[ferro-alloys.com]Insteel Industries posted strong fiscal fourth quarter profits on Thursday, thanks to higher spreads between selling prices and raw material costs and a lower effective tax rate, but CEO Howard "H" Woltz warned US Section 232 tariffs were causing business conditions to become "increasingly challenging."

"The [Trump] Administration's Section 232 imported steel tariff program ... has driven domestic prices for our primary raw material, hot-rolled steel wire rod, well above world market levels," Woltz said on an earnings call.

"Considering that no tariffs were placed on imports of downstream products such as welded wire reinforcement and PC strand, we expect a surge in low-priced import competition that results in market share erosion and margin compression for domestic producers," he added.

The Mount Airy, North Carolina-based company says it remains engaged in discussions with the Trump Administration and Congress to address the "unsustainable competitive environment" that has developed in the wake of the Section 232 tariffs.

"I think there is a genuine interest in the situation that exists now, and there is a genuine desire not to injure downstream producers," Woltz said. "However, the mechanics of those issues are difficult for the [Commerce Department] to deal with."

"We believe that it's time to either terminate the 232 program or extend tariffs to downstream products derived from wire rod that have become susceptible to low-priced import competition."

Net income for the quarter ended September 29 was $9.4 million on sales of $121.4 million, up from net income of $3.8 million on sales of $96.9 million a year ago. The 25% increase in sales reflected a 27% increase in average selling prices partially offset by a 1.6% decrease in shipments, the company said.

Net earnings for fiscal year 2018 rose to $36.3 million, up from $22.5 million in fiscal year 2017. Net sales increased 16.5% to $453.2 million from $388.9 million in the prior year, which the company attributed to an 11.5% increase in average selling prices and a 4.6% increase in shipments.

"As we move into fiscal 2019, the outlook for our construction end markets remain strong with the leading indicators and forecast pointing to continued growth in the coming year," said Insteel CFO Michael Gazmarian on Thursday.

• [Editor:王可]