U.S. Steel Corp., Pittsburgh, is citing low pricing and weak demand for steel as reasons for a net loss of $83 million in the quarter ending March 31.
The loss compares to a net income of $9 million in the first quarter of 2001, but is less severe than the adjusted net loss of $121 million experienced for the previous three months, ending Dec. 31, 2001.
The company’s CEO predicts that improving conditions in the steel industry should improve results in upcoming quarters. “We believe that flat-rolled prices bottomed in the first quarter,” says U.S. Steel president and CEO Thomas J. Usher. “Our flat-rolled steel shipments increased by 15 percent versus the fourth quarter of 2001, and our domestic raw steel production increased to 92 percent of capability to support the higher steel order rate.”
Usher is less optimistic concerning the tubular side of the company’s business, expecting flat prices and “continued weak markets.”
Overall, though, the steel company CEO believes prospects are brightening. “We are encouraged by improving economic conditions in both the U.S. and Europe. In addition, the removal of some domestic capacity and the 30 percent tariffs President Bush announced in March should provide relief for our flat-rolled segment,” says Usher. “Our domestic order rate for second quarter sheet product shipments has been strong and prices are improving. As a result, we’re currently operating these facilities near capacity, which should continue to have a major effect in lowering our per-unit operating costs. In summary, we currently anticipate that we will be profitable for 2002.”
For the most recently completed quarter, U.S. Steel shipped more than 2.3 million tons of flat rolled products and nearly 190,000 tons of tubular steel products from its domestic mills. The company also produces raw steel and steel products at its mill in Kosice, Slovakia.