AK Steel, Nucor Post Strong Results From Construction, Automotive Business

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Cold-rolled steel

Steelmakers AK Steel  and Nucor on Tuesday beat fourth-quarter 2014 expectations, amid rebounds in the auto and construction industries. But concerns persisted about low commodity prices dragged by oversupply.

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AK Steel said earnings per share slid 46% from a year ago to 14 cents, topping analyst views for 7 cents but nonetheless a reflection of lower prices. Revenue jumped 36% to $1.997 billion, edging views for $1.987 billion.

Shipments rose 41% from a year ago and 37% from Q3 to around 2 million tons, lifted by auto-market demand and the acquisition of steel facility Dearborn Works from Russian steel company Severstal, AK Steel said.

Nucor’s fourth-quarter EPS spiked 46% to 65 cents, beating views by a dime. But revenue missed targets, rising 2% to $5 billion. Nucor shipped more than 6 million tons in Q4, a 1% increase from a year ago but an 11% drop from the third quarter. Average sales prices per ton rose 1% from a year ago but fell 2% from Q3.

Steel mill utilization rates rose to 76% in the quarter vs. 75% a year ago, but fell from 81% in the third quarter. The company attributed the drop from Q3 to seasonality. The colder winter season can slow the pace of construction. Nucor also said the acquisition of the Gallatin Steel “contributed profitable performance” during the quarter.

The company said that Q1 2015 earnings would fall vs. Q4 “to a level slightly exceeding the first quarter of 2014.”

Chinese slab had the largest decline on Thursday, January 29, dropping 1.3% and landing at CNY 2,330 ($373.10) per metric ton. The price of Chinese HRC remained steady at CNY 2,610 ($417.94) per metric ton. For the fifth consecutive day, the price of Chinese coking coal held flat at CNY 1,080 ($172.94) per metric ton. The price of iron ore 58% fines from India hit a high price of CNY 840.00 ($134.51) and a low price of CNY 840.00 ($134.51) per dry metric ton.

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The steel billet cash price held steady on the LME at $500.00 per metric ton. The steel billet 3-month price saw essentially no change on the LME for the fifth day in a row, remaining around $480.00 per metric ton.

The US HRC futures contract 3-month price showed little movement on Thursday at $572.00 per short ton. The spot price of the US HRC futures contract saw little movement at $583.00 per short ton.

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