US Steel announced it will idle two US blast furnaces and one European blast furnace while reporting the company’s second quarter 2019 guidance.
The company said that in response to current market conditions, the Great Lakes B2 blast furnace, which was idled last week for planned maintenance, will remain idled. The company will also idle a south blast furnace at the Gary Works facility, for a combined decrease in production capacity of approximately 200,000-250,000 net tons beginning in July. If both furnaces remain idled for the remainder of the year, US Steel said it expects full year flat rolled shipments to third party customers to be approximately 11.0 million tons.
In Europe, USSE continues to be negatively impacted by increasing levels of imports and continued market headwinds related to raw material costs and demand. US Steel will idle the #2 blast furnace, which has the capacity to produce approximately 125,000 tons per month.
The company said it will resume blast furnace production at one or all three idled blast furnaces when market conditions improve.
As for US Steel’s Q2 earnings guidance, the company expects adjusted EBITDA for the quarter to reach about $250 million, with adjusted earnings per share around $0.40. In a statement, the company said it expects earnings in the flat rolled segment to be higher compared to Q1 despite the market being “negatively impacted by decreasing steel prices and softening end market demand.” The company also expects Q2 shipments to be lower due to flooding in the southern US, which has “limited the availability of barges and our ability to ship finished product to customers over the past few weeks.”
For the tubular segment, the company expects second quarter 2019 adjusted EBITDA to be lower than first quarter 2019.