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Big 3 steelmakers expect banner year; making as much steel as possible and securing raw-material supply are the uppermost concerns for the top three domestic steel producers.

Article Excerpt
The United States' three biggest steelmakers reported record earnings for the first half of 2004--a dramatic turnaround from a year ago when these companies either lost money or had relatively anemic returns.

During a recent conference call with equities analysts, U.S. Steel President and Chief Operating Officer John Surma said the company's second-quarter adjusted earnings were the highest recorded since it began reporting steel results separately in 1991. "U.S. Steel is firing on all cylinders and firing quite well."

The flat-rolled group, on track to ship 15.8 million tons this year, is gathering steam, and the tubular business, on track to ship 1 million tons, is accelerating rapidly. "Both segments benefited from the robust economic recovery and the resulting strong demand, which we are observing across virtually all of our end markets.

"We see the global supply-demand dynamics supporting favorable trends [such as improved pricing and strong contract sales] at least through year-end," Surma said.

Regarding demand trends, Gretchen Haggerty, executive vice president, treasurer and chief financial officer, noted that auto production schedules remain strong, while service center inventories remain well below historical levels. "Sustained strength on the non-consumer side of the order book--which until earlier this year had lagged significantly--supports our optimism for the third quarter and for the balance of the year," she added. "Accordingly, average fiat-rolled prices in the third quarter are expected to exceed second quarter levels." (See chart, page 46.)

Nucor Corp.'s earnings went off the chart in the second quarter and first half, compared with the comparison periods last year. "Because of the efforts of the Nucor team, we have achieved a record year after only six months," said Daniel DiMicco, vice chairman, president and chief executive officer during the company's second-quarter conference call with analysts and employees.

Nucor's first-half production and shipments grew 18 percent and 16 percent, respectively, from 2003. The company is on track to produce and ship more than 20 million tons of steel products this year....

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