Russel nabs earnings record, continues tubular drawdown

North American service centre chain Russel Metals hit an earnings record in the second quarter, Kallanish understands. 

The company posted a profit of CAD 118 million ($94m) in the second quarter on sales of CAD 1.07 billion. In Q2, Russel earned CAD 5m on sales of CAD 558m. 

“Steel prices continued to rise in the 2021 second quarter.  Metals service centres experienced an increase in selling price per (short) ton of 53% compared to the 2020 second quarter and 19% compared to the 2021 first quarter,” Russel says. “Steel distributors also experienced an increase in demand and selling price per ton due to low inventory levels in the supply chain and product shortages.  Demand in the energy products segments continues to recover, albeit at a slow pace.”

Russel in the process of slashing its exposure to the energy tube market. Last year, it set a goal of reducing cap ex in that sector by CAD 100m by the end of the year. 

“The rationale of lowering our exposure to the energy sector was to reduce earnings volatility and enhance our return on capital over the cycle,” the company says. “As of June 30, 2021, inventory at our OCTG and line pipe operations was CAD 143 million which was a reduction of CAD 129 million over the past year, including a CAD 30 million reduction in the second quarter of 2021.”

Additionally, its Canadian energy tube division has been combined with Marubeni-Itochu Tubulars America to form TriMark Tubulars.

Dan Hilliard USA