Reliance (RS) 34th Annual BMO Global Metals, Mining & Critical Minerals Conference summary

End market performance and outlook

• Non-residential construction, including infrastructure, remains steady with significant activity in data centers, manufacturing facilities, and public projects, expected to continue into 2025.

• Automotive toll processing volumes increased in 2024 and are expected to remain healthy in 2025, despite potential temporary slowdowns.

• Aerospace, accounting for 10% of sales, is anticipated to improve in 2024 after a slowdown, with long-term strength expected.

• General manufacturing is diverse, with rail, barge, and military applications strong, while agriculture and heavy equipment remain weak.

• Semiconductor market softened due to excess inventory, expected to remain slow through mid-2025, but long-term outlook is positive.

Investment and capacity expansion

• Ongoing investments in niche semiconductor-related businesses, with expanded capacity in Texas and larger facilities ready but not fully utilized due to market softness.

• International presence in South Korea and China, with recent focus shifting back to U.S. semiconductor builds.

• Toll processing business in the U.S. is 70% automotive, 20-25% appliances, with high growth in aluminum processing and continued expansion in Mexico.

Tariffs, sourcing, and pricing dynamics

• Minimal direct impact from tariffs due to 96% domestic sourcing; ability to pass price changes to customers helps maintain stable gross profit margins.

• Price increases for sheet, HRC, and plate are holding, supported by strong mill order books and limited discounting.

• Some customers and competitors are adjusting buying patterns ahead of tariffs, but the company focuses on inventory turnover rather than stockpiling.

• Specialty stainless and some commodity metals are sourced internationally when not available domestically, but domestic sourcing is preferred for shorter lead times and lower risk.