Steel Mills
Ryerson Reports 2020 Loss, But is Bullish on 2021
Written by David Schollaert
February 25, 2021
Executives at Ryerson, the nation’s second largest service center company, remain optimistic about their prospects for 2021, even after reporting a net loss of $65.8 million on revenues of $3.47 billion in 2020. The company saw a 23% drop in sales last year due to the pandemic. Revenues improved by 2.6% in the fourth quarter to $853 million driven by record-high metal prices and recovering demand fundamentals, but not nearly enough to make up for declines of around 24% in Q2 and Q3.
Despite ongoing pandemic-related uncertainties, Ryerson is hopeful based on its strong start to this year. The company expects Q1 2021 revenues of $1.08 billion to $1.10 billion, assuming sequential average selling price growth of 13-15% and an average shipping growth of 11-13%.
“In the absence of another acute economic shock, current price conditions appear to have more staying power than previously thought as supply-side constraints are intensifying, especially following the extreme weather events of the past week,” said Ryerson President and CEO Eddie Lehner during the company’s earnings call this week. “Probabilities are increasing that we are moving into a period of higher cyclical demand for our industry, creating strong post-pandemic recovery prospects.”
Lehner believes Ryerson is well positioned to weather the market’s uncertainties this year due to the service center’s strength across a wide range of commodities. While demand and capacity utilization remain below pre-COVID-19 levels, they are exceeding supply chain capabilities, thus driving prices to unprecedented levels. As a result, the company expects higher than average prices to persist into mid-Q4 2021.
Steel Market Update puts the current benchmark price for hot rolled steel at a record $1,210 per ton, nearly three times higher than the low of $440 per ton in August 2020 when the pandemic shocked the market.
By David Schollaert, David@SteelMarketUpdate.com
David Schollaert
Read more from David SchollaertLatest in Steel Mills
Stelco Considering Bid for U.S. Steel: Bloomberg
Canadian steelmaker Stelco Holdings Inc. is now in the mix to purchase U.S. Steel, according to an article in Bloomberg on Thursday, which cited people familiar with the matter.
USS Expects Lower Q3 Earnings, Says UAW Strike Partly To Blame
U.S. Steel expects earnings to drop in the third quarter vs. the prior quarter and the same period a year earlier as the company adjusts production because of the United Auto Workers (UAW) union strike.
SDI to Provide Steel for Mercedes Plant in Alabama
Steel Dynamics Inc. (SDI) and Mercedes-Benz have signed an agreement for the automaker to source 50,000 metric tons of C02-reduced steel for its plant in Tuscaloosa, Ala.
Algoma’s CEO Highlights the Switch to Greener Steelmaking
As the world works to decarbonize and limit greenhouse-gas emissions to reach the goals outlined in the Paris Agreement, many steel companies have joined others in setting their own targets to reach net zero emissions by 2050.
U.S. Steel Idling Granite City ‘B’ Furnace in Response to UAW strike
U.S. Steel said on Monday it plans to temporarily idle blast furnace ‘B’ at its Granite City Works near St. Louis. The Pittsburgh-based steelmaker said it made the move in response to the United Auto Workers (UAW) union strike against “Big Three” automakers Ford, General Motors, and Stellantis. “Following the announcement of UAW strike actions, […]