Archives May 2017

Danieli GFG Alliance signing ceremony

Danieli Technology Partner for GFG Alliance

New structural and rail mill project in Australia

Danieli has struck a new partnership with GFG Alliance for the design and construction of a new high-tech rail and section mill at the Whyalla Steelworks.

The new 750,000-tpy structural and rail heavy section mill will be an environmentally friendly facility that will increase the Steelworks production capacity, reduce waste and enable GFG ’s Liberty Primary Steel to lift product capability and improve its competitive advantage.

The mill will be equipped with the RH2 system, the Danieli patented process for rail hardening that enhances mechanical properties of high-speed rails through multi-immersion steps into a quenchant.

The project will be executed in two phases. The first phase foresees Danieli to work in combination with AAR TEE Ferretti International for turnkey construction and auxiliaries, and the Liberty team to develop the engineering stage.

The second phase will consist of equipment design, manufacturing, supplying and commissioning to reach the goal of hot commissioning in the following 18 months.

The Australian government paid much attention to the project. The Prime Minister of Australia Scott Morrison, the Federal Leader of the Opposition Bill Shorten, the South Australian Premier Steven Marshall, and the Mayor of Whyalla City Clare McLaughlin attended the signing ceremony.

Source: Danieli


Steel Dynamics to Acquire 75% of United Steel Supply, LLC to Expand Painted Galvalume® Distribution Capabilities

FORT WAYNE, Ind., Feb. 1, 2019  — Steel Dynamics, Inc. (NASDAQ/GS: STLD) today announced that it has entered into a definitive agreement to acquire a majority of the equity interest of United Steel Supply, LLC (“United Steel Supply”).   United Steel Supply is headquartered in Austin, Texas and is a leading distributor of painted Galvalume® flat roll steel used for roofing and siding applications.  Steel Dynamics has agreed to purchase 75 percent of the equity interests of United Steel Supply for $134 million, comprised of cash consideration of $92 million and the assumption of $42 million in apportioned debt. The purchase price assumes total net working capital of $59 million, which is subject to customary post-closing adjustments.  Additionally, Steel Dynamics has an option to purchase the remaining 25 percent equity interest of United Steel Supply in the future.  

“United Steel Supply provides an exciting opportunity to expand our painted Galvalume® value chain, by affording us with a better opportunity to provide our high-quality flat roll steel directly to this important market segment,” said Mark D. Millett, President and Chief Executive Officer. “United Steel Supply has a reputation for best-in-class service, short supply lead-times and strong customer relationships.  We believe this partnership will provide a strong cultural fit with Steel Dynamics.  We are eager to welcome the United Steel Supply employees and customers, and we look forward to our mutual growth and success.”

United Steel Supply Acquisition Overview

United Steel Supply (“USS”) distributes painted and coated flat roll steel coils to the niche regional roll-former market, serving the roofing and siding industry.  USS is headquartered in Austin, Texas, with four distribution centers strategically located in Mississippi, Indiana, Arkansas, and Oregon, and employs 38 non-union individuals.  As part of the transaction, current United Steel Supply owners Bret Curtis and Will Waldrip will continue to lead USS in their current capacities as President and Vice President, respectively.  Under Messrs. Curtis and Waldrip’s leadership, United Steel Supply has achieved an extraordinary 26 percent compounded annual revenue growth rate since inception in 2007.

Steel Dynamics’ unique combination of Galvalume® manufacturing and on-site paint application presents attractive synergies in the production of painted Galvalume®, which is the principal product distributed by United Steel Supply. Due to the smaller individual order size and extensive service levels required by USS’s large and diverse customer base, this transaction adds a new, complementary distribution channel for Steel Dynamics and connects it to a rapidly growing industry segment with customers that do not traditionally purchase steel directly from a steel producer.   Steel Dynamics expects this transaction to provide continued growth in one of its highest-margin flat roll steel products.   Steel Dynamics’ Columbus Mississippi and Butler Indiana Flat Roll divisions already supply flat roll steel to USS, and this volume is expected to grow. 

