Steel Dynamics, Inc. today announced first quarter 2018 net sales of $2.6 billion and net income of $228 million. Comparatively, prior year first quarter net income was $201 million with net sales of $2.4 billion. Sequential fourth quarter 2017 net income was $305 million.
First quarter 2018 operating income for the company's steel operations increased 63 percent sequentially to $338 million, based on a 7 percent increase in shipments and metal spread expansion, as average steel product pricing increased more than consumed raw material scrap costs. The first quarter 2018 average product selling price for the company's steel operations increased $61 to $822 per ton. The average ferrous scrap cost per ton melted increased $21 to $321 per ton.
First quarter 2018 operating income attributable to the company's flat roll steel operations increased over 70 percent sequentially, driven by metal spread expansion related to higher selling values and a five percent increase in shipments.
Operating income from the company's long product steel operations increased over 25 percent, as a result of improved shipments and metal spread expansion, primarily from the company's Engineered Bar Products and Roanoke Bar divisions.
The company's steel production utilization rate was 94 percent in the first quarter 2018, compared to the estimated domestic steel industry utilization rate of 76 percent.
First quarter 2018 operating income from the company's metals recycling operations increased to $28 million, compared to $22 million in the sequential fourth quarter, based on higher average selling values and a seven percent increase in recycled ferrous shipments, resulting from strong domestic steel mill demand.
The company's fabrication operations recorded first quarter 2018 operating income of $20 million, compared to sequential fourth quarter results of $22 million, as improved average selling values were more than offset by seasonally lower shipments.
"We remain confident that current and anticipated macroeconomic and market conditions are in place to benefit domestic steel consumption in 2018," said Mark D. Millett, President and Chief Executive Officer. "Domestic steel inventory levels remain reasonably balanced. World steel demand and pricing have improved. Based on strong domestic steel demand fundamentals and customer optimism, we believe price momentum and growth in steel consumption will continue during the year. We also believe recent US Federal Administration steel trade actions will result in reduced imports during the year, and that tax reform will provide a stimulus for additional domestic fixed asset investment and growth. In combination with our expansion initiatives, we believe there are firm drivers for our growth in 2018.