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

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

Laura Miller is a reporter and editor for Steel Market Update. She has held a variety of positions within the steel industry since 2007, including reporting and editing for Steel Business Briefing/Platts, the Association for Iron and Steel Technology, and Kallanish Commodities, as well as marketing for what was then known as ThyssenKrupp Steel USA (now AM/NS Calvert). After a five-year hiatus working across other industries, she returned to steel in 2021 and has covered the flat rolled, tubular, and trade areas of the industry. She is a member of the Association of Women in the Metal Industries and a past-president of the AWMI Pittsburgh Chapter. She holds a BA in Latin American Studies from Edinboro University of Pennsylvania. She can be reached at laura@steelmarketupdate.com or 724-759-7869.

Read more from Laura Miller

Latest in Steel Mills

USS threatens to cut ‘thousands’ of jobs, move HQ if Nippon sale blocked

U.S. Steel could slash thousands of jobs, shift away from integrated steelmaking, and move its headquarters out of Pittsburgh if its acquisition by Nippon Steel isn’t completed, the company’s top executive said. “We want elected leaders and other key decision makers to recognize the benefits of the deal was well as the unavoidable consequences if the deal fails,” company President and CEO David Burritt said in a statement on Wednesday.