Nucor Foresees Encouraging Steel Market Conditions in 2018

SEATTLE (Scrap Monster): Charlotte, North Carolina headquartered Nucor Corp. has announced guidance for company’s performance during the fourth quarter of year. According to the company, the Q4 results are expected to witness drop from Q3. Nucor expects the results to be in the range of $0.50 to $0.55 per diluted share. This is almost flat when compared with Q4 2016 results.

The company continues to be negatively impacted by rising steel imports. As per estimates, the US steel imports rose nearly 19% year-on-year during the first ten months of 2017. Also, estimates by the American Iron and Steel Institute (AISI) suggest that finished steel accounted for 28% import market share during this period. Nucor, along with other domestic steel producers, has continued its fight against unfairly traded imports.

In order to safeguard domestic steel industry, the US administration has announced key measures including imposition of duties on additional steel products. The preliminary determination against Chinese-origin corrosion-resistant and cold-rolled steel from Vietnam is an encouraging step in this direction. The final determination is expected to be announced during the first quarter of 2018. Efforts to expose subsidized steel imports into the US will continue, Nucor noted.

Nucor foresees encouraging market conditions in 2018. The increased price for steel products and the recent decline in imports during the past several months as compared with beginning of 2017 are expected to bring in positive momentum for the struggling domestic steel industry. The automotive market may continue to remain as the key segment propelling growth. Energy markets may extend their recovery, whereas the non-residential construction market is expected to remain stable when compared with 2017 levels.

The overall market demand remained relatively stable in Q4, Nucor noted. Compressed margins and pressure from spiraling imports during H1 ’17 may negatively impact Q4 earnings of steel mills segment. Steel products segment is also likely to witness weakness during the quarter. After an unplanned outage during the quarter, Nucor Steel Louisiana resumed operations in early-December. The shorter outage period as compared with longer outages in Q3 ’17 is likely to lift raw material segments earnings in Q4.

Recently, Nucor Corp. had announced new investment of up to $250 million to build a new rebar micro mill in Sedalia, Missouri. Prior to that, it had also announced investment of $ $180 million at its existing Nucor Steel Kankakee Inc. bar steel mill located in Bourbonnais, Illinois towards construction of a full-range merchant bar quality (MBQ) mill.