Steel Dynamics, Inc. today announced third quarter 2017 financial results. The company reported third quarter 2017 net sales of $2.4 billion and net income of $153 million. Comparatively, prior year third quarter net sales were $2.1 billion, with net income of $157 million. Sequential second quarter 2017 net sales were $2.4 billion, with net income of $154 million.
“Elevated levels of steel imports persisted during the quarter, hindering the ability for domestic steel prices to keep pace with raw material costs,” said Mark D. Millett, President and Chief Executive Officer. “Despite reported low levels of steel service center inventory, we believe steel traders built inventory at the ports ahead of potential domestic trade actions, which resulted in an overhang position for flat roll steel during recent months. This oversupply resulted in periods of weaker customer orders. The increase in our sequential earnings was principally the result of improved engineered bar, structural and merchant steel shipments. Underlying demand from the construction sector appeared to remain strong, and the energy sector was stable. Conversely, demand from the domestic automotive sector softened, but our steel operations continue to gain market share somewhat mitigating the impact.”
Third quarter 2017 operating income for the company's steel operations increased 2 percent, or $6 million, to $280 million sequentially, based on higher shipments from our long products divisions outpacing metal spread compression.
Third quarter 2017 operating income attributable to the company's flat roll products decreased 3 percent when compared to the sequential second quarter, based on slightly lower shipments and metal spread compression, as average scrap costs increased more than average selling values.
The company's steel production utilization rate was 92 percent in the third quarter 2017, compared to 91 percent in the sequential second quarter and compared to the estimated third quarter domestic industry utilization rate of 75 percent.
As for an outlook, Millet said, “Although US automotive production has peaked, we believe North American automotive steel consumption will be steady, and that there will be continued additional growth in the energy and construction sectors, especially for larger, public sector infrastructure projects.”