United States Steel Corporation's (US Steel) tubular products group recorded a segment income of $30 million in Q1 2011, a 68 percent drop from the Q4 segment income of $96 million.
Tubular results were lower than the fourth quarter as costs for hot rolled bands and rounds supplied by US Steel's flat-rolled segment increased while average realized prices decreased due to product mix and competitive market conditions. Shipments increased by 10 percent to 425,000 nt, and the reported average realized price decreased by $57 to $1,447/nt.
Although US Steel expects improved results in its flat-rolled segment in Q2 (US Steel incurred a $57 million loss for its flats segment in Q1), the company is less optimistic about its tubular products group. US Steel anticipates that Q2 tubular results will be similar to Q1 results, as the benefits of increased average realized prices will be once again offset by higher input costs of hot bands from its flats segment.
In commenting on the results US Steel's Chairman and CEO John Surma said that while the US' tubular market is firm and strong enough to absorb oncoming production from other steelmakers, the company is "anxious about import numbers," and that some import trends have been "unsettling."