Emboldened by a recent favorable ruling for U.S. steelmakers in a steel pipe trade case, Nucor Corp said on Thursday it was confident the industry was poised for more success in future cases as it works to stem “a tsunami of imported steel.”
Nucor Chairman and Chief Executive John Ferriola said that after spending time in Washington he is more optimistic that U.S. lawmakers are finally starting to understand how damaging low-priced steel imports are for the U.S. economy and jobs.
In particular, he said he felt “good” about an upcoming final ruling in a case concerning imports of steel rebar from Mexico and Turkey.
“We feel confident that we’ve got a good shot at a final ruling that’s more favorable than the preliminary,” Ferriola said on a conference call after Nucor reported better than expected quarterly earnings on higher shipments and prices.
In April, the U.S. Commerce Department set preliminary duties on millions of dollars worth of rebar imports from the two countries after U.S. producers complained about price undercutting.
Earlier this month, the Commerce Department set duties on South Korean steel pipe used in the oil and natural gas industry, reversing itself in one of the most contentious trade disputes in years after hefty lobbying from U.S. producers and lawmakers.
Ferriola also hinted that more trade cases were in the offing but declined to be specific.
Ferriola declined to say whether Nucor had made a bid for the Columbus unit of Russia’s Severstal but said that although it was a good asset Nucor could not justify the price.
Severstal said on Monday it will sell its Columbus unit in Mississippi to Steel Dynamics Inc for $1.63 billion.
“Given that it really didn’t expand our geographical footprint, it didn’t help us on our customer base, it didn’t expand our product portfolio, we could not justify the $1.6 billion price tag,” Ferriola said.
He added that he was pleased that Columbus was bought by an existing domestic competitor as that would result in further consolidation in the sheet industry.
Earlier on Thursday, Charlotte, North Carolina-based Nucor said performance improved at its steel mills compared with the first quarter, especially at sheet and bar mills. It also expects an improvement in earnings in the current quarter.
Strong demand and rivals’ supply problems boosted demand for sheet steel, and volume and margins rose at bar mills.
Second-quarter earnings increased to $147.0 million, or 46 cents a share, from $85.1 million, or 27 cents, a year earlier. Net sales jumped 13 percent to $5.29 billion.
On average, analysts had expected earnings of 40 cents a share, according to Thomson Reuters I/B/E/S.
Nucor’s shares ended 0.2 percent firmer at $51.11.
Source – Reuters