Steel Products

Steel Dynamics Doubles 4th Quarter Earnings

Written by Sandy Williams

Written by: Sandy Williams

Steel Dynamics doubled its fourth quarter earnings from last year. Net income was $60.57 in fourth quarter 2012 compared to $30.20 million in 2011, and $13 million in third quarter 2012. Results included a positive tax adjustment of $16 million.

Steel shipments for the quarter dropped slightly from 1.464 million tons in 2011 to 1.457 million tons in 2012 but increased by 4 percent from the previous quarter.  Fourth quarter shipments were as follows: 300,000 tons of hot-roll, 92,000 tons of P&O, 37,000 tons of cold-roll, 117,000 tons of hot-roll galvanized, 53,000 tons of cold-roll galvanized, 97,000 tons of painted, and 18,000 tons of Galvalume.

Average sale price per ton shipped declined 8 percent for the quarter to $784 per ton and scrap costs declined $9 per ton to $343.  Steel mill capacity improved to 80 percent in the fourth quarter from 78 percent in the third. 

Net income for 2012 declined to $163.55 million from $278.12 million in 2011. Net sales for the year decreased 9 percent to $7.29 billion from $8.0 billion in 2011.

“We remain optimistic that the organic growth projects we identified in 2012 will position us to continue to build a strong enterprise,” said President and Chief Executive Officer, Mark Millett. “We believe there is potential for certain market sectors, such as automotive and manufacturing, to build momentum in 2013. Recent housing start data suggests potential improvements in residential construction, and there are areas across the U.S. indicating signs of strengthening in the nonresidential construction sector, although levels remain historically low.”
Production at Steel Dynamics’ Mesabi Mining has been somewhat disappointing according to information provided in the Steel Dynamics conference call. Mechanical problems and cold weather have hampered production of iron ore which has been about 20,000 tons per month. Annual capacity is eventually expected at 300,000 to 350,000 tons annually. A shutdown to make mechanical changes is expected in the spring with production ramping up through 2013.

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