BlueScope slashes earnings guidance on US woes

The news: Australia’s biggest steelmaker BlueScope has slashed its first-half earnings guidance, blaming softer prices at its North Star business in the US.

The numbers: It now expects underlying earnings for the first half of fiscal 2024 to be between $620 million and $670 million, compared to the previous guidance of $700 million-$770 million. It expects the first-half result at the North Star business to be around half that of the second half of FY23.

The context: BlueScope said the lower guidance was driven by the weaker performance at North Star, which has been hit by softer-than-expected benchmark steel prices. US mini-mill benchmark spreads are now expected to be around USD100/tonne lower than in the second half of FY23. Despite this, it said the US business continues to operate at full capacity, with the ramp-up of the expansion project progressing well. The company said softer than expected spreads in the Australian business have been largely offset by stronger prices and favourable raw materials mix. BlueScope will provide more detail on trading conditions at its annual meeting on 21 November.