SunCoke Energy, Inc.

What they do

SunCoke heats metallurgical coal in refractory ovens to produce coke, the principal raw material in blast furnace steelmaking, and sells most of its output under long-term, take-or-pay contracts. It owns and operates five U.S. cokemaking facilities with about 3.7 million tons of annual nameplate capacity, and operates a sixth facility in Brazil for ArcelorMittal Brasil. Its Industrial Services segment provides export and domestic material handling, mixing, and mission-critical mill services, with terminals able to transload more than 40 million tons annually.

Revenue drivers

• Domestic Coke — Coke, steam and electricity sales from the Jewell, Indiana Harbor, Haverhill, Granite City and Middletown plants; the core business, with most blast furnace coke sold under long-term take-or-pay agreements and excess capacity sold into export and domestic markets.
• Industrial Services - logistics — Export and domestic material handling, mixing, storage and transloading of coal, coke, steel, power and other bulk products through terminals with over 40 million tons of annual transloading capacity.
• Industrial Services - mill services (Phoenix Global) — Mission-critical mill services to steel producers and molten slag handling, metals recovery, scrap handling and transportation; acquired August 1, 2025 for preliminary consideration of $295.8 million and included in results beginning that quarter.
• Brazil cokemaking — Operation of a 1.7 million ton-per-year facility in Brazil under licensing and operating agreements on behalf of ArcelorMittal Brasil, whose Adjusted EBITDA is grouped in Corporate and Other.

Recent performance

Second quarter 2026 revenues were $475.3 million versus $434.1 million a year earlier, with operating income of $29.0 million and net income of $15.6 million, or $0.15 per share. Consolidated Adjusted EBITDA rose to $69.6 million from $43.6 million in Q2 2025, and first-half Adjusted EBITDA was $126.1 million versus $103.4 million. Results benefited from favorable coal-to-coke yields and higher terminals handling volumes, partly offset by the Haverhill I shutdown and lower energy revenue from the Middletown turbine failure, which resumed operations in May 2026. First-half net income fell to $12.2 million from $22.9 million on higher depreciation from Phoenix Global and higher interest expense. Operating cash flow was negative $27.2 million in the quarter.

Strategy

Management is pursuing growth and diversification beyond contracted coke production, anchored by the August 2025 acquisition of Phoenix Global, a provider of mill services to steelmakers. It has extended the Haverhill II take-or-pay agreement with Cleveland-Cliffs, amended and extended its revolving credit facility to July 2030 while reducing capacity by $25.0 million to $325.0 million, and completed the shutdown of the Haverhill I facility in the first quarter of 2026. The company is also pursuing recovery of financial losses from Algoma Steel's breach of contract. It continues returning capital through a $0.12 per share quarterly dividend, declared for the 28th consecutive quarter.

Risks

• Customer contract breach — Algoma Steel breached its coke supply contract and refused further tons, driving a $90.1 million ($68.1 million net of tax) Haverhill I impairment charge in 2025.
• Equipment failure and outages — The Middletown cogeneration turbine failure reduced energy revenues in the first half of 2026, illustrating exposure to unplanned outages at critical facilities.
• Coke market pricing and volume mix — 2025 results fell on lower pricing driven by the mix of contracted and non-contracted blast coke sales, unfavorable coal-to-coke yields, and lower foundry sales pricing in the first half of 2026.
• Customer concentration in steel — Domestic Coke revenue depends on long-term take-or-pay agreements with a limited set of steelmakers, so a customer's contract breach or steel market weakness directly affects results.

Outlook

Management raised full-year 2026 Consolidated Adjusted EBITDA guidance to $250 million to $265 million from an initial $230 million to $250 million following second quarter results. The company ended the quarter with approximately $207 million of liquidity. Management cited strong operating performance from Industrial Services and Domestic Coke, and noted the Middletown turbine resumed power generation in May 2026.