SDI’s earnings rise quarter on quarter

Steel Dynamics Inc. (SDI), a recycled-content metals producer based in Fort Wayne, Indiana, has reported second-quarter 2025 net income that is nearly 28 percent higher compared with the prior quarter but about 30 percent lower compared with the second quarter of 2024.

The CEO of SDI credits stable steel pricing and expanded margins for its net sales of $4.6 billion and net income of $299 million ($2.01 per diluted share) in the second quarter 2025.

“During the second-quarter 2025, steel pricing stabilized at higher levels, resulting in a significant sequential improvement in consolidated operating income of 39 percent and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of 19 percent,” SDI Chairman and CEO Mark D. Millett says.

“The earnings improvement was driven by expanded margins across our steel platform and stronger shipments from our long products steel operations. Across the company, our teams delivered a solid performance in an uncertain trade environment while continuing to prioritize the safety and well-being of one another."

SDI, which operates several recycled-content electric arc furnace (EAF) steel mills and a network of metal recycling facilities under the OmniSource name, has invested this decade to also produce recycled-content aluminum.

Millet says that capital expense project is beginning to enter its return on investment stage.

“Our aluminum team continues to successfully commission the company’s Columbus, Mississippi, aluminum flat-rolled products mill, along with the San Luis Potosi, Mexico, satellite recycled slab center,” he says.

“Last month we successfully produced and sold our first aluminum coils, and we expect volume to steadily increase over the coming months. We anticipate exiting 2025 at a utilization rate of between 40 and 50 percent, and 2026 at an exit rate of 75 percent as product certifications occur.”

The CEO does not mention the aluminum slab facility in Mexico specifically in second-quarter results-related comments on tariff and trade issues but does refer to “uncertainty.”

“The uncertainty regarding trade policy continues to cause hesitancy in customer order patterns across our businesses, despite healthy underlying demand factors, such as manufacturing onshoring, infrastructure program funding and increased regionalization of supply chains in the U.S.,” Millett says.

“This hesitancy, combined with an inventory overhang of coated flat-rolled steel, resulted in lower steel and steel fabrication shipments in the second quarter [of] 2025. We strongly believe that as individual country trade agreements are negotiated and trade policy is generally stabilized in the coming months, strong pent-up demand for our products will result. Coupled with our expansion in value-added steel and now aluminum flat rolled products, we are firmly positioned for continued growth and long-term value creation.”

Millet says SDI anticipates it will continue to see corporate demand for metal that is produced on shore and in a sustainable fashion.

“We have intentionally aligned our growth with the evolving needs of our customers by delivering efficient, sustainable supply chain solutions alongside the highest quality products,” he says.

“To date, this strategy has been focused primarily on the steel industry. However, many of our flat-rolled steel customers are also significant consumers and processors of aluminum flat-rolled products. We are excited to expand and diversify our end markets by supplying aluminum flat-rolled products with high recycled content, serving the counter-cyclical, sustainability-driven beverage can and packaging industry, as well as the automotive, industrial and construction sectors.”

Recycled metal figures prominently in SDI’s operations both as feedstock at its mills and as a potential profit center at its OmniSource scrap processing and trading business unit.

In the steelmaking part of that equation, SDI says the average ferrous scrap cost per ton melted at the company’s steel mills in the second quarter averaged $408 per ton, representing an increase of $22 per ton compared with the prior three months.

However, the firm's second quarter 2025 average external product selling price for steel made in its mills increased by $136 quarter on quarter, rising to an average of $1,134 per ton.

“Second quarter 2025 operating income for the company’s steel operations was $382 million, or 66 percent higher than sequential first quarter results, due to metal spread expansion across the platform as average realized selling values increased significantly more than scrap raw material costs,” SDI says.

SDI says second quarter 2025 operating income from its metals recycling operations amounted to $21 million, or down by $4 million compared with the prior quarter, which it says was based on lower realized ferrous scrap pricing more than offsetting record quarterly shipments.

“We remain confident that market factors are in place to support strong domestic steel and aluminum product consumption in the coming years, as the uncertainty concerning trade and tax policies is mitigated and the interest rate environment improves," Millett says.

"Additionally, based on conversations with our customer base, we believe demand for lower carbon emissions, domestically produced steel and aluminum products will competitively advantage our businesses now and in the future. As unfairly traded imports decline, uncertainty dissipates and growth of manufacturing continues to increase in the U.S., we believe a strong market environment will emerge, supporting pricing and demand.”