Steel Dynamics, Inc. today announced third quarter 2018 net sales of $3.2 billion and net income of $398 million. Comparatively, prior year third quarter net sales were $2.4 billion, with net income of $153 million.
In a statement, the company said its steel fabrication platform achieved record shipments in the quarter, as nonresidential construction demand remained strong and customer sentiment positive. The order backlog remained at near record highs entering October. Despite the positive demand environment, earnings from the steel fabrication operations slightly decreased by the continued rise in average steel input costs.
Third quarter 2018 operating income for the company's steel operations increased 7 percent sequentially to a record $577 million. Third quarter 2018 operating income attributable to the company's flat roll steel operations increased 5 percent sequentially, driven by metal spread expansion related to continued strong underlying demand and higher average selling values. Operating income from the company's long product steel operations increased 17 percent, as a result of higher average selling values and metal spread expansion.
Third quarter 2018 operating income from the company's metals recycling operations was $18 million, compared to $26 million in the sequential second quarter. Ferrous shipments decreased slightly and metal spread remained steady, the company said in a statement.
The company's fabrication operations recorded third quarter 2018 operating income of $13 million, compared to sequential second quarter results of $14 million, as record high shipments and improved average selling values were offset by continued higher average steel input costs.
In a press release, Mark D. Millett, President and Chief Executive Officer, commented that “underlying domestic steel demand remained strong” in Q3 despite “some temporary hesitancy in flat roll order activity based on customer sentiment and increased hot roll coil import levels.” Overall, Millet said demand from major steel consuming sectors was steady, including construction, automotive, and energy.
As for an outlook, Millett said the company remains confident that macroeconomic and market conditions are in place to benefit domestic steel consumption in 2019.” Based on strong domestic steel demand fundamentals and customer optimism, Millett said the company believes steel consumption will continue to be strong.