Q1北美金属与采矿业业绩预览

1、North America Metals & Mining1Q19 Earnings Preview & CalendarNorth America Equity Research12 April 2019Steel prices declined through 4Q18 and into 1Q19, which should result in sequentially lower earnings across our steel names. However, we think prices have bottomed and see them improving into 2Q19.

2、 Iron ore prices remain elevated as our team thinks it is unlikely for Vale volumes to return to the market in the near future. Higher steel raw material prices tend to bode well for domestic steel producers, as the U.S. is the only country with sufficient supply in all three key raw materials: iron

3、 ore, met coal, and scrap. On the base metals front, we expect prices to be relatively range-bound as they have already appreciated double-digits YTD. We see demand holding up as we move into the seasonally stronger part of the year. We continue to favor the steel names in our coverage universe incl

4、uding X, STLD, and STLC. We also like CLF given a tight iron ore market and EAF as we think the companys earnings potential remains underappreciated by investors.AKS results should decline modestly q/q on slightly lower average realized prices and margins, partially offset by higher seasonal shipmen

5、ts. We expect Xs earnings to decline meaningfully from 4Q18 levels, largely driven by lower steel spot prices and higher maintenance and outage costs in Flat Rolled. We are lowering our 1Q19E as well as our 2019 and 2020 estimates for STLC mainly to reflect lower steel prices and modestly lower ship

6、ments. Based on our lower estimates, we are reducing our Dec-19 PT to C$31 from C$36. STLCs 1Q19 results should take a step down q/q due to lower realized prices, though company earnings should benefit from improved mix and lower tariff costs. Earnings for STLD should decrease q/q mainly on lower pr

7、ices and profits in its sheet operations, with a partial offset from higher seasonal shipments and increased profitability in Metals Recycling and Fabrication. Similarly, results for NUE should decline q/q with the sheet mills seeing lower prices and margins. For TMST, we are increasing our 2019 est

8、imates to reflect anticipated higher prices from annual contract resets, but we expect Q1 results to decline q/q, driven by lower shipments and higher costs, partly offset by these higher prices. However, we are trimming our Dec-19 PT to $14 from $14.50 based on a lower valuation multiple. We expect

9、 EAFs results to be weaker q/q driven by lower sales volumes with a partial offset from a higher weighted average realized price due to modestly more spot sales.North America Metals & Mining Michael F. Gambardella AC(1-212) 622-6446 HYPERLINK mailto:michael.gambardella michael.gambardellaBloomberg J

10、PMA GAMBARDELLA Tyler J. Langton(1-212) 622-5234 HYPERLINK mailto:tyler.j.langton ty HYPERLINK mailto:ler.j.langton ler.j.langtonStephanie Yee(1-212) 622-5032 HYPERLINK mailto:stephanie.yee stephanie.yeeJ.P. Morgan Securities LLCEquity Ratings and Price TargetsCompanyTickerMkt Cap ($ mn)Price CCYPri

11、ce Rat Curing PrevCur Price TargetEndPrev DateEnd DateAllegheny TechnologiesATI US3,405.44USD27.20Nn/c24.00Dec-1928.00n/cStelcoSTLC CN1,073.07CAD16.18OWn/c31.00Dec-1936.00n/cTimkenSteelTMST US472.31USD10.59Nn/c14.00Dec-1914.50n/cFreeport-McMoRanFCX US19,538.37USD13.41Nn/c15.00Dec-19n/cn/cSource: Com

12、pany data, Bloomberg, J.P. Morgan estimates. n/c = no change. All prices as of 11 Apr 19.See page 22 for analyst certification and important disclosures.J.P. Morgan does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may

13、have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. HYPERLINK / Michael F. Gambardella (1-212) 622-6446 HYPERLINK mailto:michael.gambardella michael.gambardellaNorth America E

14、quity Research12 April 2019AAs results should decline sequentially from the impact of lower alumina selling prices in Alumina and lower aluminum selling prices in Aluminum (with the segment not fully benefitting from lower alumina prices due to its lag). Similarly, CENXs earnings should decline q/q

15、due to lower aluminum prices and higher costs. We expect 1Q results for CLF to be adversely impacted by the typical seasonality of having limited ability to ship on the Great Lakes. Earnings for FCX should be down q/q, with the benefit of higher realized copper and gold prices and positive settlemen

16、t adjustments for provisionally priced copper being offset by higher copper cash costs. We expect TECKs earnings to improve sequentially due to higher zinc, copper, and coal prices.We are lowering our 1Q19 and 2019 estimates for ATI to reflect weaker than expected 1Q results due to operational issue

