see Industrial Info's project report.
Alabama is home to the company's steel mill and seamless steel pipe plant in Fairfield, which recently started up its $150 million addition of an electric arc furnace, which will replace an aging blast furnace and produce 1.6 million tons per year of raw steel. The complex also is undergoing a $65 million caster modernization, which will produce 742 million tons per year. According to U.S. Steel, flat-rolled products produced at Fairfield primarily serve the metal building components, automotive and appliance industries, while its tubular products primarily serve the oil and gas market. For more information, see Industrial Info's reports on the arc furnace and caster projects.
Flat-rolled steel products were the biggest bright spot in U.S. Steel's gloomy quarter. Executives noted in a quarterly presentation that the company's automotive order book remains strong and auto production remains high, with North American vehicle sales expected to increase for a sixth straight month. They also noted domestic construction spending is actually exceeding pre-COVID levels, with U.S. Steel's construction-related customers not expecting any slowdowns going into the winter months. Low customer inventories, particularly in the appliances market, also are expected to boost demand.
The COVID-19 pandemic has forced U.S. Steel to delay a pair of improvements at its Edgar Thomson Steel Works plant in Braddock, Pennsylvania: the estimated $1.5 million relinings of Basic Oxygen Furnace F and Basic Oxygen Furnace R. The 2.6 million-ton-per-year facility performs these overhauls of the 250-ton furnaces every five years to improve operations and extend the units' lives. The blast furnaces produce liquid iron, which is then refined into steel slabs that are later rolled into a number of different sheet products for the appliance, automotive, metal building and home construction industries, according to U.S. Steel.
Furnace F's relining was expected to begin this March, but was pushed back one year to March 2021 in response to COVID-19 precautions. Furnace R's relining will not begin until March 2022, at the earliest. For more information, see Industrial Info's reports on the Furnace F and Furnace R projects.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 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.
