Steel Mills
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/media/k2/items/src/0d69594db8dd959e8cef8b9de7d189e1.jpg)
Reliance Optimistic About 2018
Written by Sandy Williams
February 15, 2018
Reliance Steel and Aluminum Co. is seeing growing demand across all its product segments and expects that trend to continue through 2018.
Reliance reported a strong fourth quarter with net sales up 15.3 percent year-over-year to $2.38 billion. Third-quarter sales were somewhat lower due to expected seasonality. Fourth-quarter shipments totaled 1,451,000 tons, up 6.3 percent from Q4 2016 and down 4.6 percent from Q3. Average selling price per ton increased 1.6 percent from the third quarter to $1,632 per ton.
Net income for the quarter totaled $301.4 million, up from to $61.7 million in Q4 2016 and $97.3 million in Q3 2017. Income includes a one-time income tax reform benefit of $207.3 million.
For full-year 2017, the company posted its second highest annual net sales at $9.72 billion, a 12.9 percent increase year-over-year. Shipments increased 3.8 percent from 2016 to 4.85 million tons. Net income attributable to Reliance was $613.4 million, up from $304.3 million in 2016. Excluding the impact of the fourth-quarter tax reform benefit, net income attributable to Reliance was $406.1 million for the year, up 33.5 percent from 2016, and the third highest net income in the company’s history.
Looking forward to first-quarter results, Reliance expects shipments to grow by 6-8 percent.
Reliance is planning about $225 million in capital expenditures for 2018 with about 59 percent of that going toward growth-related projects across the company and the rest toward maintenance. CEO Gregg Mollins said the company is seeing acquisition opportunities picking up as sellers line up for potential acquirers.
Carbon plate demand is looking good with a lot of price increases coming through, including a $50 increase yesterday. Mills are operating at a 74-75 percent capacity with demand strengthening.
CFO Karla Lewis noted that carbon toll processing has been solid and aluminum toll processing has increased significantly. The company’s new plant in Kentucky was in response to growing aluminum use in the region and customer requests for a closer processing facility.
Nonresidential construction demand has been increasing steadily over the past two or three years and any spending on infrastructure would be welcomed by Reliance. About one-third of the company’s business is in nonresidential, which includes infrastructure.
Said Mollins, “We are very optimistic. Certainly it would be very, very helpful if the administration got in bed and started throwing some cash at it [infrastructure], and gets the private sector to invest as well.”
The energy sector continues to pick up with Reliance contributions coming mostly in alloy products for the drilling and completion-end of the industry.
Reliance’s foreign investment in the semiconductor market is well timed, said Lewis. Reliance is not a new player in either South Korea or China and, although somewhat volatile, the semiconductor market was very strong last year. In South Korea, Reliance is basically doubling its production, said Mollins.
Regarding Section 232 and how presidential action or inaction may affect the steel industry, Mollins commented: “Let me tell you what I know about the 232 case—I don’t know anything. I’m confused by the son-of-a-gun,” he said. “We don’t run our company based on hope, we run it based on what we know.” What Reliance knows is that there is room for imports to decline further and prices to increase more. “We like prices higher than lower, but at the same time we hope the mills use some discipline so the spreads don’t become so great that more imports come in. If you want a really good answer to 232, you’d better call the White House.”
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/2023/04/sandy-williams.jpeg)
Sandy Williams
Read more from Sandy WilliamsLatest in Steel Mills
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/stelco.png)
Steel Summit 2024: Stelco CEO reflects on strategy, growth, and sale to Cleveland-Cliffs
In a candid fireside chat with SMU Senior Analyst/Editor David Schollert, Stelco’s CEO Alan Kestenbaum opened up about Stelco’s pending sale to Cliffs, his business strategy, outlook for the industry, and plans for the future. The chat took place on Tuesday, Aug. 24, at the 2024 SMU Steel Summit in Atlanta.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/AISI.png)
AISI: US steel shipments unchanged in July vs. June, down on-year
Domestic steel shipments remained nearly flat in July month over month but fell from a year earlier.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/white_house.png)
Media reports: Biden could block USS sale on national security concerns
President Joe Biden could block the $15-billion sale of U.S. Steel to Japan's Nippon Steel by citing national security concerns That’s according to reporting in the Washington Post and the Financial Times that was later picked up by the New York Times as well as in wire services.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/US_Steel.png)
USS threatens to cut ‘thousands’ of jobs, move HQ if Nippon sale blocked
U.S. Steel could slash thousands of jobs, shift away from integrated steelmaking, and move its headquarters out of Pittsburgh if its acquisition by Nippon Steel isn’t completed, the company’s top executive said. “We want elected leaders and other key decision makers to recognize the benefits of the deal was well as the unavoidable consequences if the deal fails,” company President and CEO David Burritt said in a statement on Wednesday.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/SSAB.png)
CRU: SSAB to expand Mobile plate mill
SSAB plans to spend $12 million to boost production capacity at its electric-arc furnace (EAF) plate mill in Mobile, Ala. The Sweden-based steelmaker will do that by expanding the existing furnace there. Shot blast equipment will also be upgraded. The expanded capacity is expected to come online late next year. The mill currently has an […]