SDI Expects Lower Shipments and Pricing in Q3

Steel Dynamics is expecting earnings to drop in the third quarter due to lower profits from its steel operations. Lower scrap prices were not enough to offset lower shipments and declining steel pricing. The steelmaker expects earnings in the range of $0.66 to $0.70 per diluted share compared to $0.87 per share in the second quarter and $1.69 per diluted share in Q3 2018.

Profitability at SDI’s metals recycling platform is also expected to decline due to lower ferrous and nonferrous scrap prices.

Steel fabrication is a bright spot for the company with higher shipments and a steady metal spread. SDI notes strong steel fabrication backlogs and customer optimism regarding nonresidential construction projects.

“Underlying domestic steel demand remains principally intact for the primary steel consuming sectors, with particular strength in construction,” said SDI.