Steel Mills
Steel Dynamics Guides to Higher Q4
Written by Sandy Williams
December 17, 2020
Steel Dynamics Inc. reported that fourth-quarter 2020 earnings will be significantly higher than third quarter, driven by flat roll metal spreads and steady steel shipments. Average steel prices for the quarter are expected to offset increased scrap costs. Demand remains good, particularly in automotive and construction.
“Strong demand coupled with historically low steel inventories throughout the supply chain is supporting higher steel selling values and order entry activity,” said SDI in Q4 guidance remarks.
Higher metal margins due to increased ferrous scrap prices and volumes will result in stronger earnings from SDI’s metals recycling operations.
Steel fabrication has record order backlogs from construction customers, however earnings are expected to be lower than third quarter due to seasonal shipment declines and metal spread compression. SDI notes average industry selling values declined and steel input costs increased during the fourth quarter.
Earnings are expected in the range of $0.72 to $0.76 per diluted share and will include costs of approximately $15 million for construction at the Sinton Texas, flat roll steel mill. In comparison, third-quarter earnings were $0.47 per diluted share and Q4 2019 was $0.56 per share.
Sandy Williams
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