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U.S. Steel: Key Investor Highlights from 2015 EBITDA Guidance

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Aug. 18 2015, Updated 1:05 a.m. ET

U.S. Steel’s 2015 EBITDA guidance

Previously in this series, we looked at U.S. Steel Corporation’s (X) 2Q15 earnings. U.S. Steel generated an adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) of $130 million in the first half of 2015. The company expects to post an adjusted EBITDA of $700 million to $900 million in fiscal 2015. In this part, we’ll see how U.S. Steel is positioned to deliver on its 2015 EBITDA guidance.

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What could work in U.S. Steel’s favor?

Steel imports are the single biggest challenge for US (VTI) (IVV) steel companies. Imports have fallen in the last couple of months, as can be seen in the previous chart. The June steel import data had some encouraging signs for companies such as ArcelorMittal (MT) and Nucor (NUE). Imports of major product types including cold rolled and hot rolled steel products declined on a year-over-year basis.

Antidumping duties

US steel companies have filed an antidumping case against the import of cold rolled steel products from several countries including China and South Korea. In its 2Q15 earnings conference call, AK Steel highlighted that a trade case against the import of hot rolled sheets is also in the cards.

Steel companies got a positive ruling from the United States International Trade Commission, or ITC, on duties imposed on imports of coated steel products. In its preliminary findings, the ITC ruled that there had been material injury caused US companies by the imports of such products. As well, a new trade bill has made it easier for steel companies to file trade cases against unfair imports.

Meanwhile, there are other headwinds facing U.S. Steel and its attempts to achieve its 2015 EBITDA guidance. We’ll discuss these in the concluding part of our series.

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