Nucor Corp. (NUE), the largest U.S. steelmaker by market value, said second-quarter profit will miss its previous guidance after a “surge” in imports undermined prices and political and economic uncertainty affected buyers’ confidence.
Earnings will be 35 cents to 40 cents a share including an impairment charge related to its Duferdofin Nucor Srl Italian joint venture, the Charlotte, North Carolina-based company said today in a statement. Excluding the charge, Nucor said profit will be “somewhat below the qualitative guidance” given in April, when the company said it expected “only a modest improvement in earnings.”
Hot-rolled coil, a benchmark steel product used in cars, trucks and appliances, has dropped 8.7 percent this year in the U.S. amid higher imports and increased output from domestic producers. Nucor said its performance is being affected by higher imports of steel rebar, which is used to reinforce concrete, and also steel plate and sheet. Lower scrap-steel prices are also hurting the company’s recycling business in the short term, it said.
“Although the U.S. market continues to show stable to slightly improving demand for steel, this surge in imports has undercut seasonal pricing momentum that is normally experienced early in the calendar year,” Nucor said.
Nucor fell 0.1 percent to $36.06 in New York.
Steel coil prices have declined to $632.50 a short ton this year, according to Steel Business Briefing data. Prices may fall to $570 a ton in the third quarter, Barclays Plc said yesterday in a note.
U.S. steel imports were 10.5 million metric tons in the first four months of 2012, 77 percent more than in the same period a year earlier, according to Census Bureau data. U.S. raw-steel production so far this year is up 7.4 percent, according to data from the American Iron and Steel Institute.
To contact the reporter on this story: Sonja Elmquist in New York at firstname.lastname@example.org
To contact the editor responsible for this story: Simon Casey at email@example.com