The US steel industry is facing a new round of crisis, the terminal market is weak, and ST52 steel flat bar prices are falling, which further leads to the decline of ST52 steel flat bar companies. As the United States tried to raise trade tariffs in 2018, it hit the global free economic market, and international relations began to deteriorate. The trade war finally came back from the counterattacks of other countries, which seriously hindered the healthy development of the global market. Last week, US Steel Company plunged about $13 to $10.78, down about 60% from a year ago. The company announced its latest third-quarter earnings, which was much lower than expected, which led to a sharp fall in stock prices. The company said that due to the impact of falling steel prices, the second half of the flat rolling income has a negative impact, it is expected that the two blast furnaces will remain idle. In the third-quarter earnings report of US Steel, the adjusted EBITDA is expected to be $115 million, excluding the $53 million loss from the fire and restructuring costs of a previous facility at the company. Considering the current market environment, the company plans to reduce the number of employees in Europe by 2,500. At present, the European headquarters has cut 1,800 jobs.
Since President Trump announced a 25% tariff on all ST52 steel flat bar and aluminum imports last year, the market value of US steel stocks has fallen by more than 70%. US steel companies warned that the European steel market is deteriorating, and the disconnect between steel sales and material costs continues to lead to a sharp drop in profit margins. The US steel industry is in a quagmire. On the one hand, the price of steel fell, on the other hand, the cost of raw materials remained stable, which led to further compression of the profits of the US steel industry, and its competitiveness in the European market became fragile.
In addition, the United States has been keeping importing steel, and a large number of cheaper imported ST52 steel flat bar products have affected the US local market. Previously, Trump imposed a 25% tariff on Chinese imports of steel to help the US manufacturing industry revive, but actually damaged US Steel’s business in Europe. Besides the US Steel Company, the other two US steel giants were also seriously affected, one of them is Nucor, he said that the third-quarter results were lower than expected, mainly because of the weak steel and raw materials business. The other is the Steel Power Company, he expects the steel business’s profit in the third quarter will be lower, due to the decline in average steel prices and shipments, resulting in a decline in the profitability of the steel business.
Due to the industry downturn, besides layoffs in Europe, US Steel plans to close factories in Michigan and Indiana. It is understood that the US Steel Company plans to idle East Chicago tin factory, which mainly produces metal materials for food cans, paint cans and other tin products, and it is one of the six steel mills in northwestern Indiana. In view of the large number of low-priced imported tin products entering the United States and the decline in tin can business, US Steel decided to merge the current tin plant production scale from three plants to two plants, so the East Chicago tin plant in Indiana was vacant. The plant was acquired by the US steel company from LTV in 2001. At present, low-priced imported products have already occupied half of the market for tin plants in the United States, and the capacity utilization rate of tin plants in the United States has declined. Today, the East Chicago tin factory is in an idle state, and when to reopen it depends on the future market conditions. Coincidentally, another US steel company is facing the same dilemma. ArcelorMittal plans to lay off 100 workers in a West Virginia ironworks to maintain its competitive and sustainable status as tinplate producer. Today, the market prefers fresh ingredients rather than canned food, and the future market in this area will be full of challenges. Local companies are facing reduced demand for tin cans and pressure from imported products from other countries.