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U.S. Steel Announces 3-Year Tentative Agreement with USW

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United States Steel Corp.X has declared a tentative three-year collective bargaining agreement with United Steelworkers ("USW") involving around 18,000 USW-represented employees. These employees work in the company's domestic flat-rolled, iron ore mining facilities and tubular operations in Fairfield, AL, Lorain, OH and Lone Star, TX. However, the tentative agreement is yet to be ratified.

According to Mario Longhi, President and Chief Executive Officer of U.S. Steel, the company is looking forward to strengthening its relation with USW through this agreement taking its Carnegie Way Transformation a step ahead.

U.S. Steel, in its third-quarter call, noted that market conditions are not improving as it had expected earlier in the second half of 2015. High levels of imports have not only put downward pressure on steel selling prices, but also had an unfavorable impact on the rebalancing of supply chain inventories, leading to lower customer order rates in the second half. Moreover, deteriorating conditions in the market for oil country tubular goods are also impacting its flat-rolled and tubular businesses.

Oversupply in the industry has put pressure on steel prices as Chinese steel production outpaced demand. Low costs of production in China enable Chinese companies to sell their products at cheaper rates, leading to an industry-wide price decline. This may hurt the margins and earnings power of U.S. Steel.

U.S. Steel's Tubular segment remains challenged by weak pricing due to imports. A recovering economy along with a strengthening dollar has made the U.S. an attractive destination for steel imports.

U.S. Steel currently carries a Zacks Rank #5 (Strong Sell).

Some better-ranked companies in the basic materials sector include Grupo Simec S.A.B. de C.V. SIM , Harmony Gold Mining Company Limited HMY and Richmont Mines Inc. RIC , all carrying a Zacks Rank #2 (Buy).

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UTD STATES STL (X): Free Stock Analysis Report

GRUPO SIMEC SA (SIM): Free Stock Analysis Report

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RICHMONT MINES (RIC): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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