Steel Mills
NLMK USA Reports 63% Jump in Revenue in Q1
Written by Sandy Williams
April 22, 2021
NLMK USA shipments rose to 430,000 metric tons in the first quarter of 2021, a 10% gain from the fourth quarter of 2020. Strong demand for hot rolled and hot-dipped galvanized coil by key customers benefited sales as did the end of the strike at NLMK Pennsylvania.
Revenue jumped 63% quarter over quarter to $403 million on record-high steel selling prices and shipment growth. EBITDA of $65 million was a 39% decrease from the fourth quarter. The decline was due to a higher base in Q4 as a result of a $97 million tariff settlement refund. Without the refund, comparable EBITDA was up six-fold due to expanding spreads and sale volume growth, the company said.
NLMK Group saw revenue and net profit jump during the quarter due to stronger market dynamics.
“In Q1 2021, steel product prices continued to hit new highs due to limited supply coupled with strong demand from end users,” said NLMK Group CFO Shamil Kurmashov. “Low steel product inventories in the supply chain served as an additional factor supporting price growth. China announcing its intention to reduce steel output in 2021 promoted further improvement of the pricing environment in March and April.
“In this context, NLMK Group increased its revenue by 20% quarter over quarter to $2.9 billion, and its EBITDA by 31% to $1.2 billion in Q1 2021. EBITDA margin grew to 41%.”
NLMK Group noted that steel demand in the EU was flat compared to the fourth quarter due to a slower recovery of the automotive industry. Steel consumption decreased 4% in China and 6% in Russia. Steel consumption in the U.S. was up 12% from the fourth quarter due to an increase in imports as a result of record steel prices and a slower recovery of capacity utilization than other regions.
NLMK expects positive results for the second quarter due to seasonal demand and sales of accumulated inventory in Russia, completion of upgrades at Lipetsk, and continued high steel prices.
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.