US Steel 2nd Quarter 2024 Results and Industry Insights

US Steel's 2nd quarter 2024 results showed a significant increase in revenue, with a 15% rise compared to the same period last year.

The company's earnings per share also saw a notable jump, with a 20% increase over the same quarter in 2023.

US Steel's improved financial performance can be attributed to strong demand for steel products in the automotive and construction industries.

The company's focus on increasing production capacity and reducing costs also played a crucial role in its success during the quarter.

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US steel prices have taken a hit in the second quarter of 2024, with hot-rolled coil prices falling 19.27% since April 1.

US Steel, Steel Dynamics Inc, and Nucor all pointed to slipping steel prices in their guidance releases for the second quarter.

The Fastmarkets' daily steel hot-rolled coil index, fob mill US Midwest, fell from $42.75 per hundredweight on April 1 to $34.51 per cwt on June 14.

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Steel Dynamics attributes the spotty spot buying environment to declining scrap prices, which has resulted in a weakening scrap environment.

US Steel expects its second-quarter adjusted net earnings to be $0.76-0.80 per diluted share, down from $0.82 per diluted share in the first quarter.

Steel Dynamics forecasts second-quarter earnings of $2.64-2.68 per diluted share, a significant drop from $3.67 per diluted share in the first quarter.

Nucor expects second-quarter earnings to be $2.20-2.30 per diluted share, down from $3.46 per diluted share in the first quarter.

Cleveland-Cliffs has not yet released detailed guidance for the second quarter, but its CEO expects to benefit from lower costs under the company's full-year guidance.

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In the 2nd quarter of 2024, significant progress was made on the proposed $14 billion purchase of USS by Nippon Steel.

Nippon Steel has obtained overwhelming approval from its shareholders for the deal.

The company has also received all non-US regulatory approvals, bringing it one step closer to closing the transaction.

Remaining US regulatory approvals are still in the works, but the company is actively pursuing them.

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Big River Steel is a significant part of U.S. Steel's operations. The company has a dual Galvalume/Galvanized coating line that came online in the second quarter at its Osceola, Ark, mill.

The Big River Steel project has a planned start-up of Big River 2 in H2'24, with related start-up and one-time construction costs of around $30 million.

U.S. Steel is expecting both mini mills, along with electrical steels from its new non-grain oriented (NGO) finishing line, to increase its capability to provide sustainable steels that are in high demand from various end markets.

The company is working towards the planned start-up of Big River 2, which will further enhance its steel production capabilities.

Here are some key statistics about the Big River Steel project:

The company is expecting the Big River Steel project to increase its capability to provide sustainable steels that are in high demand from various end markets.

The Nippon deal is making significant progress.

Nippon Steel's proposed acquisition of USS is moving forward with substantial milestones achieved in Q2'24.

The company has obtained overwhelming approval from its shareholders.

All non-US regulatory approvals have been received.

The remaining US regulatory approvals are still in the process of being obtained.

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BlueScope Steel is pulling back on its expansion plans in the US for now. They're scaling back their plans, but still remain optimistic about the North American market. The company is shelving its midstream facility plans, which is a significant move. This decision suggests that BlueScope is taking a cautious approach to its US expansion. Despite this setback, BlueScope still sees potential in the US market and is choosing to focus on other areas.

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In the second quarter of 2024, U.S. Steel is expecting a mixed bag of results across its different segments.

The flat-rolled segment is anticipated to have a higher adjusted Ebitda than the first quarter, thanks to diversified end-market exposure and successful annual fixed-contract negotiations.

Average selling prices and shipments in the mini-mill segment are expected to be lower than in Q1, due to market-based monthly contracts and spot price exposure.

However, higher shipment volumes and lower metallics costs are seen as partially offsetting these pricing headwinds.

The European segment's adjusted Ebitda is expected to be lower than Q1, mainly due to soft demand and the temporary idling of the #2 blast furnace at Kosice in Slovakia.

The tubular segment's adjusted Ebitda is also expected to be lower than Q1, due to lower selling prices.

Here's a brief summary of the expected performance of each segment:

U.S. Steel provided Q2 adjusted EPS guidance below the street view.

U.S. Steel sees Adjusted EBITDA of $425 million, at the lower end of prior Q2 outlook.

The company's adjusted net earnings per diluted share guidance for the second quarter 2024 is $0.76 to $0.80, which is below the analyst consensus estimate of $0.83.

U.S. Steel's adjusted EBITDA is expected to be approximately $425 million against the prior guidance of $425 million to $475 million.

Adjusted EBITDA guidance of $425 million is at the lower end of their prior second quarter outlook, reflecting stable domestic flat-rolled steel end-use demand despite a dynamic spot steel pricing environment.

U.S. Steel's Tubular segment is facing challenging market conditions, which are negatively impacting its performance.

The company is still working towards the remaining U.S. regulatory approvals for a deal that was initially expected to close by mid-2024.

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U.S. Steel earned $183 million in Q2'24, a significant drop of nearly 62% from $477 million in Q2'23.

Revenue fell approximately 18% to $4.1 billion in Q2'24 compared to the same period last year.

The company's performance was affected by pricing headwinds that grew in the quarter across its operating segments.

In the second quarter, the price for hot-rolled (HR) coil started at $845 per short ton (st) on average and fell 21% to $670/st by the end of June.

Prices have since stabilized in the mid/low $600s/st, but it remains to be seen if recent domestic mill price hikes will stick.