U. S. Steel Tubular Products Inc., a subsidiary of United States Steel Corporation (X), joined hands with Surface Enhancement Technologies (SET), part of Lambda Technologies Group, to utilize Low Plasticity Burnishing (LPB).
As per the agreement, the U. S. Steel Tubular Products will become the sole manufacturer of tubular products utilizing LPB, an advanced, patented technology that can be applied to a variety of tubular products to improve their performance and extend their service life.
The LPB process will allow the U. S. Steel Tubular Products to offer its customers a wide range of engineered product solutions with longer-lasting, more resistant parts designed to perform in situations that involve challenging field conditions.
U.S. Steel reported revenues of $17.4 billion for 2010, an increase of almost 60% from the $11 billion recorded in 2009. The operations for the year, however, failed to generate a profit with $111 million in operating loss reported. But the fact that losses were in excess of $1.6 billion in 2009 shows that the company is recovering from the after-effects of the downturn.
Also, U.S. Steel managed to ship more than 22 million tons of steel in 2010, almost reaching its shipment figures of 24 million tons in 2008. It is interesting to note that the company’s revenue per ton of iron ore shipment in 2010 has not increased much from 2009. The average price for flat-rolled steel increased from $651 in 2009 to $675 in 2010. In fact, tubular steel generated only $1494 per ton in 2010 compared with $1755 per ton in 2009 – a drop of almost 15%
According to the American Iron and Steel Institute, U.S. Steel’s raw steel production inched up 1.1% last week to 1.847 million tons from 1.827 million tons a week earlier.
The company competes with international steel giants like ArcelorMittal (MT), BaoSteel, POSCO (PKX), Nippon Steel Corp. (NISTY.PK) and ThyssenKrupp (TYEKF.PK).
We maintain our Neutral recommendation on U.S. Steel. Currently, it holds a Zacks # 2 Rank (Buy) on the stock.
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