Steel Dynamics profitability improves in first quarter 2016

During the first quarter, CEO Mark Millett noted flat roll steel import levels declined, “and customer inventory levels are better matched with actual demand requirements, supporting higher domestic steel mill utilization."

"The domestic steel demand outlook is relatively unchanged and steady, with the heavy equipment, agricultural and energy markets remaining weak, while automotive continues to be strong and construction recovers,” he said.

Profitability of the Fort Wayne-based company’s metals recycling operations improved, moving from an operating loss of $16 million in the fourth quarter 2015 (which excluding non-cash asset impairment charges of $428.5 million) to operating income of $6 million in the first quarter of this year. 2016, based on both improved metal spread and shipments. The company’s ferrous shipments increased 9 percent and metal margins improved over 30 percent, as demand and pricing improved due to both increased domestic steel mill utilization and scrap export demand.

The company’s fabrication operations continued to perform well, achieving first quarter operating income of $32 million which was only surpassed by the record level of $37 million set in the third quarter of last year.