Will the new management structure help U.S. Steel?

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New management structure for U.S. Steel

U.S. Steel Corporation (X) has announced a new management structure for its operations. Please be aware that the new management structure will not have any impact on the company’s reporting structure. U.S. Steel will continue to report its results under the following three operating segments: flat-rolled, tubular, and U.S. Steel Europe. Let’s find out now about the management changes U.S. Steel has announced.

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U.S. Steel splits flat-rolled operations

As shown in the above chart, the flat-rolled operations of U.S. Steel will now be realigned into several commercial entities. Each entity will serve different end customers. The entities will address the automotive, industrial, consumer, service center, and mining industries.

The Consumer Solutions segment will serve the appliance, packaging, construction, and container markets. Please be aware that the construction industry accounts for almost half of steel consumption in the United States.

Industrial solutions will focus on customers in pipe and tube manufacturing. It will also serve the agricultural and industrial equipment markets.

Mining operations segregated

One of U.S. Steel’s major decisions is the segregation of mining from steel operations. U.S. Steel has both iron ore and coal mines that supply raw material to its steel plants.

ArcelorMittal (MT) reports its mining results as a separate segment. AK Steel (AKS) also has a separate entity for its mining operations.

Mini-mills like Nucor (NUE) and Steel Dynamics (STLD) use steel scrap to produce steel. They have subsidiaries that help them source scrap for their steel plants. Currently, both of these companies are part of the Standard and Poors depositary receipt (or SPDR) S&P Metals and Mining exchange-traded fund (or ETF) (XME).

Let’s now analyze how this new management structure will help U.S. Steel. Please move to the next part to learn more.

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