Steel Mills

Steel Dynamics and Nucor Guide to Higher Q1 Earnings

Written by Sandy Williams

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 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.

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