United States Steel Company (X) – Get the United States Steel Corporation report stocks surged higher on Monday as investors tracked the impact of the energy crisis in Europe on regional producers, which could slow exports to the United States in the coming months.
Spain’s Sidenor suspended production at its plant near the Basque capital of Bilbao until at least the end of the year on Monday, citing a sharp rise in electricity and electricity prices – triggered by a 250% year-to-date increase in natural gas – he said operations there were not financially viable.
The move follows warnings from the British industry lobby, UK Steel, which warned that “as winter approaches, demand for gas and electricity will rise and prices may rise, making profitable steelmaking impossible “, leading to closures and price increases in the domestic market.
US Steel shares rose 4.9% late Monday morning to change hands to $ 21.72 each, a move that would extend their year-to-date gain to around 30%.
Nucor Corp. (NAKED) – Get the report from Nucor Corporation shares jumped 3.3% to $ 101.25 each as Cleveland-Cliffs (FCF) – Get the Cleveland-Cliffs Inc report jumped 5.45% to $ 21.75 each.
The US market remains the most attractive destination for European steel exports, despite the 25% tariff imposed by President Donald Trump in 2018. Domestic producers, such as US steel, could benefit from a slowdown European imports – as well as the opening of overseas markets which followed the removal of measures to “rebalance” steel tariffs by the European Union last spring – if the energy crisis continues in the last months of the year.
That, in turn, could offset fears that capacity additions – including US Steel’s plans for a $ 3 billion plant that will begin production in 2024 – will test the “higher for longer” thesis (for steel prices) as the government prepares to finalize its multibillion-dollar stimulus bill.
Overall, US factories – including US Steel – have produced 71.4 million tonnes of crude steel so far this year, according to data from the American Iron and Steel Institute, an increase of 20, 26% compared to the same period last year. Average capacity utilization is now 81.1%, down from just 66.8% in the same period last year.
US Steel said it expects adjusted earnings for the current quarter of around $ 2 billion, an increase of more than 50% from the previous period, adding that it has reduced its overall debt. approximately $ 2.7 billion so far this year, excluding that related to its acquisition of Big River in 2019. Steel.