Steel Dynamics, Inc. reports record net income in Q3

Tuesday, 19 October 2021 20:53:51 (GMT+3)   |   San Diego

Steel Dynamics, Inc. (SDI) announced third quarter 2021 financial results, reporting record third quarter 2021 net sales of $5.1 billion and net income of $991 million. Comparatively, prior year third quarter net sales were $2.3 billion, with net income of $100 million. Net sales in the second quarter of 2021 totaled $4.5 billion, with a net income of $702 million.

Third quarter 2021 operating income for the company's steel operations was a record $1.4 billion, or 33 percent higher than sequential second quarter results, due to significant metal spread expansion, the company said in a press release, adding that record flat roll and strong long product steel realized selling values more than offset higher scrap input costs. The third quarter 2021 average external product selling price for the company's steel operations increased $258 sequentially to $1,550 per ton. The average ferrous scrap cost per ton melted at the company's steel mills increased $50 sequentially to $489 per ton.

SDI said third quarter operating income from the company's metals recycling operations remained strong at $47 million as a result of higher sequential ferrous metal margins offsetting slightly lower volumes. Ferrous scrap prices moderated in August and September after rising early in the quarter, the company said, adding that it anticipates ferrous prime scrap pricing indices to increase slightly for the remainder of the year, after also declining in October.

The company's steel fabrication operations reported record operating income of $89 million in the third quarter 2021, more than tripling the sequential second quarter results, SDI said. Supported by record quarterly shipments, earnings significantly improved as realized pricing increased $586 per ton, more than offsetting higher average steel input costs. Steel joist and deck product pricing has strengthened significantly to record levels, due strong demand, the company said, adding that order activity remains extremely strong, and customers continue to be optimistic concerning new projects well into 2022. The company's steel fabrication order backlog is at a record level in terms of volume and forward-pricing at the end of September, SDI said.

As for an outlook, Mark D. Millett, Chairman and CEO, said, "Current market conditions are in place to support solid domestic steel demand for the fourth quarter and into 2022. Order entry activity continues to be robust across our businesses. We continue to see strong steel demand coupled with moderating, but still historically low customer inventories throughout the supply chain. These dynamics support continued elevated steel selling values. Domestic steel demand remains solid in our automotive, construction, and industrial end markets.  We believe this momentum will continue and that our fourth quarter consolidated earnings could represent another record performance. Based on strong domestic steel fundamentals and customer confidence, we continue to be positive regarding North American steel market dynamics. This constructive environment coupled with our strategic growth initiatives provide firm drivers for our further growth in the coming years.”

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