17、s as well as our expectation for higher costs to linger through 2019. Based on our lower estimates, we are reducing our Dec-19 PT to $24 from $28. For HAYN, F2Q19 earnings should improve over F1Q19 levels, with most of the planned outage at Kokomo behind them. CRS F3Q19 results should increase q/q o

18、n continued solid demand, with earnings bolstered by typical seasonality. CSTMs 1Q19 EBITDA should be about flat y/y due to tough comps and as EBITDA in AS&I should decrease y/y mainly on higher costs to support its expansion efforts. We expect KALU shipments to increase 3.5% with value added pricin

19、g declining to $1.27/lb from 4Q18 levels of $1.32/lb and forecast an EBITDA margin as a % of VAR of 25%. Earnings for GSM should decrease q/q on lower realized prices and shipments. RS earnings should increase q/q on higher seasonal shipments, with its average realized pricing expected to be flat to

20、 down slightly. We forecast RYIs shipments to be up 8.5% q/q and expect adjusted EBTDA ex-LIFO margins to bottom in the quarter.DateEventTimeJPMEstimateStreet EstimateRisk to Street EPSComments and Conference Call DetailsApril 17AlcoaEarnings Release AMC($0.14)($0.06)We are forecasting 1Q19E EPS of

21、($0.14), down(AA/$28.49/OW)Conference Call5:00pmfrom $0.66 in 4Q18. The decrease should be driven by the impact of lower alumina selling prices in Alumina and lower aluminum selling prices in Aluminum (with the segment not fully benefitting from lower alumina prices due to its lag).More specifically

22、, in 1Q19 on a sequential basis, AA expects to recover approximately two-thirds of the 4Q18 Alumina price/mix decline, or a benefit of about $30mm in 1Q19. The aluminum segment should see a $40-45mm benefit from lower alumina prices. However, increased pot relining and other maintenance activities a

23、re expected to be a $30mm q/q headwind in the segment while flat rolled aluminum should see a decline of about $15mm. The company also stated that it expects the favorable impacts from current raw material spot prices to be offset by higher energy costs in 1Q19 and partially offset for the entire ye

24、ar.On the call, we think most questions will focus on the outlook for alumina and aluminum prices, further actions the company could take to reduce costs, and capital allocation.CC#: 877-883-0383; ID: 9035802.April 22Steel DynamicsEarnings Release BMO$0.91$0.98We are forecasting 1Q19 EPS of $0.91, o

25、r the higher(STLD/$33.80/OW)Conference Call10:00amend of STLDs guidance of $0.88-0.92. In 1Q, STLD expects earnings in its Steel Operations to decrease q/q mainly due to lower profits in its sheet operations. Total steel shipments are expected to increase, with the benefit being offset by steel pric

26、es declining more than scrap costs. Metals Recycling profitability should increase q/q on improved nonferrous volume and metal spread expansion.Fabrication earnings should increase sequentially from higher selling values and lower steel input costs, with a partial offset from lower shipments (mainly

27、 due to adverse weather conditions).On the call, key questions will likely revolve around the companys outlook for steel prices, thoughts on the Section 232, and demand in key end markets.CC#: 862-298-0707DateEventTimeJPMEstimateStreet EstimateRisk to Street EPSComments and Conference Call DetailsAp

28、ril 23AlleghenyEarnings Release BMO$0.11$0.20We are lowering our 1Q19E EPS to $0.11 fromTechnologies (ATI/$27.20/N)Conference Call8:15 am$0.26 to reflect weaker than expected results due to operational issues in both Flat Rolled and High Performance segments. The company pre-announced 1Q EPS of $0.1

29、0-0.13. We estimate Flat Rolled operating profit to decline by $20mm q/q from lower stainless surcharges, lower Precision Rolled Strip sales in China, as well as higher STAL JV costs. For High Performance, we lowered our margin estimate to 12% to reflect ongoing nickel powder billet supply issues an

30、d higher operating costs.During the conference call, we expect discussions and Q&A to include managements confidence in sustaining ATIs production despite Boeings 737 cut, possible updates on ATIs Section 232 exclusion request for its Tsingshan JV, and the companys capital allocation priorities.Plea

31、se visit HYPERLINK / for the webcast.April 23Teck ResourcesEarnings Release BMOC$1.31C$0.93We estimate TECKs 1Q19 EPS to be C$1.31,(TECKB.TO/ C$32.58/OW)Conference Call11:00amwhich is an increase over 4Q18 levels of C$0.86, primarily due to higher commodity prices. Coal production is expected to be

