Steel Mills
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/media/k2/items/src/ba87e32df7769445e26f337cfd693386.jpg)
Stelco Back in Black in Q1 on High Steel Prices, Increased Tons
Written by Michael Cowden
May 4, 2021
Canadian flat-rolled steelmaker Stelco swung to a profit in the first quarter and expects high steel prices and sales volumes to galvanize results for the balance of the year.
“All signs point to continued robust demand and strong pricing in the near term,” Stelco Executive Chairman and CEO Alan Kestenbaum said in a statement released with earnings data after the close of the market on Tuesday, May 4.
The integrated steelmaker recorded a profit of Canadian $119 million ($96.7 million) in the first quarter of 2021 versus a loss of C$24 million ($19.5 million) in the year-ago quarter on revenue that rose 49.4% to C$665 million ($540.5 million) over the same period, per first quarter earnings figures.
The jump back into the black came as average selling prices rose to C$959 ($789) per ton in the first quarter of 2021, up 36% from C$705 ($573) per ton in the first quarter of 2020.
Sales volumes were 675,000 tons in the first quarter of this year, up 8.7% from 621,000 tons in the same quarter last year. And gains were even more pronounced for higher value coated products, of which Stelco shipped 140,000 tons in the first quarter, up 25% from 112,000 tons in the first quarter of 2020.
The increase in tonnage sold came thanks in part to upgrades made to the “smart” blast furnace at Stelco’s Lake Erie Works in Nanticoke, Ontario. The investment resulted in higher hot metal and steel production, the company said.
Stelco also commissioned a new pig iron caster at its Lake Erie Works on Jan. 28, 2021, with annual capability of one million tons per year. The addition will allow the company to “re-shape the pig iron market in North America” by providing high-quality iron units to the region’s “expanding, but scrap constrained, electric-arc furnace steel (EAF) sector,” Kestenbaum said.
EAF mills have been adding capacity at a rapid clip in the United States, a development that some industry experts say could result in a shortage of prime scrap, the raw material needed to make high-quality finished steel products such as hot-rolled coil. Pig iron and other scrap alternatives such as direct-reduced iron (DRI) and hot-briquetted iron (HBI) could be used to help fill any void.
Stelco is also upgrading its coke battery while building a new electricity cogeneration facility, the company said.
“As we continue to generate cash, we are now beginning to turn our attention towards capital allocation decisions, which are available to us to continue to build shareholder value,” Kestenbaum said.
Given the forward curve for hot-rolled coil on the CME, Stelco could record adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of more than C$2 billion ($1.63 billion) in 2021, company Chief Financial Officer Paul Scherzer said.
“We have not historically issued guidance, other than shipments, but want to impress upon the market the earnings power of Stelco,” he said.
By Michael Cowden, Michael@SteelMarketUpdate.com
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/2024/02/SMU_MC_headshot-150x150.png)
Michael Cowden
Read more from Michael CowdenLatest 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 […]