US Steel posts $589 million net loss in Q2

Thursday, 30 July 2020 00:51:06 (GMT+3)   |   San Diego

US Steel reported a second quarter 2020 net loss of $589 million, compared to second quarter 2019 net earnings of $68 million. Total revenues in Q2 reached $2.09 billion, compared to $3.55 billion in Q2 2019.

US Steel’s total raw steel production in Q2 reached 1.47 million tons, compared to 2.98 million tons in Q2 2019. Capacity utilization in Q2 averaged at 35 percent, compared to 70 percent in Q2 2019.

By segment, US Steel’s flat-rolled division posted a net loss of $329 million in Q2, compared to net income of $134 million in Q2 2019, with shipments totaling 1.79 million tons, compared to 2.80 million in Q2 2019. The company’s tubular division posted a net loss of $26 million, compared to a net loss of $6 million in Q2 2019, with shipments totaling 132,000 tons compared to 195,000 tons in Q2 2019.

In a statement, US Steel’s President and CEO David B. Burritt said, “We are encouraged by the recovery in market conditions as automotive original equipment manufacturers (OEMs) are nearing normalized production levels and healthy order activity has continued into the third quarter. Construction demand is exceeding our expectations and is expected to remain robust, particularly for value-add construction products. To ensure we continue to serve our customers, we restarted two blast furnaces to quickly respond to increasing activity and plan to restart an additional furnace at Gary Works on August 1. In Europe, demand is beginning to recover, in-line with the re-opening of the European continent.”

Further commenting on the quarter, Burritt said, “We exceeded our second quarter guidance as North American Flat-rolled segment shipments meaningfully accelerated in the second half of June, resulting in better than expected production efficiencies and cost benefits across our mines and steel plants. Still, second quarter performance was impacted by COVID-19 and the nonrecurring costs associated with a significant portion of our steelmaking operations being idled in the quarter. We are encouraged by the accelerating pace of incoming orders across our steelmaking and sheet finishing facilities. While a portion of operating inefficiencies will continue to impact third quarter performance, we are confident that the second quarter was the trough for the year.”

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