Australia-based BlueScope Steel Ltd. has announced it will remain profitable in the first half of 2020, though its CEO acknowledges “challenging conditions caused primarily by the COVID-19 pandemic.”
The firm has predicted unaudited underlying earnings of “around AU$260 million ($182.8 million)” in the half-calendar year ending June 30, which is the second half of its 2020 fiscal year. Managing Director and CEO Mark Vassella says, “The results show a strong performance in the face of challenging conditions caused primarily by the COVID-19 pandemic. They clearly demonstrate an outstanding operational and commercial effort by our 14,000 people across all 18 countries.”
In the United States, the company’s BlueScope North Star scrap-fed electric arc furnace (EAF) mill in Delta, Ohio, faced some turbulence, according to the firm. “At North Star, the weak demand environment led by automaker shutdowns from mid-March to mid-May placed downward pressure on realized prices and spreads. However, average capacity utilization remained robust at above 90 percent across the half,” says BlueScope in a mid-July business update press release.
The company says of its Australian Steel Products business unit, “Domestic demand was resilient with [shipment] volumes (ex-mill) similar to that of the first half of fiscal year 2020, and the contribution from export coke sales improved.”
As it begins its 2021 fiscal year in July 2020, BlueScope describes “steel spreads in North America and Asia [that] are lower” than they were on average in the first half of the calendar year. “Further, while at this point orders and [shipments] in Australia remain stable, and North Star is [shipping] near full capacity, there is a high level of uncertainty in the current environment, given the risks of COVID-19 events that could disrupt demand, supply chains and operations [coupled with] broader macroeconomic weakness dampening demand.”
In the mid-July business update, BlueScope did not provide an update an expansion project at the Ohio EAF mill, which it has announced but also delayed.