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

United States Steel (USS) expressed confidence in business strength on the momentum generated in its business during the first quarter.


Market strength and a systematic method in its capital distribution have led the company to convert earnings into cash flow, USS said in a news release. The company’s strong adjusted EBITDA for Q1 2021 indicates high demand from consumers along with management tactics that brought positive Q1 results. 


The steelmaker also mentioned it has received a healthy gain from its timely purchase of Big River Steel’s remaining stake that has accounted for 32pc EBITDA margin and led the company to lift its earnings guidance in March.


The producer’s flat-rolled raw steel production declined by 18pc to 2.58mn nt (2.34mn mt) in Q1 2021 from 3.15mn nt in the same quarter last year, with flat-rolled capacity utilization down at 62pc from 74pc during the period under review. 


Meanwhile, the company’s flat-rolled steel realized prices averaged $888/nt last quarter, up 25pc from $711/nt average price in Q1 2020.


USS shipped 11.8pc more steel at 3.9mn nt in Q1 2021 against 3.5mn nt in Q1 2020 and attributed the increase to a 30pc annual rise in shipments from its European division, although flat-rolled steel shipments were down 7pc at 2.3mn nt versus 2.5mn nt in the same timeframe.


The steelmaker’s net sales increased by 33pc to $3.66bn in Q1 2021 from $2.75bn in Q1 2020, while its net earnings stood at $91mn compared to a net loss of $391mn during the same period. 


The company’s adjusted net earnings were $283mn in Q1 2021 versus an adjusted net loss of $123mn in Q1 2020. USS reported adjusted EBITDA at $551mn in the first quarter, a huge increase against adjusted EBITDA of $64mn in the prior year’s Q1.

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