SDI posts lower Q3 profit, sees better times in '25

Steel Dynamics Inc. (SDI) reported a drop in third-quarter profits driven largely by lower flat-rolled steel prices.

The Fort Wayne, Ind.-based electric-arc furnace (EAF) steelmaker also saw scrap prices slip. That happened because of softer demand from domestic mills taking planned maintenance outages.

But the company noted that prices recovered at the end of the quarter while demand remained stable. And it said it expects better times in 2025, according to commentary released with Q3 earnings results after the close of markets on Wednesday.

All told, SDI reported net income of $317.8 million in Q3’24, down 45% from $577.2 million in Q3’23 on sales that slipped 5% to $4.34 billion over the same comparison. The company shipped 3.18 million short tons (st) of steel in Q3’24, up 1% from 3.15 million st in Q3’23.

The outlook

“Based on domestic steel demand fundamentals, we are constructive regarding the outlook for 2025 metal market dynamics,” SDI Co-founder, Chairman, and CEO Mark Millett said in a statement.

“We expect steel pricing to recover with an anticipated lower domestic interest rate environment, coupled with continuing onshoring of manufacturing businesses, and the expectation of significant fixed-asset investment,” he added.

That investment comes thanks to government programs – including US infrastructure spending, the Inflation Reduction Act (IRA), and Energy Department initiatives, Millett said.

The bullish outlook for 2025 also comes thanks to a sprawling trade petition against imports of coated flat-rolled steel.

SDI noted that it is the largest producer of non-automotive coated steel. The company also pointed out that as much as 65% of its steel revenues come from value-added products such as coated sheet.

“We believe current trade actions could … reduce volumes of unfairly traded steel imports into the United States, especially for coated flat-rolled steel, which could have a significant positive impact for us,” Millett said.

Recall, too, that SDI is ramping up four new coating lines – two each at its mills in Sinton, Texas, and Terre Haute, Ind. “We have had limited benefit from these new lines so far this year, as we have been increasing production, and expect to realize the additional earnings potential in 2025,” Millett said.

Also on the operations side, Sinton, which has struggled with outages, operated at 72% of its rated capacity (outside of planned downtime), SDI said. The mill is capable of producing 3 million st per year.

Turning to nonferrous, Millett said that SDI’s new aluminum flat-rolled mill in Columbus, Miss. – where the company already operates a steel mill – remains on track to start up in mid-2025.