Steel Dynamics achieves near-record steel shipments in 2020

Tuesday, 26 January 2021 12:36:59 (GMT+3)   |   Istanbul
       

US-based steel producer Steel Dynamics, Inc. has announced its financial results for the fourth quarter and the full year of 2020. In the fourth quarter, the company recorded net sales of $2.6 billion, up 13 percent, and a net income of $188 million, rising by 88 percent, both quarter on quarter, while in 2020 it posted net sales of $9.6 billion, down 8.5 percent and a net income of $551 million, decreasing by 17.8 percent, both year on year.

In the fourth quarter last year, the operating income for the company’s steel operations was $298 million, more than double the third quarter results, due to the significant flat roll steel metal spread expansion, as strong demand and tight supply dynamics propelled selling values. In the fourth quarter, the average external product selling price for the company’s steel operations increased $80/mt from the third quarter to $814/mt. The average ferrous scrap cost per ton melted at the company’s steel mills increased $20/mt from the third quarter to $279/mt.

In 2020, the company’s operating income decreased by 14 percent year on year to $847 million. Lower earnings were primarily the result of steel metal spread compression, as lower steel prices in the first half of 2020 caused overall average annual steel selling values to decline more than average ferrous scrap costs. In 2020, average external product selling price for the company’s steel operations decreased $67/mt to $770/mt. The average ferrous scrap cost per ton melted at the company’s steel mills decreased $25/mt to $268/mt. In 2020, the company achieved near-record steel shipments of 10.7 million mt and record steel fabrication shipments of 666,000 mt.

According to the company’s statement, as domestic steel production continued to rise during the fourth quarter, demand for recycled ferrous scrap and scrap selling values also increased. As a result, fourth quarter operating income from the company’s metals recycling operations increased 75 percent to $27 million, compared to the third quarter.

The company’s steel fabrication operations reported an operating income of $25 million in the fourth quarter last year, compared to the record high $39 million in the third quarter. Earnings declined due to seasonally lower shipments and metal spread compression, as product pricing declined, while steel input costs increased. The steel fabrication platform's order backlog remains strong, and customers remain optimistic concerning construction activity.

“While the domestic economy is still recovering from the shock of Covid-19, we are seeing a strong steel demand environment,” commented Mark D. Millett, president and CEO. “The automotive sector has experienced the strongest recovery, and the construction sector remains resilient. Customers are positive concerning the business outlook for 2021. We are seeing pent-up demand, as steel service center and end-user inventories are still extremely low compared to historical norms. We also believe US trade agreements and existing steel trade cases will continue to moderate steel imports. Based on strong domestic steel fundamentals, we are optimistic regarding the North American steel market dynamics and believe steel consumption will experience growth this year. We expect to see continued steel price strength and strong customer demand in 2021.”


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