Steel Dynamics, Inc. (SDI) announced earnings of $49 million for the second quarter 2010 ($.22 per diluted share) which is $16 million lower than 1Q 2010 earnings but, an improvement over 2Q earnings in 2009 when the company had a loss of $16 million. The company shipped 1.3 million tons of steel products during the quarter of which 815,000 tons were flat rolled. Flat rolled accounted for 64 percent of second quarter steel operations shipments.

In the company’s earnings release the company reported “Flat-rolled steel shipments in the second quarter were down 15 percent from the first quarter, while shipments of long products were somewhat stronger. Weakness in flat-roll demand beginning late in the quarter, coupled with a malfunctioning melt-shop transformer, took its toll on shipments.”

Mark Parr, Keybank sSteel Analyst in a note to his clients reported “Flat-rolled volumes (excluding the Techs) came in at 622,000 tons (80% capacity utilization)…Overall external steel shipments during the 2Q were 1.18 million tons, which compares to our estimate of 1.29.”

SDI Mesabi Nugget production was 19,200 metric tons during the quarter as the company continues to work through mechanical issues as they ramp-up production. The Mesabi Nugget project is slated to improve production in the second half 2010. The company is expecting to reach two-thirds of their production rate of 500,000 metric tons (annual capacity) by the end of the year.

SMU found the following information about SDI’s scrap company OmniSource interesting: “During the second quarter, the company's scrap operations supplied 563,000 gross tons of ferrous scrap to SDI's Steel Operations, which was 42 percent of the total tonnage of ferrous scrap OmniSource shipped and was 48 percent of the tonnage of ferrous scrap purchased by our mills during the quarter.”

New Millenium Building Systems, which fabricates joists, trusses and steel decking used in the construction of non-residential buildings, had net sales of $42 million and reported an operating loss of $5 million for the quarter. The $5 million loss was a $2 million improvement over the loss suffered by New Millenium during the first quarter 2010. New Millenium had second quarter shipments of 42,000 tons which was 63 percent higher than first quarter 2010 and 18 percent higher than one year ago.

SDI CEO Keith Busse made the following statement in their earnings release, “Currently, we see the markets for our steel products remaining relatively steady, with some short-term uncertainty surrounding demand for flat-rolled steels.” He also mentioned their long product mills are “in good shape.” Structural steel volumes are running with low capacity utilization rates of less than 40 percent.

Mr. Busse also stated, “Although the economy has slowly improved over the past few quarters, at this point we are cautious about the outlook for the second half.”

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