NEW YORK U.S. Steel Corp.
will conduct planned maintenance outages at a "fairly elevated
level" during the second and, perhaps, third quarter after
performing no blast furnace outage projects in the first three
months of the year, chairman and chief executive officer John
P. Surma said.
"(Maintenance work) will be (at)
a fairly elevated level in the second quarter compared to the
first. Its the reason we pointed it out to you.
Itll probably be around that same level in the third
quarter, depending (on) if we go ahead with what we expect to
do, but we could change our minds," Surma told analysts Tuesday
during a conference call following the release of the
steelmakers first-quarter earnings results.
The Pittsburgh-based company is
undertaking maintenance work on one of the furnaces at its
Granite City, Ill., steel works "as we speak," and expects to
begin work on one of the smaller furnaces at its Gary, Ind.,
plant later this quarter, according to Surma.
"Thats our current plan.
We have the right to change our minds, of course," he said,
citing some "flexibility" in the timelines. "It all depends on
how the market looks and what our capabilities are. But given
as it currently stands, well probably do some work in the
third quarter (as well), and we normally would."
U.S. Steel is preparing for the
planned outages in advance in order to maintain its supply of
finished product to customers, Surma added.
"We plan for these things for a
long time, and that includes having some slab staged in there
right in front of the strip mill so we can maintain our
customer supply," he said. "We had some higher inventories that
you saw earlier in the year, late last year, and now were
working those down as we go through the process."
The planned outages come at a
time of apparent stability in the market, according to
"Weve looked at our second
quarter and said things look pretty good, for us at least. I
think the way Im seeing the world right now is
theres the potential for some degree of stability, which
hasnt visited us much since 2008," he said.
"There seems to be a pretty good
supply-demand balance, or at least a pretty good demand, from
our standpoint, and our supply-cost structure is relatively
stable," Surma said. "Prices seem to be in the zone, just based
on the public reports, that we can earn a pretty good living
at. So things look like stability might be happening without us
really expecting it."
That stability is more apparent
in the North American market than in Europe he said.
"If youre just looking at
todays world, youd certainly have to conclude that
North America, and the U.S. in particular, for our company is
more favorable than some of the European activities," Surma
"Despite the fact that the
economic recovery has been very choppy and its been up
and down and back and forth, (North America) is still a pretty
good market. Were still not, as an industry or as a
country or as a sector, back to the levels of steel use (before
the recession) ... and I think the biggest missing link there
is in construction. Most other markets have come back fairly
well," he said.
One particular bright spot in
the North American market is the strengthened automotive
sector. The companys tinplate business is also on the
rise, Surma said.
"I think the tin market last
year was a little slower, particularly later in the year. ...
Were (now) to the point where were running most of
our facilities in that sector pretty close to full," he said.
"(Its an) excellent market for us. Were a large
player in it and tend to be, and well stay close to our
customers. And if any of them are having trouble meeting
supply, they know where to reach us."
Surma did not mention any
company by name, but earlier this month, RG Steel
LLCanother tinplate producerconfirmed it was idling
tin mill operations at its Sparrows Point, Md., steelmaking
facility (AMM, April 14), which market sources have
said is a boon for both U.S. Steel and ArcelorMittal USA