Q1 2010 earnings season continues. This week ArcelorMittal and US Steel announced results. Links to both companies’ announcements appear below.
ArcelorMittal posted EBITDA per ton of $80 in the quarter, similar to the numbers reported by AK Steel and Steel Dynamics last week. US Steel’s EBITDA per ton was $20, not quite in line with its peers but up significantly from Q4 2009 when the company reported negative EBITDA of $33 per ton.
See historical results and compare company performance in the Nerds of Steel earnings spreadsheet. If there are other bits of information you’d like to see or think we should be tracking more companies let me know. I can’t promise we’ll fulfill all your wishes but I’d like to know what you think.
Along with its global monthly steel production figures, worldsteel also published yesterday its collective wisdom about forecast Apparent Steel Use (ASU) by country through 2011. This is the ‘Short Range Outlook.’
The current forecast (data in the Nerds spreadsheet below) shows about an 11% rise in demand in 2010 to 1.24Bn metric tonnes with a further 5.3% rise in 2011 that takes global apparent steel demand to 1.31Bn tonnes. If achieved, each year would represent successive record levels of demand. But the pattern of demand will be quite different than before the Great Recession.
According to the worldsteel forecast, the developed world will achieve in 2011 only about 80% of its demand in 2008. But the developing world will have risen to 124% of its demand in that same year. Within the developing group, the BRIC’s (Brazil, Russia, India & China) will have soared to 132% of their 2008 demand. Though demand in the developed world will no doubt recover further from 2011, it will continue to lose ground to developing nations. This is the central truth about the state of the current and future world steel industry that all developed nation producers need somehow to accommodate as fast as they can.
All the data of the worldsteel short term forecast (plus 2008 data for reference) and a variety of analytical doodles are all yours below.
Based on reported import licenses, US long products imports climbed 27% from 166,000 short tons in January to 210,000 tons in February. Long products imports in February 2009 were 115,000 tons and in February 2008 they were 330,000 tons.
Wire rod and rebar showed the biggest gains. Wire rod imports in February were 38,000 tons higher than in January, a 48% increase, with Turkey and Italy showing significantly higher volumes. Rebar imports in February were 27,000 tons higher than in January, a 109% increase, with Turkey again accounting for a big part of the increase.
Import licenses reported up to March 16th were 145,000 tons which indicates that full-month March imports should show a significant rise over February. Wire rod license applications in particular are high, with another strong rise from Turkey.
For the first time since the week ending October 25th 2008, US steel mill utilization is above 70% according to data for the week ending March 13th, 2010 released today by the AISI. The progress of weekly utilization since August of 2008 is shown in the chart below:
There are two charts on the Editgrid spreadsheet above. One that shows the reported utilization and another (the bar chart below) that shows the rate of change in utilization over rolling 12 week spans. As you will see from that chart, the rate of change in utilization is improving. Back in November of 2008, we were optimistic that we would not experience a prolonged period of sub-70% utilization on an annual basis. 2009 annual utilization was just above 50%. It’s encouraging to see 2010 pass the 70% mark before the end of the first quarter. 2010 YTD utilization is running around 66%
Based on reported import licenses, US flat products imports increased 6% from 432,000 short tons in January to 456,000 tons in February. This can be compared to 548,000 tons of flat products imports in February 2009.
Hot rolled imports showed the highest import volume gain by rising 20,000 tons in February while cut plate had the highest percentage gain by rising 49% to reach imports of 17,000 tons. Cold rolled imports dropped by 18% to 62,000 tons and hot dip galvanized imports showed a marginal decline.
It’s too early in the month to accurately forecast full-month March imports, but I will update the spreadsheet below with the newest March 16th data next week.
This morning Ternium released financial results for 2009. The press release can be found here. As has been the case for several years, Ternium continued to be among the top performers tracked on the Nerds of Steel earnings spreadsheet. For the full year of 2009, the company achieved average EBITDA per ton of $100. This is quite an accomplishment given the difficult environment the industry faced last year. Perhaps most important for the company’s cash flow generation, full year shipments fell only 15% from 2008. This compares to declines of 25-40% for companies with their primary production facilities located in the US.
