Steel Mills
Nucor Guides to Lower Q4
Written by Sandy Williams
December 15, 2016
Nucor announced today that fourth quarter results are likely to be lower than third quarter due to lower margins in the steel mills segment, particularly at the company’s sheet mills, and seasonal slower activity.
The raw materials segment is also expected to decline significantly, returning to a loss position due to lower pricing at Nucor’s DRI facilities during fourth quarter.
Said Nucor in its guidance statement:
“Market conditions for the steel mills segment have been marked by volatility in sales prices and demand during 2016. Looking ahead to 2017, we are optimistic about continued improvement in market conditions. Prices have increased throughout the fourth quarter for our sheet, bar, structural and plate mills. Scrap and other commodities prices have been increasing as we approach the end of the year. Service center inventory levels remain low. We believe higher input costs and declining imports are now causing the market to find an improved and more sustainable level that we expect to benefit 2017.”
Key Banc analyst Phil Gibbs said Nucor’s guidance was weaker than expected. “While we expect to see some weakness in the stock given weaker than expected core FIFO results, we believe investors care little about calendar 4Q earnings, instead focusing on potential for spread improvement in 1H17 and long-term structural change potential for the U.S. steel industry under the new administration, including increased protectionism, increased oil & gas exploration, and potential for increased infrastructure spending over the next several years,” said Gibbs.
Sandy Williams
Read more from Sandy WilliamsLatest in Steel Mills
BREAKING NEWS: Cliffs plans to idle three mills, cut 950 jobs on ‘insufficient demand and pricing’
Cleveland-Cliffs plans to indefinitely idle its steel mill in Riverdale, Ill., as well as mills in Conshohocken, Pa., and Steelton, Pa. The Cleveland-based steelmaker said all three facilities would be idled on or around June 30. Approximately 950 jobs will be impacted, the company said.
CRU: Usiminas may reduce capex unless government strengthens protection
“The lack of effective measures to create fair competition, amid a surge in subsidized imports, is the main threat to the sustainability of Brazil’s steel industry and its value chain,” CEO Marcelo Chara said.
USS swings to loss in first quarter on N. American flat-rolled segment woes
U.S. Steel CEO praised the company’s resilience, “despite the seasonally low results driven by annual mining logistics constraints in our North American Flat-Rolled segment and lagging spot prices.”
Nucor gives updates on new capacity coming online
Nucor said several of its capital projects will start operations within the next year and provided an update on them.
Algoma swings to loss on ‘market challenges’ and ‘tariff uncertainties’
Canada’s Algoma Steel swung to a loss in the first quarter amid "market challenges," and the company now expects first steel production from its first EAF in the second quarter.