United States Steel Corp. (NYSE:X) $1.8B Write-down Due To High Prices and Sluggish Economy

United States Steel Corporation (NYSE:X) is likely to record a $1.8 billion write-down for two of its North American units including Texas operations and North American in the third quarter. The steal company declared the write-down as it is affected by prolonged decrease steel prices because of overcapacity and a slower international economy.

The steel producer North American flat-rolled, $1 billion write-down is mainly for the company’s North American flat-rolled reporting unit was primarily drive by the excess international steel-manufacturing capacity valuation effects of the protracted as well as economic recovery. And Texas operations will write down $0.8 billion in value.

In the meantime, the firm’s Texas operations declared $800 million as write-down. Because of volume and price pressure from an increase welded tubular products among elevated point of tubular product.

Many of the steel producers are facing huge opposition from weak prices due to supply overabundance brought by falling orders since of the irregular economic revival.

In July the United States Steel Corporation (NYSE:X) declared that it swung to Q2 loss as the firm declared low bottom-line earnings in its flat-rolled, tubular and European segments. The firm is planned to declare its Q3 results on October 29, for which the firm declared it expect big third-quarter loss.  While analyst at Thomson Reuters, suggest that the firm declare a net loss of 44 cents a share to $72.7 million.

The firm also noted on Friday that non-cash charge will not influence the firm’s liquidity and compliance or compliance with debt contract.

The US steel producer also said both of it North America unit of U.S. Steel process carry roughly all of its goodwill. The write-down related to flat-rolled unit is mainly to the “long-drawn-out” economic recovery and excess international capacity. While the write-down in other unit of the firm was mainly encourage by decrease in cost for welded tubular steel after “elevated” import altitude and plans for further domestic capacity. United States Steel Corporation share up 1.35% to $23.98 in last trading session.