ArcelorMittal blames EU policy gaps for green plans delay
The world’s second-largest steelmaker said further steps are contingent on favourable policy, technological progress, and market conditions.
Two of the largest U.S. steelmakers posted record quarterly profit that easily beat analysts’ estimates during the greatest steel rally in a generation.
Yet investors clearly focused more on the outlook from Nucor Corp. and Cleveland-Cliffs Inc. Cliffs projected higher full-year earnings that didn’t appear to be enough to satisfy investors already enjoying strong returns. Nucor gained after its chief executive officer said on an analysts’ call that third-quarter shipments will be slightly better than the prior quarter.
Related: Cleveland-Cliffs’ record Q2 results marred by earnings miss
Nucor shares ended the day 1% higher in New York trading while Cliffs stock pared losses to close down 0.5%. The second quarter set a new benchmark for profits by the metal makers amid a generational rally that has boosted benchmark domestic steel prices more than 75% this year.
Nucor, the largest U.S. producer, and Cliffs, the second largest, said they expect to extend the record streak into the third quarter, following a similar prediction earlier this week by Steel Dynamics Inc. Cliffs upped its guidance for earnings before interest, taxes, depreciation and amortization, but didn’t specifically cite its steel price assumptions. That gives investors cause for concern, according to Keybanc Capital Markets analyst Phil Gibbs.
Cliffs “missed our second-quarter number and our third-quarter outlook,” Gibbs said in an email. “They moved guidance to $5.5 billion for the year versus a prior $5 billion, but I think investors were thinking higher.”
Nucor CEO Leon Topalian said on the earnings call that he expects third-quarter steel shipments to be “slightly higher” sequentially, indicating that all of its end markets are growing. The Charlotte, North Carolina-based steelmaker is seeing signs of activity in its business that supplies the oil and gas industry, while inventories for the automotive sector are “staggeringly” low, he said.
(By Joe Deaux)
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