Steel Mills
Steel Dynamics and Nucor Guide to Higher Q1 Earnings
Written by Sandy Williams
March 19, 2020
Steel Dynamics and Nucor are both expecting improved earnings for the first quarter of 2020 due to higher steel prices and increased shipments.
So far, the impact from the COVID-19 outbreak has been minimal on supply chains and operations, said the companies. Disruptions are expected, however, as more manufacturers temporarily suspend production and construction activity slows. Steel Dynamics and Nucor continue to monitor the situation and to address the safety of employees.
Steel Dynamics
Steel Dynamics expects first-quarter earnings from the company’s steel operations to be “meaningfully higher” than fourth quarter. Increased shipments and higher average quarterly steel pricing are expected to offset rising scrap costs, resulting in a steady metal spread, said SDI. Earnings are expected to be in the range of $0.83 to $0.87 per diluted share compared to sequential fourth-quarter earnings of $0.67 per diluted share.
Earnings for Steel Dynamic’s steel fabrication operations are expected to decrease from near record Q4 results due to seasonally lower shipments.
“The customer order backlog for the company’s steel fabrication platform is at a record high level and customers currently remain constructive concerning nonresidential construction projects. At this time, projects have not been delayed or canceled,” said Steel Dynamics.
The company said it is too early to determine the negative impact the COVID-19 outbreak will have on steel demand. Temporary closures of steel consuming businesses are expected to affect order activity in the coming weeks. SDI believes trade protections are strong enough to continue to limit the flow of unfairly traded steel imports into the U.S. during the crisis.
Nucor
Nucor expects higher first-quarter earnings in the range of $0.95 to $1.00 per diluted share compared to $0.35 per diluted share in the fourth quarter of 2019.
Higher average selling prices for Nucor’s sheet, bar and plate mills, along with higher volumes are expected to drive earnings. Results for the steel products segment are expected to decline due to normal seasonality. Higher raw material pricing and improved performance at Nucor’s DRI facility should result in improved results for the company’s raw materials segment.
“Order rates, backlogs and utilization rates at our steel mills have remained strong well into March, which reflects strong underlying demand in nonresidential construction and other end-use markets,” said Nucor.
Sandy Williams
Read more from Sandy WilliamsLatest in Steel Mills
U.S. Steel sues Algoma over iron pellet shipments
U.S. Steel is suing Algoma over the Canadian flat-rolled producer's rejection of iron pellet shipments, arguing it has breached its contract.
August US mill shipments slip but still higher than last year
The American Iron and Steel Institute reported a decline in the monthly shipments of US mills from July to August.
TransPod, Algoma, Supreme Steel linkup anchors Canadian steel in high-speed transit build
The three Canadian companies have announced a strategic partnership to support the development of an ultra-high-speed transit line from Edmonton to Calgary.
Metallus, USW agree to tentative four-year labor deal
Metallus and the United Steelworkers (USW) have agreed to a tentative four-year labor contract.
ArcelorMittal Dofasco resumes cokemaking after emergency maintenance
The Canadian steelmaker reported on Sept. 30 that “urgent maintenance” was needed in its coke plant off-gas systems. The work required coke oven gas from the No. 2 coke plant to be flared for most of that week.