Steel Mills
SDI warns of lower Q4 profits on weak prices, Butler outage
Written by Stephanie Ritenbaugh
December 17, 2024
Steel Dynamics Inc. expects profits to slide in the fourth quarter due to an unplanned mill outage and sagging steel prices, according to earnings guidance released on Monday.
The Fort Wayne, Ind.-based steelmaker and metal recycler expects Q4’24 earnings guidance in the range of $1.26 to $1.30 per diluted share. That’s down from the Q3’24 earnings of $2.05 per diluted share and Q4’23 earnings of $2.61 per diluted share.
SDI noted an unplanned outage at its steel mill in Butler, Ind., that cut volume by an estimated 50,000 short tons. The mill is capable of producing over 3 million st of flat-rolled steel annually.
The company said Q4’24 profits have also been hit by lower average realized pricing and seasonally lower shipments.
SMU’s hot rolled price has been below mill list prices in recent months. Our HR price index currently stands at $675/st. That’s down $5/st from a month ago and $365/st from this time last year, according to SMU’s interactive pricing tool.
“Flat-rolled steel prices have stabilized, and underlying steel demand remains seasonally steady for the primary steel consuming sectors, as evidenced through solid customer order activity,” SDI said said.
“Customers have been positive concerning the business outlook for 2025,” the company added.
As for scrap, quarterly earnings from SDI’s recycling operations are expected to be “significantly higher” than the third quarter based on steady ferrous volumes and flat average realized pricing, the company said.
Meanwhile, earnings from the company’s steel fabrication operations are expected to be lower. That’s based on seasonally lower shipments and a decline in average realized pricing.
But the company predicted better times for its fabrication business in 2025. That comes thanks to a steady order backlog, which SDI said extended “deep into the first half 2025 at attractive pricing levels.”
The company expects fabrication to benefit from increased volumes in 2025, lower interest rates, infrastructure spending, and onshoring. Those factors should boost demand not only for steel joist and deck products but also for flat rolled and long product steel, SDI said.
The company plans to release its quarterly earnings after the markets close on Wednesday, Jan. 22.
Stephanie Ritenbaugh
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