Steel Mills

SDI

SDI Q1 earnings slip on order volatility, low scrap tags

Written by Ethan Bernard

April 23, 2024

First quarter ended March 3120242023% Change
Net sales$4,694$4,893-4.1%
Net income (loss)$584$637-8.3%
Per diluted share$3.67$3.70-0.8%
(in millions of dollars except per share)

Steel Dynamics Inc.’s (SDI’s) earnings fell in the first quarter of 2024. The company cited steel order volatility early in the quarter and lower scrap prices.

The Fort Wayne, Ind.-based steelmaker logged net income of $584 million in Q1’24, off 8.3% from $637 million a year earlier, on net sales that slid 4.1% to $4.69 billion.

“Underlying steel demand was steady in the quarter. However, we experienced some steel-order volatility early in the quarter as customer inventories remain incredibly low and scrap prices declined month over month in the quarter,” Mark D. Millett, chairman and CEO, said in a statement on Tuesday afternoon. (Recall that scrap prices fell sharply in March.)

“Customer orders rebounded strongly in March, supporting increased pricing and solid order backlogs, especially within our value-added coated flat-rolled steel products portfolio,” he added.

The company said the automotive, non-residential construction, energy, and industrial sectors lead demand. Also, flat-rolled pricing “has rebounded from recent lows, and steel producer lead times have extended since the end of the first quarter.”

The Q1’24 average external selling price for SDI’s steel operations rose $111 per short ton (st) sequentially to $1,201/st. Steel shipments totaled 3,225,594/st in Q1’24, off 3% from a year earlier.

Outlook

Regarding the rest of this year, Millett said, “We remain confident that market conditions are in place for domestic steel consumption to be strong throughout 2024.”

“We believe North American steel consumption will increase in 2024, and that demand for lower-carbon emission, US-produced steel products coupled with lower imports will support steel pricing,” he added.

Operations updates

Millett said SDI has successfully started commissioning and operating its four new (previously announced) value-added flat-rolled steel coating lines. The lines are located at its Heartland flat-rolled processing mill in Terre Haute, Ind., and its Sinton sheet mill in Sinton, Texas.

“The teams have produced prime-quality galvanized and painted products on the first two lines in record times,” Millett said.

“We expect to begin benefiting from the additional 1.1 million tons of value-added steel products beginning in the second quarter of this year and fully in 2025,” he added.

Millett said SDI was also progressing on its aluminum flat-rolled mill in Columbus, Miss. “We plan to begin operating the aluminum flat-rolled mill mid-2025,” he said.

He noted that a significant number of SDI’s flat-rolled steel customers are also consumers and processors of aluminum flat-rolled products.

The company plans to supply aluminum flat-rolled products with high recycled content to the beverage can and packaging industry, in addition to the automotive, industrial, and construction sectors.

Ethan Bernard

Ethan Bernard is managing editor for Steel Market Update. He previously worked for American Metal Market as a copy editor in the New York office for two years, starting in 2008. Later, he copy edited AMM’s monthly magazine on a freelance basis from 2015 until 2017. With experience in financial copywriting and textbook publishing, he holds a BA in Comparative Literature from UC Berkeley, and an MFA. in Creative Writing from New York University. He can be reached at ethan@steelmarketupdate.com or 724-759-7871.

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