S&P shifts U.S. Steel view to positive

S&P said it revised the outlook for U.S. Steel Corp. and its subsidiary Big River Steel LLC to positive from stable and affirmed their B- issuer and debt ratings.

“U.S. Steel's credit metrics will likely improve in 2021 given strong market conditions, which will enable it to reduce its leverage and bolster its liquidity while it contemplates investments to sustain its large integrated steelmaking operations. Moreover, the company's Big River Steel subsidiary is also improving its credit measures as it continues to ramp-up its Phase II expansion project,” S&P said in a press release.

The forecast includes the agency’s projection for about $1.4 billion-$1.5 billion of adjusted EBITDA over the next two years assuming hot-rolled coil (HRC) prices of about $850 per ton over the next year and about $700 per ton in 2022, which compare favorably with the historical average of about $600 per ton, S&P said.

Big River’s positive outlook reflects that of its parent and the expectation for an improvement in its production coupled with favorable steel demand and prices in 2021 and 2022, S&P said.

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