Speaking during the company’s first-quarter earnings call, SDI executives said the Texas mill’s paint line, galvanizing line and pickling line remain on track on for a June commissioning, with some limited shipments beginning in July. However, they said initial shipments are likely to be constrained because of a scarcity of coils — its own steel mills are jam-packed with orders, executive said, and third-party coils are in tight supply.  

“But those (lines) will be commissioned on time, and we'll start to see incremental shipments in the third and fourth quarters,” SDI chief executive Mark Millett told analysts during the call. 

Tight steel supplies catapulted SDI to one of its best quarters ever, with the company posting record quarterly net sales, operating income and adjusted EBITDA. For the quarter, SDI posted net income of US$431 million on net sales of US$3.5 billion. 

“During the first quarter, steel demand remained robust and product pricing gained momentum across our entire steel platform. Higher flat-roll steel selling values were the most significant drivers for our record quarterly earnings, as demand strength and historically low customer inventories throughout the supply chain supported prices. Domestic steel consumption remained strong from the automotive, construction and industrial sectors, and energy has shown some signs of rebounding,” Millett said in a statement, adding that SDI sees the momentum continuing.  

"While global economies are still recovering from the shock of COVID-19, we are seeing strong steel demand coupled with extremely low customer steel inventory throughout the supply chain. The automotive sector has experienced the strongest recovery, despite the electronic chip shortage, and the construction, equipment and transportation sectors are also strong. Our order entry continues to be robust across our businesses, and when coupled with historically low inventories, supports continued strong steel selling values. We believe this momentum will continue throughout the year and that our second quarter 2021 earnings will be even higher than our record first quarter 2021 results.”

Also during the call, Millett spoke about SDI’s planned US$400 million investment in two new paint lines and two new galvanizing lines, a pair of each of which are to be built in the southern and midwestern United States. 

The galvanizing lines will have Galvalume® capabilities, which will allow SDI to more deeply tap an important part of the flat-rolled market, it said. 

“Galvalume products represent the fastest growing flat-roll steel market in the United States, primarily serving the metal building industry. This market has historically sourced as much as 45% of need from foreign imports. Our preferred cost-effective supply chain has resulted in our existing lines consistently running at full capacity through both increased consumption and market share gain,” Millet said during the call.  

The southern U.S. lines are intended to complement capabilities at the Sinton, Texas, mill, which is generating manufacturing investments by third-party processors. 

During the call, executives said four customers have agreed to establish operations on the mill campus, representing 1.3 million tons of on-site consumption. Discussions are underway with at least two others.  And still several more are following SDI to Texas, but are choosing to build near the campus.   

“There is a lot of excitement among the customer group,” Millett said.