By upgrading iron ore capabilities in Minnesota
and repurposing blast furnaces at Granite City Works in Illinois
with SunCoke Energy, the Company aims to expand its domestic,
low-cost iron ore advantage
United States Steel Corporation (NYSE: X) ("U. S. Steel")
announced today it would expand its low-cost iron ore competitive
advantage and increase its self-sufficiency by supplying domestic
feedstock to its growing fleet of electric arc furnaces (EAFs). The
Company expects related improvements to its capital and carbon
intensity and financial performance from anticipated future
internal and external EAF demand.
New Production of Direct Reduced (DR)-grade Pellets
U. S. Steel plans to break ground in Fall 2022 at one of its two
Minnesota Ore Operations facilities, Keetac or Minntac, to
construct a system dedicated to producing DR-grade pellets. This
will enable one of the Company’s existing pelletizing plants to not
only create DR-grade pellets but also maintain the optionality to
continue producing blast furnace-grade pellets.
The Company does not expect the approximately $150 million
DR-grade pellet investment to change the 2022 capital spending
budget and will continue to prudently manage future capex in-line
with its strategic priorities.
DR-grade pellets are a critical feedstock for ironmaking in a
direct reduced iron (DRI) or hot briquetted iron (HBI) process that
ultimately supplies EAF steelmaking. Upon completion, the Company
would have the option to sell the new pellets to third-party DRI /
HBI producers or use them to feed a potential future DRI or HBI
facility of its own. The DR-grade pellets produced would be a new
product line for U. S. Steel. The investment and expected timeline
are subject to state and local support and receipt of regulatory
permitting.
Non-Binding Letter of Intent: Progressing towards an
agreement for U. S. Steel to supply SunCoke with iron ore to
produce pig iron
U. S. Steel signed a Non-Binding Letter of Intent with SunCoke
Energy, Inc., a raw material processing and handling company,
setting forth the preliminary terms for a potential arrangement
under which SunCoke would acquire the two blast furnaces at Granite
City Works and build a 2 million ton granulated pig iron production
facility. Upon completion of the proposed facility, SunCoke would
supply U. S. Steel access to 100% of the pig iron production for
the next ten years.
U. S. Steel intends to supply the needed iron ore to be used to
produce the pig iron. Because the iron ore would come from U. S.
Steel’s own mines, the Company would realize a significant cost
advantage. This pig iron could be used by EAFs and is expected to
supply U. S. Steel’s growing fleet of EAFs.
The proposed transaction is contingent upon several conditions,
including the negotiation and execution of a definitive agreement,
approval by the U. S. Steel Board of Directors, and receipt of all
appropriate regulatory approvals. There can be no assurance as to
the final terms of the proposed transaction, that the conditions
will be satisfied, or that the proposed transaction will be
completed.
SunCoke would be leading the efforts in construction of the new
facility and repurposing of the blast furnaces. The contemplated
pig iron production facility’s permitting and construction is
expected to last approximately two years. This transaction is not
expected to impact immediate staffing levels at Granite City
Works.
Since 2009, SunCoke has operated a coke making facility at
Granite City Works, supplying a key ingredient in blast furnace
steelmaking.
Advancing U. S. Steel’s Metallics Strategy to Support a Best
for All® Future
"Our conviction remains that steel mined, melted, and made in
America is vital to our national and economic security," said David
B. Burritt, President & CEO of U. S. Steel. "We are
strategically investing in our raw materials that will feed the
advanced steel mills of today and tomorrow, making us increasingly
self-sufficient. It’s another way that we’re supporting domestic
manufacturing, simplifying complex global supply chains, addressing
the sustainability demands of our customers, and ultimately
creating profitable steel solutions for people and the planet."
U. S. Steel recently announced an investment in a pig iron
caster at Gary Works in Indiana. The approximately $60 million
investment will produce up to 500,000 tons of pig iron annually and
provide a critical raw material input for the Company’s EAFs. Once
complete, the Gary pig iron project is expected to provide nearly
50% of Big River Steel’s ore-based metallics needs, contribute over
$30 million of run-rate enterprise EBITDA benefits and deliver an
internal rate of return in excess of 30%. Pig iron production at
Gary Works should begin in the first half of 2023.
Cautionary Language on Forward-Looking Statements:
This release contains information that may constitute
"forward-looking statements" within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. We intend the
forward-looking statements to be covered by the safe harbor
provisions for forward-looking statements in those sections.
Generally, we have identified such forward-looking statements by
using the words "believe," "expect," "intend," "estimate,"
"anticipate," "project," "target," "forecast," "aim," "should,"
"plan," "goal," "future," "will," "may" and similar expressions or
by using future dates in connection with any discussion of, among
other things, the construction or operation of new or existing
facilities, operating performance, trends, events or developments
that we expect or anticipate will occur in the future, statements
relating to volume changes, share of sales and earnings per share
changes, anticipated cost savings, statements regarding our future
strategies, products and innovations, changes in global supply and
demand conditions and prices for our products, statements regarding
our greenhouse gas emissions reduction goals and statements
expressing general views about future operating results. However,
the absence of these words or similar expressions does not mean
that a statement is not forward-looking. Forward-looking statements
are not historical facts, but instead represent only the Company's
beliefs regarding future events, many of which, by their nature,
are inherently uncertain and outside of the Company's control. It
is possible that the Company's actual results may differ, possibly
materially, from the anticipated results indicated in these
forward-looking statements. Management believes that these
forward-looking statements are reasonable as of the time made.
However, caution should be taken not to place undue reliance on any
such forward-looking statements because such statements speak only
as of the date when made. Our Company undertakes no obligation to
publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise, except
as required by law. In addition, forward-looking statements are
subject to certain risks and uncertainties that could cause actual
results to differ materially from our Company's historical
experience and our present expectations or projections. These risks
and uncertainties include, but are not limited to, the risks and
uncertainties described in "Item 1A. Risk Factors" in our Annual
Report on Form 10-K for the year ended December 31, 2021, and those
described from time to time in our reports filed with the
Securities and Exchange Commission.
References to "we," "us," "our," the "Company" and "U. S. Steel"
refer to United States Steel Corporation and its consolidated
subsidiaries unless otherwise indicated by the context, and
references to "Big River Steel" refer to Big River Steel Holdings
LLC and its direct and indirect subsidiaries unless otherwise
indicated by the context.
Founded in 1901, United States Steel Corporation is a leading
steel producer. With an unwavering focus on safety, the Company’s
customer-centric Best for All® strategy is advancing a more secure,
sustainable future for U. S. Steel and its stakeholders. With a
renewed emphasis on innovation, U. S. Steel serves the automotive,
construction, appliance, energy, containers, and packaging
industries with high value-added steel products such as U. S.
Steel’s proprietary XG3™ advanced high-strength steel. The Company
also maintains competitively advantaged iron ore production and has
an annual raw steelmaking capability of 22.4 million net tons. U.
S. Steel is headquartered in Pittsburgh, Pennsylvania, with
world-class operations across the United States and in Central
Europe. For more information, please visit www.ussteel.com.
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version on businesswire.com: https://www.businesswire.com/news/home/20220627005819/en/
Amanda Malkowski Media Relations Manager Corporate
Communications T – (412) 433-2512 E – almalkowski@uss.com
Kevin Lewis Vice President Investor Relations T – (412) 433-6935
E – klewis@uss.com
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