Steel Mills
Nucor Expecting Drop in Q1 Results Due to Import Impact
Written by Sandy Williams
March 19, 2015
Nucor Corporation expects first quarter results to “decrease significantly” compared to fourth quarter and exceed first quarter 2014 levels only slightly. High levels of imports have lowered selling prices and squeezed margins.
Nucor notes that total steel imports rose 38 percent in 2014 and account for 34 percent of the total domestic shipments last year. The trend has continued in 2015 with January import levels up 37 percent year over year. “Global overcapacity built by state-owned enterprises is the biggest risk factor to our business,” said Nucor in its first quarter earnings guidance.
The steel sheet market has been hit hardest, says Nucor. Pricing on hot-band has decreased another 19 percent from the end of 2014. Margins are expected to improve in second quarter as the company begins to realize benefits from lower raw material costs and stabilizing selling prices. Imports are expected to decrease in second quarter but remain at “excessively high levels.”
The slow but steady growth of the nonresidential construction market will help bolster growth of the downstream products segment in Q1 resulting in an increase year over year. Sequential results will be lower due to seasonality First quarter results in the raw materials segment will include an operating loss of $37 million due to idled operations at Nucor Steel Lousiana and declines in the scrap processing business and natural gas drilling interests.
Nucor Steel Louisiana operations have been idled since November 2, 2014 due to equipment failure of the process gas heater. Repairs are progressing and Nucor Louisiana is expected to be operational by the end of first quarter 2015.
Sandy Williams
Read more from Sandy WilliamsLatest in Steel Mills
Cleveland-Cliffs quietly removes name from Steelton mill
The Cleveland-Cliffs name has been removed from its idled Steelton rail mill. SMU asked Cliffs about the move and if it might signal that it is selling the mill...
Nucor sees sequentially lower Q3 profits across all three business segments
Nucor's third-quarter earnings will be down quarter-over-quarter, but still higher than a year earlier.
Hyundai still on for Louisiana steel mill despite US raid at Georgia battery plant
Hyundai has reaffirmed its commitment to build a steel plant in Louisiana following a US government immigration raid at its battery facility in Georgia.
Hybar lowers output forecast, owning up to EAF startup delay
Hybar LLC’s rebar mill in Osceola, Ark., is now melting scrap and will soon be fulfilling orders, according to CEO David Stickler, despite a six-to-eight-week delay caused by commissioning the world’s first Aura electrical system.
Steel Dynamics guides to more metal, more money in Q3
Steel Dynamics Inc. is bullish heading into the close of the third quarter, with all three of its operating segments tracking higher.