Nucor, Steel Dynamics Surge as Steelmaking Outlook Gets Rosier
(Bloomberg) -- Two of the largest American steelmakers struck a more optimistic tone about the market after reporting stronger-than-anticipated demand driven by non-residential construction markets.
Steel Dynamics Inc. said it expects strong demand and prices to remain supportive amid raw material inflation and supply disruptions related to Russia’s invasion of Ukraine. Nucor Corp., the largest U.S. producer, said it expects second-quarter earnings to rise due to more robust demand in nonresidential construction through the Spring building season.
“We believe steel prices will remain strong based on higher raw material input costs, global flat roof steel supply disruptions related to the Ukraine-Russia conflict and lower steel imports,” Steel Dynamics Chief Executive Officer Mark Millett told analysts on an earnings call. “Looking forward, we remain optimistic.”
Steel Dynamics shares rose 5.2%, the biggest gain in a month, while Nucor surged 6% to a record high of $183.14 a share.
The two producers are outpacing their integrated metal-making peers, helped by the fact that Millett said his company secured supplies of pig iron, a key metal-making ingredient needed to run their mills, into 2023. Electric arc furnaces, which account for about 70% of American steel output, get more than half their shipments of the key feedstock from Ukraine and Russia.
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