USX-U.S. Steel Forecasts a Bleak Fourth Quarter

USX-U.S. Steel Group, which is in consolidation talks with other U.S. steel firms, gave a bleak fourth-quarter outlook Thursday, while two smaller companies involved in the talks announced management changes.

U.S. Steel, the country’s biggest integrated steel company, said shipments would be “well below” its third quarter, and forecast flat pricing, higher production costs and lower capacity utilization rates.

Separately, Bethlehem Steel Corp., which with U.S. Steel is leading the consolidation effort, announced the resignation of its president and three senior executives in a companywide restructuring.

Meanwhile, LTV Corp. named a new chief executive and said it is seeking a buyer for Copperweld Corp., now part of its metals fabrication segment. LTV Corp. also has been named as a participant in the proposed merger.

Bethlehem, the nation’s No. 2 integrated steel company, filed for Chapter 11 bankruptcy protection in October, while LTV, the No. 3 player, is in liquidation proceedings after filing for bankruptcy last year.

The news added to uncertainty for the U.S. steel industry, which has been devastated by years of cheap imports, weakening demand and spiraling costs.

Shares of U.S. Steel fell 85 cents to close at $17.11, while Bethlehem Steel fell 18 cents to 51 cents, both on the New York Stock Exchange.

U.S. Steel said it expects fourth-quarter domestic steel shipments of about 2.2 million net tons, down from 2.6 million net tons in the third quarter.

It also forecast higher fourth-quarter production costs compared with the third quarter, as raw steel production in the current quarter is expected to be about two-thirds of capacity, down from an 83% utilization rate in the third quarter.