Steel Mills

Stelco Posts Record Profit in '21, Warns of Lower Demand in '22
Written by Michael Cowden
February 23, 2022
Stelco Holdings Inc. posted record annual results in 2021 but warned – unlike other North American steelmakers – that the good times would not roll into this year.
“We certainly benefited from exceptional price levels for much of the year,” Stelco Executive Chairman and CEO Alan Kestenbaum said.
“In 2022, however, we expect to see pressure on margins due to lower pricing and inflationary pressures on some of our cost inputs as well as a reduction in demand,” he said.
Kestenbaum made the comments along with fourth quarter earnings data released after the close of markets on Wednesday, Feb. 23.
The Hamilton, Ontario-based flat-rolled steelmaker swung to a profit of Canadian $1.61 billion ($1.26 billion U.S.) in 2021 after losing C$159 million ($124.9 million) in 2020 on revenue that more than doubled to C$4.12 billion ($3.24 million).
The record results in 2021 came thanks to record steel prices and strong shipment volumes.
Stelco posted an average selling price of C$1,473 per ton ($1,157 per ton) in 2021, more than double C$705 per ton ($554 per ton) in 2020 on shipping volumes that rose nearly 83% to 2.69 million tons year-over-year.
Fourth-quarter 2021 results were also up sharply from the year-ago period. But they were down quarter-over-quarter.
Stelco recorded net income of C$513 million ($403 million) in the fourth quarter of 2021 after losing C$47 million ($37 million) in the final quarter of 2020 on revenue that more than doubled to C$1.19 billion ($930 million).
Profits, however, were down 16% from C$614 million ($482 million) in the third quarter even as average selling prices rose 2% to C$1,845 per ton ($1,449 per ton) in the fourth from $1,808 per ton ($1,420 per ton) in the third.
The reason for the decline in profitability: Shipment volumes fell to 626,000 tons in the fourth quarter, down 12% from 710,000 tons in the third.
Details on Stelco’s product mix, which is heavily tilted toward hot-rolled coil, are below.
Stelco executives said they had the low-cost operations and strong balance sheet needed to weather a market downturn.
“While the outlook for 2022 is unclear, we expect that the foundation we have built … and the continued commitment of our employees to continually and relentlessly focus on costs, will allow Stelco to remain the North American leader in steel industry profit margin,” CFO Paul Scherzer said.
The company said it had C$1.2 billion ($940 million) in total liquidity at the outset of 2022, including $955 million ($750 million) in cash on hand.
By Michael Cowden, Michael@SteelMarketUpdate.com

Michael Cowden
Read more from Michael CowdenLatest in Steel Mills

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.

AISI: Raw steel production ticks back down
US raw steel output declined last week after increasing the week prior, according to the latest data from the American Iron and Steel Institute (AISI). Output has see-sawed from week to week since mid-August. Still, it has remained historically strong over the past four months and has held near multi-year highs since June. Domestic mills […]