Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

BlueScope expects the company to achieve an underlying EBIT in H1 FY22 of AUD1.8-2bn ($1.3-1.5bn), up from EBIT of AUD1.72bn in full FY21 ended June 2021. The company forecasts strong steel use demands trends through various industries in the medium-term but expressed uncertainty on how long strong conditions and elevated prices will be sustained. 


The positive financial results in FY21 and outlook in H1 FY22 are assisting the company to accelerate its strategic growth plans, including pursuing long-term capital investments and proceed with the AUD150mn five-year climate program. 


The company confirmed that the 850,000mt expansion of the North Star mini-mill in Delta, Ohio is progressing well and in route to produce its first coil by H2 FY22 with full capacity growth over the following 18 months after start. The growth will allow for BlueScope to raise hot strip mill capacity by 500,000mt annually.


BlueScope is growing its capital allocation to BlueScope Properties Group (BPG) by AUD200mn to accelerate its growth in US-based steel-intensive infrastructures assets beyond the 10 projects completed in the past five years.


Port Kembla Steelworks is slated to end operations at blast furnace No 5 between 2026-2030 and the company is exploring options. Blast furnace No 6 is undergoing a pre-investment assessment which will most likely determine the realignment strategy at a cost of AUD700-800mn to be invested in FY23-FY25 will be the best strategy. A more concrete conclusion is to be provided by H1 FY22.


BlueScope continues to be on track for net-zero carbon emissions by 2050 across the global operations but noted the goal dependent on new technology investments, access to affordable and reliable renewable energy and hydrogen sources, access to raw materials, and public policy support to achieve goals. The company also recently appointed a chief of executive climate change. The climate action report to be published in September will have a more concrete decarbonization route. 


BlueScope’s Australian division’s crude steel production doubled to 3.2mn mt in FY21 against 1.6mn mt the prior year. The same trend happened at North Star with crude steel production of 2.1mn mt in FY21 against 1.1mn in FY20 and New Zealand and Pacific Steel crude steel production rose to 0.67mn mt in FY21 against 0.32mn mt the previous year. 


BlueScope revenues rose by 82pc to AUD12.9bn in FY21 as it achieved a net profit after tax of AUD1.19bn in FY21, up by AUD1.1bn, both figures against FY20. Underlying EBIT of AUD1.72bn in FY21 tripled from results in FY20 due to strong steel demand and steel spreads on historically high prices on finished steel goods.


The company’s Australian steel segment’s revenues climbed by 88pc to AUD5.8bn in FY21 as underlying EBIT rose by 121pc to AUD674.3mn also in FY21, both compared to FY20. Australian domestic sales volumes of 2.5mn in FY21 were the highest since FY08 with demand throughout all lines, especially, coated, and painted product lines. North Star sales grew by 49pc to AUD2.4bn in FY21 compared to the previous year. 


Buildings Products Asia and North America division revenues climbed by 85pc to AUD3.1bn in FY21 compared to FY20 as underlying EBIT increased by 115pc to AUD333.5mn in the same timeframe. The North American and ASEAN regions benefited from better volume sales and margin expansion on higher sales costs but lower input raw material costs. COVID-19, though, is persisting to impact some markets in Asia. Buildings North America underlying EBIT climbed by 131pc to AUD87.5mn in FY21 against FY20. The company warned that margins are under pressure in Building’s engineering due to soaring steel input costs. New Zealand & Pacific Islands division achieved EBIT of AUD130.1mn in FY21 against the previous year’s AUD5.8mn loss. 


BlueScope operates in over 18 countries with about 14,000 personnel.




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