U.S. Steel Expects Dip in 2024 Capex

Researched by Industrial Info Resources (Sugar Land, Texas)--Executives with United States Steel Corporation (U.S. Steel) (NYSE:X) (Pittsburgh, Pennsylvania) recently discussed the progress of key projects, including a non-grain-oriented (NGO) electrical steel line, a new minimill and galvanizing line. The company expects to maintain its capital expenditures (capex) of $2.5 billion for 2023 but is projecting a lower spend for 2024.

On the company's second-quarter earnings conference call on July 27, Chief Financial Officer Jessica Graziano discussed the company's $2.5 billion capex plan for this year as well as spending plans for 2024.

She said the company is just starting its forecasting process, but "let's start with probably about 800 million (dollars) of additional strategic capex next year in '24. Early read on sustaining at this point is probably something in the neighborhood of 600 million to 700 million (dollars) of capex. So, let's call it somewhere in the neighborhood of 1.4 billion to 1.5 billion (dollars) for 2024."

Discussing the year-over-year drop in capex, she noted the company aims to maintain a strong balance sheet while it invests and executes its strategy. "We'll continue to consider direct returns of priority in capital deployment with the potential for a new sizable repurchase authorization and a fresh review of our dividend policy. What's really exciting is seeing our key in-flight initiatives come online."

She said capex from existing strategic projects "will be substantially done" in 2024.

Industrial Info is tracking 61 active projects from U.S. Steel, worth nearly $7 billion. Subscribers to Industrial Info's Global Market Intelligence (GMI) Metals & Minerals Project Database can click here for a list of detailed project reports.

According to Graziano, the project with the biggest portion of strategic capex into 2024 is the $3 billion Big River 2 minimill in Osceola, Arkansas, which remains on track for a startup later that year.

"Once complete, this cutting-edge facility, in combination with the existing Big River Steel, will form a 6 million-ton mega mill, supplying the most advanced and sustainable steels in North America," said Chief Executive Officer David Burritt on the conference call. He noted 87% of the spend has already been committed, and 59% of the project is complete.

Subscribers can click here for the minimill project report.

Although the Big River 2 project is the company's largest, Burritt first highlighted a NGO electrical steels line at its Big River Steel operations, which is on track to launch in the third quarter of this year. Subscribers can click here to read a detailed project report for the NGO line.

He said U.S. Steel has received its first customer orders for its NGO steels, in both the industrial and electric vehicle (EV) markets. "Our NGO will also be unmatched in customer value, strategically located to support manufacturing concentration in the U.S., Canada, and Mexico and producing next-generation steels that aren't widely available today ... The thinner we can make our NGO steels, the further their electric vehicle motors can go between charges."

Burritt did not mention specific customers, but earlier this year, U.S. Steel announced it had signed a supply agreement with General Motors Company (NYSE:GM) (Detroit, Michigan) to supply the EV automaker with a sustainable-steel product from Big River.

Also underway at the Big River Steel site is the construction of a 325,000-ton-per-year galvanizing line. Completion is planned for second-quarter 2024. Subscribers can click here for the project report.

Subscribers to Industrial Info's GMI plant and project databases can click here for a full list of detailed reports for projects mentioned in this article, and click here for a related plant profile.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).