Reliance Steel & Aluminum anticipates market demand will continue its recovery, which began in Q2, this quarter, although performance still lags behind 2019 levels.
The company estimates that its average sales price per ton this quarter will be 0-2pc compared to Q3, despite persistent market uncertain stemming from the COVID-19 pandemic.
It also expects to see metals pricing for carbon steel products to improve in Q4 2020, driven by mill price increases. But the price increases will be somewhat offset by lower sales in certain markets, like aerospace.
Reliance projects shipping volumes will drop in Q4 from Q3 for seasonal reasons, but it believes that impact could be less of a factor than in previous years. Resultantly, the company expects sales tons to decline by 4-6pc in Q4 2020 compared to the prior quarter.
Non-residential construction demand, Reliance’s largest end market, rose slowly last quarter, thanks to strong bidding on new projects and the resumption of paused projects. Reliance is hopeful that non-residential construction demand will continue improving in Q4 2020 due to strong backlogs and consumer sentiment.
The metal provider sold 1.04mn nt (943,654mt) of carbon steel in Q3 2020, down by 12.4pc compared to 1.19mn nt of carbon steel sold in Q3 2019. Carbon steel tons sold in Q3 2020 represent an increase of 5.4pc compared to 897,300nt sold in Q2 2020.
The company sold 70,500nt of aluminum in Q3 2020, declining by 17.4pc compared to 85,300nt sold in Q3 2019. Aluminum tons sold in Q2 2020 were 68,100nt representing a 3.5pc increase in Q3.
Reliance’s tons sold in Q3 surpassed expectations and volumes sold in Q2 as demand grew in most end markets due to gradual recovery in the economy.
The metal processor’s net sales were $2.09bn in Q3 2020, dropping by 22.4pc compared to $2.69bn in Q3 2019. Net sales were up by 3.3pc in Q3 compared to $2.02bn recorded in Q2 2020.
The company’s net income totaled $97.6mn in Q3 2020, down 40pc compared with $162.7mn in Q3 2019. Net income was up by 21.7pc in Q3 compared to $80.2mn logged in Q2 2020.