Nucor Benefits from Improved Steel Mill Performance, Trade Cases

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Researched by Industrial Info Resources (Sugar Land, Texas)--Steel manufacturer Nucor Corporation (NYSE:NUE) (Charlotte, North Carolina) expects to see an improvement in first-quarter 2017 earnings, as it benefits from improved performance at its steel mills and favorable trade case rulings, the company said Thursday. Industrial Info is tracking $254 million in Nucor capital projects that are currently expected to start construction this year.

The results for the quarter ending April 1 are expected to be in the range of $1.10 to $1.15 per diluted share, compared with fourth-quarter 2016 consolidated earnings of 50 cents per share, and first-quarter 2016 earnings of 27 cents per share. The company attributed the expected earnings hike primarily to increased profitability in its steel mills segment, which is driven by improved performance of its sheet and plate mills.

Also, trade cases in cut-to-length plate and rebar products "are helping to stop the flood of dumped and subsidized products from foreign producers...," the company said. Of the trade cases filed against 12 countries, favorable final decisions have been announced regarding imports from Brazil, South Africa and Turkey. In addition, the U.S. International Trade Commission (ITC) voted that the U.S. industry is being injured by dumped and subsidized plate imports from China. The U.S. Department of Commerce has announced preliminary antidumping duties on imports of steel concrete reinforcing rebar from Japan, Taiwan and Turkey.

Executives with Nucor and United States Steel Corporation (NYSE:X) (Pittsburgh, Pennsylvania) have lauded the Trump administration's support for trade laws and infrastructure spending. For related information, see February 7, 2017, article - U.S. Steel, Nucor Sunny on 2017, Herald Trump's Stance on Infrastructure, Trade Laws.

"We are encouraged by the renewed growth in demand we are seeing in both the nonresidential construction and energy markets," Nucor said in a statement on Thursday. "The heavy equipment markets remain weak. The automotive markets remain strong."

Nucor is performing an economic evaluation for a $230 million specialty cold rolling mill addition project at its Blytheville Sheet Rolling Mill in Arkansas. The addition will expand the company's capability to produce advanced, high-strength low-alloy and motor lamination steel products for the automotive market, according to the company. Construction of the 500,000-ton-per-year cold rolling mill is currently expected to kick off in September this year, with completion in third-quarter 2018. For more information, see Industrial Info's project report.

Two upgrade projects at Nucor's Cofield-Hertford Steel Plate Mill in Winton, North Carolina, are also in the works this year. The $10 million steel plate finishing mill upgrade involves replacement and modification of obsolete control equipment as well as finishing area production equipment to improve efficiency. Completion of the steel plate finishing mill upgrade is expected by the end of the first quarter. For more information, see Industrial Info's project report.

Also expected for completion later this year at the Winton facility is a $10 million steel plate rolling mill upgrade, involving replacement of obsolete equipment and other modernizations. For more information, see Industrial Info's project report.

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