Day: 20 December 2021

Despite a seasonal slowdown in end-of-year order activity, US Steel is bullish going into 2022, believing that the current “steel industry super cycle will continue,” Kallanish reports.

In its fourth quarter earnings guidance, president and ceo David Burritt said that “2022 should be another great year for US Steel with robust free cash flow, continued ample liquidity to fund strategic investments, and additional opportunities to enhance our capital allocation priorities. US Steel’s future is bright, and I can confidently say our best days are ahead.”

The Pittsburgh-based company says its fixed price contracts are “resetting significantly higher” for next year, which it says will allow it better earnings stability when compared to competitors with more exposure to the spot market.

The steelmaker’s flat rolled segment is benefiting from higher selling prices and is expected to post Q4 adjusted Ebitda nearing $1 billion. In Q3, the segment had earnings just over $1 billion.

The company notes lower volumes in its Big River Steel mini mill segment, saying “cautious seasonal buying” is being offset by lower metallics usage. Similar margins are expected to the $424 million posted in Q3.

The Q4 performance of US Steel’s European segment is expected to be lower than that of the $394m posted in the prior quarter, with lower steel prices and unfavourable exchange rates impacting the division. The Košice mill in Slovakia recently initiated a planned outage of its #1 mill which will continue into January.

Within the tubular segment, higher steel prices are contributing to improving Ebitda, and the company expects its tubular operations to “become a more meaningful contributor to Ebitda in 2022.”

Site selection for the company’s planned $3 billion investment in an EAF minimill is ongoing, Kallanish notes.

Laura Miller USA

The European Commission (EC) has given the go-ahead for the acquisition of French metal recycling group Ecore by scrap French market leader Derichebourg on the condition the latter divests assets, Kallansh learns from the company.

“Derichebourg is the leading metal scrap recycler in France and directly competes with Group Ecore on the collection and recycling of metal scrap in several regions in France,” European Commission competition policy vice president Margrethe Vestager says in a note. “Together, they would have had a strong position in these markets and the acquisition would have eliminated an important alternative for customers and suppliers. We approved the acquisition of Group Ecore thanks to comprehensive divestments that will ensure that competition remains vibrant in the French recycling market.”

For the merger to be successful, Derichebourg offered the EC competition office to divest four plants in France and four collection sites. It also proposed up to five additional collection sites in France in the same area of the divested plants. This will contribute to the supply of metal scrap to shredders, the EC explains. It adds that the company will provide access to all assets and services required to operate the divested facility competitively and independently from Derichebourg.

Thanks to these commitments, the Commission says the merger no longer implies competition issues.

Derichebourg had a turnover of €3.6 billion ($4 billion) for its 2021 financial year. In 2020, Ecore posted a turnover of €880 million – it employs 1,323 workers and recycles 2.8 million tonnes of metal waste.

Natalia Capra France