Steel companies were supposed to be entering a turnaround in 2015. The strong dollar and weaker international markets have gotten in the way. Most earnings reports from the U.S.-based international steel and metals giants sounded much the same. Now Moody’s has issued its warning that the outlook for the U.S. steel industry has been lowered to negative from stable.

United States Steel Corp. (NYSE: X) was named in the report as having been affected by lower oil prices affecting its sales of tubular goods into oil patch companies. It may be due to a serious post-payrolls market pop, but U.S. Steel did not get the memo that its shares were supposed to have some concern on Friday’s downgrade. 24/7 Wall St. looked into this further, and we have shown how the recent earnings report and guidance may remain serious concerns ahead.

Perhaps the biggest warning of them all was right up front, and it will hurt for those hoping for great and rapid turnarounds ahead of 2016. Prices have collapsed across all grades of steel and capacity utilization rates remain weak. Capacity utilization rates are below 75% and the U.S. purchasing managers’ index (PMI) is less than 50. Industry outlooks reflect Moody’s expectations for fundamental credit conditions in a given industry over the next 12 to 18 months.

Market and supply-demand issues are expected to weigh on capacity utilization rates through the outlook horizon. Moody’s expects utilization rates to range between 70% and 74% in 2015, while PMI remains in decline despite being above 50.

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On the fear of pricing issues, Moody’s signaled that selling prices have fallen rapidly this year, and those prices are now at levels that have a negative impact on profitability for steel makers. Hot rolled coil prices averaged $494 per short ton through April of 2015, versus an average of $657 per ton in 2014. While steel companies recently announced a $20 price hike per ton, Moody’s warned that whether the price hike will stick remains to be seen.

While there are multiple reasons accounting for the steel price decline, the main two cited were a recent drop in oil prices hurting those that sell into the oil country tubular goods, and that import levels remain high (finished steel imports were up 35% year-on-year) and are to continue based on a strong dollar.

The formal quote from Moody’s should indicate how poor the recovery chances are looking. Friday’s report said:

Capacity utilization rates for the US steel industry through the week of 25 April stood at 72.4%, against 77% for the comparable period last year. While severe weather hindered movement of input materials and product in the first four or five months of 2014, the lower utilization rates seen so far in 2015 are indicative of fundamental market and supply/demand issues and will take more time to correct.

While the automotive market remains relatively robust and construction continues to slowly improve, the collapse in the OCTG market and weak demand in equipment markets will dull these brighter spots. We see no catalyst that would lead to material improvement over the next several quarters, and risk remains to the downside.

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U.S. Steel shares were up 1.8% at $24.25 midday on Friday. Its market cap is $3.5 billion, and the steel giant has a 52-week range of $20.13 to $46.55. The consensus analyst price target of only $26.59 does not exactly give much hope that equity analysts think the credit ratings agency may be off base here.

When U.S. Steel reported its earnings at the end of April, it lost $75 million in the first quarter — and the adjusted loss was also $10 million. U.S. Steel’s president and CEO, Mario Longhi, gave many of the same concerns that Moody’s has glanced over. His warning about the current price and supply-demand woes said:

Our results reflect extremely challenging market conditions, including the negative impact of the tremendously high levels of imports, which have contributed to reduced volumes and average realized prices. We have taken aggressive action to balance our operational footprint in the most cost effective way; however, we are maintaining our customer focus and our flexibility to respond quickly when market conditions improve. We have accelerated our Carnegie Way transformation efforts and we expect we will continue to increase our earnings power and create stockholder value, while working to minimize the negative impact on our business arising from current market conditions.

Other comments from U.S. Steel’s earnings report showed concerns by segment:

• “First quarter results for our Flat-Rolled segment decreased significantly compared to the fourth quarter due to both lower shipments, including intersegment shipments to our Tubular segment, and average realized prices. Our Flat-Rolled segment results continue to be adversely impacted by the massive volume of steel imports that accelerated during the first quarter, many of which we believe are unfairly traded.”
• “First quarter results for our Tubular segment decreased significantly compared to the fourth quarter primarily due to lower shipments. Shipments were adversely impacted by reduced drilling activity caused by low crude oil prices and the significant amount of steel and tubular imports, many of which we believe are unfairly traded.”
• “Spot prices for flat-rolled products have decreased at an accelerated pace reaching levels well below market expectations at the beginning of the year and imports have remained at historically high levels.”

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U.S. Steel’s guidance was not even talking about positive earnings for 2015. The guidance said:

Based on all of the factors described above, we expect full-year 2015 adjusted EBIT to be between $115 million and $315 million, or full-year 2015 adjusted earnings before interest, income taxes, depreciation and amortization (EBITDA) of between $700 million and $900 million.

Thomson Reuters also shows the stark concerns for this year, which would coincide with the concerns brought up at Moody’s. The consensus equity analyst reading shows an expected drop of almost 27% in revenues, down to $12.84 billion in 2015.

Perhaps the larger is question after seeing this credit ratings warning is whether U.S. Steel can achieve the Thomson Reuters consensus expectation for a revenue gain of more than 9% to $14.04 billion in 2016.

Also, Thomson Reuters is calling for the $4.47 in earnings per share in 2014 to fall to a loss of $0.30 per share in 2015, with $1.12 in earnings per share in 2016.

Do we dare ponder what a trade pact might do ahead?

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