Transaction Details

This transaction is valued on a total enterprise value based on five times United Steel Supply’s 2018 adjusted EBITDA.  The existing USS owners will also have an opportunity to receive an additional earn-out over the five-year period after closing by achieving certain operational and financial metrics expected to benefit both United Steel Supply and Steel Dynamics.  This transaction is subject to customary closing conditions and receipt of regulatory approvals.

About Steel Dynamics, Inc.

Steel Dynamics is one of the largest domestic steel producers and metals recyclers in the United States based on estimated annual steelmaking and metals recycling capability, with facilities located throughout the United States, and in Mexico. Steel Dynamics produces steel products, including hot roll, cold roll, and coated sheet steel, structural steel beams and shapes, rail, engineered special-bar-quality steel, cold finished steel, merchant bar products, specialty steel sections and steel joists and deck. In addition, the company produces liquid pig iron and processes and sells ferrous and nonferrous scrap.

Forward-Looking Statements

This press release contains some predictive statements about future events, including statements related to conditions in the steel and metallic scrap markets, Steel Dynamics’ revenues, costs of purchased materials, future profitability and earnings, and the operation of new or existing facilities. These statements, which we generally precede or accompany by such typical conditional words as “anticipate”, “intend”, “believe”, “estimate”, “plan”, “seek”, “project”, or “expect”, or by the words “may”, “will”, or “should”, are intended to be made as “forward-looking”, subject to many risks and uncertainties, within the safe harbor protections of the Private Securities Litigation Reform Act of 1995. These statements speak only as of this date and are based upon information and assumptions, which we consider reasonable as of this date, concerning our businesses and the environments in which they operate. Such predictive statements are not guarantees of future performance, and we undertake no duty to update or revise any such statements. Some factors that could cause such forward-looking statements to turn out differently than anticipated include: (1) the effects of uncertain economic conditions; (2) cyclical and changing industrial demand; (3) changes in conditions in any of the steel or scrap-consuming sectors of the economy which affect demand for our products, including the strength of the non-residential and residential construction, automotive, manufacturing, appliance, pipe and tube, and other steel-consuming industries; (4) fluctuation in the cost of key raw materials and supplies (including steel scrap, iron units, and energy costs) and our ability to pass on any cost increases; (5) the impact of domestic and foreign import price competition; (6) unanticipated difficulties in integrating or starting up new or acquired businesses or assets; (7) risks and uncertainties involving product and/or technology development; and (8) occurrences of unexpected plant outages or equipment failures.

More specifically, we refer you to Steel Dynamics’ more detailed explanation of these and other factors and risks that may cause such predictive statements to turn out differently, as set forth in our most recent Annual Report on Form 10-K under the headings Special Note Regarding Forward-Looking Statements and Risk Factors, in our quarterly reports on Form 10-Q or in other reports which we from time to time file with the Securities and Exchange Commission. These are available publicly on the SEC website, www.sec.gov, and on the Steel Dynamics website, www.steeldynamics.com: Investors: SEC Filings.

Source: Steel Dynamics, Inc.


United States Steel Corporation Reports Fourth Quarter and Full-Year 2018 Results

  • Full-year 2018 net earnings of $1,115 million, or $6.25 per diluted share; full-year adjusted net earnings of $957 million, or $5.36 per diluted share
  • Full-year 2018 adjusted EBITDA of $1.76 billion
  • Returned over $110 million of capital to stockholders in 2018, including $75 million of share repurchases

PITTSBURGH, Jan. 30, 2019 — United States Steel Corporation (NYSE: X) reported full-year 2018 net earnings of $1,115 million, or $6.25 per diluted share.  Adjusted net earnings were $957 million, or $5.36 per diluted share.  This compares to a full-year 2017 net earnings of $387 million, or $2.19 per diluted share.  Adjusted net earnings for 2017 was $341 million, or $1.94 per diluted share.

Fourth quarter 2018 net earnings were $592 million, or $3.34 per diluted share.  Adjusted net earnings for the fourth quarter 2018 were $324 million, or $1.82 per diluted share. This compares to a fourth quarter 2017 net earnings of $159 million, or $0.90 per diluted share. Fourth quarter 2017 adjusted net earnings were $136 million, or $0.76 per diluted share.

