Reliance Steel and Aluminum Co.’s metals shipments decreased 5% year over year in the second quarter as the company’s average selling price per ton decreased by 3% sequentially compared to Q1, the leading US distributor reported Thursday.
The Los Angeles-based company sold 1.51 million st of metal products in Q2, down 5% year over year compared with the 1.58 million st the company sold in the year-ago quarter.
Reliance’s average selling price per ton during the quarter was $1,904/st, up slightly from $1,890/st in Q2 2018, but down roughly 3% sequentially compared with an average selling price per ton of $1,958/st in Q1.
Overall, Reliance reported net income of $183.1 million on sales of $2.88 billion in Q2. This is down from net income of $230.8 million on sales of $2.99 billion in the same period a year ago.
“We had a solid second quarter characterized by relatively steady demand conditions in most of the key end markets we serve,” Reliance CEO Jim Hoffman said in a statement. “…Overall, metal pricing during the second quarter was slightly weaker than we had anticipated, with our average selling price per ton sold down 2.8% compared to the first quarter of 2019, outside of our expected range of flat to down 1%. While there were multiple mill price decreases on many of the carbon steel products we sell, our broad diversification of products, customers and end markets helped mitigate the impact on our business.”
Demand from the aerospace and automotive markets remained strong throughout the quarter, while demand from the non-residential construction sector was steady, the company said. Demand from the energy sector softened further in Q2, with the company expecting to see a steady near-term slowdown in this market.
Looking ahead, Reliance expects Q3 demand to be relatively steady subject to normal seasonal patterns, including a decline in shipping volume due to customer shutdowns and vacation schedule. Reliance expects its tons sold to be down 4%-6% in Q3 compared with Q2.
Average selling prices per ton are also expected to be down 1.5%-2.5% compared to Q2, Reliance said.