Steel Mills
Ryerson Foresees Weaker Business Conditions in Q3
Written by Laura Miller
August 3, 2022
Ryerson expects “counter-cyclical business conditions” in the third quarter, with moderating demand and falling prices resulting in lower sequential sales and shipments.
The Chicago-based service center made the comments in its second quarter earnings report after the market closed on Wednesday, August 3.
For Q2, sales volumes of 524,000 tons were down 6% from the previous quarter. Lower volumes were shipped to the HVAC, food processing, and machinery and agricultural sectors. Volumes increased to the oil and gas, commercial ground transportation, and metal fabrication and machine shop markets. Carbon steel shipments were 408,000 tons—0.7% higher than Q1 but 4.7% below Q2 2021—with average selling prices 4% lower quarter-on-quarter but 25% higher year-on-year.
“Driven by faster and sharper-than-anticipated price declines in nickel, aluminum and carbon steel indices during the quarter, we experienced mid-quarter margin compression as spot-replacement cost of inventory fell faster than average-cost of inventory amidst decelerating increases in average selling prices,” the company stated.
Q2 revenues of $1.74 billion were just below Q1’s record $1.75 billion but showed year-on-year growth of 23%. Net income of $196.4 million was up 20% from Q1.
Revenues in Q3 are expected to be between $1.45 billion and $1.55 billion, with average selling prices down 5-8% sequentially, and shipments falling 4–6%.
By Laura Miller, Laura@SteelMarketUpdate.com
Laura Miller
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