Steel Mills
SDI Expects Lower Q3 Earnings, Continues to Be Impacted by Sinton Ramp-Up
Written by Laura Miller
September 15, 2022
Steel Dynamics Inc. expects its third quarter earnings to be down from the second quarter as the Fort Wayne, Ind.-based steelmaker is seeing lower flat rolled earnings and pricing, as well as continued impacts from the start-up of its new sheet mill in Sinton, Texas.
SDI’s earnings guidance is in the range of $4.93–4.97 per diluted share for Q3. This includes cost impacts of $0.40 per diluted share related to the Sinton mill. The Q3 guidance is down from the $6.44 per diluted share achieved in Q2 (when costs associated with Sinton’s start-up were $0.29 per diluted share), but up slightly from the $4.85 per diluted share seen in Q3 2021 earnings.
Profitability in the company’s steel operations is anticipated to be historically strong for Q3, SDI noted, but will be down noticeably sequentially “due to lower earnings from the company’s flat-rolled steel operations, as lower average flat-rolled steel pricing is expected to more than offset lower raw material costs and higher shipments.”
Impacts of high-cost steel substrate Q3 inventory at the Texas Flat Roll Steel Division should be alleviated before year’s end, SDI commented.
Lower Q3 pricing and volumes in ferrous and nonferrous scrap will result in lower earnings within the company’s metals recycling operations. At the same time, the steel fabrication segment’s Q3 earnings will be higher than its record Q2 results due to strong volumes and expanding margins. A strong non-residential construction market will result in continuing strength in the segment’s order backlog and this is expected to continue well into 2023.
By Laura Miller, Laura@SteelMarketUpdate.com
Laura Miller
Read more from Laura MillerLatest in Steel Mills
Nucor sees sequentially lower Q3 profits across all three business segments
Nucor's third-quarter earnings will be down quarter-over-quarter, but still higher than a year earlier.
Hyundai still on for Louisiana steel mill despite US raid at Georgia battery plant
Hyundai has reaffirmed its commitment to build a steel plant in Louisiana following a US government immigration raid at its battery facility in Georgia.
Hybar lowers output forecast, owning up to EAF startup delay
Hybar LLC’s rebar mill in Osceola, Ark., is now melting scrap and will soon be fulfilling orders, according to CEO David Stickler, despite a six-to-eight-week delay caused by commissioning the world’s first Aura electrical system.
Steel Dynamics guides to more metal, more money in Q3
Steel Dynamics Inc. is bullish heading into the close of the third quarter, with all three of its operating segments tracking higher.
AHMSA opens doors to potential buyers as $1.3B asset auction nears
AHMSA is opening its doors to potential buyers to tour its steel plant and mining operations in northern Mexico in preparation for the next stage of its bankruptcy process: the auction of its assets.