Steel Mills
SDI Guidance Expects Lower Profit in Q4
Written by Sandy Williams
December 16, 2015
Steel Dynamics expects reduced profitability from its steel operations in fourth quarter compared to third. Lower steel shipments, customer destocking and seasonal demand weakness are impacting the steel platform and, in particular, commodity grade hot roll products. Lower steel pricing will offset any benefits from lower ferrous scrap costs.
Fabricated steel joist and decking products continue to have strong demand indicating a positive trend for non-residential construction. Fabrication shipments are expected to be higher than third quarter shipments but average pricing will be lower due to market conditions and a shift in product mix. Profitability for fabricated is expected to decrease, despite improved volume, due to the lower average pricing.
The metals recycling segment is expected to show a loss based on lower shipments and metal spread compression. Steel mill demand is down for ferrous scrap, resulting in a $65 to $70 per ton drop in pricing between the end of September and end of November. SDI anticipates an impairment charge in Q4 for its metals recycling operations but the amount has yet to be determined.
Commenting on commodity markets, heavy equipment, agricultural and energy remain challenged, said SDI. Automotive continues to be strong and construction continues to improve
Despite lower earnings, SDI, expects to generate cash flow of more than $200 million in Q4, resulting in record high liquidity for 2015. SDI provided earnings guidance in the range of $0.03 to $0.07 per diluted share, compared to sequential third quarter 2015 earnings of $0.25 per diluted share and prior year fourth quarter adjusted earnings of $0.40 per diluted share.
Sandy Williams
Read more from Sandy WilliamsLatest in Steel Mills
Cliffs, USW cite First Amendment in USS/Nippon litigation; seek case dismissal
The union says the suit is "a frivolous and unsubstantiated attack on our union simply for exercising our First Amendment rights."
AISI: Weekly raw steel output ticks higher
The volume of raw steel produced by US mills slightly increased last week, according to American Iron and Steel Institute (AISI) data. Last week’s production rate represents the second-highest level recorded this year.
Opening briefs filed in Nippon/USS lawsuit vs. US government
Together, Nippon Steel, Nippon Steel North America, and U.S. Steel announced the filing of their opening brief in their litigation to invalidate the government’s decision to block their announced merger. The brief lays out “how President Biden made a predetermined decision for political reasons, not national security, causing CFIUS to engage in a sham review […]
Cliffs blames muted auto demand for steep losses in 2024
Muted demand from the auto industry took a particular toll later in the year.
U.S. Steel losses widen, better times seen as BR2 ramp-up continues
U.S. Steel’s losses widened in the fourth quarter on lower steel prices, weaker demand, and startup costs relating to the expansion of its Big River Steel EAF sheet mill in Arkansas. But the Pittsburgh-based steelmaker said it expected results to improve in 2025 as Big River 2 – the project to double capacity at the Osceola, Ark., mill - gains steam.