US Steel Kosice third-quarter shipments decline, anticipates further weakening
US Steel expects its Kosice (USSK) plant’s fourth-quarter performance to be weaker versus Q3 given weak underlying demand and pricing conditions, and the absence of positive CO2 allocations. A one-time favourable CO2 allocation adjustment offset the weak market environment in Q3, Kallanish notes.
USSK’s steel shipments fell 6% on-year in Q3 to 899,000 net tons, with averaged realised sales price also down 6% to $802/net ton. Raw steel production was down only 2% to 970,000nt, meaning 77% capacity utilisation versus 79% a year earlier.
Net sales dropped 12% on-year in Q3 to $721 million but Ebitda almost quadrupled to $39m. The latter was due to the adjustment related to the reserve for CO2 emissions and lower coal, PCI, and iron ore costs. Moreover, USSK enjoyed lower energy cost and favourable foreign exchange impact.
In Q4, USSK anticipates lower volumes and average selling prices versus Q3. It also foresees negative impact from volume inefficiencies, higher energy costs and repair costs related to unplanned downtime at the #1 Caster. There should be a favourable impact from inventory adjustments.
USSK’s blast furnace no.1 remains offline following a planned 30-day outage in August, reflecting weak demand. This means 1.6m nt/year of the plant’s 5m nt/y hot metal capacity is idle.
The firm’s shipments in the nine months through September inched down only 1% on-year to 2.85mnt, with raw steel output down 8% to 3.03mnt and capacity utilisation at 81% versus 88%. Net sales fell 11% to $2.43 billion, while Ebit fell 48% to $13m.
Adam Smith Poland
