Two
US steel industry-related companies, minimill steel producer Steel Dynamics Inc. (SDI) and
iron ore miner Cliffs Natural Resources Inc., have both raised their near-term performance outlooks on the back of improved steel demand and
production.
SDI on Thursday raised its third-quarter profit expectations, citing continued strong orders for flat rolled steel and improved
scrap recycling volumes. SDI now expects to achieve Q3 profits of 20 to 25 cents per share, up from the previously projected 10 to 20 cents.
Keith Busse, Chairman and CEO said in a statement, "Earlier in the quarter, it was uncertain as to whether the strength in flat rolled order entry could be maintained; encouragingly, orders have remained strong.”
Busse went on to say that the firm's order book for flat rolled remains solid with bookings through October for value-added products. Furthermore, SDI's
scrap recycling division, OmniSource, is benefiting from increased demand and flows for ferrous
scrap as domestic steel producers become more active buyers, said Busse.
However, Busse also cautioned that the firm's fourth quarter outlook is still uncertain, as the economy is still in a “fragile” state. SDI's long product and
fabrication divisions also continue to see difficult market conditions.
“The most difficult part of our business remains our long products steel divisions and our
fabrication operations whose recovery awaits stronger
construction activity. We have not yet seen signs of improvement in non-residential building or gains from government stimulus,” said Busse.
On Friday, Cleveland-based Cliffs Natural Resources Inc. also announced increased
production and sales volume expectations for its North American Business Unit, which includes its North American
Iron Ore and North American Coal business segments.
Cliffs now expects its North American
Iron Ore business segment to recognize sales volumes of approximately 16 million long tons in 2009, an increase from the company`s previous expectation of 13 to 14 million tons.
Iron ore production is expected to rise to 17 million tons, from the 15 million tons predicted earlier in the year. Cliffs also raised its 2009 expected sales volume for its North American Coal business segment to approximately 1.8 million net tons, from a previous expectation of 1.5 million tons. North American Coal
production volume is expected to be 1.8 million net tons, up from a previous expectation of 1.3 million tons.
Donald J. Gallagher, president of Cliffs` North American business unit, said, "As our customers are increasing steel
production and restarting blast furnaces in
North America and
Europe, we are seeing modest improvements in orders and in market expectations for
steelmaking raw materials. We will continue to monitor the markets closely to ensure we adjust
production appropriately to meet demand as needed."