Steel Mills

SDI Doesn’t Rule Out Inorganic Growth M&A

October 19, 2023

On its third-quarter earnings conference call on Thursday, Oct. 19, Steel Dynamics Inc. executives did not rule out the possibility of ‘inorganic growth’ opportunities.

An analyst on the call, inquiring about capital allocation, asked, “Can you confirm that, at the moment, you are not interested in looking at large acquisitions on the flat-rolled side and that, right now, 100% of your attention is on aluminum?” EVP and CFO Theresa responded that, “We can’t confirm that.”

SDI is “very much focused” on its aluminum strategy and on high-return growth opportunities, she said. But as the company is “sitting with record liquidity,” it also has “the luxury to be able to both invest organically and transactionally if there were something that were to fit into our long-term strategy.”

For what it’s worth, SDI’s name has not been thrown around publicly as a potential buyer of U.S. Steel, which is currently considering the sale of all or a portion of its assets.

SDI’s financial statements show it had more than $1.76 billion in cash and equivalents as of the end of the third quarter.

Chairman and CEO Mark Millett emphasized the company’s plans to fund its new aluminum mill in Columbus, Miss., and associated facilities with cash and cash flow from operations.

On the cap-ex front, Wagler said the company is still in the planning stages for next year. She provided an early estimate of $1.8-2.0 billion in capital expenditures for 2024. The aluminum investment will utilize $1.3-1.4 billion of that. About $150-175 million will be used for the construction and startup of the SDI Biocarbon Solutions joint venture with Aymium. And four new value-add lines, to be commissioned by Q1’24, will utilize another $100 million, she said.

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.