CMC Earnings Jump on Strong North American Demand

“CMC’s outstanding financial performance during fiscal 2023’s first quarter was made possible through strong execution by our North America and Europe teams who navigated very different market environments,” company chair, president and CEO Barbara R. Smith said in a statement.

In its North American segment, the company said the average selling price for steel products increased by $44 per ton vs. the first quarter of fiscal 2022, while the cost of scrap utilized dropped $103 per ton, resulting in a year-over-year increase of $147 per ton in steel products margin over scrap.

“While we anticipate margins over scrap in both North America and Europe to remain elevated in relation to historical levels, we expect they will compress from first quarter levels,” Smith said.

In North America, CMC shipped 704,000 tons of steel products in the quarter vs. 699,000 tons in the year-ago period, while its European segment it shipped 473,000 tons vs. 365,000 tons a year earlier.

Regarding the previously announced Arizona 2 micro-mill in Mesa, Ariz., Smith said the company is en route for a spring 2023 start-up.

“The commissioning of this exciting project is well-timed, as we anticipate construction activity related to the Infrastructure Investment and Jobs Act will begin ramping up during 2023,” Smith noted.

The company recorded net after-tax costs of $4.4 million associated with pre-commissioning activities at the Arizona 2 project.

Smith added that last month CMC announced the location of a fourth micro-mill, Berkeley County, W.Va.

“Once complete, we expect this investment will enhance our production flexibility and customer service capabilities, generate attractive returns, and improve our sustainable, through-the-cycle earnings and cash flows,” the CEO said.

By Ethan Bernard, Ethan@SteelMarketUpdate.com