US steelmakers warn on profits U.S. steelmakers projected lower quarterly profits, as automotive companies and equipment manufacturers dial down production.
Charlotte, N.C.-based Nucor said Tuesday that lower demand for steel in a weakening manufacturing sector and falling sales of its steel construction materials would result in a roughly 80% decline in third-quarter profit, including one-time charges, from the same quarter last year. Indiana-based Steel Dynamics late Monday forecast lower quarterly profit as well, describing earnings from its steel business as being “meaningfully lower” from the prior quarter because of weak demand and lower steel prices.
Steelmakers have been struggling this year against a slump in U.S. manufacturing that is cutting into demand for the flat-rolled sheet steel that makes up the bulk of steel companies’ output.
Higher interest rates, rising operating costs, a strengthening U.S. dollar and lower selling prices for commodities are damping activity at factories across the country. Executives for makers of long-lasting items such as cars, crop-harvesting combines and washing machines are projecting challenging business conditions for the remainder of the year.
Weakening demand has created a shaky steel market, though the spot market price for sheet steel has risen from its recent low during the summer. S&P Global Commodity Insights on Monday reported hot-rolled sheet steel selling for $700 a ton, up about $20 from a month earlier. Steelmakers made unsuccessful attempts over the summer to push prices above $700.
Steel imports to the U.S. have been rising this year as foreign steel producers export more steel to offset lower demand in their home markets. Nucor and other U.S. steelmakers complained this summer that steel from China is eluding U.S. tariffs by entering the country from Mexico, which is allowed to send products into the U.S. without tariffs under a trade agreement between the U.S., Mexico and Canada.