US steelmakers report third quarter profits

Several major steelmakers reported impressive third quarter earnings today. Leading North American minimill steel producer Gerdau Ameristeel reported net income of $96.0 million on net sales of $1.2 billion for the third quarter, ended September 30, 2006, compared to net income of $62.2 million on net sales of $999.3 million for the same quarter of last year. For the nine months ended September 30, 2006, Gerdau Ameristeel reported net income of $309.3 million on net sales of $3.4 billion, compared to a net income of $215.1 million, on net sales of $3.0 billion for the nine months ended September 30, 2005. Mario Longhi, President and CEO of Gerdau Ameristeel, commented: "The third quarter was an excellent quarter with record composite long product prices, metal spreads and finished steel production from our 16 long product mills. We are seeing some seasonal shipment slowness across product lines as winter approaches, and inventory levels are on the high side throughout the system. We remain hopeful that better matching of domestic production to demand, and some abatement from the recent spike in steel imports, will normalize inventory levels and create a favorable industry environment for 2007. US flat rolled producer Wheeling-Pittsburgh Corp. announced Q3 net income of $17 million on sales of $482.7 million, compared to Q3 '05 net loss of $21.1 million on sales of $374.9 million. Although the company posted significant gains over 2005 earnings, which the company attributed to an increase in both shipments and prices, Wheeling-Pitt predicts a 25 percent drop in shipments and an operating loss for the fourth quarter. CEO James G. Bradley told press in a statement: "Along with the broader carbon flat rolled market, we experienced a dramatic decline in the rate of incoming orders for the fourth quarter. Heavier imports coupled with automotive and housing start declines have combined to drive service center inventories above target levels . . . As a result, we currently expect to incur an operating loss in the fourth quarter.” Lastly, scrap recycler Schnitzer Steel reported Tuesday net earnings from its fourth quarter, ended August 31, 2006. Net income totaled $50.2 million on sales of $604.6 million, compared to Q4 '05 net income of $34.4 million on sales of $195.7 million. Schnitzer Steel said the results were helped by strong performances in all segments, including its metals and recycling business, which had higher sales volumes as well as higher prices for ferrous and nonferrous metal and better productivity than the same quarter of the previous year.