SMU Data and Models
CMC Sees Construction Demand As Boon for Earnings
Written by Laura Miller
June 22, 2023
Positive structural trends in the North American market are supporting strong earnings results for Commercial Metals Co.
The Irving, Texas-based longs producer and metals recycler reported lower fiscal third-quarter sales and earnings compared to levels seen in the year-ago quarter during the 2022 earnings boom, but its results remain strong, said CEO Barbara Smith.
“CMC delivered strong third-quarter financial results, benefiting from robust North American construction activity, good product margins in the domestic market, and success in our continued efforts to reduce controllable costs,” Smith said in a statement released with the company’s quarterly results.
For fiscal Q3 ended May 31, CMC posted net income of $234 million on sales of $2.3 billion compared to income of $312 million on sales of $2.5 billion in the year-ago quarter.
Finished steel shipments were comparable to the year-ago period while average selling prices of downstream products were up by $208 per ton.
“During the third quarter, North American segment volumes were supported by significant structural trends, including the re-shoring of manufacturing and logistical supply chains, and increasing investment to improve the condition and functionality of our nation’s core infrastructure and energy markets,” Smith explained.
“We expect increased activity in these rebar-intensive construction sectors will continue to drive demand in the quarters and years ahead,” she added.
CMC said downstream bid volumes improved year-over-year and expanded the company’s contract backlog value.
Healthy end-market demand and a historically high downstream backlog will support consistent levels of finished steel shipments in the current quarter, CMC said.
Smith said the commissioning of its Arizona 2 merchant bar and rebar micro mill is progressing and happening at an “ideal time to capitalize on growing construction activity related to the Infrastructure Investment and Jobs Act, re-shoring, and the Inflation Reduction Act.”
By Laura Miller, laura@steelmarketupdate.com
Laura Miller
Read more from Laura MillerLatest in SMU Data and Models
Steelmaking raw material prices ease in July
The majority of steelmaking raw material prices declined in June, following the same trend seen in May, according to SMU’s latest analysis.
SMU price ranges: HR declines moderate. Are we near a bottom?
SMU’s sheet price ranges slid again this week. But the declines were more pronounced on tandem products whereas prices for hot-rolled coil held roughly steady.
Some SMU Key Market Indicators improve, others remain near historic lows
SMU’s Key Market Indicators include data on the economy, raw materials, manufacturing, construction, and steel sheet and long products. They offer a snapshot of current sentiment and the near-term expected trajectory of the economy. All told, nine key indicators point lower, 16 are neutral, and 13 point higher. One thing worth noting: The nine indicators pointing lower are all lagging indicators. Many of those pointing upward are leading indicators.
SMU survey: Steel Buyers’ Sentiment Indices rebound
SMU’s Steel Buyers’ Sentiment Indices both saw improvement this week. Current sentiment ticked higher but remains near the four-year low seen earlier this month. Future Sentiment continues to indicate that buyers are optimistic for future business conditions.
SMU market survey results now available
The latest SMU market survey results are now available on our website to all premium members. After logging in at steelmarketupdate.com, visit the pricing and analysis tab and look under the “survey results” section for “latest survey results.” Historical survey results are also available under that selection. If you need help accessing the survey results, or if your […]