Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Steel Dynamics (SDI) is optimistic about demand and consumption in the steel market in the medium to long term. The steelmaker’s order books continue to remain strong while inventories are historically low supporting strong steel sales.


SDI expects this trajectory to continue all year and projected its Q2 2021 earnings to be higher than its record Q1 2021 results. The company announced plans to add four additional flat-rolled steel coating lines in the South and Midwest on Apr 15. These units are slated to begin operating during H2 2022.


The company looks forward to its Sinton, Texas flat roll steel mill project, which will have capabilities beyond the existing electric-arc-furnace flat-rolled steel producers, SDI indicated. Construction is on target and remains within expected costs of $1.9bn, with plans to start production by the end of summer this year. 


The steel producer also implemented agreements with customers to locate on-site, representing more than 1.3mn nt of yearly steel consumption and processing capabilities. SDI’s newly acquired Mexican scrap company is also providing major support for ferrous scrap requirements in Sinton, the company indicated in its earnings statement on Monday.


SDI’s steel mill production declined by 2.3pc to 2.48mn nt in Q1 2021 compared to 2.54mn nt in the same quarter last year. The company shipped 2.82mn nt in total, a near-record in Q1 2021, although it was down 0.87pc from 2.85mn nt of total shipments during Q1 2020.


The company’s consolidated net sales surged by 37.6pc to $3.54bn in Q1 2021 compared to $2.56bn in Q1 2020. Net income tallied at $431mn in Q1 2021 up by 130pc versus $187mn in the prior-year quarter. SDI’s average steel sales price stood at $1,041/nt in Q1 2020 above the average of $774/nt in Q1 2020.


The company’s Q1 2021 operating income also surged by 117pc to $594mn compared to $274mn in Q1 2020. Operating income for steel operations reached a record of $641mn, up 118pc from $293mn in Q1 2020. SDI’s adjusted EBITDA rose by 86.6pc to $664mn in Q1 2021 against adjusted EBITDA of $356mn in Q1 2020.

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