Nucor, SDI Off to Solid 2020 Start, But Coronavirus Consequences Loom
“Thus far the impacts of COVID-19 on our supply chains and operations has been minimal. However, more severe impacts are probable as economic activity is disrupted by construction sites being shut down in some major cities and other business interruptions. It is too early to gauge how significant those impacts will be for the balance of the year,”
Nucor said in its first-quarter earnings guidance.
“We are carefully monitoring this evolving situation. Additionally, we are monitoring the recent volatility in the commodity and financial markets, and any potential future impacts on our operations and on those of our suppliers and customers.”
Steel Dynamics echoed those comments.
“It is too early to determine the scope of the negative impact that will occur from the coronavirus on global economies, and the related impact to the domestic economy and steel demand environment,”
the company said.
“At this time the company's steel and steel fabrication order backlogs are strong and customer order activity has remained steady. However, given the continued spread of COVID-19 and recent announcements concerning temporary closures of steel-consuming businesses in an attempt to slow the virus in the United States, the company expects these events to impact order activity in the coming weeks.”
Setting aside impacts from the virus, both of the steelmakers said they are off to a good start this year.
“Order rates, backlogs and utilization rates at our steel mills have remained strong well into March, which reflects strong underlying demand in non-residential construction and other end-use markets,” Nucor said.
Steel Dynamics meanwhile is forecasting that first-quarter earnings will fare much better than fourth-quarter 2019 earnings due to increased shipments, especially in the long products group.
“The customer order backlog for the company's steel fabrication platform is at a record high level and customers currently remain constructive concerning non-residential construction projects. At this time, projects have not been delayed or canceled,” it said.