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Improvements in Flat Rolled Market Help Boost Steel Dynamics' Q1 Profits
04/21/2016 - U.S.-based Steel Dynamics Inc. doubled its first-quarter profits on greater shipments and improving market conditions, especially in its flat rolled business, the company reported Thursday.
For the quarter ended 31 March 2016, the steelmaker posted a net income of US$63 million on sales of US$1.7 billion. In the same quarter last year, the company made US$30.8 million on sales of US $2 billion.
In a statement, president and chief executive Mark D. Millett said that although shipments and profitability improved for all of its operating divisions, the results from its flat rolled business largely lifted the bottom line.
He said that not only have imports levels declined, customer inventories have come into better alignment with demand, supporting improved mill utilization rates. And, he said, recent price increases now appear to be holding.
“2016 has certainly provided a changing landscape to the domestic flat rolled market,” he said during a conference call with analysts.
During the quarter, shipments from its flat rolled plants, which include its southwestern Pennsylvania galvanizing facilities, rose 28.5 percent on a year-over-year basis to about 1.66 million tons. And, Millet said, those plants generally ran at full capacity during the quarter.
While the company is seeing some improvement, conditions remain challenging. End-use demand in some of its markets, particularly agriculture, heavy equipment, and energy, remains soft, and its average steel prices remain down.
In fact, the company’s average mill price fell 6.5 percent to US$574 per ton from the fourth quarter of 2015. The company also said the industry’s capacity utilization remains below historical rates due competition from what it said are unfairly traded imports.
In a statement, president and chief executive Mark D. Millett said that although shipments and profitability improved for all of its operating divisions, the results from its flat rolled business largely lifted the bottom line.
He said that not only have imports levels declined, customer inventories have come into better alignment with demand, supporting improved mill utilization rates. And, he said, recent price increases now appear to be holding.
“2016 has certainly provided a changing landscape to the domestic flat rolled market,” he said during a conference call with analysts.
During the quarter, shipments from its flat rolled plants, which include its southwestern Pennsylvania galvanizing facilities, rose 28.5 percent on a year-over-year basis to about 1.66 million tons. And, Millet said, those plants generally ran at full capacity during the quarter.
While the company is seeing some improvement, conditions remain challenging. End-use demand in some of its markets, particularly agriculture, heavy equipment, and energy, remains soft, and its average steel prices remain down.
In fact, the company’s average mill price fell 6.5 percent to US$574 per ton from the fourth quarter of 2015. The company also said the industry’s capacity utilization remains below historical rates due competition from what it said are unfairly traded imports.
