Steel Mills
SDI Flat Roll Operations Drive Stronger Profits for Q3
Written by Sandy Williams
September 20, 2016
Steel Dynamics expects stronger profits in third quarter due to meaningful metal spread expansion. In the company’s third quarter guidance, SDI said higher steel pricing in Q3 will more than offset higher scrap prices, however, improved margins will be impacted by lower steel shipments across the product platform.
Higher earnings for third quarter are driven by the SDI’s flat-roll operations. Demand is still challenged in heavy equipment, agricultural and energy sectors but automotive remains strong and construction showing gradual improvement.
Metals recycling profits are expected to be lower due to declining shipments of ferrous and non-ferrous scrap. A ferrous metal spread contraction is expected from falling market prices in the second half of third quarter.
Fabrication is experiencing steady demand from nonresidential construction and shipments are expected to remain consistent with product pricing higher than Q2. Higher raw material flat roll steel costs are expected to result in metal spread compression and earnings sequentially for fabrication.
Sandy Williams
Read more from Sandy WilliamsLatest in Steel Mills
USS confirms split CFIUS decision on Nippon deal; it’s now up to Biden
Nippon Steel's purchase of U.S. Steel could lead to lower steel output domestically, and that presents “a national security risk," the Washington Post reported.
USS/Nippon deal: Who will have the happiest holidays?
Will Santa bring gifts for the leadership, employees, and shareholders of U.S. Steel and Nippon Steel, and lumps of coal for USW leadership and politicians opposed to the deal?
‘Orderly liquidation’ of AHMSA assets begins
A trustee has formally taken over AHMSA and begun the liquidation process of the bankrupt Mexican steelmaker.
Nippon buying stake in Canadian iron ore project
Nippon Steel and a Japanese trading company have entered an agreement to buy a 49% interest in a Champion Iron ore project in Canada.
USS anticipates Q4 loss on weak demand, BR2 start-up
Amid a challenging pricing and demand environment, and with the ongoing ramp-up of the Big River 2 mill, USS is anticipating a loss for the fourth quarter.