By Rhiannon Hoyle 

Australia's BlueScope Steel Ltd. reported a sharp jump in annual profit--to 1.19 billion Australian dollars (US$877 million) in the year through June, from A$96.5 million the 12 months earlier--underpinned by strong steel demand and prices. Here are some remarks from its earnings filings.


On Australian steel markets:

"Increased volumes were driven by strength across building and construction, with activity levels supported by focused sales and marketing initiatives, various government stimulus and infrastructure programs, redirected discretionary spending, and recovery work following recent storm/flood events. FY 2021 steel sales of Colorbond steel, Truecore steel, Tru-Spec steel and Galvanised were the highest on record for the ASP business--assisted by both specific sales initiatives and broader segment demand growth."


On U.S. markets:

"Strong production and despatch levels continued throughout FY 2021--with North Star despatching at full capacity other than during scheduled maintenance outages in November 2020 and June 2021. U.S. automotive sales rebounded strongly after the Covid-19 production shuts and demand shock in the June 2020 quarter, with the annualized sales run-rate averaging 17 million units for 2H FY 2021. Construction spending increased in FY 2021 over FY 2020. Driven by increased customer activity levels, consolidation and rationalization of supply and low service centre inventories, benchmark Midwest steel spreads improved significantly from late 1H FY 2021, reaching record highs during 2H FY2021."


On the outlook:

"At the beginning of 1H FY 2022, order and despatch rates in key markets remain robust. Spot steel spreads in North America are materially higher than both 2H FY2021 and longer-term averages. In light of these unusually strong conditions, the company expects underlying Ebit in 1H FY2022 to be in the range of A$1.8 billion to A$2.0 billion. While in the medium term we see supportive industry and end-use demand trends, it is uncertain how long the current robust conditions will be sustained."


On growth plans:

"BlueScope has a wide range of growth opportunities across its footprint, leveraging sector trends, allowing the company to deploy capital in a disciplined and efficient manner to support growth and future earnings. BlueScope has identified over A$500 million of growth projects across its footprint, building on the strength of its portfolio of assets and leveraging key macro and sectoral trends, such as the improving industry conditions across China and the U.S., the supportive investment environment provided by low interest rates and government stimulus, shifts in preferences towards lower density regional housing and online shopping, and recognition of the critical nature of steel in underpinning the transition to a clean energy future."


Write to Rhiannon Hoyle at


(END) Dow Jones Newswires

August 15, 2021 19:14 ET (23:14 GMT)

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