The fall in steel prices and a larger-than-expected drop in scrap prices are expected to hurt Flat-rolled earnings in the second half of 2019. The company currently plans to idle two of its blast furnaces through at least the end of the year. Based on these factors, the company expects Flat-rolled shipments to third-party customers to be approx. 10.7 million tons for the full year.
United States Steel continues to face deteriorating market
conditions and pressure on margins in Europe. Due to the current market
conditions and the high level of steel imports into Europe, the company does
not expect to restart its idled blast furnace this year. The company also
reiterated its full-year shipment guidance of approx. 3.6 million tons.
The company plans to reduce its headcount by 2,500 positions by the end of 2021 at US Steel Europe. To date, approx. 1,800 positions have been eliminated.
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The Tubular segment is expected to see pressure for the remainder of the year due to negative market conditions and high import levels. The company reduced its full-year shipment expectation to approx. 0.7 million tons due to weaker demand for oil country tubular goods product.
The weak demand, along with 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 stock has dropped over 39% thus far this year and over
63% over the past one year.