In the previous part of this series, we looked at several steel companies’ 2Q17 shipments. In this part, we’ll look at the volume guidance provided by various steel companies during their 2Q17 earnings calls.
Steel Dynamics and Nucor
Steel Dynamics (STLD) expects its volumes to improve in 3Q17 compared to 2Q17. Nucor (NUE) sees its shipments stable in the near future with expectations of a small upside over its volumes in the first half of 2017. However, it’s worth noting that those volumes could change significantly if the Trump administration restricts steel imports. Having said that, the recent comments from President Trump haven’t been very encouraging for the US steel industry, which was expecting tough measures.
AK Steel (AKS) was a little circumspect about its 3Q17 volumes. Jaime Vasquez, the company’s CFO (chief financial officer), noted during the company’s 2Q17 call, “We estimate that third quarter shipments will be relatively flat compared to the second quarter as increased shipments of the carbon distributing and converting market are expected to be offset by a decline in automotive shipments.” We should remember that the automotive market is the biggest end market for AK Steel, accounting for almost two-thirds of its shipments. ArcelorMittal (MT) is the leading steel supplier to the automotive industry.
U.S. Steel (X) is working on revitalizing its assets and expects its hot band production capacity to increase by 1.0 million tons from the current level of 10.0 million tons by 2020. However, the increase is expected to be gradual.
Along with steel shipments, we also need to look at average selling prices (or ASP). In the next part, we’ll compare steel companies’ 2Q17 ASPs.