Metals service center operator Reliance expects its average steel selling prices to fall in the third quarter and shipping volumes to increase.
Reliance's average metal selling price declined in the quarter ending 30 June to $2,348/short ton (st), an 11pc decrease from a year earlier. The Arizona-based company projected that price to fall 2-4pc further in the third quarter, according to its earnings report last week.
Price reductions in steel plate, tubing and flat-rolled products will drive decreases in the third quarter, the company said. Reliance noted that the quarterly average price includes figures from July, and it does not expect significant declines from today's price.
Reliance told investors last week that it had not noticed steel mill orderbooks firming up recently.
"We've not heard from the mills that they're having trouble filling our orders or that they're being overextended with big orders coming from our competitors. So we've not seen any spike in the carbon activity at the mill level," said Stephen Koch, Reliance's chief operating officer.
The firm projected third quarter shipment volumes to increase by 4.5-6.5pc from a year earlier, when it sold 1.42mn st of metals products. Reliance, the largest US metals service center company, sold 1.55mn st in the second quarter this year, an increase of 5pc from a year earlier.
Its carbon steel volumes increased by 6pc to 1.27mn st in the second quarter, while its stainless steel sales rose by 3pc to 73,600st from a year earlier. Reliance's aluminum sales decreased by 2pc to 81,300st, and alloy sales fell by 6pc to 32,500st.
Reliance attributed the uptick in sales volumes to three acquisitions it has completed this year. It acquired American Alloy Steel and Mid-West Materials on 1 April, as well as Cooksey Iron and Metal on 1 February.
Demand from non-residential construction — Reliance's largest end market — improved in the second quarter from a year earlier, and it expects steady demand from that sector through September. Reliance also projected stable demand in the aerospace and automotive sectors in the third quarter, while demand in the semiconductor market could remain under pressure.
Reliance reported a second quarter profit of $268mn, down from $385mn a year earlier.
