U.S. Steel restarts three blast furnaces that were idled due to the coronavirus. (Photo: U.S. Steel)
In its third quarter 2020 guidance, U.S. Steel Corp. reported that improving market conditions for steel markets experienced in June and July have accelerated through August and September. “Strengthening steel fundamentals and our ability to respond quickly to increasing customer demand are expected to result in significantly improved adjusted EBITDA in the third quarter,” U.S. Steel President and CEO David B. Burritt said. “We have grown confident in the recovery that is under way in North America and Europe.”
He added that recovery is enduring and the company will continue to focus on issues they can control, such as management actions to stay nimble, reduce costs and preserve cash.
The company said it now has the confidence to repay a portion of its debt in September. “By the end of the quarter, we plan to repay approximately $900 million of our U.S. ABL, which will place our U.S. ABL borrowings below pre-COVID-19 levels,” Burritt said. “We continue to proactively review our use of the U.S. ABL as a reliable and low-cost source of capital.”
Burritt said he is encouraged by the pace of market improvement and while he expects the flat-rolled segment results to be negative in the third quarter, he expects them to be significantly better than second quarter results.
The company’s order book and lead times have improved. U.S. Steel responded by restarting three blast furnaces that were temporarily idled earlier this year.
“We will continue to evaluate our order book and regularly assess our footprint to remain nimble to meet changes in customer demand,” Burritt said. “Based on today’s order activity, we expect two blast furnaces to remain temporarily idled through year-end.”
