Steel Mills
SDI Modestly Lowers Sinton’s 2022 Production Guidance
Written by David Schollaert
April 21, 2022
Steel Dynamics Inc. (SDI) expects that its new electric-arc furnace sheet mill in Sinton, Texas, will reach a run rate of approximately 80% by the end of the third quarter and over 90% by year-end, company executives said during the quarterly earnings conference call on Thursday.
The Fort Wayne, Ind.-based steelmaker has said that it currently expects 2022 shipments from Sinton to be over 1.5 million tons, slightly behind its original goal of 2 million tons.
The slightly revised guidance is due to “challenges” that prevented its hot end from being fully commissioned by the end of 2021, delaying the first coil – both melted and rolled – by approximately two months.
The reduced volume resulted from a delayed start-up on the hot mill caster, SDI president and CEO Mark Millett said. But the mill has been running extremely well since, and all of it capabilities have been commissioned.
“Just to emphasize, the progress at Sinton is remarkable,” Millett said. “I think it’s going well … and am confident that we will exceed those 1.5 million tons in all honesty, we’re just being conservative. We couldn’t be happier.”
The steelmaker incurred a cost of $84 million or $0.31 per diluted share during the first quarter of 2022 for the continued commissioning and start up of its Sinton flat-rolled steel mill.
SDI’s steel operations generated net income of $1.10 billion in the first quarter, achieving record shipments of 2.9 million tons, of which Sinton contributed 50,000 tons. When fully operational, Sinton will provide an additional 750,000 tons per quarter of availability, company executives said during the call.
“The mill has produced 84.6-inch width coils and down to 0.60 on high-strength low alloy grades,” Millett added. “A slow ramp isn’t all that bad from a supply-demand dynamic right now anyway. … Our ramp-up is going to be solid through the rest of this year.”
By David Schollaert, David@SteelMarketUpdate.com
David Schollaert
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