Service Centers

Ryerson: Improved Demand in Third Quarter

Written by Sandy Williams

Ryerson Holding Corp., a value-added processor and distributor of industrial metals, sees improved demand and sequential growth for the third quarter in the construction equipment, food processing and agricultural industries and year-over-year growth in nearly all of its end markets.

In its third-quarter guidance, Ryerson noted U.S. service center volumes have increased by more than 3 percent, January through August, compared to the same period in 2016.

“However, elevated import levels, well-supplied metals markets, and Section 232-driven ‘panic’ buying throughout 2017 have muted pricing,” said the company. “The muted pricing, together with higher procured metal costs, resulted in margin compression through the quarter. Consequently, Ryerson anticipates gross margins, excluding LIFO expense, to be lower in the third quarter than the second quarter of 2017.”

Second- and third-quarter industrial economic demand appeared consistent, said Ryerson. The spread between foreign and domestic pricing narrowed due to a weaker U.S. dollar and improved global pricing conditions. Commodity prices continued to trend higher through the third quarter despite volatility in base metal markets.

Revenue for the third quarter is expected to be in the range of $840-$860 million, slightly lower than the second quarter, but above $735 million in third-quarter 2016. Quarterly shipments are expected to be 1 to 2 percent lower sequentially due to hurricane-related impacts and SAP conversion costs in Canada, but average selling prices and tons sold will be higher year over year, said Ryerson.

Net income for the third quarter is expected to range from zero up to $2 million.

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