Nucor reports operating rate of 90 percent for Q2
Nucor reports operating rate of 90 percent for Q2
<
Included in the first quarter of 2017 earnings are inventory related purchase accounting charges of $9.8 million, or 2 cents per diluted share, associated with the recent acquisitions of Southland Tube and Republic Conduit.
Nucor reports that its consolidated net sales increased 7 percent to $5.17 billion in the second quarter of 2017 from $4.82 billion in the first quarter of 2017 and increased 22 percent compared with $4.25 billion in the second quarter of 2016. Average sales price per ton in the second quarter of 2017 increased 5 percent from the first quarter of 2017 and increased 17 percent from the second quarter of 2016. Total tons shipped to outside customers were 6.75 million tons in the second quarter of 2017, a 2 percent increase from the first quarter of 2017 and a 5 percent increase from the second quarter of 2016. Total second quarter steel mill shipments increased 3 percent from the first quarter of 2017 and 7 percent from the second quarter of 2016. Second quarter of 2017 downstream steel products shipments to outside customers increased 9 percent from the first quarter of 2017 and 1 percent from the second quarter of 2016, according to the company.
In the first half of 2017, Nucor’s consolidated net sales increased 25 percent to $9.99 billion compared with $7.96 billion in last year’s first half, and total tons shipped to outside customers increased 6 percent from the first half of 2016, while average sales price per ton increased 19 percent.
The average scrap and scrap substitute cost per ton used during the second quarter of 2017 was $313, an increase of 10 percent from $284 in the first quarter of 2017 and an increase of 35 percent compared with $232 in the second quarter of 2016. The average scrap and scrap substitute cost per ton used in the first half of 2017 was $298, an increase of 40 percent from $213 in the first half of 2016.
Overall operating rates at Nucor’s steel mills increased to 90 percent in the second quarter of 2017 as compared to 89 percent in the first quarter of 2017 and the second quarter of 2016. Operating rates for the first half of 2017 increased to 90 percent as compared with 84 percent for the first half of 2016.
Total steel mill energy costs in the second quarter of 2017 were comparable with the first quarter of 2017 and increased approximately $2 per ton compared with the second quarter of 2016, primarily because of higher natural gas unit costs. Total steel mill energy costs for the first half of 2017 also increased $2 per ton compared with the first half of 2016 primarily because of higher natural gas unit costs, according to Nucor.
“Our liquidity position remains strong with $1.6 billion in cash and cash equivalents and short-term investments as of July 1, 2017, and an untapped $1.5 billion revolving credit facility that does not expire until April 2021,” the company notes.
In May, Nucor announced that it is investing an estimated $176 million to build a hot band galvanizing and pickling line at its sheet mill in Ghent, Kentucky. The new galvanizing line will expand Nucor Steel Gallatin’s product capabilities and should have an annual capacity of 500,000 tons. Once the necessary approvals are obtained, Nucor says it expects to construct the galvanizing line and begin operations in two years.
In June, Nucor’s board of directors declared a cash dividend of nearly 38 cents per share payable on Aug. 11, 2017, to stockholders of record as of June 30, 2017. This dividend is Nucor’s 177th consecutive quarterly cash dividend, a record the company says it expects to continue.
The company says imports continue to negatively impact the U.S. steel industry. Through the first half of 2017, finished steel imports have increased an estimated 15 percent compared with the same period in 2016 and account for an estimated 27 percent share of the U.S. market. The industry continues to pursue trade cases to combat unfairly traded imports. Final determinations issued earlier this year against cut-to-length steel plate imports from 12 countries are having a positive impact as steel imports of these products have decreased in the first six months of this year compared with the same period last year, Nucor says.
Last month, the U.S. International Trade Commission made final injury determinations affirming the Department of Commerce’s antidumping duties in the steel concrete reinforcing bar (rebar) case against Japan and Turkey, as well as final countervailing duties on rebar imports from Turkey. The Commerce Department also determined in late July that exporters from Taiwan have sold rebar in the U.S. at from 3.5 percent to 32 percent less than “fair value,” based on what it calls “factual evidence provided by the interested parties.”
In May, the government determined that there is a reasonable indication that the U.S. steel industry is materially injured or threatened with material injury by reason of carbon and certain alloy steel wire rod imports from 10 countries. As a result, the government will continue its wire rod antidumping and countervailing duty investigations, and is expected to issue preliminary duty determinations in the coming months.
The performance of the company’s steel mills segment, particularly the sheet mills and bar mills, decreased in the second quarter of 2017 compared with the first quarter of 2017. Market conditions for hot-rolled sheet products have been challenging in light of aggressive competition, the company says.
The profitability of Nucor’s plate mills improved in the second quarter of 2017 compared with the first quarter of 2017. The performance of the company’s downstream products segment improved in the second quarter of 2017 compared with the first quarter of 2017. The profitability of the downstream products segment in the second quarter of 2017 decreased from the second quarter of 2016 because of a highly competitive market environment and margin compression resulting from higher steel prices. In particular, the company says its rebar fabrication operations have experienced significant declines in performance from downward pressure on pricing caused by surges of rebar imports. Nucor says its raw materials segment’s performance increased in the second quarter of 2017 relative to the first quarter of 2017 because of the profitable performance of its direct reduced iron facilities.
Earnings in the third quarter of 2017 should be in a range similar to that of the quarterly results of the first half of 2017. Nonresidential construction indicators, such as the Dodge Momentum Index and Architecture Billings Index, continue to suggest that construction activity will remain healthy through the end of the year, Nucor says.
The company also notes that it is encouraged by improved energy markets relative to 2015 and 2016.
]]>
Source: Recycling Today
Nucor reports operating rate of 90 percent for Q2
<![CDATA[Nucor Corp., headquartered in Charlotte, North Carolina, has announced consolidated net earnings of $323 million, or $1 per diluted share, for the second quarter of 2017. By comparison, Nucor reported net earnings of $356.9 million, or $1.11 per diluted share, for the first quarter of 2017 and net earnings of $243.6 million, or 76 cents per diluted share, for the second quarter of 2016. Nucor and its affiliates manufacture steel products and operate facilities primarily in the U.S. and Canada. Its products include carbon and alloy steel in bars, beams, sheet and plate; hollow structural section tubing; electrical conduit; steel piling; steel joists and joist girders; steel deck; fabricated concrete reinforcing steel; cold finished steel; steel fasteners; metal building systems; steel grating; and wire and wire mesh. Through the David J. Joseph Co., Cincinnati, Nucor also brokers ferrous and nonferrous metals, pig iron and HBI/DRI (hot briquetted iron and direct-reduced iron); supplies ferro-alloys; and processes ferrous and nonferrous scrap. In the first half of 2017, Nucor reported consolidated net earnings of $679.9 million, or $2.11 per diluted share, compared with consolidated net earnings of $331.2 million, or $1.03 per diluted share, in the first half of last year. Earnings and…