CMC shipments boosted by Gerdau assets

Texas-based steelmaker and recycler Commercial Metals (CMC) saw sharp jumps in rebar shipments and sales during its first full quarter to include results from mills acquired from Gerdau.

The company said sales during its second quarter of fiscal year 2019, which ended 28 February, increased by 33pc to $1.4bn from a year earlier.

Net sales at its Americas mills segment increased by 82pc to $775mn from $426mn a year earlier. Rebar shipments nearly doubled to 773,000st from 405,000st a year earlier because of the four mills acquired from Gerdau in November 2018. Merchant and other volumes grew by 15pc to 322,000st.

Overall volumes rose by 60pc to 1.1mn st from 684,000st a year earlier, while metal margins increased by 32pc to $374/st. Margins fell by $1/st from the prior quarter, when they reached their highest since 2008.

Weather and heavy rainfall in some regions impacted CMC's overall shipments, while the company said unplanned outages at its Knoxville, Tennessee, rebar operations because of gas line issues impacted production an unspecified amount.

In CMC's US recycling segment, total scrap volumes were flat year-over-year at 629,000st as an uptick in ferrous volumes offset a drop in nonferrous.

Ferrous scrap shipments rose by 10,000st from the prior year to 570,000st, while average selling prices dropped by 7pc to $266/st ($298/gt), primarily because of the "unsual" $30-40/gt drop in the domestic market in January because of a lack of export volumes, CMC said.

Nonferrous shipments fell by 6pc to 59,000st as average prices dropped to $1/lb from $1.17/lb.

Sales for the company's Americas recycling segment fell by 11pc to $287mn in the second quarter from a year earlier on lower prices for both ferrous and nonferrous scrap.

Second quarter sales in the Americas fabrication segment increased by 70pc to $531mn from a year earlier. Volumes rose by 64pc to 396,000st from 241,000st while the selling price increased by 6pc to $845/st. Wet winter weather impacted construction activity and shipments for the segment.

The company's international mill segment in Poland saw sales drop by 17pc to $175mn from $212mn a year earlier. Total volumes fell by 12pc to 304,000st, while the metal margin fell by 4pc to $244/st.

CMC sees stronger demand in the US and Polish markets where it operates over the rest of fiscal year 2019. It expects metal margins to remain stable.

Second quarter profit rose by 36pc to $13.9mn, up from $10.2mn a year earlier.