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Researched by Industrial Info Resources (Sugar Land, Texas)--Despite challenging financial results for the first half of 2019, executives with Nucor Corporation (NYSE:NUE) (Charlotte, North Carolina) said they expect the steel producer's capital expenditures to amount to $1.8 billion this year.
For the just-ended second quarter, Nucor reported consolidated net earnings of $386.5 million, down substantially from earnings in the first quarter of 2019 and second-quarter 2018. For the first half of 2019, Nucor reported $888.3 million in earnings, down from $1.04 billion in the same period of 2018.
"Our financial results were lower than our expectations at the start of the quarter. Unusually wet weather and aggressive supply chain destocking impacted mill order rates in the first half of 2019," said Chief Executive Officer John Ferriola last week during the company's quarterly earnings conference call with industry analysts. "We have seen lower volumes during the first half of this year, resulting in a more challenging price environment."
Supply chain customers began destocking this year following a big inventory buildup in 2018, Ferriola said. Original equipment manufacturers and service center customers expanded their inventories last year over fears that the new U.S. steel import tariffs would curtail their supplies, he said.
Customers "were afraid of not being able get the steel; they put their inventories to very high levels, and of course, domestic capacity came on, everything settled down, the order rate and pricing returned to more normalized levels, but they maintained this high inventory," Ferriola said, adding: "At the end of the year, they want to get rid of that overblown inventory, they began to aggressively destock."
Going into the second half of 2019, Ferriola said he was cautiously optimistic that pricing has bottomed out on most products and that sales volumes "should be more closely aligned with real end-use demand in the second half of the year."
Industrial Info is tracking more than $4.5 billion in Nucor project activity.
Click on the image at right for a graph showing Nucor's project activity by market region.
Ferriola gave an update on several investment projects in various stages of development.
At its operations in Hickman, Arkansas, Nucor anticipates as much as 20% of its new cold steel mill's capacity will be booked with contract customers by yearend, Ferriola said. For more on the 500,000-ton-per-year cold rolling mill addition, see Industrial Info's project report.
In Kentucky, Nucor Steel Gallatin has begun commissioning its new 500,000-ton-per-year galvanizing line, Ferriola said.
"Production of pickled and oiled coils has started this month and will be followed by production of galvanized coils in August," he said, adding the 72-inch galvanizing line will be the widest hot-rolled galvanizing facility in North America. The line will serve the Midwest heavy-gauge hot-band galvanized steel market. For more information, see Industrial Info's project report.
In March, Nucor said it will build a $1.35 billion steel plate mill in Brandenburg. Kentucky. Construction of the 1.2 million-ton-per-year facility is planned to kick off by the end of 2019, with completion in early 2022. For more information, see Industrial Info's project report and March 29, 2019, article - Nucor's Planned $1.3 Billion Steel Plate Mill Finds Home in Kentucky.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
For the just-ended second quarter, Nucor reported consolidated net earnings of $386.5 million, down substantially from earnings in the first quarter of 2019 and second-quarter 2018. For the first half of 2019, Nucor reported $888.3 million in earnings, down from $1.04 billion in the same period of 2018.
"Our financial results were lower than our expectations at the start of the quarter. Unusually wet weather and aggressive supply chain destocking impacted mill order rates in the first half of 2019," said Chief Executive Officer John Ferriola last week during the company's quarterly earnings conference call with industry analysts. "We have seen lower volumes during the first half of this year, resulting in a more challenging price environment."
Supply chain customers began destocking this year following a big inventory buildup in 2018, Ferriola said. Original equipment manufacturers and service center customers expanded their inventories last year over fears that the new U.S. steel import tariffs would curtail their supplies, he said.
Customers "were afraid of not being able get the steel; they put their inventories to very high levels, and of course, domestic capacity came on, everything settled down, the order rate and pricing returned to more normalized levels, but they maintained this high inventory," Ferriola said, adding: "At the end of the year, they want to get rid of that overblown inventory, they began to aggressively destock."
Going into the second half of 2019, Ferriola said he was cautiously optimistic that pricing has bottomed out on most products and that sales volumes "should be more closely aligned with real end-use demand in the second half of the year."
Industrial Info is tracking more than $4.5 billion in Nucor project activity.
Ferriola gave an update on several investment projects in various stages of development.
At its operations in Hickman, Arkansas, Nucor anticipates as much as 20% of its new cold steel mill's capacity will be booked with contract customers by yearend, Ferriola said. For more on the 500,000-ton-per-year cold rolling mill addition, see Industrial Info's project report.
In Kentucky, Nucor Steel Gallatin has begun commissioning its new 500,000-ton-per-year galvanizing line, Ferriola said.
"Production of pickled and oiled coils has started this month and will be followed by production of galvanized coils in August," he said, adding the 72-inch galvanizing line will be the widest hot-rolled galvanizing facility in North America. The line will serve the Midwest heavy-gauge hot-band galvanized steel market. For more information, see Industrial Info's project report.
In March, Nucor said it will build a $1.35 billion steel plate mill in Brandenburg. Kentucky. Construction of the 1.2 million-ton-per-year facility is planned to kick off by the end of 2019, with completion in early 2022. For more information, see Industrial Info's project report and March 29, 2019, article - Nucor's Planned $1.3 Billion Steel Plate Mill Finds Home in Kentucky.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