“We are pleased with both the strong earnings we reported in 2018 and the important progress we made on our strategic objectives… We are encouraged by the effectiveness of the investments we are making and remain focused on improving our operating and commercial performance to drive long-term value creation for our stockholders.”


U. S. Steel President and Chief Executive Officer David B. Burritt.

The Company currently expects first quarter 2019 adjusted EBITDA to be approximately $225 million, which excludes the expected first quarter impacts of the December 24, 2018 fire at our Clairton coke making facility.

First quarter 2019 EBITDA for the Flat-rolled segment is expected to be higher than first quarter 2018, primarily due to higher average realized selling prices, partially offset by higher raw materials costs.

First quarter 2019 EBITDA for the U. S. Steel Europe segment is expected to be lower than first quarter 2018, primarily due to lower volumes, higher raw materials costs, and an unfavorable change in the U.S. dollar / Euro exchange rate.

First quarter 2019 EBITDA for the Tubular segment is expected to be higher than first quarter 2018, primarily due to higher average realized selling prices and increased volumes, partially offset by higher costs for steel substrate.

Source: United States Steel

Continue reading and see official data at ussteel.com


Advanced pulsating spray cooling system from Primetals started up at Hyundai Steel continuous slab caster

  • DynaJet Flex system reduces appearance of corner cracks when casting advanced steel grades
  • Highest discretization of cooling zones in width direction
  • Pulse-width modulated cooling widens operation window with higher turn down ratio
  • Operational cost reduction by reduced scarfing losses and air consumption

In November 2018, the newly introduced DynaJet Flex spray cooling system from Primetals Technologies has been started up at the two-strand continuous slab casting machine CC2 in the Dangjin, Korea plant of Hyundai Steel. DynaJet Flex allows for pulse width modulated cooling, thus enabling highest discretization of cooling zones in width direction and widening the operation window with higher turn down ratios compared to cooling systems currently in use. This minimizes the appearance of corner cracks especially for advanced high-strength steels (AHSS). Consequently scarfing losses and in addition air consumption are reduced. This is the first industrial application of DynaJet Flex technology. The order for the new system for the first strand was placed in late November 2017. After a successful test, the application of the system on the second strand was ordered immediately.

Caster CCM2 has a rated capacity of 2.8 million metric tons of slab per year. It has a machine radius of 9.5 meters and a metallurgical length of 43.5 meters. Slabs are cast in a width range of 800 to 1,650 millimeters and a thickness of 250 millimeters. Hyundai Steel is producing special steels for the automotive industry, e.g. Hyundai Motors, such as AHSS of the second and third generation. Such crack sensitive steel grades require a width- adjustable secondary cooling to avoid overcooling of the slab corners.  In order to adjust spray cooling in the bender area for slab width ranges from 800 to 1,650 millimeters, a 4-step margin control with the Dynajet Flex system was installed on CCM2.

Today, secondary cooling of continuous casting machines is typically equipped with air-mist nozzles to achieve a wide turn down ratio which is the highest to lowest water flow without jeopardizing the spray pattern uniformity. To prevent corner cracks the zones are additionally split into center and margin strips across the casting direction. DynaJet Flex is the new cooling system to put the discretization of cooling zones at casting machines to the next level. By using water only nozzles, which are driven with a pulse width modulated signal, it is possible to increase the turn down ratio compared to air mist systems and significantly reduce the operating costs by reduced air consumption. The system can be installed on a segment during a planned maintenance cycle. After reinserting the segment into the machine DynaJet Flex is immediately activated. From then on the segment is ready to operate and provides the drastically refined cooling control for an optimal slab temperature, both longitudinally and transversely.

DynaJet Flex pulse-width cooling system from Primetals Technologies mounted in bender zone at Hyundai Steel

DynaJet Flex pulse-width cooling system from Primetals Technologies mounted in bender zone

Source: Primetals Technologies


Nucor Announces 2018 Financial Results

2018 record earnings per diluted share of $7.42 is 24% higher than previous record earnings of $5.98 per diluted share reported in 2008

CHARLOTTE, N.C. — Nucor Corporation (NYSE: NUE) announced today record consolidated net earnings of $2.36 billion, or $7.42per diluted share, for 2018 compared to $1.32 billion, or $4.10 per diluted share, for 2017. The new earnings record of $7.42 per diluted share in 2018 is a 24% increase as compared to the Company’s previous record earnings of $5.98 per diluted share reported in 2008.

