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Released June 24, 2020 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--Second-quarter earnings guidance statements released last week by steel producers in the U.S. reflect the challenges being faced by the industry.
U.S. steel mills shipped 5,623,229 net tons in April, a 27.9% drop from 7,802,192 net tons shipped in March, and a 31.5% decrease from the 8,210,425 net tons shipped in April 2019, the American Iron and Steel Institute reported earlier this month. Shipments for the first four months of this year totaled 29,732,832 net tons, an 8.1% decrease from 32,362,476 net tons shipped during the same period of 2019.
United States Steel Corporation (NYSE:X) (U.S. Steel) (Pittsburgh, Pennsylvania) said it expects to report a diluted loss per share of about $3.06 for the second quarter. "As expected, the second quarter is being significantly impacted by the effects of COVID-19 and the expected nonrecurring costs associated with a significant portion of our steelmaking operations being idled in the quarter," said U.S. Steel Chief Executive Officer David Burritt in a press release. He added that the quarter is expected to mark the company's financial trough for the year.
For first-quarter 2020, U.S. Steel had reported a net loss of $391 million, compared with net earnings of $54 million in the first quarter a year prior. For more information, see May 4, 2020, article - U.S. Steel Corporation Looks to Future Despite First-Quarter Loss, Idled Assets.
U.S. Steel said it expects second-quarter results in its flat-rolled segment to be "significantly lower" than those from the first quarter this year as the impacts from COVID-19 lessened customer activity, particularly in the automotive and energy end-markets, the company said. However, in the automotive sector, original equipment manufacturer (OEM) restarts are progressing and customer demand has started to return, the company said.
"Still, we are continuing to identify additional management actions and operating improvements to improve our cash usage through the end of the year," U.S. Steel added.
Market conditions remain challenged in U.S. Steel's tubular segment, as rig counts continue to decline and oil prices remain low, the company said, resulting in drops in demand for welded and seamless pipe. The company has indefinitely idled its facilities in Lone Star, Texas, and Lorain, Ohio, and consolidated tubular production at its Fairfield Works facility near Birmingham, Alabama.
U.S. Steel said it expects to see cost reductions by in-sourcing production at its new electric-arc furnace at its Fairfield facility. The furnace is scheduled to begin production in the second half of 2020. For more information, see Industrial Info's project report.
Nucor Corporation (NYSE:NUE) (Charlotte, North Carolina) said it expects second-quarter earnings to be in the range of 10 cents to 15 cents per diluted share, compared with $1.29 per diluted share in second-quarter 2019, and seven cents per diluted share in first-quarter 2020. For first-quarter 2020, the company reported net earnings of $20.3 million, compared with $501.8 million in the prior-year quarter. For more information, see April 29, 2020, article - Steelmaker Nucor Evaluates Capital Projects as it Cuts Planned Spending.
Nucor's second-quarter operating performance has been better than expected, the company said in a June 18 press release, adding that although overall market conditions were still challenging, demand in the nonresidential construction sector has been resilient.
The economic impact of COVID-19 has caused Nucor to reduce production at its sheet and plate mills due to weak oil and gas market activity and customer production disruptions, the company said. Nucor's raw materials segment saw decreased pricing and an outage at its direct-reduced-iron (DRI) facility in Trinidad due to stay-at-home orders there.
On the positive side, the company said it was seeing a strong rebound in automotive-related steel demand.
Industrial Info is tracking active Nucor projects with a combined worth of more than $4 billion. Among the largest of these is its planned grassroot steel plate mill in Brandenburg, Kentucky. Construction was planned to kick off earlier this year, but it has been paused indefinitely because of the COVID-19 pandemic. For more information, see Industrial Info's project report.
Steel Dynamics Incorporated's (NASDAQ:STLD) (Fort Wayne, Indiana) second-quarter earnings guidance range is 29 cents to 33 cents per diluted share, compared with 87 cents per diluted share in second-quarter 2019, and 88 cents per diluted share in first-quarter 2020. For the first quarter of this year, the company reported net income of $187 million, compared with $204 million in the same quarter a year earlier.
Second-quarter 2020 earnings from the company's steel operations are expected to be much lower than those in the first quarter this year, due to lower shipments and prices as a result of temporary COVID-19 lockdowns among steel-consuming businesses, Steel Dynamics said.
Domestic automotive plants, which had been idled starting in March, have begun restarting production, but construction-related steel demand has been steadier than industrial manufacturing this quarter, Steel Dynamics said in a June 18 press release.
Steel Dynamics said it anticipates steel and recycled scrap volumes to improve as states begin to reopen and steel consuming businesses begin to resume operations.
Second-quarter construction startup costs of the company's Sinton, Texas, flat-roll steel mill are estimated at about $10 million, the company said. The project remains on schedule for completion in mid-2021. Industrial Info is tracking $2.35 billion worth of projects by Steel Dynamics, including the 3 million-ton-per-year electric-arc-furnace (EAF), flat-roll steel mill in Texas. For more information, see Industrial Info's project report and April 22, 2020, article - Steel Dynamics Presses on With Big Texas Steel Mill Project, Reports Strong First-Quarter Results.
