Will United States Steel’s Top Line Accelerate In 2022?

X: United States Steel logo
United States Steel

The shares of United States Steel (NYSE: X) continued to trend upward as commodity and energy prices surged during the latter half of 2021. United States Steel is the third largest steel producer in the United States. In 2021, the company’s annual raw steel production capacity was 26.2 million tons with 21.2 million tons in North America and 5 million tons in Europe. The WHO has laid out a plan to end the emergency phase of the pandemic and countries have lifted restriction measures to spur macroeconomic growth. While the ripple effects of the Russia-Ukraine war will affect global trade in the near term, United States Steel’s top line is expected to benefit from the upward commodity price cycle. Trefis highlights the historical trends in United States Steel’s revenues across key operating segments in an interactive dashboard analysis.

How did United States Steel perform in 2021?

In 2021, United States Steel reported a 108% (y-o-y) growth in total revenues assisted by rising iron ore prices coupled with pent-up demand in China, and supply chain hurdles due to the pandemic. Geographically, the share of total sales in the Americas and Europe is 80% and 20%, respectively. Per industry reports, the apparent steel consumption (ASC) in the U.S., Europe, Brazil, and CIS regions are likely to expand at an average rate by 2%, 1%, 9%, and 1%, respectively, in 2022. The growth is projected to be led by the automobile and infrastructure sectors as supply chain issues and labor force participation rate alleviates with macroeconomic recovery. With $4 billion of cash from operations, the company invested $863 million in property, plant & equipment and repaid $3.2 billion of long-term debt.

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Stock Has Outperformed Broader Markets

X stock declined from levels of around $9 in February 2020 (pre-crisis peak) to levels of around $5 in March 2020 (as the markets bottomed out), implying X stock lost 44% from its approximate pre-crisis peak. It observed a strong rally post the broader market sell-off and has reached $37 at present. In comparison, the S&P 500 Index first fell 34% as lockdowns were imposed in many countries and since has almost doubled in value.

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Returns Apr 2022
MTD [1]
YTD [1]
Total [2]
 X Return -2% 55% 12%
 S&P 500 Return -2% -6% 99%
 Trefis Multi-Strategy Portfolio -2% -9% 257%

[1] Month-to-date and year-to-date as of 4/21/2022
[2] Cumulative total returns since the end of 2016

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