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

US Steel (USS) plans to expand its opportunities in the long steel market this year amid continued strong demand. 


Planned industry outages in H2 2021 and long lead times will also help keep the market balanced, the company noted in its H1 and Q2 2021 earnings report on Friday. Low steel inventories in a variety of industries along with increased steel consumption are expected to support the second half of 2021. 


Consumption is anticipated to grow from automakers looking to accelerate their H2 2021 and 2022 assembly schedules to more than double the 27 days of vehicle inventory. Construction is also anticipated to be well-positioned for several quarters while the home appliance market will continue strong in H2 2021. Oil drilling will also expand with higher oil prices, USS noted. 


Shipments rise in H1

Compared to H1 2020, consolidated crude steel production for flat-rolled steel grew by 9.7pc to 5.07mn nt in H1 2021 with the BRS mini mill contributing an additional 1.26mn nt for a total of 6.33mn nt. USS Europe’s crude steel production increased by 62.1pc to 2.48mn nt in H1 2021 against the same period last year.


USS’ total steel shipments climbed by 34.8pc to 8.13mn nt (7.4mn mt) in H1 2021 against 6.03mn nt in the same period a year ago. The total includes 1mn nt from the mini-mill segment added after Jan 15 with the purchase of Big River Steel’s (BRS) remaining equity. 


Flat-rolled steel shipments from ongoing operations rose by 8.4pc to 4.66mn nt in H1 2021 with the tubular segment falling by 39pc to 194,000nt, both against the same year-ago period. In Europe, USS shipments grew by 56.6pc to 2.21mn nt in H1 2021 compared to the same year-ago period. 


Production up in Q2

Crude steel production for flat-rolled rose by 69.3pc to 2.49mn nt in Q2 2021 against the year-ago quarter with an additional 747,000nt from BRS. In Q2 2021, USS Europe’s crude steel output increased by 98pc to 1.28mn nt while Tubular gained 114,000nt against no production in the same year-ago quarter.


Total steel shipments rose by 66.4pc to 4.41mn nt in Q2 2021 against the same year-ago quarter with flat-rolled shipments rising by 29.9pc to 2.33mn nt and USS Europe shipments increasing by 91.3pc to 1.17mn in the same period under comparison.


The average realized price in Q2 2021 was $1,078/nt for flat-rolled, $1,207/nt for flats from BRS, $905/nt from USS Europe, and $1,633/nt for the tubular segment. 


Raw steel capacity utilization leaped to 59pc in Q2 2021 from 35pc in the year-ago quarter for flat-rolled and rose to 103pc for the Europe division from 52pc. 


The steelmaker’s net sales increased by 140pc to $5.03bn in Q2 2021 from $2.09bn in the same year-ago quarter. Earnings before interest and income taxes for flat-rolled stood at $579mn in Q2 2021 against a loss of $329mn in the same quarter in 2020 while USS Europe cleared $207mn in Q2 against a $26mn loss last year. The BRS mini mill contributed $284mn to EBIT in Q2 2021. 


Net earnings of $1.01bn in Q2 2021 beat a loss of $589mn in the same quarter in 2020 as the adjusted net earnings remained positive at $964mn in Q2 2021 compared to a $469mn loss in the prior year’s quarter. 

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