U.S. Steel Corp shares jumped higher this past Monday as investors realized the impact Europe’s energy crisis would have on regional producers which could slow exports into the U.S. over these next months. The organization said it expects adjusted current quarter profits of around $2 billion, an increase of over 50 percent from the prior period.
Spain very recently suspended production at its plant near Bilbao until the end of the year, citing an increase in the price of electricity and power, triggered by a 250 percent year-to-date surge in natural gas. Based on these conditions, operations there were determined to be financial unviable.
U.K. Steel ventured that, “with winter approaching, demand for gas and electricity will rise and prices could get higher, which will make it impossible to profitably make steel.”
The U.S. market is still the most profitable for European steel exports. Domestic producers would benefit from a slowdown in European imports, as well as the opening of markets overseas that followed the removal of steel tariff “rebalancing” measures by the European Union this past spring, if the current energy crunch continues.
According to data from the American Iron and Steel Institute, U.S. mills have produced over 71 million tons of crude steel so far in 2021, a 20.26 percent increase from the same period last year. Average capacity utilization is now at 81.1 percent, up from just 66.8 percent over last year.
