Daily Management Review

US Steel to reduce production due to lower demand


US Steel has announced shutdown of 3 blast furnaces in the United States and Europe. The planned reduction in the production of rolled products by the American company can amount to 350 thousand tons per month.

by roy.luck
by roy.luck
In a forecast for the financial statements for the II quarter of the year, US Steel Corp announced that as part of routine maintenance, they shut down the blast furnaces at Gary (Indiana) and Great Lakes metallurgical plants and will not resume production at these enterprises unless "market conditions improve."

As a result, the output of US Steel cast iron will decrease by 200-225 thousand tons per month starting in July of this year. At the same time, the company allowed the possibility of suspending production at these enterprises until the end of 2019.

US Steel joined other US companies, Nucor and Steel Dynamics, which had previously released cautious forecasts on company profits in Q2 2019 and declared lower steel demand compared to previous estimates.

By many estimates, US Steel is one of the most vulnerable companies in the US metallurgical sector due to the high unit cost of steel production for this company. Trump's plans to support the US steel sector may be threatened by deteriorating dynamics in the automotive sector, as well as a general decline in demand for steel due to a slowdown in the global economy, which, according to many estimates, is caused by the US-launched trade war with China.

source: cnn.com