U.S. Steel Unveils Aggressive Actions to Mitigate COVID-19 Impacts

SEATTLE (Scrap Monster): The Pittsburgh-based United States Steel Corporation (U.S. Steel) announced a series of aggressive actions in response to changes in global oil and gas markets on account of COVID-19 spread.

The company will idle the no.4 blast furnace at Gary Works with immediate effect so as to begin a planned outage. It has also decided to complete the indefinite idling of the iron and steel making facilities at Great Lakes works. By late-May this year, U.S. Steel will idle all or most of the tubular operations at Lonestar and Lorain for an indefinite period.

Further, U.S. Steel decided to reduce its capital spending for the current year by approximately $125 million. The 2020 capital spending by the company is expected to total $750 million. The reduction in capital spending is likely to impact several strategic projects. For instance, the construction of the endless casting and rolling line and cogeneration facility at its Mon Valley Works will be delayed. Also, it will impact planned upgrades at Gary Hot Strip Mill and the new Dynamo Line at USSE.

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In addition, the company has also decided to increase its borrowings under its revolving credit facility by additional $800 million, in order to increase its cash position and preserve financial flexibility during this tough time.

The actions announced are unlikely to have material impact on the company’s first quarter results.