Steel Dynamics, Inc. today announced second quarter 2018 financial results. The company reported second quarter 2018 net sales of $3.1 billion and net income of $362 million. Comparatively, prior year second quarter net income was $154 million, with net sales of $2.4 billion. Sequential first quarter 2018 net income was $228 million, with net sales of $2.6 billion.
In a press release, the company said second quarter 2018 operating income for the company's steel operations increased 59 percent sequentially to a record $537 million, based on an 8 percent increase in shipments and metal spread expansion, as average steel product pricing increased more than consumed raw material scrap costs. The second quarter 2018 average product selling price for the company's steel operations increased $110 to $932 per ton. The average ferrous scrap cost per ton melted increased $27 to $348 per ton.
Second quarter 2018 operating income attributable to the company's flat roll steel operations increased 67 percent sequentially, driven by metal spread expansion related to continued strong underlying demand, higher selling values and a 5 percent increase in shipments. Operating income from the company's long product steel operations increased 36 percent, as a result of improved shipments and metal spread expansion, primarily from the company's Structural and Rail Division.
The company's steel production utilization rate was 99 percent in the second quarter 2018, compared to 94 percent in the sequential first quarter and 91 percent in the second quarter of 2017.
Second quarter 2018 operating income from the company's metals recycling operations was $26 million, compared to $28 million in the sequential first quarter. Higher procurement costs offset a seven percent increase in recycled ferrous shipments, resulting from strong domestic steel mill demand.
The company's fabrication operations recorded second quarter 2018 operating income of $14 million, compared to sequential first quarter results of $20 million, as improved average selling values and higher shipments were more than offset by higher steel input costs.
"We remain confident that macroeconomic and market conditions are in place to benefit domestic steel consumption," said Mark D. Millett, President and Chief Executive Officer. "Based on strong domestic steel demand fundamentals and customer optimism, we believe steel consumption will continue to be strong for the remainder of the year. Domestic steel inventory levels also remain reasonably balanced. In combination with our expansion initiatives, we believe there are firm drivers for our continued growth. We are excited about Heartland and our recently announced expansion plans at the Columbus Flat Roll Division. These actions represent a few steps in the continuation of our growth initiatives, to further increase value-added products and market diversification.”