SDI posts higher Q2 profits on record shipments, sees good times rolling into 2027

The big picture

Steel Dynamics Inc. posted sharply higher profits on record quarterly shipments and predicted the good times might continue to roll into 2027.

“We remain confident that market conditions are in place to support strong domestic steel and aluminum consumption through the remainder of 2026 and into 2027,” SDI president and CEO Mark Millett said in a statement.

“Customer sentiment, order entry activity, and pricing have continued to improve across our businesses,” he added.

Millett made the remarks in commentary released along with second-quarter earnings figures after the close of markets on Wednesday.

By the numbers

All told, the Fort Wayne, Ind.-based steelmaker recorded a Q2’26 profit of $534.1 million, up 78.8% from $298.7 million in Q2’25 on revenue that increased 33.4% to $6.09 billion over the same period. Shipments totaled 3.74 million tons in Q2’26, a record. They were also up 11.6% from 3.35 million tons in Q2’25.

“Steel fundamentals continued to strengthen during the second quarter, as pricing improved, demand remained solid, and customer inventory levels declined, remaining lower than historical norms,” said Millett. “Steel backlogs and lead times have also extended.”

SDI reported average external sales prices of $1,298 per ton in Q2’26, up 14.4% from $1,134/ton a year earlier. Scrap costs meanwhile increased only marginally. The company reported average ferrous costs per ton melted of $412 per ton in Q2’26, little changed from $408/ton in Q2’25. The result: expanded profit margins for finished steel.

SDI did not report specific inventory or lead time figures. That said, SMU data indicates that service center sheet inventories remain at their lowest levels since April 2021. Our hot-rolled coil lead time, meanwhile, stands at an average of 7.3 weeks, up from an average of 4.6 last summer.

Following typical seasonal trends, scrap flows improved in Q2 compared to Q1, which meant there was “ample supply” for domestic mills, SDI said.

Looking downstream, the company said its steel fabrication operations had received a shot in the arm. Notably, the company’s fabrication backlog is up a whopping 45% compared to last year. The big gains come thanks to reshoring and improved conditions across a variety of downstream markets – including data centers.

Aluminum update

On the aluminum side, Aluminum Dynamics Inc. (ADI), SDI’s aluminum subsidiary, narrowed its operating losses to $33.4 million in Q2’26 from $40.6 million in Q2’25. The decline happened despite ADI incurring a $16-million charge related to moving a second recycled aluminum slab caster from Arizona to its campus in Columbus, Miss. (SMU sister publication AMU has more on the development here.) Progress continues on a slab caster in San Luis Potosi, Mexico.

Also on the operations side, ADI in July finished construction and began commissioning a third and final cold mill. Commercial production is expected in August, providing a total capacity of 650,000 metric tons per year at Columbus. In addition, the first of two continuous annealing solution heat (CASH) lines is operating. The CASH lines will allow ADI to make finished automotive products, and the company said it was already shipping material for qualifications.

“The team is already providing high-quality products for the industrial, beverage, and automotive markets, with continued customer qualifications currently underway,” Millett said.

“We recently received qualifications to supply products for automotive applications, with expectations for automotive sales to commence before the end of 2026,” he added.

Broadly speaking, SDI expects ADI shipment volumes and profitability to “increase sharply” in the second half of 2026 and into 2027 on strong demand, a supply deficit, and as startup costs decrease.