Steel Dynamics’ Income From Metals Recycling Division Surged 24%
The huge jump in demand from domestic steel mills resulted in 7% jump in recycled ferrous shipments.
Fort Wayne, Indiana-based Steel Dynamics, Inc. (SDI)-one of America’s leading steel producers, has announced operating results for the first quarter of 2018. The company reported a net income of $228 million over net sales of $2.6 billion. The company delivered tremendous quarterly performance with its income from metals recycling platform surging ahead by 24%.
The operating income from steel operations soared nearly 63% over the prior quarter to $338 million. The shipments were up by 7% sequentially. The robust uptick in steel product pricing offset the increase in raw material scrap costs. The average product selling price rose 8% to $822 per ton. It must be noted that the average cost of ferrous scrap witnessed 7% jump during the first quarter of the current year.
The company’s operating income from flat roll steel operations surged higher by 70% over the prior quarter. Meantime, the operating income from long product steel operations has increased by over 25%. The company’s steel mills recorded high production utilization rate of 94%, as compared with average domestic industry utilization rate of 76%.
The operating income from company’s metals recycling platform surged higher by 24% quarter-on-quarter from $22 million to $28 million. The huge jump in demand from domestic steel mills resulted in 7% jump in recycled ferrous shipments. However, the fabrication operations recorded sequential drop in operating income from $22 million to $20 million, mainly due to seasonally lower shipments.
Announcing the company’s outlook for 2018, Mark D. Millett, President and Chief Executive Officer, SDI noted that domestic steel consumption is likely to benefit from anticipated positive macroeconomic and market conditions. Also, price momentum and growth in steel consumption is likely to continue during this year. The company is well-positioned for growth and remains focused on pursuing strategic growth opportunities, Millett concluded.