Reliance Steel & Aluminum expects strong demand in Q1 2020 and estimates sales volumes to increase by 6-8pc during the quarter, the company said while reporting its earnings for 2019 and Q4 2019 on Thursday.

 

The company expects metals pricing to remain near current levels, which, in turn, could increase its average selling prices by 1-2pc in Q1 2020 compared to Q4 2019.

 

Reliance reported it has benefitted from its strategy of serving varied markets by providing an wide range of products and processing services. Demand for its products and services for the aerospace and automotive markets remained strong through Q4 2019 and the company gave a positive outlook for these end markets through 2020.

 

Reliance’s largest end market, non-residential construction remained strong in Q4 2019 with solid shipment volumes of carbon steel structural, and tubing products. The company remains optimistic that demand will improve in 2020.

 

The ferrous and non-ferrous metals manufacturer’s total sales volumes decreased by 4.1pc to 5.86mn nt (5.32mn mt) in 2019 from 6.11mn nt in 2018, signifying a 1.3pc decrease on average selling price per ton sold in 2019 compared to the previous year. In Q4 2019 the company sold 1.38mn nt, a 3.7pc decrease from 1.43mn nt sold in Q4 of 2018.

 

By commodity, the company’s carbon sales fell by 3.6pc to 4.7mn nt from 4.9mn nt in 2018. It sold 341,400nt of aluminum in 2019, a 6.5pc dip from 365,300nt in 2018. Its Stainless steel sales dropped by 6.4pc to 306,100nt in 2019 from 327,100nt in 2018. The company sold 194,900nt of alloy in 2019, down 11.2pc from 219,500nt in 2018.

 

Reliance’s net sales at $11bn, decreased by 4.9pc from 2018, but led to a record in annual gross profit of $3.33bn, up 1.5pc from $3.28bn in 2018. In Q4 2019 net sales decreased 13pc to $2.45bn from $2.81bn in Q4 2018. Reliance’s gross profit in Q4 2019 was $794mn, up 11.9pc from $709.8mn in Q4 2018.

 

The company reported a pretax income of $929.3mn, a 9.3pc increase in 2019, compared to $850.6mn in 2018. Pretax income for Q4 2019 was $209.6mn, a 69.2pc increase from $123.9mn in Q4 2018.

 

Reliance’s net income increased by 10.7pc to $701.5mn, compared to $633.7mn in 2018. Net income for Q4 2019 was $165.6mn, a 93.5pc increase from $85.6mn in Q4 2018.

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