BlueScope Unsure How Long Steel-Market Boom Will Last -- Commodity Comment
15 Agosto 2021 - 6:27PM
Noticias Dow Jones
By Rhiannon Hoyle
Australia's BlueScope Steel Ltd. reported a sharp jump in annual
profit--to 1.19 billion Australian dollars (US$877 million) in the
year through June, from A$96.5 million the 12 months
earlier--underpinned by strong steel demand and prices. Here are
some remarks from its earnings filings.
On Australian steel markets:
"Increased volumes were driven by strength across building and
construction, with activity levels supported by focused sales and
marketing initiatives, various government stimulus and
infrastructure programs, redirected discretionary spending, and
recovery work following recent storm/flood events. FY 2021 steel
sales of Colorbond steel, Truecore steel, Tru-Spec steel and
Galvanised were the highest on record for the ASP
business--assisted by both specific sales initiatives and broader
segment demand growth."
On U.S. markets:
"Strong production and despatch levels continued throughout FY
2021--with North Star despatching at full capacity other than
during scheduled maintenance outages in November 2020 and June
2021. U.S. automotive sales rebounded strongly after the Covid-19
production shuts and demand shock in the June 2020 quarter, with
the annualized sales run-rate averaging 17 million units for 2H FY
2021. Construction spending increased in FY 2021 over FY 2020.
Driven by increased customer activity levels, consolidation and
rationalization of supply and low service centre inventories,
benchmark Midwest steel spreads improved significantly from late 1H
FY 2021, reaching record highs during 2H FY2021."
On the outlook:
"At the beginning of 1H FY 2022, order and despatch rates in key
markets remain robust. Spot steel spreads in North America are
materially higher than both 2H FY2021 and longer-term averages. In
light of these unusually strong conditions, the company expects
underlying Ebit in 1H FY2022 to be in the range of A$1.8 billion to
A$2.0 billion. While in the medium term we see supportive industry
and end-use demand trends, it is uncertain how long the current
robust conditions will be sustained."
On growth plans:
"BlueScope has a wide range of growth opportunities across its
footprint, leveraging sector trends, allowing the company to deploy
capital in a disciplined and efficient manner to support growth and
future earnings. BlueScope has identified over A$500 million of
growth projects across its footprint, building on the strength of
its portfolio of assets and leveraging key macro and sectoral
trends, such as the improving industry conditions across China and
the U.S., the supportive investment environment provided by low
interest rates and government stimulus, shifts in preferences
towards lower density regional housing and online shopping, and
recognition of the critical nature of steel in underpinning the
transition to a clean energy future."
Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com
(END) Dow Jones Newswires
August 15, 2021 19:14 ET (23:14 GMT)
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