Reliance Steel & Aluminum Co., Los Angeles, reported record sales of $3.42 billion during the second quarter. Sales were up 69.3 percent compared with the prior year.
Net income in the quarter totaled $329.1 million, up more than four-fold from the same period last year.
“Our resilient business model coupled with favorable market conditions drove a second consecutive quarter of record financial performance,” said Jim Hoffman, CEO of Reliance. “Our managers in the field exhibited tremendous execution and most importantly, maintained their relentless focus on safety.”
During the quarter, the company’s tons sold increased 1 percent compared to the first quarter, in-line with Reliance’s expectations of flat to up 2 percent. The company experienced strong demand trends in the majority of its end markets during the second quarter. However, Reliance continues to believe underlying demand is stronger than its second quarter shipment levels reflect due to factors hindering economic activity such as metal supply constraints, labor shortages and other supply chain disruptions experienced by Reliance, its customers and its suppliers.
Demand in nonresidential construction, Reliance’s largest end market, continued to improve, with Reliance shipments reaching pre-pandemic levels during the second quarter. Likewise, demand in heavy industry for both agricultural and construction equipment improved significantly in the second quarter to exceed its pre-pandemic numbers.
Demand for the toll processing services Reliance provides to the automotive market softened slightly from first-quarter levels. Nevertheless, the Company believes underlying demand is stronger than its second quarter trends reflect due to the impact of global microchip shortages on production levels in certain automotive markets. Reliance is cautiously optimistic that demand for its toll processing services will improve in the second half of 2021.
Reliance executives remain optimistic about business conditions in the current environment with strong underlying demand in the majority of the end markets it serves. However, factors impacting shipment levels in the second quarter of 2021 such as metal supply constraints and supply chain disruptions will continue to persist in the third quarter. Accordingly, the company estimates its tons sold will be down 1 percent to up 1 percent compared with the second quarter. Reliance executives also expect metal pricing trends to remain strong in the third quarter.