US Steel provided third quarter 2022 guidance, expecting adjusted EBITDA to be approximately $825 million. Third quarter 2022 adjusted net earnings per diluted share is expected to be in the range of $1.90 to $1.95.
In a press release, the company said its flat-rolled segment’s adjusted EBITDA is expected to be lower than the second quarter, due to accelerating market headwinds in the third quarter that negatively impacted demand across most end-markets, which is expected to result in lower shipment volumes.
The company noted that supply chain issues in automotive and appliance end-markets continue, while containers and packaging has softened, and service center buyers remain on the sidelines.
The Mini Mill segment’s adjusted EBITDA is expected to be significantly lower than the second quarter’s strong performance, the company said, noting that weaker demand and significantly reduced average selling prices from the segment’s exposure to spot selling prices are expected to negatively impact the segment’s EBITDA performance. In addition, high-cost raw materials procured at the onset of the war in Ukraine began to impact margins in the third quarter and are expected to impact results through year-end.
The Tubular segment’s adjusted EBITDA is expected to improve on last quarter’s strong performance, the company said. Continued healthy demand and the trade case on oil country tubular goods imports is resulting in higher selling prices and higher expected EBITDA compared to the second quarter. The segment continues to be advantaged by its electric arc furnace supplying internally sourced rounds substrate and the margin expansion from the segment’s proprietary connections.
President and Chief Executive Officer David B. Burritt said, “We expect to deliver a solid third quarter, even as the business continues to respond to the market headwinds that have accelerated over the quarter. We have quickly adjusted our integrated steelmaking operating footprint to better match our order book and expect our Tubular segment to deliver another quarter of earnings growth.”
The company mentioned several capacity updates in the guidance report, including the news that it will idle Blast Furnace #8 at Gary Works due to “market conditions and continued high levels of imports.” The furnace has approximately 1.5 million net tons of annual raw steel equivalent capability.
The company also announced it will temporary idle tin line #5 at Gary Works, also due to market conditions. Tin line #5 has approximately 140,000 net tons of annual capability.
Also on schedule for idling is the Blast Furnace #3 at Mon Valley Works for previously-announced 30-day outage. Blast furnace #3 has approximately 1.4 million net tons of annual raw steel equivalent capability.