Steel Mills
Stelco To Report Strong Q2, Weaker Results for 2H
Written by Laura Miller
July 25, 2022
Stelco Holdings Inc. expects its second quarter earnings results to be notably higher sequentially and year-on-year but is warning that a weakening steel market will mean lower results for the second half of the year.
In a preliminary earnings report, the Canadian flatrolled steelmaker said it expects its Q2 adjusted EBITDA to be Candian $460-470 million ($357.7-365.5 million US) with shipping volumes of 677,000 tons 10% higher than Q1. EBITDA will be an improvement from the C$402 million ($312.6 million) seen in Q1 and the C$410 million ($318.8 million) seen in Q2 2021.
Stelco noted that steel prices “began increasing sharply in March 2022 and then reversed course in late-April, with the benchmark CRU sheet price falling for 13 consecutive weeks from a peak of $1,492 per net ton to $895 per net ton currently.”
SMU’s latest market check put hot-rolled coil prices at an average of $875 per ton as of July 19.
With “the weakening of the steel market and falling prices over the last three months,” the company expects additional decreases in its Q3 and Q4 results should currently lower prices and shorter lead times continue for the remainder of the year.
Contract negotiations between Stelco and the United Steelworkers union are ongoing. Local USW chapters, which are working with a prior contract that expired on June 30, have voted to authorize a strike, and the USW has requested government conciliators to resolve the differences between the steelmaker and the union.
By Laura Miller, Laura@SteelMarketUpdate.com
Laura Miller
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