U.S. Steel's president says the struggling company's Canadian plants are "challenged" money losers that have to be reshaped.

Mario Longhi told industry analysts Wednesday the former Stelco operations in Hamilton and Nanticoke are squarely in the sights of the company's cost-cutting plan, but "no decisions have been made" yet about restructuring.

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Longhi spoke to analysts in a conference call to explain the company's $18-million second-quarter loss — a sharp improvement from the $60-million loss stock watchers predicted and the $78-million loss for the same period last year.

Jefferies & Co. analyst Luke Folta asked why the company was rewriting credit and factoring agreements in the United States, a move he said "looks like an initial step to distance yourself from that business in case you did want to pursue some kind of restructuring up there."

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Longhi said the move "will give us the additional levels of flexibility that in this kind of business are necessary. We have been looking at every angle of our business and Canada is one that is challenged.

"We are working on it and are going to keep working on it," he said, adding the Canadian branch "unfortunately is not generating a profit."

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In an email exchange company spokesperson Courtney Boone said U.S. Securities and Exchange Commission rules prohibit the company from revealing plant-by-plant financial results. She refused to answer other questions beyond what Longhi said.

In a recent SEC filing, U.S. Steel reported it had amended agreements with American lenders to ensure a debt default in Canada would not trigger defaults in the U.S. That move is seen by some as a first step in a plan to exit this country at the end of 2015. That's when promises to operate in Canada expire, along with a special pension funding arrangement with the Ontario government.

The moves take place against the background of a company-wide cost-cutting drive dubbed the Carnegie Way. It is expected to shave $435 million in costs by the end of this year.

Independent steel analyst Chuck Bradford said there have been persistent Wall Street rumours that U.S. Steel intends to close some or all of its Canadian branch and recent events hint something is coming.

"It certainly looks like they're getting set up to do something, but I don't know what," he said. "I'm a little surprised at all this talk about them closing something in Canada."

Bradford was also doubtful that the Canadian plants are true money losers.

In Hamilton, the company operates a coke oven battery, cold mill and the Z Line coating facility Bradford said is popular among auto makers. It may be suffering now because of business lost during an 11-month lockout of Hamilton workers in 2010-11.

"There could be a number of things they're doing to make it appear to be a loser," he said. "Everything I've heard is that the Z Line is one of the best around, that it's a very specific and unique entity."

Rolf Gerstenberger, president of United Steel Workers Local 1005, added it's small wonder the Hamilton plant is losing money given the amount of time it has been closed and the way its operations have been slashed.

"We were profitable in 2008 when we were running at 100 per cent, but it's hard to be profitable when you're not operating," he said. "It's almost like they've designed this to fail."

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He also agreed orders were lost during the lockout.

U.S. Steel reported Tuesday operating income of $132 million compared to $154 million in the first quarter of 2014 and $47 million for the second quarter last year.

An operating profit of $154 million and net profit of $52 million were notched in the flat-rolled segment, which includes the Hamilton and Nanticoke plants.