Reliance Achieves Record Sales and Profit in First Quarter

“Notwithstanding ongoing macroeconomic challenges, our performance was supported by positive underlying trends including continued strong demand with improving shipment levels in each month of the quarter, along with ongoing strength in metals pricing,” CEO Jim Hoffman said on the service center’s earnings call on Thursday.

The company shipped just over 1 million tons of carbon steel products in the first quarter – a 10.5% increase over the fourth quarter but a 1.7% decrease from Q1 2021. Reliance thinks shipment levels will continue to increase through the rest of the year. The average selling price per ton for carbon products was down 2.7% sequentially but 56% higher year-on-year.

Hot rolled sheet and coil sales accounted for 10% of total sales in the first quarter, cold rolled sheet and coil 4%, galvanized sheet and coil 5%, carbon plate 11%, and carbon tubing 11%.

Reliance anticipates continuing strength in overall underlying demand, with non-residential construction demand improving sequentially and showing notable strength in March. Demand for agricultural and construction equipment continues to improve with significant increases in shipments to these sectors. Toll processing demand remains healthy despite supply chain challenges.

Noting significant reshoring of semiconductor fabrication, Reliance has increased its 2022 capex from $350 million to $455 million in order to build a new facility in Texas to service this burgeoning domestic industry.

The merger and acquisition pipeline remains robust, company executives say, with a high volume of potential opportunities. The company has completed 71 acquisitions since going public in 1994.

By Laura Miller, Laura@SteelMarketUpdate.com