Tariff to fuel record profit for Nucor in 2018

US steelmaker Nucor expects higher selling prices across most of its products to boost fourth-quarter profit and push full-year profit to a record level.

The Charlotte-based company expects to earn profit of around $600mn on the quarter, up from $395mn in the same period of the prior year, according to earnings guidance released today. Argus estimated fourth-quarter profit using the company's expected earnings per share and the average number of diluted shares outstanding in Nucor's third-quarter earnings filing. The company's repurchase of shares of its common stock in the fourth quarter is likely to reduce the number of shares outstanding.

Estimated fourth-quarter profit would be down from the $706mn recorded in the third quarter amid seasonally lower demand and as hot-rolled coil (HRC) buyers continue to limit purchases as prices retreat from 10-year highs reached earlier this year. Argus assessed US HRC at $754/st ex-works this week, down by nearly 20pc from around $920/st in early July.

Still, the company continues to see strong demand and higher year-over-year prices across most products heading into 2019.

Nucor expects to report record profit of around $2bn in 2018, up from $1.4bn a year earlier amid gains in shipments and selling prices fueled by the US 25pc tariff on imported steel imposed in March.

Domestic steel mill shipments surged in the wake of the Trump administration's action, rising by 5pc, or 3.5mn st, through October from the prior year to replace the 3.3mn st drop in US carbon and alloy steel imports over the same period.