Canadian metal distribution company Russel’s shipments dropped by 7pc in Q3 2020, from the prior-year quarter. Shipments in the first nine months of the year declined by 10pc compared to the prior-year period. From Q2, however, metals shipped rose by 9pc, according to the company release.
In the September ending quarter, the average selling price fetched by the company was 10pc lower than Q3 2019. While in the first nine months, selling prices were lower by 14pc than in 2019. Russel’s net earnings in the quarter were largely unchanged from Q3 2019 at $18.2mn, but in Jan-Sept 2020, declined to $33.3mn from $83.2mn in the prior-year period. EBITDA in Q3 2020, declined to $47.2mn from $48.7mn in Q3 2019, while in the first nine months, declined to $114.2mn from $185.4mn.
The company states COVID-19 related restrictions led to a temporary closure of businesses for its customers, impacting Russel’s operations. The economic uncertainty due to the virus still looms, and the extent of its effect on business cannot be anticipated yet. Moreover, tariff changes with countries trying to safeguard their domestic industries could impact steel prices and product availability.
For steel and aluminium, the replacement of the North American Free Trade Agreement by the United States–Mexico–Canada Agreement could aid demand after the pandemic. The company also believes the Feb 2020 determination by the US Trade Commission that fabricated structural steel imports from Canada, China, and Mexico do not materially injure the domestic industry could prove beneficial for its customers.