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

Steel Dynamics (SDI) is confident that the market environment will continue thriving to support strong steel demand for the rest of 2021 and beyond.


Demand is strong and order books are robust, while customer steel inventory levels are low, SDI noted. The healthy sentiment will likely continue, driving the company’s Q3 2021 earnings potential to reach another record performance. 


The steelmaker along with consumers continues looking forward to the Sinton, Texas electric arc furnace (EAF) flat roll steel mill investment. The company is now hot commissioning the paint line while the galvanizing line is set to be operational next month. The company deferred steel production to Q4 2021 due to the recent heavy rain in Texas. 


Sinton’s shipments may reach near 100,000nt for the rest of 2021 and between 2.2-2.4mn nt in 2022. The yearly EBITDA for SDI’s Sinton flat roll plant when fully operational and accessing four coating lines, slated in 2023, is expected to be $475-525mn.


The steel producer also plans to invest about $450-500mn in four additional flat roll steel coating lines comprised of two paint lines and two galvanizing lines, in the Southern US to provide Sinton with the same expansion and product capabilities as its two active flat-rolled steel groups. 


The company’s other two lines will be in the Midwest to support growing coated flat-rolled steel demand and expand the capacity of its current Midwest operations. These four lines may start operations in H2 2022. SDI also recently announced cutting greenhouse gas emissions and renewable energy goals, including a target for its steel mills to be carbon neutral by 2050. 


SDI’s steel mill production increased by 5.4pc to 4.92mn nt in January-June against 4.67mn nt in H1 2020. Steel mill production rose by 14.6pc to 2.44mn nt in Q2 2021 compared to 2.13mn nt in Q2 2020. 


The company’s total steel shipments increased by 6.5pc to 5.71mn nt in January-June versus 5.37mn nt in the same prior-year period. SDI reached record high total steel shipments of 2.89mn nt in Q2 2021, up 14.8pc from 2.52mn nt in Q2 2020. 


The steelmaker’s net sales surged by 71.5pc to $8bn in H1 2021 compared to $4.7bn in H1 2020. The company reached a record in net sales of $4.5bn in Q2 2021 soaring 113pc against $2.1bn in Q2 2020.


SDI’s net income was $1.1bn in the first half of 2021, significantly higher than $263mn in H1 2020. In Q2, net income reached $702mn a huge increase from $76.5mn in Q2 2020. 


The company’s adjusted EBITDA was $1.7bn in January-June 2021 compared to $573mn in H1 2020. Adjusted EBITDA reached $1bn in Q2 2021 versus $217mn in Q2 2020.


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