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.
U.S. steel mills shipped 5,623,229 net tons in April, a 27.9% drop from 7,802,192 net tons shipped in March, and a 31.5% decrease from the 8,210,425 net tons shipped in April 2019, the American Iron and Steel Institute reported earlier this month. Shipments for the first four months of this year totaled 29,732,832 net tons, an 8.1% decrease from 32,362,476 net tons shipped during the same period of 2019.
United States Steel Corporation (NYSE:X) (U.S. Steel) (Pittsburgh, Pennsylvania) said it expects to report a diluted loss per share of about $3.06 for the second quarter. "As expected, the second quarter is being significantly impacted by the effects of COVID-19 and the expected nonrecurring costs associated with a significant portion of our steelmaking operations being idled in the quarter," said U.S. Steel Chief Executive Officer David Burritt in a press release. He added that the quarter is expected to mark the company's financial trough for the year.
For first-quarter 2020, U.S. Steel had reported a net loss of $391 million, compared with net earnings of $54 million in the first quarter a year prior. For more information, see May 4, 2020, article - U.S. Steel Corporation Looks to Future Despite First-Quarter Loss, Idled Assets.
U.S. Steel said it expects second-quarter results in its flat-rolled segment to be "significantly lower" than those from the first quarter this year as the impacts from COVID-19 lessened customer activity, particularly in the automotive and energy end-markets, the company said. However, in the automotive sector, original equipment manufacturer (OEM) restarts are progressing and customer demand has started to return, the company said.
"Still, we are continuing to identify additional management actions and operating improvements to improve our cash usage through the end of the year," U.S. Steel added.
Market conditions remain challenged in U.S. Steel's tubular segment, as rig counts continue to decline and oil prices remain low, the company said, resulting in drops in demand for welded and seamless pipe. The company has indefinitely idled its facilities in Lone Star, Texas, and Lorain, Ohio, and consolidated tubular production at its Fairfield Works facility near Birmingham, Alabama.
U.S. Steel said it expects to see cost reductions by in-sourcing production at its new electric-arc furnace at its Fairfield facility. The furnace is scheduled to begin production in the second half of 2020. For more information, see Industrial Info's project report.
Nucor Corporation (NYSE:NUE) (Charlotte, North Carolina) said it expects second-quarter earnings to be in the range of 10 cents to 15 cents per diluted share, compared with $1.29 per diluted share in second-quarter 2019, and seven cents per diluted share in first-quarter 2020. For first-quarter 2020, the company reported net earnings of $20.3 million, compared with $501.8 million in the prior-year quarter. For more information, see April 29, 2020, article - Steelmaker Nucor Evaluates Capital Projects as it Cuts Planned Spending.
Nucor's second-quarter operating performance has been better than expected, the company said in a June 18 press release, adding that although overall market conditions were still challenging, demand in the nonresidential construction sector has been resilient.
The economic impact of COVID-19 has caused Nucor to reduce production at its sheet and plate mills due to weak oil and gas market activity and customer production disruptions, the company said. Nucor's raw materials segment saw decreased pricing and an outage at its direct-reduced-iron (DRI) facility in Trinidad due to stay-at-home orders there.
On the positive side, the company said it was seeing a strong rebound in automotive-related steel demand.
Industrial Info is tracking active Nucor projects with a combined worth of more than $4 billion. Among the largest of these is its planned grassroot steel plate mill in Brandenburg, Kentucky. Construction was planned to kick off earlier this year, but it has been paused indefinitely because of the COVID-19 pandemic. For more information, see Industrial Info's project report.
Steel Dynamics Incorporated's (NASDAQ:STLD) (Fort Wayne, Indiana) second-quarter earnings guidance range is 29 cents to 33 cents per diluted share, compared with 87 cents per diluted share in second-quarter 2019, and 88 cents per diluted share in first-quarter 2020. For the first quarter of this year, the company reported net income of $187 million, compared with $204 million in the same quarter a year earlier.
Second-quarter 2020 earnings from the company's steel operations are expected to be much lower than those in the first quarter this year, due to lower shipments and prices as a result of temporary COVID-19 lockdowns among steel-consuming businesses, Steel Dynamics said.
Domestic automotive plants, which had been idled starting in March, have begun restarting production, but construction-related steel demand has been steadier than industrial manufacturing this quarter, Steel Dynamics said in a June 18 press release.
Steel Dynamics said it anticipates steel and recycled scrap volumes to improve as states begin to reopen and steel consuming businesses begin to resume operations.
Second-quarter construction startup costs of the company's Sinton, Texas, flat-roll steel mill are estimated at about $10 million, the company said. The project remains on schedule for completion in mid-2021. Industrial Info is tracking $2.35 billion worth of projects by Steel Dynamics, including the 3 million-ton-per-year electric-arc-furnace (EAF), flat-roll steel mill in Texas. For more information, see Industrial Info's project report and April 22, 2020, article - Steel Dynamics Presses on With Big Texas Steel Mill Project, Reports Strong First-Quarter Results.
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.
