Steel Mills
Reliance Posts Sales Record for 2018
Written by Sandy Williams
February 21, 2019
Reliance Steel & Aluminum reported record results in 2018, delivering the highest net sales in the company’s history at $11.53 billion.
“2018 was an incredible year for Reliance, full of significant financial and operational milestones,” said Jim Hoffman, President and CEO of Reliance. “We experienced improved pricing conditions, healthy demand and excellent execution by our managers in the field.”
Fourth-quarter net sales declined 5.4 percent to $2.8 billion due to normal seasonal patterns. Although 2018 saw a series of price increases supported by demand and trade actions, upward momentum weakened in the fourth quarter. Average selling price per ton was relatively stable, but dipped 0.4 percent compared to the third quarter. Net income for the quarter was $85.6 million compared to $148.3 million in Q3.
Reliance Steel & Aluminum is optimistic that business conditions will remain strong in 2019. Customers report strong demand across all sectors except semi-conductors, which Reliance expects to improve over the course of the year.
Aerospace has been particularly robust and the recent cancellation of the Airbus program is not likely to have a major impact on Reliance due to increasing demand for aluminum plate domestically and abroad.
The nonresidential construction sector is a good market for Reliance and will do better if government infrastructure spending is approved, said Hoffman. Recent trade suits on structural materials have been filed on Chinese material entering the U.S. through Canada. If successful, fabricators will have a fairer playing field, he said.
Steel plate pricing is somewhat flat right now, with import pricing unattractive, said Hoffman. Imports from Korea were reduced last year due to quota restrictions, but will pick up in the near term as the new import cycle begins, possibly causing a slight short-term uptick in pricing.
When asked if Reliance will help build The Wall, Hoffman said no one knows what will happen with the project. “We sell metal and we will certainly quote on pieces and parts of that,” he said. “If they decide to build some of it, I hope they call Reliance for the tubing and plate that goes into it.”
Mill pricing for carbon steel products is still at high levels and is expected to remain stable or rise in the first quarter.
Heat treated aluminum plate demand remains strong and the price increase announced in January continues to hold.
Stainless steel is impacted by nickel prices, which have been challenged lately, keeping stainless steel pricing relatively steady.
Asked about potential risks from new capacity additions in the U.S., Hoffman said that mills have good decision makers. “If they think it is good for them, then it will be good for us.”
Sandy Williams
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