A number of North American steelmakers have been reporting their Q1 financial results in recent weeks, including Nucor Corporation, Steel Dynamics, Inc. and AK Steel-all reporting significantly improved results from prior quarters. On Tuesday however, United States Steel Corporation (US Steel) announced it incurred a net loss of $86 million in Q1 2011. While still an improvement over the Q4 2010 net loss of $249 million and a Q1 2010 net loss of $157 million, US Steel was the first of the major US steelmakers to report a net loss in Q1 2011.
US Steel Chairman and CEO John Surma commented, "We reported better first quarter operating results in comparison to the fourth quarter as improving economic conditions and firm customer demand led to increased average realized prices, shipments and raw steel capability utilization for our North American and European flat-rolled operations. The improvements were partially offset by increased raw materials costs."
Surma said that Q1 results for the flat-rolled segment improved from Q4 2010, and that average realized prices were only partially offset by higher raw material costs. Average selling prices for US Steel rose to $720/nt in Q1-up $63/nt over Q4 2010-however, the company still incurred a net loss of $57 million for the segment.
Surma maintained that every end market has been relatively strong, including both the automotive and appliance sector, and that any deviation from persistent activity is stemming from service centers and steel processors, which have been making fewer purchases recently. Surma explained that lead times for HRC are about six to seven weeks on the spot market (down about one week over the last month), and order books remain relatively full for May already.
US Steel flats mills operated at about a 77 percent capacity utilization rate in Q1 compared to 72 percent in Q4, and although recent order rates have "moderated," according to Surma, the company remains cautiously optimistic going forward.