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U.S. Steel (X) to Reopen Granite City Works Blast Furnace

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United States Steel Corporation (X - Free Report) is set to restart one of two blast furnaces and the steelmaking facilities at its integrated steelmaking plant, Granite City Works. U.S. Steel expects to call back around 500 employees starting this month. The restarting process could take about four months.

The move is expected to support the increased steel demand in the United States resulting from the pending action announced by President Donald Trump on Mar 1, following the U.S. Department of Commerce’s Section 232 investigation on steel imports. Section 232 actions by the President recognizes the considerable threat that steel imports cause to national and economic security.

Last week, President Trump announced that he will impose heavy tariffs on steel and aluminum imports in a major move to protect the domestic producers of these metals, rebuild the long-struggling U.S. steel and aluminum industries and safeguard American jobs.

About Granite City Works

It may be noted here that both the blast furnaces of Granite City Works and its steelmaking facilities were idled in December 2015. In January 2016, the plant’s hot strip mill was idled in response to challenging market conditions, including unfairly traded imports and surplus global steel capacity.

However, the cold mill, finishing lines and the pickle line continued to operate per customer demand. In February 2017, the company restarted the hot strip mill to address customer needs after taking the decision to speed up the pace of its asset revitalization efforts.

Price Performance

Shares of U.S Steel have rallied 36.7% in the past three months, significantly outperforming the industry’s 12.1% gain.


Upbeat Outlook for 2018

U.S. Steel, during the fourth-quarter earnings call, stated that its focus in 2018 will be on improving the fundamental drivers of business including quality, delivery, cost and safety. The company expects the performance momentum it witnessed last year to continue in 2018.

For 2018, U.S. Steel expects net earnings of around $685 million or $3.88 per share and EBITDA of roughly $1.5 billion, considering market conditions at their current levels.

Zacks Rank & Other Stocks to Consider

U.S Steel currently sports a Zacks Rank #1 (Strong Buy).

Some other top-ranked stocks in the basic materials space are Steel Dynamics, Inc. (STLD - Free Report) , Westlake Chemical Corporation (WLK - Free Report) and CF Industries Holdings, Inc. (CF - Free Report) , each flaunting a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Steel Dynamics has an expected long-term earnings growth rate of 12%. Its shares have soared 37.3% over the last six months.

Westlake Chemical has an expected long-term earnings growth rate of 12.2%. Its shares have moved up 53% over the past six months.

CF Industries has an expected long-term earnings growth rate of 8%. Its shares have rallied 65.2% over the last six months.

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