Steel Mills
Olympic Steel Expects Better Business in Q3
Written by Sandy Williams
August 6, 2020
Olympic Steel posted a net loss of $6.5 million for the second quarter of 2020. Sales totaled $248 million, down from $429 million in Q2 2019 due to lower average selling prices and a significant decline in shipments as a result of pandemic-related shutdowns, including the automotive industry.
“As the pandemic began to affect the U.S. economy, we quickly took decisive actions to sustainably reduce operating expenses, limit capital expenditures to safety and maintenance needs, further tighten inventory management, and preserve liquidity,” said CEO Richard Marabito. “As a result, while many of our key markets faced extreme disruption and volatility, we benefited from a significantly lower expense run rate and the ability to efficiently respond to fluctuations in demand, resulting in positive adjusted EBITDA for the quarter. Our pipe and tube and specialty metals businesses were particularly resilient, with both segments delivering consistent profitability in a difficult market.”
In June, Olympic Steel opened its new metal processing facility in Buford, Ga., expanding its presence in the southeastern U.S. The facility will serve as Olympic’s primary flat roll fabrication hub, said President and CFO Andrew Greiff. Production began on the newly installed stamping equipment at the Winder, Ga., facility with production expected to be running full by the end of the third quarter.
The Detroit facility has seen consistent business volume from the auto industry since manufacturers resumed operations in June. Auto business is expected to remain consistent throughout the third quarter. “Across the company, no advance warning of temporary closures from our large industrial OEMs has become the norm and will likely continue in the second half of 2020,” said Greiff. “We will take whatever actions are necessary to maintain our strong position and ability to meet customer needs.”
In specialty metals, the food equipment industry is coming back. The truck-trailer industry was behind going into 2020, but is showing some improvement. The agriculture market looks challenging for the remainder of the year. Construction activity is expected to be flat in the second half.
“We believe that market conditions will continue to improve and expect the third quarter to be sequentially better than the second quarter,” said Marabito. “Our operational flexibility and strong liquidity position, along with the diversification we’ve built into our business, give us the foundation to manage through the ongoing challenges.”
Sandy Williams
Read more from Sandy WilliamsLatest in Steel Mills
USW seeks clarity on 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.
ArcelorMittal Mexico to import from sister mills as it works to resume DRI production
ArcelorMittal has partially restarted operations at its direct reduction plant in Lazaro Cardenas, Michoacan. An explosion on Aug. 18 rocked the massive steelworks on Mexico’s Pacific coast, impacting production of direct-reduced iron (DRI).
Fall maintenance outages are coming in hot
Labor Day has passed, the sun is starting to set a little earlier each day, and cooler weather has begun to find its way down to many of us across North America. And you know what that means for the steel industry… Fall maintenance outages!
AISI: Domestic steel production ticks up
US raw steel production ticked up in the week ending on Sept. 6 after a decrease the week before, according to the most recent data from the American Iron and Steel Institute (AISI).