Steel Dynamics Reports Strong Momentum in First Quarter

Written by Tim Triplett

Steel Dynamics Inc. forecast higher first- and second-quarter results, fueled by strong shipments and record steel prices, according to guidance issued Wednesday.

“First-quarter 2021 profitability from the company’s steel operations is expected to be significantly higher than sequential fourth-quarter results, driven by flat roll metal spread expansion, as strong demand continues to support flat roll steel prices,” the steelmaker said. “Average realized quarterly flat roll steel product pricing is expected to increase substantially during the quarter more than offsetting higher scrap costs.”

The auto and construction sectors are leading the way in terms of steel demand, SDI said. “Order entry continues to be robust as strong demand, coupled with historically low flat roll steel inventories, underpins higher steel selling values. The company believes this momentum will continue, resulting in even stronger second-quarter 2021 results.”       

Ferrous scrap demand also was strong in the first quarter on rising domestic steel production. The company expects its first-quarter earnings from metals recycling operations to grow based on increased volume and improved metal margins from higher raw material prices.

First-quarter 2021 earnings from the SDI’s steel fabrication operations are expected to be lower than the fourth quarter due to higher steel input costs. Steel fabrication shipments are likely to reach record levels in the first quarter, however, as order activity is extremely strong, and customers continue to be optimistic concerning non-residential construction projects. Steel joist and deck product pricing has strengthened significantly as a result of strong demand and higher steel costs, the company reported.

SDI provided first-quarter 2021 earnings guidance of $1.88 to $1.92 per diluted share. Excluding the impact from costs associated with the construction of the company’s Sinton, Texas, Flat Roll Steel Mill, the company expects first-quarter adjusted earnings in the range of $1.94 to $1.98 per diluted share, which could represent a record earnings quarter for the company.

SDI, one of the largest steelmakers and metals recyclers in the United States, produces hot roll, cold roll and coated sheet steel, structural steel beams and shapes, rail, engineered special-bar-quality steel, cold finished steel, merchant bar products, specialty steel sections, and steel joists and deck. In addition, the company produces liquid pig iron and processes and sells ferrous and nonferrous scrap.

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