U.S. Steel Sets New Stock Buyback After Metal-Price Surge

U.S. Steel Corp. plans to buy back $500 million of its shares, rewarding investors after a record surge in steel prices fueled one of the company’s most profitable years ever.

The Pittsburgh-based steelmaker reported full-year 2021 adjusted earnings before interest, tax, depreciation and amortization of $5.59 billion, higher than analysts expected. The new buyback comes just three months after the company announced a $300 million repurchase, of which it has already bought back $150 million.

Driving earnings is the surge in benchmark steel prices, which rose more than 40% last year and rallied to a record high of nearly $2,000 a ton. Additionally, the company continued to shift it’s steelmaking focus from traditional integrated metal production, a technology that dates back to the days of Andrew Carnegie, to electric arch furnaces, which remelt scrap metal and turned into new steel.

The announcement comes hours after competitor Nucor Corp., the largest U.S. steel producer, told analysts that demand in every steel end market remains “very robust.” Nucor Chief Executive Officer Leon Topalian was upbeat about backlogs and shipments, but did say the industry may have seen some overbuying. 

Last week, the chief of Stelco Holdings Inc. warned investors that the North America steel market is in for some rough months ahead, with demand shrinking and excess supplies.

U.S. Steel shares fell 1% at 4:35 p.m. after the close of regular trading in New York The company will hold a call with analysts on Friday.