United States Steel Corp. continues to see improved demand for steel used in products such as appliances, automobiles and heavy industrial equipment

DENVER United States Steel Corp. continues to see improved demand for steel used in products such as appliances, automobiles and heavy industrial equipment.That improvement is slowly working its way to the steelmaker’s bottom line.The Pittsburgh manufacturer reported a narrower loss for the first three months of the year and its best result since it reported a profit in the last quarter of 2008. The company predicted more improvement in the current quarter as shipments increase and prices rise, although it cautioned that raw materials also continue to rise.

U.S. Steel is the latest steel maker to note a gradual improvement in business after struggling through a difficult 2009 when recession-battered customers cut back on orders.”Our operating results have been making a slow and steady recovery since hitting a low point in the first quarter of 2009 until this quarter, when the benefits of improved utilization rates and selling prices began to be realized in a more significant way,” John P. Surma, chairman and CEO, told analysts during a conference call.

Surma said all of the company’s operating segments should be profitable in the second quarter, a little sooner than Wall Street had been expecting.”Gradually improving business conditions should be reflected in our operating results,” he said in a statement.The results are an indication of both an improving global economy and a slow turnaround in the U.S., Argus Research analyst Bill Selesky said.He noted U.S. Steel is increasing production at some facilities. “They would not do that unless they thought they had a window here where demand was going up,” he said.

U.S. Steel reported a loss of $157 million, or $1.10 per share, for the quarter. A year ago, it lost $439 million, or $3.78 per share.Revenue rose 42 percent to $3.9 billion from $2.75 billion.Prices for flat-rolled steel, used in everything from automobiles to appliances, fell to $654 a net ton from $715 a net ton a year ago. But they improved from the fourth quarter.Prices also fell year over year in U.S. Steel’s European operations and in the tubular business, which produces pipe products.

Yet companywide, overall shipments jumped 67.5 percent from a year ago.Analysts polled by Thomson Reuters, on average, had predicted a loss of $1.43 a share on revenue of $3.75 billion. Such estimates typically exclude one-time items.U.S. Steel said cost-cutting measures that it has taken in the past year have made operations more efficient.

In the months ahead, the company expects to see higher costs for coal used in the steelmaking process and iron ore for its European operations. Although U.S. Steel has its own iron ore source for North American operations, it expects to pay more for the raw material in Europe.Manufacturers that buy iron ore in the marketplace are expected to pay more because of a new international system that allows prices to be set quarterly instead of annually.

Shares fell $3.44, or 5.7 percent, to close at $56.63.U.S. stocks fell overall after Standard & Poor’s downgraded the debt of Greece and Portugal. The move intensified investors’ fears that Europe’s debt problems are spreading.(AP)

U.S. natural gas industry officials on Thursday defended a controversial drilling technique

U.S. natural gas industry officials on Thursday defended a controversial drilling technique known as hydraulic fracturing as the industry braces for possible new government regulations.Hydraulic fracturing injects millions of gallons of water, sand and a proprietary mix of chemicals up to two miles underground where it breaks open fissures in the gas-bearing shale to allow the gas to be extracted.Some environmental groups claim the technique, which is often referred to as “fracking”, is unsafe and threatens supplies of drinking water, but the industry claims its practice is safe.

“There is no known instance where fracking has contaminated someone’s drinking water,” said Will Brackett, the managing editor of the Powell Barnett Shale Newsletter, speaking on an industry panel sponsored by the George W. Bush Institute and Southern Methodist University’s Cox Maguire Energy Institute.Bush, the former U.S. president and Texas oil man, said more natural gas drilling would create more U.S. jobs. Bush did not touch on the hydraulic fracturing debate.

“When you explore for natural gas, when you develop natural gas, when you lay pipelines for natural gas, Americans are working,” Bush said in opening remarks to the conference.Earlier this month, the top U.S. environmental regulator said she was “very concerned” about the practice. The Environmental Protection Agency last week said it will conduct a study of drinking water impacts, which could mean new regulations on a booming area of the energy sector.

An industry scramble to develop vast shale deposits that are estimated to contain enough natural gas to meet U.S. needs for up to a century has brought drilling rigs within the limits of cities like Dallas and Fort Worth.

A bill in Congress would require gas companies to disclose the chemicals used in hydraulic fracturing and give the EPA oversight of the industry, which is now regulated by the states.

Industry officials dismissed any suggestion that their drilling practices were dangerous.”We have had some issues in less than half a dozen cases and they have been mostly mistakes and it is not clear that the issue is directly related to the fracking process itself,” said Randy Foutch, chairman and CEO of privately-held Laredo Petroleum.

Some residents who live near gas rigs in states from Pennsylvania to Wyoming say their water has become undrinkable since drilling companies fractured the wells and they complain of sickness and skin rashes after using the water.

Removing gas from shale rock accounts for 15 to 20 percent of U.S. natural gas production and provides a relatively clean energy source for the United States, which is trying to reduce its dependence on foreign oil.(Reuters)