Nucor forecasts Q1 2021 net earnings to best 2008 record
While the first half of 2020 posed significant challenges for metals manufacturers and end users alike, some firms have showed signs of recovery in the ensuing months and into 2021.
In the second quarter, steel demand suffered. Automotive manufacturers idled production in North America for a period of about two months last year, beginning in the tail end of the of the first quarter.
Nucor forecasts strong Q1 2021
The Charlotte-based steelmaker said it expects its first-quarter earnings could exceed $900 million.
By comparison, Nucor reported net earnings of $20.3 million in Q1 2020. In Q2 2020, the steelmaker reported net earnings of $108.9 million.
“We are encouraged by positive economic trends and the robust demand we are seeing across our markets,” Nucor President and CEO Leon Topalian said. “We currently expect our first quarter 2021 results to significantly exceed Nucor’s previous record for quarterly net earnings, set in 2008. As we move through 2021, we remain focused on building on our momentum, meeting and exceeding our customers’ needs, and delivering sustainable value creation for Nucor stockholders.”
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Rising prices
Earlier this month, Nucor Tubular Products announced a price hike in a letter to customers.
The company announced an at least 12% hike for sprinkler pipe products. In addition, A53 products would rise by at least $140.
“This increase is a result of rising raw material costs, strong demand, and volatility of transportation costs,” Nucor said in the price increase notice. “New orders, quotes and contracts not previously confirmed by Nucor will be subject to this increase.”
Overall, this quarter will likely prove much stronger than Q4 2020.
“The Company’s sheet, plate, bar and structural mills continue to forecast increased profitability in the first quarter of 2021 as compared to the fourth quarter of 2020,” Nucor reported. “Realized prices and shipment volumes have increased for Nucor’s steel mills in the first quarter as compared to the fourth quarter of 2020.”
In addition, Nucor said rising raw materials prices will boost the performance of that segment. Nucor owns the David J. Joseph Company, a scrap brokerage. The steelmaker also produces direct reduced iron (DRI), a steelmaking input.
US steel price gains
US steel prices have continued to rise well into 2021.
Hot rolled coil (HRC) closed Wednesday at $1,156 per short ton, or up 9.78% from a month ago. Meanwhile, cold rolled coil (CRC) is up 15.24% to $1,331 per short ton. Hot dipped galvanized (HDG) is up 11.29% to $1,439 per short ton.
Plate price gains have not been as significant; however, plate is up 5.28% to $1,036 per short ton.
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