US Steel, formerly a darling of Trump’s trade war, plunges 15% after issuing dismal profit forecast

• Shares of US Steel tumbled as much as 15% on Thursday after the producer said it expects to post a larger loss than analysts expected for the third quarter.
• The company said it expects a loss of $0.35 per share for the period, compared to the $0.06 loss estimated by Wall Street analysts.
• The firm cited falling demand for flat-rolled steel and a bleak outlook for the European market as the reason for the forecast.
• The weak guidance come as the steel industry is continuing to grapple with dwindling demand and the fallout of the US-China trade conflict.
• The Trump administration levied steep tariffs on steel in early 2018, a move meant to level the playing field for American companies through restrictions on foreign access to the market.
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Shares of US Steel plunged as much as 15% on Thursday after the company gave a bleak profit forecast amid diminishing demand for flat-rolled steel and deteriorating market conditions in Europe.

The steel producer said it expects to see a loss of $0.35 in the third quarter, compared to the $0.06 loss forecasted by Wall Street analysts.

“Based on the current market conditions and the continued high level of steel imports into Europe, we do not expect to restart the currently idled blast furnace this year,” the firm said in an SEC filing on Thursday.

The firm also said it plans to continuing slashing up to 2,500 jobs in its European segment by the end of 2021. So far, the company has reduced headcount by about 1,800. US Steel also laid off dozens of workers at a plant in Michigan in late August.

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US Steel is the third manufacturer to report guidance below expectations this week. Nucor and Steel Dynamics said they expect profits come up short of analysts estimates amid lower prices and softening demand.

The Trump administration levied steep tariffs on steel in early 2018, a move meant to level the playing field for American companies through restrictions on foreign access to the market. But the industry has struggled over the last year.

Shares of US Steel are down more 40% year-to-date.