32、6.3mm mt, a decline vs. 4Q18 of 7.3mm mt but an increase vs. a year ago of 6.2mm mt. Our estimated copper production of 75kmt is roughly flat q/q and y/y, while Red Dog zinc production should be lower q/q due to typical seasonality.On the conference call, we expect discussions and Q&A to include man

33、agements view on the met coal market, QB2 progress, and the companys capital allocation strategy.CC#: 800-239-9838April 23NucorEarnings Release BMO$1.50$1.52We are forecasting 1Q19 EPS of $1.50, or the high(NUE/$57.67/OW)Conference Call2:00 pmend of the companys guidance of $1.45-1.50. Q1 earnings i

34、n NUEs Steel Mills segment should decrease q/q mainly due to lower prices and margins in its sheet mill group. The performance in its Raw Materials segment is expected to decrease q/q due to margin compression in NUEs DRI businesses from lower selling prices. Steel Products profitability should be r

35、oughly flat q/q.We expect discussions on the conference call to include market dynamics for sheet, plate, and rebar, updates on the companys numerous investments (including its recently announced plate mill), and managements capital allocation priorities.Please contact NUE for the CC# or visit HYPER

36、LINK / for the webcast.DateEventTimeJPMEstimateStreet EstimateRisk to Street EPSComments and Conference Call DetailsApril 23Kaiser Aluminum(KALU/$105.35/N)Earnings Release AMC$1.80$1.79We are forecasting 1Q19E EPS of $1.80, an increaseover 4Q18 levels of $1.40. In the quarter, we estimate that shipm

37、ents will increase by 3.5% with value added pricing declining to $1.27/lb from 4Q18 levels of $1.32/lb. We are forecasting an EBITDA margin as a % of VAR of 25%.Topics of interest on the conference call will likely include the companys ability to capitalize on the aerospace and automotive cycles and

38、 the trade environment.April 24ConstelliumEarnings Release BMO0.150.20We are forecasting 1Q19E EPS of 0.15 and(CSTM/$8.82/OW)Conference Call10:00amEBITDA of 122mm. 1Q19 EBITDA should be about flat y/y due to tough comps and as EBITDA in AS&I should decrease y/y mainly on higher costs to support its

39、expansion efforts.On the call, we dont expect the company to make any changes to its 2019 guidance for EBITDA growth of 8-10% and FCF of greater than 50mm. We think most questions will focus on the ramp of Bowling Green and how demand in key end markets such as auto and aerospace is tracking.CC#: 86

40、6-394-7514. Conference ID: 9078647April 24Kaiser Aluminum(KALU/$105.35/N)Conference Call 1:00pmCC#: 844-889-7783April 25Cleveland-CliffsEarnings Release BMO($0.14)($0.11)We are forecasting 1Q19E EPS of ($0.14) and(CLF/$10.05/OW)Conference Call9:00amEBITDA of about breakeven. 1Q19 results should see

41、a meaningful step down from 4Q18 levels (EBITDA of $188mm) mainly due to limited ability to ship on the Great Lakes from normal weather conditions. As a result, CLF can only ship through rail, which leads to lower volumes and realized prices.During the conference call, we expect management commentar

42、y and Q&A to include updates on the HBI project, capital allocation, and the outlook for the steel and iron ore markets.CC#: 833-236-5758. Passcode: 3275628DateEventTimeJPMEstimateStreetEstimateRisk toStreet EPSComments and Conference Call DetailsApril 25Freeport-McMoRan (FCX/$13.41/N)Earnings Relea

43、se BMOConference Call 10:00am$0.08$0.07We are lowering our 1Q19E EPS to $0.08 from$0.11 to reflect higher cash costs for the quarter,mainly as weather related issues impactedproduction and sales from the El Abra mine. FCXsEPS should be down q/q, with the benefit of higherrealized copper and gold pri

44、ces and positivesettlement adjustments for provisionally pricedcopper being offset by higher copper cash costs.Key topics on the call will likely revolve around thecontinued de-risking of its operations in Indonesia(Grasberg Block Cave and Deep MLZ), expansionopportunities at FCXs existing assets, a

45、nd thoughtson capital allocation with the divestment transactionfor Grasberg now complete.CC#: 800-403-5770 or 706-679-8487. Passcode:5889067.April 25Reliance Steel & Aluminum (RS/$90.78/N)Earnings Release BMO Conference Call 11:00am$2.37$2.39We are forecasting 1Q19 EPS of $2.37, vs. the companys gu

46、idance of $2.35-2.456. Shipments are expected to increase 6-8% q/q and benefit fromtypical seasonal improvement. RS also stated that itexpects price increases for many of the products itsells. However, its average realized pricing in 1Q19should be flat to down 1% q/q, as many of the priceincreases w

