The two largest steelmakers in the United States posted record quarterly profits that easily beat analysts’ estimates during the largest rise in rolled steel prices in a decade.
However, investors have clearly focused more on the prospects for Nucor Corp. and Cleveland-Cliffs Inc. Cliffs predicted higher annual returns, which did not seem to be enough to satisfy investors who already had high returns. Nucor shares rose after its chief executive officer told analysts on a call that third-quarter shipments would be slightly better than the previous quarter.
Nucor, the largest US producer, and Cliffs, the second largest producer, said they expect to extend their record streak in the third quarter following a similar forecast by Steel Dynamics Inc. earlier this week. Cliffs raised its forecast for earnings before interest, taxes and taxes. depreciation and amortization, but no specific reference to estimated steel prices. According to Phil Gibbs, an analyst at Keybanc Capital Markets, this is a concern for investors.
The second quarter set a new benchmark for steelmakers’ profits amid staggering growth that has pushed up benchmark domestic steel prices by more than 75% this year.