Nucor CEO Calls Bottom in Steel Prices, Citing ‘Strong’ Demand

(Bloomberg) -- Nucor Corp., America’s largest steelmaker, is calling a bottom in U.S. steel prices.

“Real demand for our products remains strong in key end-use markets,” Chief Executive Officer John Ferriola said Thursday in Nucor’s second-quarter earnings statement. “We are cautiously optimistic that pricing has bottomed for most products.”

The Charlotte, North Carolina-based company has raised prices for its flat-rolled sheet products twice since June. Customers’ response to the latest hike was “encouraging" and that Nucor expects order volumes to increase in the fourth quarter, Ferriola told analysts during the steelmaker’s earnings call Thursday.

A turnaround in prices would be a welcome change for the steel industry, considering one core product, hot-rolled coil steel, has fallen about 25% this year. Ferriola said demand in the industry has been hurt by heavy rains in the first half of the year that delayed construction projects and customers clearing bloated inventories.

Still, Nucor said lower prices will weigh on results in its steel-mills segment in the third quarter as prices started to rebound only recently. A recovery in margins will take some time, Ferriola said.

Nucor settled little changed at $54.69 in New York trading Thursday, after swinging between gains and losses. The stock has risen more than 5% this year.

To contact the reporter on this story: Matt Townsend in New York at mtownsend9@bloomberg.net

To contact the editors responsible for this story: Luzi Ann Javier at ljavier@bloomberg.net, Joe Richter

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