Reliance Steel Reports Lower Average Selling Price Per Ton In Q4 – Commodity Commentary

By Robb M. Stewart

Reliance Steel & Aluminum Co. said while demand is expected to remain healthy through the end of the year, the average selling price of its products is expected to decline further.

At orientation:

Reliance said Thursday it expects healthy demand trends to continue in the fourth quarter despite macroeconomic uncertainty, inflation, continued supply chain disruptions and geopolitical issues.

However, he said he also expects shipping levels to be affected by normal seasonal factors, including fewer shipping days in the fourth quarter than in the previous three months, as well as the added effect of extended closings and holiday schedules tied to customers’ vacations. As a result, Reliance said it estimates its tons sold would be down 6.5% to 8.5% in the fourth quarter from the third quarter, or flat at 2% from the same period last year.

The company’s average selling price for the fourth quarter is expected to be down 6% to 8% per ton from the prior quarter, due to continued price declines for many of its products, “notably for products flat rolled carbon, stainless steel and aluminum”. products, partially offset by stable pricing for higher value products sold in the aerospace, energy and semiconductor end markets,” Reliance said.

The company said it expects continued pressure on its gross profit margin in the last quarter of the year, adding that it was temporary and resulted from the sale of higher cost inventory in an environment falling metal prices.

On 3Q results

Reliance Steel’s sales for the third quarter fell to $4.25 billion from $4.68 billion in the previous quarter, as tons sold fell to 1.41 million from 1.46 million and the price average sales per ton fell 6.2% from the second quarter.

Write to Robb M. Stewart at [email protected]

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