United States Steel Corp. (X) received the final federal permits for expanding its Minntac facility in Mountain Iron, MN, from the U.S. Army Corps of Engineers. Minntac mine is the largest taconite mining operation on the Mesabi Iron Range. Earlier this year, the project received the state permits. The final permits will allow the company to begin the expansion of the mine.
Minntac mine will now be expanded by 483 acres and production could continue for another 16 years. The expansion will create roughly 100 jobs which will help the economy of Minnesota.
On Jul 29, U.S. Steel posted better-than-expected second-quarter 2014 results. The company narrowed its losses in the reported quarter backed by gains from its cost improvement strategies under the Carnegie Way initiative and improved pricing that offset weather-related headwinds.
U.S. Steel is seeing strong demand in the automotive space. Its partnership with specialty alloy maker Carpenter Technology Corp. (CRS) to develop lighter high-strength steel for automotive applications will usher in incremental opportunity in the automotive market. The company is expected to witness rise in income from operations and higher shipments, going ahead.
U.S. Steel, a Zacks Rank #1 (Strong Buy) stock, is also actively engaged in aggressive cost management. It is looking for opportunities related to the availability of reasonably priced natural gas as an alternative to coke in the iron reduction process to improve its cost competitiveness while reducing its dependence on coal and coke in the long term. However, oversupply in the steel industry and high domestic imports still remain the headwinds.
Some other companies in the steel industry include Grupo Simec S.A.B. de C.V. (SIM) and TimkenSteel Corporation (TMST). Both the companies sport a Zacks Rank #1 (Strong Buy).
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