US Steel Corp. provided third quarter 2019 guidance today, expecting adjusted EBITDA to be approximately $115 million. The results will exclude approximately $53 million of estimated third quarter impacts from the December 24, 2018 fire at the company’s Clairton coke making facility and estimated restructuring charges. US Steel expects third quarter 2019 adjusted diluted loss per share to be approximately ($0.35).
In a press release, US Steel said the positive flat-rolled steel market indicators experienced earlier this summer have softened after a brief recovery in steel selling prices.
“The impact of falling steel prices through the second quarter, combined with the impact of a larger than expected drop in scrap prices on market sentiment, is expected to negatively impact Flat-rolled earnings in the second half of the year. As a result, our current assessment of the Flat-rolled segment suggests two blast furnaces will remain idled through at least the end of the year. Based on the continued idling of our two US blast furnaces and current demand forecasts, we now expect full year Flat-rolled shipments to third party customers to be approximately 10.7 million tons. We will continue to evaluate our footprint to best match our production with our order book.”
Additionally, the company said that market conditions have continued to deteriorate in Europe, as the dislocation between steel selling prices and raw material costs continues to result in significant margin compression.
“Based on current market conditions and the continued high level of steel imports into Europe, we do not expect to restart the currently idled blast furnace this year,” the company said. “As a result, we reiterate our full year shipment guidance of approximately 3.6 million tons.”
The company said it will also continue to execute its labor productivity strategy at US Steel Europe, which includes a headcount reduction of 2,500 by the end of 2021. To date, US Steel Europe has eliminated approximately 1,800 positions.
US Steel said it expects its Tubular segment to remain under pressure for the remainder of the year as “market conditions have turned negative and import levels remain high.”
“Weaker demand for oil country tubular goods product, which has reduced our full year shipment expectation to approximately 0.7 million tons, and lower selling prices for seamless and welded pipe, are expected to have a significantly negative impact on earnings in the second half of the year,” the company said.”