From Staff and Wire Reports
Citing weakening markets for tubular products for the energy industry, U.S. Steel Corp. said it expects to report a wider loss than analysts were expecting, making it the third American steelmaker in three days to warn on their outlook.
The Pittsburgh-based company also cited declining demand for flat-rolled steel as it said last week it expects an adjusted loss of 35 cents per share this quarter, compared with the average analyst estimate for a 6-cent loss.
The outlook comes after Nucor, the largest U.S. producer of the metal, and Steel Dynamics also gave guidance short of estimates. Steelmakers raised some prices earlier this quarter, but buyers have been slow to accept the increases, underscoring fading optimism more than a year after the introduction of U.S. tariffs meant to bolster the industry.
“This speaks to the emerging weakness in the energy sector in U.S., it speaks to pervasive weakness in Europe as well,” Phil Gibbs, an analyst at Keybanc Capital Markets, told Bloomberg in a telephone interview. “They’re not getting help anywhere right now.”
On Monday, Charlotte, North Carolina-based Nucor fell after saying its profit waned in the third quarter as prices decreased amid softening in several end markets.
Performance in the steel mills segment is expected to decrease from the previous quarter “due primarily to lower prices for sheet and plate steel,” Nucor said.
Since the tariffs were announced in 2018, shares of U.S. steelmakers have slumped amid mounting concern that U.S.-China trade tensions threaten global economic growth and demand for the commodity.
The S&P Supercomposite Steel Index of 13 producers has dropped 28% since the beginning of March last year.
U.S. Steel operates a plant in Lone Star that makes tubular products, while Nucor has a plant in South Longview.
U.S. Steel also said Wednesday that it’s almost three-quarters of the way toward its goal of reducing its European workforce by 2,500 by the end of 2021. The company has eliminated 1,800 jobs in its European unit, according to the statement.