Steel Product Producers
Friedman Expects Hedging Gains To Offset HRC Pricing Pressure
Written by Laura Miller
August 15, 2023
Longview, Texas-based steel processor Friedman Industries is anticipating steady demand in the current quarter.
Downward pricing pressure on hot-rolled coil (HRC) will lead to lower margins, but this should be offset by hedging related gains, the company said in its earnings report for its fiscal 2024 first quarter ended June 30.
Q1 sales in Friedman’s flat-roll product segment declined 13% from the year-ago quarter due to lower selling prices. Tons sold were up 28% year over year to 120,000 tons, primarily due to the acquisition of Plateplus Inc. in April 2022, as well as a new facility in Sinton, Texas, coming online in October 2022, the company said.
In its tubular products segment, lower prices and fewer tons sold resulted in a 36% year-over-year decline in sales to $12.1 million. Sales volumes were down 14% to 9,000 tons.
All told, Friedman’s fiscal Q1 net earnings were $7.7 million on sales of $137.3 million, down 31% and 15%, respectively, from the same quarter last year.
Friedman Industries Inc.
| First quarter ended June 30 | 2023 | 2022 | % Change |
|---|---|---|---|
| Net sales | $137.3 | $161.8 | -15% |
| Net earnings (loss) | $7.7 | $11.2 | -31% |
| Per diluted share | $1.04 | $1.55 | -33% |
“Our first-quarter results are a great start to fiscal year 2024 as we strive to deliver record earnings for a third year in a row,” commented president and CEO Michael J. Taylor.
“Our team did a good job of evaluating and responding to market conditions during the first quarter. As fiscal 2024 continues, we are focused on maximizing sales volume on our existing assets while also evaluating additional growth opportunities for the company,” he added.
Friedman processes HRC at its facilities in Hickman, Ark.; Decatur, Ala.; East Chicago, Ind..; Granite City, Ill.; and Sinton, Texas. Its facility in Lone Star, Texas, manufactures electric-resistance welded pipe.
Laura Miller
Read more from Laura MillerLatest in Steel Product Producers
August US mill shipments slip but still higher than last year
The American Iron and Steel Institute reported a decline in the monthly shipments of US mills from July to August.
TransPod, Algoma, Supreme Steel linkup anchors Canadian steel in high-speed transit build
The three Canadian companies have announced a strategic partnership to support the development of an ultra-high-speed transit line from Edmonton to Calgary.
Metallus, USW agree to tentative four-year labor deal
Metallus and the United Steelworkers (USW) have agreed to a tentative four-year labor contract.
ArcelorMittal Dofasco resumes cokemaking after emergency maintenance
The Canadian steelmaker reported on Sept. 30 that “urgent maintenance” was needed in its coke plant off-gas systems. The work required coke oven gas from the No. 2 coke plant to be flared for most of that week.
AISI: Raw steel production ticks back down
US raw steel output declined last week after increasing the week prior, according to the latest data from the American Iron and Steel Institute (AISI). Output has see-sawed from week to week since mid-August. Still, it has remained historically strong over the past four months and has held near multi-year highs since June. Domestic mills […]