Nucor plans to increase production in 2020, the steelmaker indicated while reporting its full year and Q4 2019 earnings on Tuesday. The company’s mill in Missouri is expected to be fully online within a few weeks and other mills, including a rebar mill in Florida, are likely to follow.
The demand for scrap and the underlying demand for steel are expected to remain stable in 2020, according to Leon Topalian, Nucor’s president and chief executive officer, after the inventory destocking that occurred throughout most of 2019 concluded in Q4 and customers resumed more normal buying patterns.
The destocking impacted Nucor’s consolidated net sales, which decreased by 10pc to 22.589bn in 2019 compared to the previous year and fell by 18pc to $5.132bn in Q4 2019 compared to the same prior-year quarter. The company also reported a 45pc decrease in profits to 1.783bn in 2019 compared to 2018.
In 2019, Nucor’s steel sheet shipments decreased by 2pc to 10.577mn nt, compared to the prior year, bars decreased 10pc to 8.019mn nt, structural decreased 8pc to 2.237mn nt, and plate decreased 12pc to 2.124mn. Shipment of other products increased 14pc in 2019 to 399,000nt compared to 2018. During the year, sheets made up 45pc of total shipments, while bars were the other big category at 34pc.
Shipments to internal customers represented 21pc of total steel mill shipments in Q4 2019, in line with growing from 19pc in Q4 2018. Total steel mill shipments of 5.779mn nt in Q4 2019 decreased 2pc compared to the same prior year period.
Operating rates at Nucor’s steel mills in 2019 decreased to 84pc from 91pc in 2018, and decreased 88pc in Q4 2019 compared to Q4 2018.
Total steel including raw material shipped to outside customers fell by 5pc to 26.5mn nt in 2019, compared to the previous year. Of the total 6.48mn nt was shipped in Q4, decreasing by 3pc from the same 2018 quarter.
Raw materials tonnage to outside customers decreased 1pc to 3.133mn nt in 2019 from 2018 and decreased by 13pc to 677,000nt in Q4 2019 from the same prior year quarter.
The average scrap and scrap substitute cost used in steel production in 2019 was priced at $314/gt, down 13pc compared to $361/gt in 2018, while the average price of scrap and scrap substitutes was around $275/gt in Q4 2019 down 23pc compared from $359/gt in Q4 2018.