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Researched by Industrial Info Resources (Sugar Land, Texas)--United States Steel Corporation (U.S. Steel) (NYSE:X) (Pittsburgh, Pennsylvania) is honing in on nearly $4 billion in capital expenditures (capex) for three strategic investments at its Big River Steel (BRS) operation in Osceola, Arkansas, and a project in Gary, Indiana. Industrial Info is tracking almost $6 billion worth of capital-spending projects in the U.S. attributed to the steel producer.
Subscribers to Industrial Info's Global Market Intelligence (GMI) Metals & Minerals Project Database can click here for a full list of detailed project reports.
U.S. Steel executives pointed to the capital expenditures during the company's first-quarter earnings conference call on Friday.
The majority of the spend is wrapped up in the construction of its $3 billion "Mini Mill #2," a steel mini mill in Osceola, Arkansas at the BRS operation. The mill will include two electric arc furnaces (EAFs) with 3 million tons per year of steelmaking capability, an endless casting and rolling line and advanced finishing capabilities, as well as technology for steelmaking and finishing that will support the company's effort to reduce its greenhouse gas (GHG) emissions by 20% by 2030. Construction kicked off in February, with the completion expected in 2024. Subscribers can click here for the detailed project report.
Another project is the ongoing construction of a $450 million, 200,000 ton-per-year non-grain oriented electrical-steel line addition at the existing 3.3 million-ton-per-year mini mill in Osceola. Electrical steel is needed to modernize the electricity grid, as well as to produce electric vehicle (EV) chargers. The startup is expected in third-quarter 2023. Lastly, a 325,000-ton-per-year galvanizing line addition at the existing facility is expected to kick off in 2023, with startup in second-quarter 2024.
Subscribers can see project reports on the electrical-steel and galvanizing line additions.
First-quarter capital expenditures of $349 million were up from the $136 million in first-quarter 2021, led by the mini mill segment with $211 million. U.S. Steel previously said it expected about $2.3 billion in 2022 capex, including $1.57 billion for strategic investments. For more information, see Industrial Info's November 1, 2021, article - U.S. Steel Expects $2.3 Billion in Capex for 2022, Including Spending on New Mini Mill.
According to Joe Govreau, Industrial Info's vice president of research for the Metals & Minerals Industry, the implementation of renewable energy sources and battery metals demand is changing the types of projects being seen throughout the industry. For more information, see February 10, 2022, article - IIR Webinar: Metals & Minerals Project Activity Going Full Steam Ahead.
In an earnings-related press release, U.S. Steel Chief Executive Officer David Burritt said, "Today's geopolitical uncertainty and elevated raw material cost environment reinforces to customers the importance of steel that is mined, melted and made in the U.S.A." He added, "Our iron ore mines are a unique competitive advantage that cannot be easily replicated by other competitors. Additionally, we continue to progress on our sustainability goals and deliver the 'green' products our customers are increasingly demanding."
U.S. Steel is planning a pig iron plant addition at its Gary Steel Works in Indiana, to produce up to 500,000 tons of pig iron annually. "This pig iron investment, with expected start-up in early 2023, will supply up to 50% of Big River Steel's ore-based metallics needs," Burritt said. The kickoff is expected in June. Click here for the project report.
The project comes at an opportune time. The Russia-Ukraine conflict has caused a global pig iron shortage, as both countries are major exporters of the product. Ukrainian ports are closed, and few buyers are willing to take on Russian pig iron due to the threat of sanctions. Russia exported 3.53 million tons of pig iron in 2021, while Ukraine exported 3.16 million tons, according to data from the International Steel Statistics Bureau (ISSB).
U.S Steel reported a record first-quarter profit of $882 million, up from just $91 million year-over year, driven by higher prices and margins for most of its major products. Sales of $5.23 billion were up 43% year-over-year due to increased earnings before interest and income taxes across some of its segments--including flat-rolled steel ($513 million up from $146 million); tubular steel ($77 million up from a $29 million loss); and mini mills ($278 million up from $132 million). The growth was buoyed by increased average realized prices.
In the first quarter, the price of flat-rolled steel was $1,368 per net ton, up 54% year over year, and the price of tubular steel was up 71%.
The mini mill segment in particular shined, with a profit margin of 38% before income taxes, interest expenses, depreciation and amortization (EBITDA), "outperforming both mini mill and integrated peers," according to Burritt.
Burritt expects the second quarter to feature record profits as well: "We currently expect the second quarter to be the company's all-time best second quarter as our balanced customer portfolio, raw materials integration and operating leverage is expected to expand adjusted EBITDA...."
