For Q3 2012, Nucor reported net earnings of $110.3 million, down from the $112.3 million earned during Q2 2012, and $181.5 million in Q3 2011. As for the first nine months of 2012, Nucor reported earnings of $367.7 million, compared with $641.1 million for the first nine months of 2012.
Net sales fell 6 percent to $4.8 billion in Q3, compared with $5.1 billion in Q2 and 9 percent lower than the $5.25 billion in Q3 2011. Average sales price per ton decreased 3 percent from Q2 2012 and decreased 8 percent from Q3 2011. Nucor said that volatility in scrap prices, together with a combination of political and economic uncertainty in global markets, is impacting steel buyer confidence and therefore supply-chain stocking levels.
Meanwhile, the average scrap and scrap substitute cost per ton used in Q3 2012 was $380, a decrease of 11 percent from $427 in Q2 and 15 percent lower than the $449 in Q3 2011. Nucor executives wouldn't comment as to whether scrap bottomed after the October drop, saying that predicting scrap trends is always a challenge. While demand remains weak there's always correlation between scrap and iron ore pricing, and iron ore prices are in the midst of climbing back up.
Steel mill operating levels in Q3 dropped to 71 percent, compared to 76 percent in Q2 and 74 percent in Q3 2011. Year-to-date steel mill utilization was flat at 75 percent compared with the same period a year ago.
While Nucor did not go into much detail regarding price increases on the flat rolled side this week, Nucor executives did say that "the market was oversold, and pricing had reached unsustainably low levels." Further, inventories are low throughout the entire supply chain in the sheet market and customers are beginning to place their Q1 orders. Nucor's lead times are also out "just about to December" now and order backlog has improved.
Toward the end of the question and answer portion, Chairman and CEO Dan DiMicco addressed the current bidding process on ThyssenKrupp's Americas assets as Nucor has been listed as one of the numerous bidders on the Calvert, Alabama rolling mill. He said that bidding now is not binding at this point, and it gives Nucor and others a "free look-see" as to what the facility entails. He said that while the mill is "not worth anywhere near what they spent on it," it will get sold. The main attraction is "it's new; it's there."