US steel prices have bottomed: Nucor

Leading US steelmaker Nucor said today that domestic steel prices have bottomed out following a steady price decline that led to lower third quarter profits.

The electric arc furnace steelmaker said excess inventory in the steel supply chain resulted in continuing destocking through the quarter and lower prices for hot-rolled coil (HRC). The Argus weekly domestic US HRC index last week dropped to $493/st ex-works Midwest, down by a third since the beginning of the year and the lowest since late 2016.

Total shipments for sheet products in the third quarter were down by 3pc year over year to 2.7mn st, while bar shipments fell by 10pc to 2mn st.

Nucor sold 6.6mn st of steel to outside customers in the third quarter, down by 7pc from the 7mn st it sold in the same period of the prior year.

The company's steel mills segment sold 4.6mn st to outside customers, a 9pc decline compared to the 5mn st sold in the third quarter of 2018.

The average scrap and scrap substitute cost per ton in the third quarter was $299/st, a decrease of 20pc compared to the $374/st in the same period prior year.

Nucor expects the performance of its raw materials segment to decline in the fourth quarter compared to the third quarter because of a continued maintenance outage at its Louisiana direct reduced iron (DRI) facility. The outage is planned to last through mid-November.

Nucor's profits fell by 59pc to $275mn in the third quarter. In the first nine months of 2019, Nucor's earnings have declined by 33pc to $1.16bn compared with the same period of 2018.