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Mixed results from mills.

Article Excerpt
Some steel producers were pleased with their third-quarter results, others were frustrated by such uncontrollable factors as declining prices, equipment outages and hurricanes. Most would agree the third quarter set the stage for a solid finish to 2005 and a similar performance for the industry in 2006. Following is a mill-by-mill summary of third-quarter conference calls.

NUCOR

Continues Record-Setting Pace

Despite a dip in quarterly earnings, Nucor Corp., Charlotte, N.C., continued on a record-setting pace through the first nine months of 2005.

Nucor's third-quarter earnings of $291.9 million were a drop from the $322.7 million posted in the second quarter and 30 percent less than the $415.4 million recorded in the third quarter of 2004. Yet, earnings through the first nine months of 2005 were $969.3 million, an increase of 24 percent from the same time span in 2004.

Consolidated net sales from the third quarter were $3.03 billion, a 3 percent dip from the $3.15 billion in the second quarter and down 4 percent from the $3.24 billion in the third quarter of 2004. Average sales price per ton decreased 15 percent from the third quarter of 2004 and 8 percent from the second quarter this year.

Vice Chairman, President and CEO Daniel DiMicco said that 2004 was a record year for earnings, with particularly strong performance from the company's flat-rolled and plate businesses. "Now 2005 is on track to be our second-consecutive record earnings year for Nucor."

Putting pressure on earnings were rising energy costs, which increased approximately $12 per ton compared to the third quarter of 2004, and $6 per ton from the second quarter of 2005.

Nucor saw a significant increase in shipments and production in the third quarter. The minimill shipped a record 5.3 million tons in the third quarter, an increase of 9 percent over the third quarter of 2004 and a 5 percent hike from the second quarter of 2005. Additionally, steel production rose from 4.9 million tons in the second quarter to almost 5.1 million tons in the third quarter. These two factors reflect strong business conditions in the fourth quarter, Nucor officials said.

"We see the market in the States and throughout most of North America continuing to improve as long as our economy does not start sliding backwards," said DiMicco. "The demand we see domestically and the order entry and backlog data is all very supportive of a strong fourth quarter and extending into the first quarter of next year."

China remains a wildcard in the steel industry, DiMicco admitted. "It's a situation unique to China because of the massive amount of capacity they've built in that country. How that impacts the global marketplace, which will affect our marketplace here, has yet to be determined. There have been a number of conflicting signals coming out of the China with respect to the Chinese government."

The Chinese steel industry has expressed a desire to consolidate, which would be a positive for a global marketplace worried about excessive Chinese exports. "There is probably an excess of 100 million tons of very inefficient, antiquated steel production in China that I'm sure they would like to see eliminated because of their very inefficient use of raw materials. What they're doing right now is encouraging...

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