Steel Mills
Good Second Quarter for Kloeckner
Written by Tim Triplett
July 26, 2017
Kloeckner Metals Corp., Roswell, Ga., reported a solid second quarter due largely to more favorable steel pricing in the U.S.
Asked about the status of the Section 232 investigation during the second-quarter earnings call, Kloeckner CEO Bill Partalis said it’s unclear if or when President Trump will act on possible new tariffs on steel imports. “Just the drum beating by the administration is enough to put the brakes on imports at this point,” he said. Pressure on imports has helped sustain recent price increases by domestic mills.
The company reported that its sales in the Americas during the second quarter increased by 12 percent year over year to about $728 million. Earnings of $37.6 million were up about 6.6 percent from the prior quarter and second-quarter 2016.
Kloeckner’s outlook for full-year 2017 is positive, as the company projects a 3-4 percent jump in sales, led by increases in construction, manufacturing and energy. It expects flat sales to the shipbuilding sector and a slight dip in automotive.
Pointing to specific markets, Partalis said the construction sector is forecast to grow by 3-4 percent. Government infrastructure spending may accelerate this year. In the manufacturing sector, makers of construction and agricultural equipment are more optimistic. Energy demand could increase by 4-5 percent on the strength of a big increase in the rig count. Sales to the auto sector will be flat or down perhaps 2 percent this year, he said, but the auto build rate will still hit 17.1 million vehicles.
In other action, Kloeckner Metals has invested $11.3 million to expand its Greenville, S.C., operations. The expansion will add 50,000 square feet to the facility to house a new high-speed slitting line capable of processing aluminum and advanced high-strength steel. The company plans to begin operating the new line by Sept. 1.
Klockner & Co., the company’s German parent, reported its best half-year results in six years, with sales up 8.1 percent to $1.88 billion.
Tim Triplett
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