BlueScope Steel today announced it now expects underlying earnings before interest and tax (EBIT) for the first half of the financial year 2025 (FY2025) to be in the range of $270 million to $310 million. This is below the prior guidance range of $350 million to $420 million.

Speaking to the revised guidance, BlueScope’s Managing Director and Chief Executive Officer, Mark Vassella, said, “The revised outlook highlights the challenging operating conditions not only facing BlueScope, but the broader global steel industry. These challenges include the continued softness in East Asian spreads off the back of record levels of Chinese steel exports, ongoing cost inflation and a period of pause and uncertainty in the US pending the outcome of the elections and timing of further rate cuts.”

In Australia, whilst expectations for stable domestic demand compared to 2H FY2024 remain unchanged, performance at Australian Steel Products (ASP) has been impacted by: (1) Softer export coke contribution, which is now expected to be $10 million lower, as global coke prices softened on increased supply; (2) The unfavourable impact of the sustained softness in East Asian steel pricing on estimated period-end inventory net realisable value provisions, and intercompany profit in stock eliminations. ASP now expects to deliver a 1H FY2025 EBIT around two thirds of that in 2H FY2024.

In New Zealand, continued softness in the domestic economy (which has not materially recovered from recessionary conditions) has resulted in a soft demand and pricing environment. The New Zealand and Pacific Islands (NZPI) segment is now expected to deliver a result in line with 2H FY2024.

BlueScope´s North America region is now expected to deliver a result slightly below half that of 2H FY2024. Meanwhile, performance in the China business has been impacted by the softening domestic Chinese economy, and the South East Asian business has been affected by short-term operational challenges in Thailand, which have since been resolved.

To ensure the ongoing resilience of the business, BlueScope is targeting a further improvement in annualised earnings through the identification and delivery of approximately $200 million of cost and productivity initiatives across the Group. BlueScope will provide updates on progress against this targeted improvement in performance in its regular disclosures to the market.