Steel Mills

NLMK USA Sales Surge on Construction and Pipe Demand

Written by Sandy Williams

April 27, 2017

NLMK USA sales jumped 33 percent from fourth to first quarter on stronger demand from construction and pipe manufacturers. Sales volume totaled 562,000 tonnes. Sales revenue was $399 million, which included $186 million for HRC, $109 million for CRC, $96 million for HDG, and $1 million for slabs. Profit for first quarter was $54 million compared to a loss of $12 million in Q1 2016.

 

 

NLMK noted during the earnings call that first quarter prices in home markets in the United States, Europe and Russia were showing premium in the merchant market. In particular, the Russian market premium was $70-80 dollars vs. export FOB Europe over $100 premium and U.S. over $200.

When asked about operations in NLMK’s foreign divisions, the executives said there was further room for improvements in terms of operational efficiency. “We’ve done a good job in making foreign assets more competitive from where they were before. All the divisions are profitable, all our plants except one outside of Russia are profitable. In the U.S., particularly, there is room for productivity improvements. There is some slack in available capacity which can and should be used in today’s pricing environment. Currently we are at 80-90 percent of capacity so there is some headroom there which we should be able to utilize.”

NLMK Group revenue grew 10 percent q/q to $2.15 billion on sales of 3.6 million tonnes. Net profit for the period was $323 million. Sales grew in the U.S. and EU while seasonal weakness was experienced in Russia.

Sandy Williams

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