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US Steel: prioritising liquidity

US Steel: prioritising liquidity



US Steel to cut capex to preserve cash

The firm plans to slash its capital spending by $150 million to $750 million in 2020, which is set to delay certain projects

June 2020

US Steel said it plans to idle multiple furnaces and slash capital expenditures by $125 million, delaying some projects, to prioritise cash and liquidity in order to better serve customers, said a report.

The company said it will immediately idle the No. 4 blast furnace at its flagship Gary Works in Indiana to begin a planned outage that was originally planned to begin in April and last 48 days, according to Platts, S&P Global.

“The scope of the current outage has been reduced and the remainder of the Gary No. 4 blast furnace outage is being delayed,” US Steel stated, adding that the furnace is expected to remain idled until market conditions improve.

In addition, US Steel is set to temporarily idle blast furnace A at its Granite City Works outside St. Louis, stated the report.

The move had been anticipated by market participants earlier in the week with the possibility growing after the company announced it would be idling its Lone Star Tubular Operations in Texas, which receives hot-rolled coil from the mill.

US Steel also plans to slash its capital spending by $150 million to $750 million in 2020. The reduction is set to delay certain projects.

Investment at its Mon Valley sheet mill operations near Pittsburgh – an “endless casting and rolling line and cogeneration facility” – is now delayed as a result of both the coronavirus and the cut in spending, said the report.

Earlier in the week the Allegheny County Health Department announced a temporary pause in the permitting process as a result of challenges posed by the coronavirus.

In addition to the regulatory delay, US Steel plans to delay the groundbreaking on the project for an indeterminate period until “market conditions become more certain,” it added.

 




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