US Steel Košice's 2024 Performance Shows Decline Amidst Market Pressures
US Steel Košice, the Slovakian subsidiary of US Steel, has reported a significant reduction in its steel production and product shipments in 2024. According to the company’s latest report, steel production fell by 12.8% year-on-year, totaling 3.83 million metric tons. This marks a significant decline compared to the 4.39 million metric tons produced in 2023, which reflected a 14.5% increase y/y from the previous year.
Steel product shipments also decreased in 2024, falling by 8.2% y/y, amounting to 3.58 million metric tons. This represents the lowest sales volumes recorded by the company since 2020, when shipments were recorded at 3.04 million metric tons. The drop in shipments also reflects broader challenges in the steel market and lower demand for steel products.
Breakdown of Product Shipments
In 2024, the largest share of steel shipments came from hot-rolled coils, which accounted for 60% of total shipments. Cold-rolled flat products contributed 10%, while coated products made up 20% of the total shipments. Semi-finished products and tin products each accounted for 5% of the shipments. The main consumers of US Steel Košice's products include the construction industry, which consumed 34%, followed by the automotive industry at 16%, and service centers, which accounted for 25%.
The decrease in demand for steel, particularly in key industries like construction and automotive, contributed to the overall drop in production and shipments.
Decline in Average Product Prices and Financial Impact
Average product prices in 2024 saw a notable decline, reaching an average of $805 per metric ton, down by 7.8% from 2023. This marks the lowest price level seen by US Steel Košice since 2020. The decline in prices reflects weaker market conditions and reduced demand for steel, which compounded the company's challenges.
In the fourth quarter of 2024, US Steel Košice experienced a significant downturn in performance. Steel production during the quarter dropped to 803,000 metric tons, marking a 17.2% decrease quarter-on-quarter and a 25.6% decrease year-on-year. Steel shipments for the period fell by 18.6% q/q and 31.7% y/y, amounting to 732,000 metric tons.
Prices during the fourth quarter also saw a significant decline, dropping to $751 per metric ton, the lowest of the year. Throughout 2024, average steel prices had fluctuated, with prices in the first quarter at $830 per metric ton, $821 per metric ton in the second quarter, and $802 per metric ton in the third quarter.
Operational Challenges and Financial Losses
US Steel Košice concluded 2024 with a loss of $54 million, compared to a minimal profit of $4 million in 2023. Several factors contributed to this negative financial outcome, including low steel demand, falling product prices, rising energy costs, and higher CO₂ emissions. The company’s EBITDA fell to $71 million, marking a 27.5% decrease y/y. The fourth quarter in particular saw a steep decline in performance, with a $35 million drop in EBITDA.
The reduction in production and sales volumes, combined with the drop in average selling prices, put significant financial strain on the company, which faced increasing operational costs.
Plant Operations and Future Outlook
At the Kosice plant, US Steel Košice currently operates two blast furnaces, BF No. 1 and No. 2, with a third blast furnace (BF No. 3) remaining idle. BF No. 3 has a capacity of 1.7 million metric tons of steel per year, but it is not currently in operation. The total production capacity of the plant stands at 5 million metric tons per year, leaving the company with the ability to scale production if market conditions improve.
Looking ahead, US Steel Košice is hopeful for a gradual recovery in steel demand in Europe. The company is expecting steel demand to stabilize in 2025, as well as the stabilization of energy markets, which have been a major factor in rising operational costs. To counteract the challenges faced in 2024, US Steel Košice plans to focus on cost optimization and improving production efficiency to return to profitability in the upcoming year.
