QUOTE AND NEWS
MarketWatch  Dec 16  Comment 
The largest Russian equity ETF was down moderately in early-afternoon action Tuesday, after slumping by as much as 10% at the open, then jumping as much as 7% above Monday's close before erasing that gain. The Market Vectors Russia ETF shed 1.7%...
Market Intelligence Center  Dec 11  Comment 
A covered call identified by MarketIntelligececenter.com's patented algorithm on Commercial Metals Co (CMC) could yield about 6.03% (22.23% annualized, for comparison purposes only) in 99 days. Pair a long position in the stock with the Mar. '15...
Benzinga  Nov 25  Comment 
Wipro-owned Opus Capital Markets Consultants, LLC (Opus CMC), a leading provider of mortgage due diligence today announced the appointment of John Levonick as Chief Compliance Counsel. Opus CMC is a wholly owned subsidiary of Wipro Ltd. (NYSE:...
Benzinga  Oct 30  Comment 
In a report published Thursday, D.A. Davidson analyst Brent Thielman reiterated a Buy rating on Commercial Metals Company (NYSE: CMC), but lowered the price target from $23.00 to $21.00. In the report, D.A. Davidson noted, “Commercial Metals...
The Economic Times  Oct 17  Comment 
"While there might not be anything fundamentally wrong with CMC but since TCS has corrected by 9% to 10% CMC would also follow suit."
The Times of India  Oct 17  Comment 
The Economic Times  Oct 17  Comment 
The Economic Times  Oct 16  Comment 
The consolidated revenue of CMC for the quarter ended September 30, 2014 stood at Rs 616.69 crore with net profit of Rs 76 crore.
The Hindu Business Line  Oct 16  Comment 
The Economic Times  Oct 16  Comment 
The Hindu Business Line  Oct 7  Comment 
CMC Ltd in an exchange filing said S Ramadorai, Chairman and Director, has stepped down from the board of the company with effect from October 6 on attaining the age of 70. This is as per...
GenEng News  Oct 1  Comment 
In July 2014, CMC Biologics announced that it had entered into a commercial supply agreement with Portola Pharmaceuticals to produce andexanet alfa, a potential first-in-class Factor Xa inhibitor antidote.  One of the reasons cited by Portola...
The Economic Times  Aug 28  Comment 
CMC, erstwhile IT arm of the govt that has overhauled its biz since turning into a private company a decade ago, is seeking a place in the upper rungs of the IT industry.




RELATED WIKI ARTICLES
 

Commercial Metals Company (NYSE:CMC) is primarily a recycler of scrap metal, using discarded material to make new finished steel products. CMC owns groups of steel mini-mills in the U.S. and in Poland which melt down scrap metal to make steel. In addition to the recycling and manufacture of steel products, the company also manufactures specialized metals and copper tubing. The company earned $6.8 billion in revenue and $21 million in net income in 2009.[1]

CMC owns the recycling centers that break down old products into scrap and the mini-mills that turn scrap into steel. This vertical integration helps shield the company from volatility in the iron ore market. CMC also protects itself by operating in multiple countries - less than 60% of its sales are in the U.S.

Increased international demand for steel, especially from China, has led to a global boom in steel prices . The flourishing industry has allowed CMC to earn handsome margins, and cash dividends for shareholders have increased fourfold in the past two years. The firm’s recent success will help it to deal with the significant risk factors in its market, including elevated international competition, rising raw material costs, and weakening domestic construction and automobile industries.

Company Overview

Business Segments[2]

CMC divides its operations into two geographic segments:

CMC Americas

  • Americas Recycling - processes scrap metals for use as a raw material by manufacturers of new metal products. This segment operates 42 scrap metal processing facilities with 20 locations in Texas, 7 in Florida, 4 in South Carolina, 2 in each of Alabama and Missouri, and one each in Arkansas, Georgia, Kansas, Louisiana, North Carolina, Oklahoma and Tennessee. The plants process and ship more than 2 million tons of scrap metal annually.
  • Americas Mills - under this segment, the company operates 5 steel mills that produce one or more of reinforcing bar, angles, flats, rounds, small beams, fence-post sections and other shapes, a copper tube minimill, and a scrap metal shredder processing facility.
  • Americas Fabrication - under this segment, the company operates steel plants that bend, cut, weld and fabricate steel, primarily reinforcing bar and angles; warehouses that sell or rent products for the installation of concrete; plants that produce special sections for floors and ceiling support; plants that produce steel fence posts; and plants that treat steel with heat to strengthen and provide flexibility.

