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U.S. Steel (X) to Restart Granite City Works Hot Strip Mill
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U.S. Steel (X - Free Report) said that it will start processing slabs on the currently idled hot strip mill at its Granite City Works plant in Granite City, IL, in mid-Feb 2017. The steel giant plans to source slabs from its own domestic facilities.
U.S. Steel idled the Granite City Works blast furnaces and steelmaking facilities in Dec 2015 and the hot strip mill in Jan 2016 in response to challenging global market conditions. The company said that the blast furnaces and steelmaking facilities will remain idled while the pickle line, cold mill and finishing lines at Granite City Works will continue to operate.
The company is making adjustment to its hot strip mill operating configuration to support an earlier announced asset revitalization process and provide better alignment with customer requirements and improve services. U.S. Steel intends to take periodic outages across Gary Works, Great Lakes Works and Mon Valley Works to improve the capabilities and reliability of the hot strip mills.
U.S. Steel’s shares have gained 116.6% over the past three months, outperforming the Zacks categorized ‘Steel-Producers’ industry’s gain of 44% over the same period.
U.S. Steel is seeing strong demand in the automotive space and is aggressively pursuing actions to improve its cost structure through its “Carnegie Way” program. The Carnegie Way program is expected to generate meaningful benefits in 2016.
U.S. Steel also expects roughly $500 million of cash benefits from working capital improvements in 2016, mainly associated with better inventory management. Moreover, the company plans to utilize its strong cash and liquidity position to speed up the revitalization of its facilities and to fund additional growth projects.
Steel market conditions have also improved lately, driven by favorable developments on steel trade cases in the recent past, providing some reprieve to U.S. steel producers.
However, the company is facing certain operational issues. Unplanned outages across several of its steelmaking and finishing facilities hurt its shipments by 125,000 tons in the third quarter of 2016. U.S. Steel expects additional maintenance on facilities and planned outages in the fourth quarter which may also affect its Flat-Rolled shipments.
U.S. Steel, last month, reduced its adjusted EBITDA (earnings before interest, income taxes, depreciation and amortization) guidance for 2016. The company now sees adjusted EBITDA of roughly $475 million for the full year, down from its earlier expectations of around $850 million.
U.S. Steel currently carries a Zacks Rank #3 (Hold).
AK Steel has an expected earnings growth of around 207.9% for the current year. The stock carries a Zacks Rank #2 (Buy).
Schnitzer Steel carries a Zacks Rank #2 and has an expected earnings growth of around 68.8% for the current year.
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U.S. Steel (X) to Restart Granite City Works Hot Strip Mill
U.S. Steel (X - Free Report) said that it will start processing slabs on the currently idled hot strip mill at its Granite City Works plant in Granite City, IL, in mid-Feb 2017. The steel giant plans to source slabs from its own domestic facilities.
U.S. Steel idled the Granite City Works blast furnaces and steelmaking facilities in Dec 2015 and the hot strip mill in Jan 2016 in response to challenging global market conditions. The company said that the blast furnaces and steelmaking facilities will remain idled while the pickle line, cold mill and finishing lines at Granite City Works will continue to operate.
The company is making adjustment to its hot strip mill operating configuration to support an earlier announced asset revitalization process and provide better alignment with customer requirements and improve services. U.S. Steel intends to take periodic outages across Gary Works, Great Lakes Works and Mon Valley Works to improve the capabilities and reliability of the hot strip mills.
U.S. Steel’s shares have gained 116.6% over the past three months, outperforming the Zacks categorized ‘Steel-Producers’ industry’s gain of 44% over the same period.
U.S. Steel is seeing strong demand in the automotive space and is aggressively pursuing actions to improve its cost structure through its “Carnegie Way” program. The Carnegie Way program is expected to generate meaningful benefits in 2016.
U.S. Steel also expects roughly $500 million of cash benefits from working capital improvements in 2016, mainly associated with better inventory management. Moreover, the company plans to utilize its strong cash and liquidity position to speed up the revitalization of its facilities and to fund additional growth projects.
Steel market conditions have also improved lately, driven by favorable developments on steel trade cases in the recent past, providing some reprieve to U.S. steel producers.
However, the company is facing certain operational issues. Unplanned outages across several of its steelmaking and finishing facilities hurt its shipments by 125,000 tons in the third quarter of 2016. U.S. Steel expects additional maintenance on facilities and planned outages in the fourth quarter which may also affect its Flat-Rolled shipments.
U.S. Steel, last month, reduced its adjusted EBITDA (earnings before interest, income taxes, depreciation and amortization) guidance for 2016. The company now sees adjusted EBITDA of roughly $475 million for the full year, down from its earlier expectations of around $850 million.
U.S. Steel currently carries a Zacks Rank #3 (Hold).
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Other Stocks to Consider
Better-ranked companies in the steel space include POSCO (PKX - Free Report) , AK Steel Holding Corporation and Schnitzer Steel Industries, Inc. .
POSCO sports a Zacks Rank #1 (Strong Buy). The company has an expected earnings growth of around 857.1% for the current year. You can see the complete list of today’s Zacks #1 Rank stocks here.
AK Steel has an expected earnings growth of around 207.9% for the current year. The stock carries a Zacks Rank #2 (Buy).
Schnitzer Steel carries a Zacks Rank #2 and has an expected earnings growth of around 68.8% for the current year.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>