Steelmakers to draw red ink as economic ills grow

Dec 12, 2008 | 12:04 PM | Scott Robertson

The global economic crisis that has prompted sharp declines in steel orders will result in a number of leading steelmakers, including Steel Dynamics Inc. (SDI), Fort Wayne, Ind., reporting quarterly losses for the end of this year and promises to lead to tough sledding in the early stages of 2009.

SDI, a mini-mill producer of flat-rolled and long steel products, and Insteel Industries Inc., a Mount Airy, N.C.-based manufacturer of steel wire reinforcing products, both expect to post losses for the current quarter, while OJSC Novolipetsk Steel (NLMK), Lipetsk, Russia, whose U.S. assets include the recently purchased Beta Steel Corp. in Portage, Ind., said its fourth-quarter results will "decrease substantially."

The announcements came days after leading U.S. mini-mill Nucor Corp., Charlotte, N.C., gave guidance indicating it would be marginally profitable in the fourth quarter (AMM, Dec. 10), and are the latest indications of the extent to which the global financial crisis has impacted the world steel industry.

Keith Busse, chairman and president of SDI, said it would be "disappointing" for the company to report a fourth-quarter loss since it would distract from what he termed its "stellar" performance in the first three quarters of the year.

SDI estimates its full-year earnings will land in a range of $2.30 to $2.40 per diluted share, well below earlier estimates of about $3.25 per share despite anticipated record annual revenue, operating earnings and cash flow, dragged down by a fourth-quarter loss of between 35 and 40 cents per share.....

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