Industrial Info Resources (IIR) is the world's leading provider of market intelligence across the upstream, midstream and downstream energy markets and all other major industrial markets. IIR's Global Market Intelligence Platform (GMI) supports our end-users across their core businesses, and helps them connect trends across multiple markets with access to real, qualified and validated project opportunities. Follow IIR on: LinkedIn.
Subscribers to Industrial Info's Global Market Intelligence (GMI) Metals & Minerals Project Database can click here for a full list of detailed project reports.
U.S. Steel executives pointed to the capital expenditures during the company's first-quarter earnings conference call on Friday.
The majority of the spend is wrapped up in the construction of its $3 billion "Mini Mill #2," a steel mini mill in Osceola, Arkansas at the BRS operation. The mill will include two electric arc furnaces (EAFs) with 3 million tons per year of steelmaking capability, an endless casting and rolling line and advanced finishing capabilities, as well as technology for steelmaking and finishing that will support the company's effort to reduce its greenhouse gas (GHG) emissions by 20% by 2030. Construction kicked off in February, with the completion expected in 2024. Subscribers can click here for the detailed project report.
Another project is the ongoing construction of a $450 million, 200,000 ton-per-year non-grain oriented electrical-steel line addition at the existing 3.3 million-ton-per-year mini mill in Osceola. Electrical steel is needed to modernize the electricity grid, as well as to produce electric vehicle (EV) chargers. The startup is expected in third-quarter 2023. Lastly, a 325,000-ton-per-year galvanizing line addition at the existing facility is expected to kick off in 2023, with startup in second-quarter 2024.
Subscribers can see project reports on the electrical-steel and galvanizing line additions.
First-quarter capital expenditures of $349 million were up from the $136 million in first-quarter 2021, led by the mini mill segment with $211 million. U.S. Steel previously said it expected about $2.3 billion in 2022 capex, including $1.57 billion for strategic investments. For more information, see Industrial Info's November 1, 2021, article - U.S. Steel Expects $2.3 Billion in Capex for 2022, Including Spending on New Mini Mill.
According to Joe Govreau, Industrial Info's vice president of research for the Metals & Minerals Industry, the implementation of renewable energy sources and battery metals demand is changing the types of projects being seen throughout the industry. For more information, see February 10, 2022, article - IIR Webinar: Metals & Minerals Project Activity Going Full Steam Ahead.
In an earnings-related press release, U.S. Steel Chief Executive Officer David Burritt said, "Today's geopolitical uncertainty and elevated raw material cost environment reinforces to customers the importance of steel that is mined, melted and made in the U.S.A." He added, "Our iron ore mines are a unique competitive advantage that cannot be easily replicated by other competitors. Additionally, we continue to progress on our sustainability goals and deliver the 'green' products our customers are increasingly demanding."
U.S. Steel is planning a pig iron plant addition at its Gary Steel Works in Indiana, to produce up to 500,000 tons of pig iron annually. "This pig iron investment, with expected start-up in early 2023, will supply up to 50% of Big River Steel's ore-based metallics needs," Burritt said. The kickoff is expected in June. Click here for the project report.
The project comes at an opportune time. The Russia-Ukraine conflict has caused a global pig iron shortage, as both countries are major exporters of the product. Ukrainian ports are closed, and few buyers are willing to take on Russian pig iron due to the threat of sanctions. Russia exported 3.53 million tons of pig iron in 2021, while Ukraine exported 3.16 million tons, according to data from the International Steel Statistics Bureau (ISSB).
U.S Steel reported a record first-quarter profit of $882 million, up from just $91 million year-over year, driven by higher prices and margins for most of its major products. Sales of $5.23 billion were up 43% year-over-year due to increased earnings before interest and income taxes across some of its segments--including flat-rolled steel ($513 million up from $146 million); tubular steel ($77 million up from a $29 million loss); and mini mills ($278 million up from $132 million). The growth was buoyed by increased average realized prices.
In the first quarter, the price of flat-rolled steel was $1,368 per net ton, up 54% year over year, and the price of tubular steel was up 71%.
The mini mill segment in particular shined, with a profit margin of 38% before income taxes, interest expenses, depreciation and amortization (EBITDA), "outperforming both mini mill and integrated peers," according to Burritt.
Burritt expects the second quarter to feature record profits as well: "We currently expect the second quarter to be the company's all-time best second quarter as our balanced customer portfolio, raw materials integration and operating leverage is expected to expand adjusted EBITDA...."
Industrial Info Resources (IIR) is the world's leading provider of market intelligence across the upstream, midstream and downstream energy markets and all other major industrial markets. IIR's Global Market Intelligence Platform (GMI) supports our end-users across their core businesses, and helps them connect trends across multiple markets with access to real, qualified and validated project opportunities. Follow IIR on: LinkedIn.
