Distributor demand boosts USSK sales, automotive outlook good

US Steel Kosice (USSK) reported an 11% on-year growth in steel shipments in the fourth quarter of 2020 to 840,000 net tons, helped by increased flat steel distributor shipments. The firm expects to ship 3.9-4.1 million nt of steel in 2021, and foresees a $115 million unfavourable change in CO2 credit costs versus 2020.

Fourth-quarter average sales price was down -3% on-year to €547/tonne. Raw steel production was up 25% to 966,000nt, giving capacity utilisation of 77% versus 61% a year earlier, Kallanish notes.

Net sales rose 18% to $564 million, while Ebitda was positive $61m versus negative $7m a year earlier. Earnings were boosted by lower costs for internally sourced iron ore and lower costs for coking coal, as well as cost control measures and lower maintenance costs.

The Slovakian plant sourced 506,000nt of iron ore pellet and fines from US Steel’s Flat-Rolled unit compared to zero in Q4 2019.

European automotive demand is accelerating into the new year, with USSK’s order book suggesting robust demand will continue through the first quarter, says parent US Steel. Appliance demand is also projected to improve in 2021. OEM production remains resilient as consumers have altered buying habits to facilitate more online appliance purchases. Construction demand is projected to improve in 2021 but remain below 2019 levels.

In 2020 USSK’s shipments fell -15% on-year to 3.04mnt and the firm more than trebled its pellet and fines sourcing from its parent company to 1.42mnt. Raw steel output fell -14% to 3.37mnt, meaning capacity utilisation was down to 67% from 78% a year earlier.

Net sales fell -19% in 2020 to $1.97 billion but Ebitda trebled to $35m.