47、ill not be fully effective in Q1 and asRSs pricing fell throughout Q4. Reliances Q1guidance also assumes LIFO income of about$12.5mm.On the call, key questions will likely revolve aroundthe companys outlook for steel prices and potentialuses of cash for the company given its strongbalance sheet and

48、healthy free cash flows.CC#: 877-407-0792. ID: 13689183April 29AK SteelEarnings Release AMC$0.14$0.15We are forecasting 4Q18E EPS of $0.14, or a q/q(AKS/$2.54/OW)decrease compared to Q4 levels of $0.16. Shipmentsshould increase in the mid-single digit range ontypical seasonality. Both average realiz

49、ed prices andmargins should be down slightly q/q.With 4Q18 earnings, AKS stated that it would stopgiving quarterly guidance, but did provide full year2019 guidance of $515-535mm for adjustedEBITDA, $160-180mm for net income and $0.51-0.57 for EPS. This guidance was based on theJanuary 2019 average c

50、arbon hot rolled coil spotprice of roughly $720mm. AK also provided thesensitivity that each $10/ton change in the HRC spotprice would impact adjusted EBITDA and netincome by approximately $5-7mm on an annualizedbasis. As HRC prices averaged $695/ton in 1Q19and currently sit at $678/ton, AK could mo

51、destlyrevise its 2019 guidance lower.Key questions on the call will likely revolve aroundthe companys outlook for steel prices, Section 232and demand in key end markets.DateEventTimeJPMEstimateStreet EstimateRisk to Street EPSComments and Conference Call DetailsApril 30AK Steel(AKS/$2.54/OW)Conferen

52、ce Call 8:30amCC #: 844-294-2300. ID: 4788287April 30Century AluminumEarnings Release AMC($0.59)($0.75)We estimate CENXs 1Q19 EPS to be ($0.59). We(CENX/$9.16/ N)Conference Call5:00pmexpect earnings to fall sequentially, mostly on higher costs as well as lower aluminum prices and still elevated alum

53、ina prices.We expect discussions on the conference call to include aluminum and alumina price trajectories and updates on Hawesville (both the last of the potline restarts and existing potline rebuild).CC#: (800) 230-1059May 1GrafTechEarnings Release BMO$0.62$0.68We estimate GrafTechs 1Q19E EPS to b

54、e $0.62, a(EAF/$13.84/OW)Conference Call10:00 amdecrease from 4Q18 levels of $0.79. This decrease should be driven by lower total sales volumes (43kmt in 1Q19E vs. 53kmt in 4Q18) with a partial offset from a slightly higher weighted average realized price due to modestly more spot sales.We expect di

55、scussions and Q&A on the conference call to include needle coke and graphite electrode pricing trends and GrafTechs capital allocation strategy.CC#: 866-521-4909. Conference ID: 3885697May 1Ryerson (RYI/$8.33/N)Earnings Release AMC$0.41$0.57We are forecasting 1Q19E EPS of $0.41, an increasefrom 4Q18

56、 levels of $0.16. In the quarter, RYI expects shipments to be up 8.5% q/q. On its 4Q18 call, RYI commented that it saw margin compression peak in Q4 and start to stabilize in the first half of 1Q19, with margins starting to expand by mid-to-late February. Given recent pricing trends, we would also e

57、xpect margins to increase in 2Q19 over 1Q19 levels. RYI also stated that it expects LIFO income in Q1 of $15-20mm.During the conference call, we anticipate discussions to include end market demand, Section 232, and managements outlook for pricesMay 2Ryerson (RYI/$8.33/N)Conference Call 10:00amCC#: 8

58、33-241-7253. Conference ID: 4575506DateEventTimeJPMEstimateStreet EstimateRisk to Street EPSComments and Conference Call DetailsMay 2U.S. SteelEarnings ReleaseAMC$0.17$0.21We are forecasting 1Q19 E EPS of $0.17 and(X/$16.69/OW)EBITDA of $225mm (in line with guidance), whichrepresents a meaningful st

59、ep down from 4Q18EBITDA of $535mm. The two biggest drivers ofthis sequential decrease are lower steel spot prices inFlat-Rolled along with higher maintenance andoutage costs. On spot prices, X commented that therecent decline in spot prices is more than offsettingthe price increases it secured on it

60、s annual contracts.Additionally, on a q/q basis, outage costs should beup $40-50mm for Flat-Rolled and Europe combined.Flat-Rolled should also see pressures from higherraw material costs (including met coal) and theseasonality of its mining operations. Falling pricesand rising raw material costs in