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U.S. Steel Secures Supply Deals, to Restart Keetac Plant
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U.S. Steel (X - Free Report) has reached agreements to supply iron ore pellets to third-party customers. The company said that it will adjust its iron ore pellet production to take full advantage of these business opportunities.
The adjustments include a restart of the Keetac iron ore plant in Keewatin, MN. The plant has been temporarily idled since May 2015 due to factors including high levels of steel imports, unfair trade and reduced steel prices, leaving hundreds of workers laid off. The Keetac plant has an annual production capacity of around 6 million net tons of iron ore pellets.
U.S. Steel expects production to begin at the Keetac plant in Mar 2017. Employee callbacks at the plant will start in early Jan 2017.
U.S. Steel has outperformed the Zacks categorized Steel-Producers industry over the past three months. The company’s shares have gained around 86.3% over this period, compared with roughly 24.7% gain recorded by the industry.
U.S. Steel 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. 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 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).
Better-ranked companies in the steel space include AK Steel Holding Corporation , Steel Dynamics, Inc. (STLD - Free Report) and Commercial Metals Company (CMC - Free Report) .
Steel Dynamics carries a Zacks Rank #2 and has an expected earnings growth of around 159.8% for the current year.
Commercial Metals also sports a Zacks Rank #2 and has an expected earnings growth of around 9.1% for the current year.
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U.S. Steel Secures Supply Deals, to Restart Keetac Plant
U.S. Steel (X - Free Report) has reached agreements to supply iron ore pellets to third-party customers. The company said that it will adjust its iron ore pellet production to take full advantage of these business opportunities.
The adjustments include a restart of the Keetac iron ore plant in Keewatin, MN. The plant has been temporarily idled since May 2015 due to factors including high levels of steel imports, unfair trade and reduced steel prices, leaving hundreds of workers laid off. The Keetac plant has an annual production capacity of around 6 million net tons of iron ore pellets.
U.S. Steel expects production to begin at the Keetac plant in Mar 2017. Employee callbacks at the plant will start in early Jan 2017.
U.S. Steel has outperformed the Zacks categorized Steel-Producers industry over the past three months. The company’s shares have gained around 86.3% over this period, compared with roughly 24.7% gain recorded by the industry.
U.S. Steel 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. 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 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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Stocks to Consider
Better-ranked companies in the steel space include AK Steel Holding Corporation , Steel Dynamics, Inc. (STLD - Free Report) and Commercial Metals Company (CMC - Free Report) .
AK Steel has an expected earnings growth of around 210% for the current year. The stock carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Steel Dynamics carries a Zacks Rank #2 and has an expected earnings growth of around 159.8% for the current year.
Commercial Metals also sports a Zacks Rank #2 and has an expected earnings growth of around 9.1% for the current year.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>