Nucor reported consolidated net earnings of $646.8 million, or $2.07 per diluted share, for the fourth quarter of 2018. By comparison, Nucor reported consolidated net earnings of $676.7 million, or $2.13 per diluted share, for the third quarter of 2018 and $383.9 million, or $1.20 per diluted share, for the fourth quarter of 2017. Consolidated net earnings of $646.8 million reported in the fourth quarter of 2018 represents the strongest fourth quarter performance in the Company’s history.

“The best way to sum up 2018 is this – it was a record year for Nucor. We posted record earnings per share and record revenue, and we shipped a record amount of steel,” said John Ferriola, Nucor’s Chairman, Chief Executive Officer and President. “Over the past decade, we have been positioning Nucor to take full advantage of an upturn in the steel market. During that time, we invested more than $9 billion to increase the Company’s peak earnings power. These investments enhanced our competitive strengths by building on our product diversity and market leadership positions. Our 2018 financial results demonstrate that Nucor’sdisciplined strategy of investing for profitable growth is working.”

Selected Segment Data

In the first quarter of 2018, the Company began reporting its tubular products and piling businesses as part of the steel products segment. These businesses were previously included in the steel mills segment. All prior period segment data presented in this news release has been recast to reflect this change. Earnings (loss) before income taxes and noncontrolling interests by segment were as follows for the fourth quarter and full year 2018 and 2017 (in thousands):
 Three Months (13 Weeks) Ended Twelve Months (52 Weeks) Ended 
$ 877,276$ 322,241$ 3,229,391$ 1,749,957
Dec. 31, 2018Dec. 31, 2017Dec. 31, 2018Dec. 31, 2017
Steel mills$ 882,438$ 324,275$ 3,500,085$ 1,953,075
Steel products86837100515467105337978
Raw materials5577326721236241129296
Corporate
/eliminations
-147772-129270-974040-670392

Financial Review

For 2018, Nucor’s consolidated net sales increased 24% to $25.07 billion, compared with $20.25 billion for 2017. In 2018, Nucor posted its highest consolidated sales in the Company’s history, surpassing Nucor’s previous record by 6%. Total tons shipped to outside customers in 2018 were 27,899,000, an increase of 5% from 2017, while average sales price per ton increased 18%.

Nucor’s consolidated net sales decreased 7% to $6.30 billion in the fourth quarter of 2018 compared with $6.74 billion in the third quarter of 2018 and increased 24% compared with $5.09 billion in the fourth quarter of 2017. Average sales price per ton decreased 2% compared to the third quarter of 2018 and increased 21% compared to the fourth quarter of 2017. Total tons shipped to outside customers were 6,687,000 tons in the fourth quarter of 2018, a 5% decrease from the third quarter of 2018 and an increase of 2% from the fourth quarter of 2017. Total fourth quarter steel mill shipments decreased 6% from the third quarter of 2018 and increased 2% from the fourth quarter of 2017. Fourth quarter downstream steel products shipments to outside customers decreased 10% from the third quarter of 2018 and decreased 1% from the fourth quarter of 2017.

Third quarter 2018 results included a non-cash impairment charge of $110.0 million, or $0.26 per diluted share, related to our proved producing natural gas well assets. Also included in the third quarter of 2018 earnings was a benefit of $24.8 million, or $0.06 per diluted share, related to insurance recoveries. Fourth quarter of 2017 results included a net benefit of $175.2 million, or $0.55 per diluted share, related to the impacts of U.S. federal tax legislation enacted in the fourth quarter of 2017.

The average scrap and scrap substitute cost per gross ton used in the fourth quarter of 2018 was $359, a 4% decrease compared to $374 in the third quarter of 2018 and a 13% increase compared to $317 in the fourth quarter of 2017. The average scrap and scrap substitute cost per gross ton used for the full year 2018 was $361, an 18% increase from $307 for the full year 2017.

