Integrated steelmaker US Steel expects its shipments to fall to 10mn short tons (st) in 2020, a 6.5pc drop from 2019.
The fall in shipments will be partially due to the company's preparation for a major outage at its Gary Works flat-rolled mill in Indiana, which has a capacity of 7.5mn st/yr.
US Steel will ship fewer tons in the first quarter as it builds up inventory in preparation for a 48-day maintenance outage of blast furnace No 4 at Gary Works that will begin in April.
First quarter shipments are expected to be lower than the 2.52mn st it shipped in the fourth quarter, the company said.
The No 4 blast furnace outage will reduce production by around 200,000st. Gary Works' idled blast furnace No 8 has been brought back online to help cover lost production.
The company expects tubular shipments to hit at least 900,000st, taking into account the full-year operation of the electric weld pipe mill at its Lone Star Tubular Operation in Texas, which was restarted in the second half of 2019. US Steel expects to complete its electric arc furnace (EAF) at its Fairfield tubular operations in Alabama this year.
Chief executive David Burritt said US Steel's top focus is completing the purchase of EAF steelmaker Big River Steel. In October US Steel bought a 49.9pc stake in Big River, which is in the midst of doubling its production to 3.3mn st/yr.
Continuing pricing headwinds in Europe mean US Steel intends to keep one of its blast furnaces at its European operations in Slovakia idled.
US Steel said it expects the first quarter to be the low point for the company in 2020, with seasonality in US Steel's mining operations and the lower shipments expected to weigh on first quarter results.
The company's fourth quarter shipments of 2.52mn st were down by 7.9pc compared to the same period prior year, while tubular shipments fell by 11pc to 193,000st.
Raw steel production for US Steel's flat-rolled segment fell by 23pc in the fourth quarter to 2.57mn st, while capacity utilization fell to 60pc from 78pc in fourth quarter of 2018.
For the full year of 2019, flat-rolled shipments rose by 1.8pc to 10.7mn compared to 2018, while tubular shipments fell by 1.4pc to 769,000st. Raw steel production fell by 4.1pc to 11.4mn st, with capacity utilization rates down by three percentage points in 2019 to 67pc.
Fourth quarter shipments for US Steel's European operations fell by 29pc to 757,000st compared to the same period prior year, while 2019 shipments fell by 19pc to 3.59mn st. Raw steel production fell by 36pc in the fourth quarter to 773,000st, while 2019 production fell by 22pc to 3.9mn st. Fourth quarter capacity utilization fell by 35 percentage points to 61pc, while for the full year it was at 78pc, down from 100pc in 2018.
The company recorded a loss of $680mn in the fourth quarter compared to a profit of $592mn in the same period prior year. For 2019 US Steel lost $642mn compared to a profit of $1.12bn in 2018.
By Rye Druzin
| US steel operations | st | |||||
| 4Q19 | 4Q18 | % change | 2019 | 2018 | % change | |
| Flat-Rolled | 2,517 | 2,733 | -7.9% | 10,700 | 10,510 | 1.8% |
| US Steel Europe | 757 | 1,073 | -29.5% | 3,590 | 4,457 | -24.2% |
| Tubular | 193 | 216 | -10.6% | 769 | 780 | -1.4% |
| Total steel shipments | 3,467 | 4,022 | -13.8% | 14,059 | 15,747 | -12.0% |
| Flat rolled raw steel production | 2,567 | 3,334 | -23.0% | 11,409 | 11,893 | -4.2% |
| US Steel Europe raw steel production | 773 | 1,213 | -36.3% | 3,903 | 5,023 | -28.7% |
| Flat rolled raw steel capacity utilization | 60% | 78% | 67% | 70% | ||
| US Steel Europe raw steel capacity utilization | 61% | 96% | 78% | 100% | ||
