Service Centers

Reliance Reaches Top Sales and Profit in Second Quarter

July 28, 2022

Reliance Steel & Aluminum Co. “delivered an exceptional second quarter with record-setting financial performance and outstanding operational execution,” CEO Jim Hoffman said in the service center’s second quarter results release.

Reliance reported record second quarter net income of $572.8 million on sales of $4.68 billion.

The company’s top results were driven by “ongoing healthy demand” in most end markets, growing shipment levels, and robust metals pricing.

“Our model continues to prove resilient amidst challenging macroeconomic circumstances,” said Hoffman, highlighting Reliance’s diverse product array and its proprietary fleet of trucks as mitigating factors during “increased transportation costs in the current inflationary environment.”

The company shipped more than roughly 1.2 million tons of carbon steel products in the second quarter—a 3.9% sequential gain, and a 1.1% increase from Q2 2021. Reliance expects shipment levels to be impacted by normal seasonal patterns, resulting in a decrease of 3–5% in tons sold for the third quarter.

The average selling price per ton for carbon products was up 0.8% sequentially and 23.8% higher YoY.

Hot-rolled sheet and coil sales accounted for 9% of total sales in the first quarter, cold-rolled sheet and coil 3%, galvanized sheet and coil 5%, carbon plate 11%, and carbon tubing 12%.

Looking ahead, Reliance is cautiously optimistic about forecasted activity in nonresidential construction, automotive toll processing and heavy equipment despite supply-chain disruptions and ongoing labor constraints. It reports particular strength in semiconductors, one of Reliance’s strongest end markets, as well as energy, which is benefiting from higher oil and natural gas prices. Demand in commercial aerospace is expected to continually improve throughout the second half of 2022 as build rates increase.

Reliance expects its average selling price per ton sold for the third quarter to be down 5–7% versus Q2 driven by pricing declines in carbon, stainless and aluminum flat-rolled products. Those should be partially offset by improving demand and pricing in the aerospace, energy and semiconductor markets.

Los Angeles-based Reliance operates 300 locations in 40 states and 13 countries outside of the US, focusing on small orders with quick turnaround and increasing levels of value-added processing.

By David Schollaert, David@SteelMarketUpdate.com

David Schollaert

David Schollaert is deputy editor-in-chief for Steel Market Update. David joined SMU after more than a decade in the metals and mining industry in a myriad of different roles. Much of his early experience and expertise were within the coverage and analysis of steel-making raw materials and served previously as senior editor of the CRU Prices Service. Most recently, however, before his return to market analysis, David held roles as a metals buyer and an operations manager for raw material suppliers. He can be contacted at david@steelmarketupdate.com or 724-720-1008.