CMC International

  • International Mills - the company's wiss subsidiary, CMC International AG owns two steel minimills — CMC Zawiercie S.A. (CMCZ) with operations at Zawiercie, Poland and CMC Sisak d.o.o. (CMCS) with operations at Sisak, Croatia. These two mills constitute the International Mills segment. CMCZ has an annual melting capacity of 1.9 million tons and CMCS has an annual capacity of 116,000 tons of short pipe.
  • International Fabrication and Distribution - operations buy and sell primary and secondary metals, fabricated metals and other industrial products. Products are sold primarily to manufacturers, in the steel, nonferrous metals, metal fabrication, chemical, refractory and transportation businesses.

Business Growth

FY 2009 (ended August 31, 2009)[1]

  • Net sales fell 35% to $6.8 billion. Sales fell in all of the company's business segments with the Americas Recycling segment having the greatest decrease of 64%.
  • Net earnings fell 90% to $21 million.

Trends and Forces

  • Climbing Steel Prices Boost CMC's Revenues: Demand for steel has been at historic levels recently, mainly due to rapid industrialization in developing countries, and especially in China. The elevated international demand for steel has caused steel prices to skyrocket and has led to impressive profits from steel makers around the world.
  • Globalization of Steel Production Creates Acquisition Opportunities for CMC: CMC's international acquisitions, such as CMCZ in Poland, allow it to take advantage of lower labor and energy costs in Central Europe. Since international demand for steel is high, CMC's international producers have generated big returns and boosted revenues. But international production has been increasing rapidly as well, and new competitors are entering the market. China is expected to become a net exporter of steel, and the production of China's state-owned steel mills and huge consumption of iron ore make a Chinese presence in steel exporting a major risk factor for CMC.
  • There are Rewards (and Risks) Associated with CMC's Recent International Acquisitions: CMC's recent movements into the Polish and Croatian steel markets offer the company an interesting position in the worldwide steel industry. The company now occupies a strategic position in central Europe, offering more direct exposure to European customers and insulating the company from potential decreases in demand in the United States. Considering the development and emergence of many of Central Europe's economies, this location will allow CMC significant chances for growth and profits. As CMC's profits become more dependent on this sector of its business, however, the firm runs the risk that political or economic instability in these distant countries could have a major negative effect on its balance sheet.
  • In Poland, the timing of the CMCZ capacity expansion at Zawiercie (+550 kt / year bar product capacity added in 2009) coincided with a comparable capacity expansion in bar production at Celsa Huta Ostrowiec (+525 kt / year bar capacity also added in 2009). These changes [adding over one million tonnes of light long product production potential] came just at a time when the steel market in Poland declined between 2008 and 2010 because of the worldwide financial crisis from ~11 million tonnes per year to ~7.7 million tonnes of steel per year[3]. In consequence, capacity utilisation at CMCZ's Polish bar rolling business at Zawiercie may prove problematic during 2010 and even during 2011, as market recovery is awaited.

Competition

Although CMC competes with regional, national and foreign manufacturers of steel and copper products, the company does not hold a substantial market share in any of its domestic productions. The company claims that CMCZ is the second largest supplier of wire rod and rebar in the Polish market. CMC also asserts that it is one of the largest recyclers of nonferrous (non-iron) metal in the domestic market. The company competes with companies like:

References

  1. 1.0 1.1 CMC 2009 10-K "Selected Financial Data" pg. 24
  2. CMC 2009 10-K pg. 3-10
  3. Polish steel demand analysis 2004-2010
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