Steel Mills

NLMK USA Sales Up on Record Prices, Despite Weakness Abroad

October 14, 2021

NLMK USA’s sales surged in the third quarter on record domestic prices and strong demand, Russian parent company NLMK Group said.

The solid showing in the U.S. helped to offset slowing demand in Russia and elsewhere as well as a protracted outage at the company’s mill in Lipetsk.

NLMK “The U.S. became the growth leader, with a continued deficit of steel in the region,” NLMK Group said in a trading update on Wednesday, Oct. 13.

Lower sales in Russia resulted not just from weaker demand but also from traders scaling back purchases “in anticipation of further price reduction,” NLMK Group said.

By the numbers, U.S. sales were up 17% quarter over quarter and 60% year over year, while Russian sales were down 7% quarter over quarter and 9% year over year.

NLMK USA also benefitted in the third quarter from September seeing the highest hot-rolled coil prices ever recorded.

SMU’s U.S. hot-rolled coil price hit $1,955 per ton ($97.75 per cwt) on Sept. 7, a new record, and nearly quadruple $515 per ton a year earlier. Hot-rolled coil prices have since fallen $35 per ton to $1,920 per ton, according to SMU’s interactive pricing tool.

Sales volumes for all products made by NLMK USA are below. NLMK’s U.S. subsidiary operates an electric arc furnace (EAF) steel mill in Portage, Ind., a hot strip mill and cold reduction mill in Farrell, Pa., and a coating facility in Sharon, Pa.

NLMK USA Q3 2021 sales

On the semifinished side, slab shipments within NLMK Group were up 30% in the third quarter compared to the same quarter last year thanks in part to a rebound in shipments from NLMK Group to NLMK USA that began in the first quarter of 2021.

NLMK Group shipped 534,000 metric tonnes of slabs to its U.S. and Danish (NLMK Dansteel) subsidiaries in the third quarter of 2021, up from 410,000 tonnes in the third quarter of 2020, according to figures in the trading update. The company does not break out slab export data specifically for NLMK USA.

While finished steel prices were higher in the U.S., scrap prices in both the U.S. and Europe were down 3% quarter over quarter on weaker demand from Turkey and lower iron ore prices, NLMK Group said.

All told, NLMK Group reported total third-quarter sales of 4.15 million metric tonnes, down 4% from the second quarter and down 7% from the third quarter of 2020.

NLMK Group, one of the largest steelmakers in Russia, typically issues a trading update with sales and production volumes ahead of complete earnings results. Its third-quarter earnings are scheduled to be released on Thursday, Oct. 21.

Steel earnings season gets underway in earnest next week when Steel Dynamics Inc. (SDI) releases its third-quarter earnings on Monday, Oct. 18, after the close of markets. SDI will be followed by Nucor, North America’s largest steelmaker, on Thursday, Oct. 21, and by Cleveland-Cliffs Inc, the region’s biggest flat-rolled steel producer, on Friday, Oct. 22.

By Michael Cowden, Michael@SteelMarketUpdate.com

Michael Cowden

Michael Cowden is editor-in-chief for Steel Market Update. Cowden has covered the steel industry since 2007. He specializes in flat-rolled steel but has also reported on steel long products, steel pipe and tube, and aluminum. Before joining SMU, Cowden held reporting jobs at Fastmarkets AMM in Chicago, the Associated Press in Pittsburgh, and the Cambodia Daily in Phnom Penh. He has also worked as a copy editor and in marketing at the University of Chicago Press. Cowden has a BA in English from the University of Chicago and an MSJ journalism from Northwestern University’s Medill School of Journalism. Contact him at michael@steelmarketupdate.com or 724-759-7872.