Overall operating rates at our steel mills decreased to 88% in the fourth quarter of 2018 as compared to 92% in the third quarter of 2018 and increased compared to 82% in the fourth quarter of 2017. Steel mill operating rates for the full year 2018 increased to 91% as compared to 86% for the full year 2017.

Total steel mill energy costs in the fourth quarter of 2018 increased approximately $2 per ton compared to the third quarter of 2018 and increased approximately $1 compared to the fourth quarter of 2017. The increases from the third quarter of 2018 and fourth quarter of 2017 were mainly due to higher natural gas unit costs. Energy costs for the full year 2018 decreased approximately $1 per ton from the full year 2017 mainly due to lower unit costs for natural gas.

Our liquidity position remains strong with approximately $1.4 billion in cash and cash equivalents as of December 31, 2018 and an untapped $1.5 billionrevolving credit facility that does not expire until April 2023.

During the fourth quarter of 2018, Nucor repurchased approximately 8.4 million shares of its common stock for an average price of $60.19 per share. At December 31, 2018, Nucor had approximately 305,591,000 shares outstanding and approximately $1.5 billion available under its share repurchase program.

Recent Developments

In January 2019, Nucor announced that it will build a state-of-the-art plate mill in the U.S. Midwest. Nucor’s board of directors approved an investment of $1.35 billion to build the mill, which is expected to be fully operational in 2022 and will be capable of producing approximately 1.2 million tons per year of steel plate products. This advanced mill will provide us enhanced ability to serve customers in the region, which is the largest plate-consuming area in the U.S., and to meet all the steel needs of customers around the country. The site for the new mill is anticipated to be selected early this year.


Fourth Quarter Analysis

As expected, the fourth quarter of 2018 was another strong quarter for Nucor. Earnings in the fourth quarter of 2018 declined from the third quarter of 2018 due in part to typical seasonality. The profitability of the steel mills segment decreased from the third quarter of 2018 due to lower shipments across the segment and lower average selling prices at our sheet, bar and structural mills. The performance of our steel products segment decreased from the third quarter of 2018 due to some decline in our tubular products group, which experienced a strong third quarter, and our rebar fabrication businesses. The raw materials segment’s performance decreased in the fourth quarter of 2018 as compared to the third quarter of 2018 due to decreased earnings of our DRI businesses.

Outlook

Following 2018’s record-setting earnings performance, we believe that 2019 will be another strong year as we expect the earnings performance to be one of the best in Nucor’s history. As we enter 2019, we have a positive outlook on end-use demand and general economic conditions.

We expect another strong quarter for earnings in the first quarter of 2019. Although sheet pricing and margins are expected to decrease in the first quarter of 2019 as compared to the fourth quarter of 2018, this will be partially offset by expected increases in profitability of our bar mills and structural mills. The performance of the raw materials segment is expected to decrease in the first quarter of 2019 as compared to the fourth quarter of 2018 due to the decreased performance of our DRI businesses, which continue to be negatively impacted by declining average selling prices for raw materials that began in the fourth quarter of 2018. The profitability of our steel products segment in the first quarter of 2019 is expected to be similar to the fourth quarter of 2018. We expect first quarter of 2019 earnings to be much stronger than the first quarter of 2018.

About Nucor

Nucor and its affiliates are manufacturers of steel and steel products, with operating facilities primarily in the U.S. and Canada. Products produced include: carbon and alloy steel — in bars, beams, sheet and plate; hollow structural section tubing; electrical conduit; steel piling; steel joists and joist girders; steel deck; fabricated concrete reinforcing steel; cold finished steel; steel fasteners; metal building systems; steel grating; and wire and wire mesh. Nucor, through The David J. Joseph Company, also brokers ferrous and nonferrous metals, pig iron and hot briquetted iron / direct reduced iron; supplies ferro-alloys; and processes ferrous and nonferrous scrap. Nucor is North America’s largest recycler.

