By Aatreyee Dasgupta
       July 16 (Reuters) - Top U.S. steelmakers are expected to
post a decline in second-quarter earnings and could face
additional pressure from a further retreat in steel prices
heading into a slow summer season, according to analysts.
    Nucor, Steel Dynamics and U.S. Steel
have highlighted a fall in profitability in their steel-making
operations on lower realized pricing, in June.
    Steel prices fell because of a supply glut fueled by
domestic production and imports, prompting distributors to
refrain from purchasing more material in excess of their
inventory.
    "On the back of plentiful supply, prices have declined, but
this hasn't prompted an increase in steel buying as the market's
levels of demand remain subdued," said Stuart Gray, a steel
market analyst at UK-based consultancy MEPS International.
    
    CONTEXT
    Analysts expect the decline in prices to extend into the
summer period, when steel consumption usually sees a dip, before
a possible restocking by distributors on bottoming of prices.
    They also expect steelmakers to curb supply until the
inflation-hit domestic demand catches up.
    "U.S. steel producers in the short term will shut some of
their plants until demand increases and eventually steel prices
go back up," said Patrick Penfield, professor of supply chain
practice at Syracuse University.
    
    FUNDAMENTALS
    
 Steelmaker  LSEG estimated  Forecast for   Reported  Reported
             mean for        Q2 2024        Q1 2024   Q2 2023
             adjusted EPS    adjusted EPS   adj EPS   adj EPS 
 Nucor       $2.37           $2.20 to       $3.46     $5.81
                             $2.30                    
 Steel       $2.67           $2.64 to       $3.67     $4.81
 Dynamics                    $2.68                    
 U.S. Steel  76 cents        76 cents to    82 cents  $1.92
                             80 cents                 
    
    Average North America price for hot-rolled coil — the most
actively traded form of finished steel — dropped to $885 per ton
in the second quarter from $1,041.7 in the preceding three
months, according to MEPS data.
    
    WALL STREET SENTIMENT
    
    ** The S&P 500 steel sub-industry index is
flat year-to-date, compared with a 28.4% rise in 2023.
    ** Steel Dynamics has outperformed the steel sub-index, with
an 11.7% rise year-to-date.

    
 (Reporting by Aatreyee Dasgupta in Bengaluru; Editing by Arpan
Varghese and Shilpi Majumdar)