Steel Mills

Reliance Steel and Aluminum: Generally Healthy Demand
Written by Sandy Williams
April 25, 2019
Reliance Steel & Aluminum posted a good first quarter with net sales of $2.96 billion, increasing 7.2 percent year-over-year and 4.1 percent from the fourth quarter. Net income jumped 122 percent from the fourth quarter to $190.1 million.
Tons sold increased 5.2 percent from the fourth quarter to 1.5 million tons, but were slightly below the company forecast of 6-8 percent and 5.9 percent below tons sold in Q1 2018.
Pricing conditions were positive and demand generally health, said CEO James Hoffman. Average selling price per ton increased 13.6 percent year-over-year, although softening by 0.4 percent from the fourth quarter.
Markets that Reliance participates in are doing well except for the semiconductor sector, which continues to soften. Toll processing is strong for the automotive markets in the U.S. and Mexico. Demand in the nonresidential construction (including infrastructure), heavy industry and energy (oil and gas) sectors remains steady.
Reliance looks forward to steady demand and pricing in the second quarter with some downward pressure on gross margin profit. Tons sold are expected to be down 1 percent to up 2 percent compared to the first quarter, and prices flat to down 1 percent.
During the earnings call, Hoffman was asked to comment on recent tariffs on imported fabricated beams. Beams have been in a “slow burn upwards” since the crash in 2009 and will do even better if infrastructure spending kicks in, said Hoffman. The trade cases have already resulted in benefits to the company, with two fairly large orders awarded to Reliance that would have gone to Mexico or Canada with Chinese product, he added.
Commenting on carbon steel plate pricing, Hoffman said prices have fallen from a very high level and are now where they should be. “The activity and capacity at the mills are strong and, if you look at all these things combined, there really shouldn’t be a price erosion, but there has been.”
Aerospace plate is on the tight side and is expected to remain that way through the year. Reliance has not been affected by the Boeing issues with its 737 Max aircraft.

Sandy Williams
Read more from Sandy WilliamsLatest in Steel Mills

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.

AHMSA opens doors to potential buyers as $1.3B asset auction nears
AHMSA is opening its doors to potential buyers to tour its steel plant and mining operations in northern Mexico in preparation for the next stage of its bankruptcy process: the auction of its assets.

USW seeks clarity on USS plans for Granite City Works
The United Steelworkers union has asked U.S. Steel to elaborate on its Granite City Works plans following reports that the steelmaker is ending processing at the facility.

Nucor maintains plate prices, opens October order book
Nucor aims to keep plate prices flat for a seventh straight month with the opening of its October order book.