US Steel points to Alabama as scrap destination

Pittsburgh-based United States Steel Corp., in a presentation to its investors, refers to iron ore-based products as the feedstock predominantly affecting raw materials costs at its Big River Steel electric arc furnace (EAF) steel mill.

The 30-slide presentation only mentions ferrous scrap in relation to its Tubular Segment EAF mill in Fairfield, Alabama. At that facility, U.S. Steel says lower scrap costs have the dominant favorable or unfavorable impact on raw material costs. In 2022, the scrap-fed mill in Alabama produced 634,000 tons of steel.

At the Big River mill in Arkansas, however, it refers to the more general category of “metallics” as having the predominant impact. Elsewhere in the presentation, the company refers to its effort to supply “up to 500,000 tons annually to Big River Steel of internally sourced pig iron.”

In the scrap alternatives category, U.S. Steel also says it is “expanding into direct-reduced-grade pellet capabilities to serve the growing EAF market.” The firm calls “low cost iron ore” one of its corporate competitive advantages.

Whether using scrap, direct-reduced iron (DRI) or another metallic, U.S. Steel says it is “on track for expected $1.3 billion annual through-cycle earnings before interest, taxes, depreciation and amortization (EBITDA) from [its] Mini Mill segment by 2026.”

At the Big River site, U.S. Steel says it is on schedule and on budget with a $3 billion project to increase capacity there, with a scheduled startup date in 2024.

The company’s financial results for 2022 showed it garnering $2.52 billion in net earnings. The result represented a decrease of 39.5 percent in earnings compared with 2021, when it netted $4.17 billion.