Forward-Looking Statements

Certain statements contained in this news release are “forward-looking statements” that involve risks and uncertainties. The words “believe,” “expect,” “project,” “will,” “should,” “could” and similar expressions are intended to identify those forward-looking statements. Factors that might cause the Company’s actual results to differ materially from those anticipated in forward-looking statements include, but are not limited to: (1) competitive pressure on sales and pricing, including competition from imports and substitute materials; (2) U.S. and foreign trade policies affecting steel imports or exports; (3) the sensitivity of the results of our operations to prevailing steel prices and the changes in the supply and cost of raw materials, including scrap steel; (4) market demand for steel products; and (5) energy costs and availability. These and other factors are discussed in Nucor’s regulatory filings with the Securities and Exchange Commission, including those in Nucor’s 2017 Annual Report on Form 10-K, Item 1A. Risk Factors. The forward-looking statements contained in this news release speak only as of this date, and Nucor does not assume any obligation to update them.

More information at Nucor.com


Steel Coil loading onto boat at a port in the emerging steel markets

Deteriorating Trading Conditions Unnerve the Emerging Steel Market

Brazil

Brazilian steelmakers remain optimistic regarding the growth prospects for domestic steel consumption. Import penetration is relatively low. Nonetheless, the Instituto Nacional dos Distribuidores de Aço (Inda) reports that, in January 2019, domestic finished steel sales are expected to total 264,000 tonnes – down 7.0 percent, compared with last year’s figure. Distributor and service centre inventory levels, at the end of December 2018, stood at 939,400 tonnes, equivalent to 5.5 months of sales.

Russia

The outlook for the Russian steel market is unchanged. Distributors are holding off purchasing to see how demand develops, citing anxieties regarding the new VAT rate (20 percent) and weakening economic fundamentals. Nevertheless, pipe and tube fabricators are optimistic. They are forecasting firm demand, from the construction and energy industries, at the end of the country’s inhospitable winter season (in mid-April). Overseas business is competitive.

India

Weak purchasing activity prevails, in India, after the year-end holiday break. Local service centres are reviewing their inventory levels and are very cautious about order placement, as a result. Furthermore, price competition in the long products market is forecast to intensify ahead of the interim budget, on February 1, 2019. Third country flat product import offers are available, but buyers show little interest.

China

In January, Chinese traders have been more cautious in their operations. Similarly, end-users are adopting a wait-and-see approach. Reduced production rates are expected in the run up to the forthcoming Lunar New Year festival season. Meanwhile, the Ministry of Ecology and Environment (MEE) stressed that it would not relax environmental protection targets, in 2019. Export business opportunities are poor, at present.

Ukraine

In Ukraine, purchasing activity is weak. Service centres resumed trading, on January 8. Exporters cut their selling figures, weighed down by a fall in the cost of billet and slab, and the increased availability of Chinese finished steel products in the market. The local association of metal producers, Metallurgprom, reported that finished steel production, in December 2018, totalled 1.519 million tonnes – up 3.1 percent, month-on-month. 

Turkey

The business climate in Turkey is unchanged since our December report. Slow construction activity is curbing buying interest in the country’s main cities. Buyers exercised caution in the period surveyed, noting unfavourable economic fundamentals. Exporters have expressed concerns about their ability to sell the full range of products overseas – preferring to focus on wire rod, rebar and hot rolled coil.

United Arab Emirates

Demand in the United Arab Emirates, in general, is flat, with minimal signs of growth. Buyers at service centres are extremely reluctant to purchase material, in what they deem, as precarious trading conditions. Export opportunities are limited outside the GCC region.

South Africa

Negative price expectations are gaining momentum, in South Africa, fuelled by political uncertainty and waning economic fundamentals. Bearish stockists are reluctant to sign contracts with the mills, at the moment. We note a reluctance on the part of end-users to commit to forward orders.

Mexico

Purchasing volumes, in Mexico, are forecast to be stable, at best, in the next trading period. Distributors conveyed frustration with the price increases proposed by their domestic suppliers. The latest initiative is viewed as unjustified and is not supported by underlying demand. Construction activity in the public sector is subdued.

Source: MEPS Developing Markets Steel Review