This Morning in Metals: U.S. Steel reports Q2 net loss of $589M

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US Steel plant in Granite City wide

The U.S. Steel Granite City Works captured by Google Street View in September, 2014.

This morning in metals news: U.S. Steel released its second-quarter earnings results; Nucor Corporation also reported its own financial earnings; and the Federal Reserve opted to maintain its federal funds rate.

U.S. Steel posts Q2 results

U.S. Steel, like other steelmakers, struggled in the second quarter, recording a net loss of $589 million.

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However, the firm is optimistic about certain market factors.

“We are encouraged by the recovery in market conditions as automotive original equipment manufacturers (OEMs) are nearing normalized production levels and healthy order activity has continued into the third quarter,” President and CEO David Burritt said.

“Construction demand is exceeding our expectations and is expected to remain robust, particularly for value-add construction products. To ensure we continue to serve our customers, we restarted two blast furnaces to quickly respond to increasing activity and plan to restart an additional furnace at Gary Works on August 1. In Europe, demand is beginning to recover, in-line with the re-opening of the European continent.”

Nucor posts Q2 results

Meanwhile, Nucor Corporation posted consolidated net earnings of $108.9 million in the second quarter, up from $20.3 million in Q1 but down from the $386.5 million in Q2 2019.

“Nucor’s enterprise-wide efforts to conserve cash and support our teammates during the COVID-19 pandemic, as described in our first quarter earnings release and 10-Q, have been effective,” the firm said in its earnings report. “We have continued to generate very robust operating cash flow in challenging steel market conditions.”

Fed holds funds rate range at 0-0.25%

As the Federal Reserve and U.S. government at large continue to consider all options aimed at stimulating the economy, the Fed this week decided to keep its federal funds target range at between 0% and 0.25%.

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“The path of the economy will depend significantly on the course of the virus,” the Fed said in a release. “The ongoing public health crisis will weigh heavily on economic activity, employment, and inflation in the near term, and poses considerable risks to the economic outlook over the medium term. In light of these developments, the Committee decided to maintain the target range for the federal funds rate at 0 to 1/4 percent. The Committee expects to maintain this target range until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals.”

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