SDI bullish on Sinton as capacity utilization passes 80% threshold

SDI President and COO Barry Schneider said on the call that “the gains we’ve seen on the hot side have really been excellent.”

Reducing extra costs at Sinton remains a primary focus. That includes making sure machinery is running more reliably as well as “improving the maintenance and the redundancies that our equipment needs,” Schneider said.

Sinton reported an operating loss of $58 million in the fourth quarter of 2024. But Schneider said he is pleased with where Sinton was moving on the cost curve. The addition and ramp up of two new coating lines should allow the mill “to be more efficient,” he said.

The facility in 2024 started up a galvanizing line with Galvalume capabilities as well as a paint line.

Beyond 80% production capacity

When it comes to production capacity at Sinton, Millett said one should focus on the “step function improvement” of hitting 80%.

And more recently Sinton has been “operating in excess of 90%, and they’re getting 10,000-ton days,” he added.

Leaving ‘startup mode’

SDI CFO Theresa Wagler said it’s important to remember that Sinton is still in “startup mode.”

“Once it gets to a fully mature facility, which will be later this year, it would be just like all our other facilities,” she added.

And SDI mills tend to operate profitably even when times are tough. She pointed out that SDI’s structural and rail division operated at less than 30% of its capacity in the “Great Recession” of 2009.

“And they were not just cash-flow positive, but they were operationally positive from an earnings perspective as well,” Wagler said. “So we’ll get there, and the team will achieve that here (at Sinton) in the first half of the year.”