Steel Mills
NLMK USA Results Hurt by Strike and Slab Shortage
Written by Sandy Williams
February 12, 2021
NLMK USA sales in the fourth quarter of 2020 increased 1% from the third quarter to 370,000 metric tons. Sales plummeted 22% from a year ago due to low capacity utilization at NLMK Pennsylvania attributed to the ongoing strike and a shortage of slabs for duty-free import. Rolling capacity utilization at the U.S. segment was 41 percent in the fourth quarter, said company executives reporting quarterly results.
Higher hot-rolled steel prices in Q4 lifted revenue by 11% to $248 million compared to the third quarter. EBITDA totaled $107 million, primarily due to a refund of $97 million in a settlement agreement with the U.S. Department of Commerce. The settlement resolved a lawsuit by NLMK challenging Commerce’s denials of NLMK’s requests for exclusion from Section 232 tariffs. Excluding the refund, EBITDA was $10 million.
On a full-year basis, sales in the U.S. segment fell 27% from 2019 to 1.6 million metric tonnes as the COVID-19 pandemic impacted demand and output. Revenue for the segment plunged 37% on lower steel prices and sales.
EBITDA for the year was $76 million versus a loss of $37 million in 2019. Excluding the fourth quarter refund from Commerce, EBITDA was negative $21 million.
NLMK Pennsylvania and the United Steelworkers have yet to reach agreement on a contract, prolonging a strike by members that began Aug. 22, 2020.
The NLMK outlook for the U.S. indicates a strong price environment and above average lead times.
NLMK Group Results
NLMK Group, NLMK USA’s Russian parent, reported $2.4 billion in revenue during the fourth quarter, a 7% gain from Q3 and 3% from Q4 2019. Revenue for the year was down 12% to $9.2 billion from 2019 due to lower steel prices in the second and third quarters and an increase in the share of semifinished products.
“In Q4 2020, the recovery in business activity, including in the form of pent-up demand and restocking in the global supply chain coupled with a limited supply of steel products, led to a spike in steel product prices in our key regions. High iron ore prices supported this trend,” said NLMK Group CFO Shamil Kurmashov. “In 2020, despite the constraints of the pandemic, we maintained our capacity utilization rates and were able to achieve a 3% yoy increase in EBITDA, reaching $2.6 billion.”
Equipment upgrades at NLMK Lipetsk are expected to increase steel output to 3.5 million tonnes in the first quarter of 2021. The company is optimistic about business conditions for the first quarter.
“Global steel prices in January 2021 were at multi-year highs, driven by high demand for steel amid limited supply,” said NLMK in a press release. “Considering the price increase in late Q4 2020 and the sales recognition time gap, average sales prices in Q1 2021 will be higher qoq, which have a positive impact on our financial performance.”
CEO Grigory Fedorishin said current high global steel prices are unsustainable and will likely normalize in the first quarter.
By Sandy Williams, Sandy@SteelMarketUpdate.com
Sandy Williams
Read more from Sandy WilliamsLatest in Steel Mills
Atlas completes Evraz NA deal, renames firm, and hires former USS exec as CEO
Atlas Holdings has completed its acquisition of Evraz North America (Evraz NA) and its subsidiaries.
ArcelorMittal: As tariffs slow global growth, Calvert could be a bright spot
ArcelorMittal expects less demand growth across most of the markets it operates in, including the US, because of President Donald Trump’s tariffs. But the Luxembourg-based steelmaker also thinks it stands to benefit from an increasingly regionalized world thanks to investments like the new EAF at its mill in Calvert, Ala.
Ternium posts solid Q2, expects further shipment growth
Latin American steel producer Ternium delivered a solid performance in the second quarter of 2025. Performance was driven primarily by higher realized steel prices in Mexico, even as shipment volumes declined slightly across its regional portfolio.
Algoma swings to loss on ‘unprecedented disruptions’ and trade barriers
Canada’s Algoma Steel saw a sharp loss in the second quarter amid a continued challenging market environment and “tariff uncertainties.”
Nucor eyes long-term gains amid strong demand and trade enforcement
Resilient demand across its steel product lines, combined with the continued ramp-up of key expansion projects, drove Nucor’s improved financial results and record-setting performance in the second quarter. That’s according to company executives speaking on an earnings conference call on Tuesday.