SDI boosts profits in second quarter

Fort Wayne, Indiana-based electric arc furnace (EAF) steelmaker Steel Dynamics Inc. (SDI) has reported second quarter 2018 net sales of $3.1 billion and net income of $362 million, or $1.53 per share. 

Those figures top its first quarter 2018 net income of $228 million, representing a 59 percent boost in profits. Its first quarter sales were $2.6 billion and its earnings per share checked in at 96 cents.

Compared with the second quarter of 2017, when SDI’s net income was $154 million, the firm’s profits jumped by 130 percent.

“The team performed exceptionally well during the quarter,” says Mark D. Millett, president and CEO of SDI. “During the second quarter, we saw improved demand and product pricing across the entire steel platform, resulting in record quarterly steel shipments and significant margin expansion. While we saw improvement from each of our steel divisions, the increase in earnings was principally driven by our flat-roll operations, as continued strong demand supported meaningful volume and margin expansion. Domestic steel demand remained strong from the automotive, construction, and energy sectors, while general industrial demand continued to grow.”

Referring to OmniSource Corp. and other SDI scrap operations, Millett comments, “The metals recycling platform also performed well, with strong shipments and continued steady operating costs, although higher unprocessed scrap procurement costs offset some of these benefits.”

Year to date, SDI’s net income stands at $590 million on net sales of $5.7 billion, up 66 percent from net income of $355 million on sales of $4.8 billion in the first half of 2017.

SDI reports the average first half 2018 selling price for products in the company’s steel operations increased by $118 to $879 per ton.  The average year-to-date cost of ferrous scrap melted, meanwhile, increased $51 to $334 per ton.

Regarding the near-term future, Millett states, “We remain confident that macroeconomic and market conditions are in place to benefit domestic steel consumption. Based on strong domestic steel demand fundamentals and customer optimism, we believe steel consumption will continue to be strong for the remainder of the year.”