Nucor expects a strong performance in its steel mills segment in Q1 2021 that will result in higher profits in the sheet, plate, bar, and structural mills compared to Q4 2020.
Operations in the steelmaker’s raw materials division are anticipated to advance considerably in Q1 2021 over Q4 2020 as raw materials selling prices have increased. Nonresidential construction and auto markets are also solid, while settings are recovering in heavy equipment, agriculture, renewable energy, and highway transportation markets.
Conversely, the company’s downstream steel products division may experience a decline in profits this quarter compared to Q4 2020 due to the lag between growing steel input expenses and increasing selling prices, along with routine seasonal impacts.
The company’s steel mills’ operating rates fell to 82pc in 2020 from 84pc in 2019, while their operating rates rose to 87pc in Q4 2020 from 83pc in the same quarter of the previous year. The company attributed the improvements in Q4 to rising sheet and plate mills’ pricing along with strength derived from bar, structural mills, and nonresidential construction.
Nucor’s profits grew in the raw materials division in Q4 2020 over the prior quarter due to its direct reduced iron sites that have gained above normal raw material selling prices.
The manufacturer’s shipped tons from steel mills fell by 3pc to 22.69mn nt (20.58mn mt) in 2020 from 23.36mn nt in the prior year. Steel mills’ shipments ticked up by 0.24pc to 5.79mn nt in Q4 2020 from 5.78mn nt in Q4 2019.
The steelmaker sold 25.52mn nt to outside customers in 2020, falling by 4pc against 26.53mn nt in the previous year. Tons sold to outside customers in Q4 2020 remained flat at 6.49mn nt compared with the prior-year period.
Nucor’s consolidated net sales fell by 11pc to $20.14bn in 2020 against $22.59bn in 2019. Consolidated net sales increased by 3pc to $5.26bn in Q4 2020 from $$5.13bn in the previous-year quarter.
Net earnings tallied at $721.47mn in 2020 down 43pc from $1.27bn in the previous year but surged 270pc to reach $398.84mn in Q4 2020, from $107.82mn in Q4 2019.