Overview of U.S. Steel’s Financial Performance

U.S. Steel, one of the largest steel producers in the United States, has released its financial results for the first quarter of 2025. The report provides insights into the company’s performance, challenges, and outlook for the future.

Segment Performance

U.S. Steel’s results were down across all of its business segments compared to the same period in 2024:

• Flat-Rolled: Earnings before interest, taxes, depreciation, and amortization (EBITDA) decreased by 33% due to lower sales prices and volumes.
• Mini Mill: EBITDA decreased by 97% due to lower sales prices, partially offset by higher shipment volumes.
• U.S. Steel Europe (USSE): EBITDA decreased by 24% due to lower sales volumes and prices, partially offset by lower raw material costs.
• Tubular: EBITDA decreased by 64% due to lower sales prices and unfavorable product mix.

The company’s overall net sales for the quarter were $3,727 million, down 10% from the same period in 2024. This decline was driven by lower sales prices and volumes across most segments.

Operational Adjustments

U.S. Steel continues to adjust its operating configuration in response to market conditions. The company has indefinitely idled the iron and steel making assets at Granite City Works, the operations of UPI, and its Lorain Tubular and Lone Star Tubular Operations. These facilities remain idled as of March 31, 2025.

Liquidity and Capital Resources

U.S. Steel finished the first quarter of 2025 with $594 million in cash and cash equivalents and $2,868 million in total liquidity. The company’s available liquidity consists primarily of cash, the Credit Facility Agreement, the Big River Steel ABL Facility, the USSK Credit Agreement, and the USSK Credit Facility.

Net cash used in operating activities was $374 million, compared to $28 million in the same period in 2024. This decrease was primarily due to lower net earnings and changes in working capital.

Capital expenditures for the quarter were $359 million, down from $640 million in the same period in 2024. The company’s capital investments were focused on projects in the Mini Mill, Flat-Rolled, USSE, and Tubular segments.

Environmental Matters and Regulatory Landscape

U.S. Steel’s operations are subject to various environmental laws and regulations, both in the United States and Europe. The company has incurred and will continue to incur substantial capital, operating, and remediation expenditures to comply with these requirements.

In the United States, the company is closely monitoring developments related to greenhouse gas emissions regulations, the Clean Air Act, and other environmental rules. The U.S. Environmental Protection Agency (EPA) has several rules under consideration that could impact U.S. Steel’s operations, though the full extent of the impact is not yet known.

In Europe, U.S. Steel’s Slovak operations (USSE) are subject to the European Union’s Emissions Trading System (EU ETS) and other environmental regulations. The company has pre-purchased emission allowances and made capital investments to comply with these requirements.

International Trade Developments

U.S. Steel continues to face challenges from import competition, much of which is unfairly traded. The company has been actively defending and supporting various trade actions, including:

• Section 232 tariffs on steel imports: These tariffs were recently expanded to include additional downstream “derivative” steel products.
• Section 301 tariffs on imports from China: These tariffs, which cover certain raw materials, semi-finished and finished steel products, and downstream steel-intensive products, remain in effect.
• New Section 232 tariffs on imports of passenger vehicles, light trucks, and most auto parts: These tariffs do not apply to U.S. content in autos meeting the United States–Mexico–Canada Agreement (USMCA) rules of origin.
• Additional tariffs under the International Emergency Economic Powers Act (IEEPA): These tariffs, ranging from 10% to 145%, have been imposed on imports from various countries to address issues such as illegal fentanyl trade, illegal migration, and non-reciprocal trade.

U.S. Steel continues to actively defend and maintain antidumping and countervailing duty orders covering its products in multiple proceedings.

Outlook and Challenges

Despite the challenges faced in the first quarter of 2025, U.S. Steel remains focused on optimizing its operations and positioning the company for long-term success. The company expects its second-quarter results to improve compared to the first quarter, with higher iron ore pellet sales, higher average selling prices, and increased shipment volumes from the ramp-up of the Big River 2 facility.

However, the company continues to face headwinds from higher energy costs, unfavorable raw material pricing, and the ongoing ramp-up of the Big River 2 facility. Additionally, the company’s future is uncertain due to the pending merger agreement with Purchaser, which is currently under review by the Committee on Foreign Investment in the United States (CFIUS).

Overall, U.S. Steel’s financial performance in the first quarter of 2025 reflects the challenges facing the steel industry, including global overcapacity, import competition, and regulatory changes. The company remains focused on optimizing its operations, investing in strategic projects, and navigating the complex regulatory and trade environment to position itself for long-term success.