Steel Mills
Ryerson Posts Higher Q1 Profit, Predicts "Price Durability" in Q2
Written by Michael Cowden
May 5, 2021
Ryerson’s first-quarter profits expanded despite an “extreme commodity environment” thanks to strong demand, higher selling prices and the sale of a facility in Washington.
And the Chicago-based metals service center thinks the black ink will flow into the second quarter as well.
“At this point in the second quarter, demand fundamentals have continued to improve while supply-side constraints remain, resulting in price durability in all three of Ryerson’s primary commodities,” the company said in outlook commentary released with earnings data after the close of markets on Wednesday, May 5.
Ryerson processes and distributes carbon steel, stainless steel and aluminum.
Steel Market Update’s benchmark hot-rolled coil price stands at $1,500 per ton, its highest reading ever.
The company recorded a profit of $25.3 million in the first quarter of 2021, up 54.2% from $16.4 million in the same quarter last year on net sales that rose 13.9% to $1.15 billion.
The gains came in part because Ryerson netted $20.3 million in the first quarter from the sale of a facility in Renton, Wash.
They also came even as shipments of carbon steel fell to 414,000 tons in the first quarter of this year, down 4.6% from 434,000 tons in the same quarter last year.
The reason: Average carbon steel selling prices, for example, were 20.4% higher in the first quarter of 2021 compared to the year-ago quarter.
Inventories, meanwhile, continued to move lower. Ryerson had 61 days of supply at the end of the first quarter of 2021 versus 68 days at the end of the fourth quarter of 2020 and 74 days at the end of the first quarter of last year.
Ryerson forecast that second-quarter revenue would be $1.32 billion to $1.34 billion given an anticipated average selling price increase of 12-14% compared to the first quarter.
“Despite ongoing risks and challenges presented by the COVID-19 pandemic, Ryerson is harvesting the benefits of its improved operating model,” company President and CEO Eddie Lehner said in a statement.
The company also reduced net debt by $354.7 million in the first quarter, and it will continue to look to strengthen its balance sheet moving forward, Lehner added.
By Michael Cowden, Michael@SteelMarketUpdate.com
Michael Cowden
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