NEW YORK Steel
Dynamics Inc. (SDI) is forecasting growth ahead, citing a
number of planned expansions slated to be completed in the
fourth quarter coupled with improving construction and housing
data, according to its top executive.
The Fort Wayne,
Ind.-based steel producer, whose second-quarter net income
plunged 34.9 percent from the same year-ago period, cited a
challenging finished steel sector, among other reasons, for the
difficulty experienced in the quarter (
amm.com, July 17). But, even so, the finished
steel segment has a lot of upside in the future.
"I think the (sheet)
market is certainly firming and solid where it is and should
remain stable there," president and chief executive officer
Mark Millett said during an earnings call July 18. "I think
obviously the market will dictate pricing going forward ... but
certainly the current market would suggest that things are
stable and slightly up for the rest of the year."
Three rounds of
successful sheet hikes that started at the end of May have
given steel producers slightly more breathing room, which
Millett said has remained "intact as the supply and demand
dynamic has resulted in extended lead times."
As a result,
hot-rolled coil lead times at its mills are set for the end of
August, while coated material is into September, Richard Teets,
SDIs president and chief operating officer for steel,
said during the call.
Steel shipments in the
flat-rolled division edged up 1.9 percent to 720,582 tons
during the quarter. This included some 307,000 tons of
hot-rolled, 102,000 tons of pickled and oiled, 24,000 tons of
cold-rolled coil, 172,000 tons of galvanized, 89,000 tons of
painted and around 26,000 tons of galvalume.
However, a challenging
international marketplace remains a concern, causing buyers to
be wary of stocking material, the company said. But bright
spots include expansions in its bar and rail segments,
particularly due to upgrades that it said are on track.
SDI pointed to its
Pittsboro, Ind.-based mills expansion for
smaller-diameter engineered bar products as being "on schedule"
and "on budget," adding that it is slated for commissioning in
November or December without material interruption to current
operations. The project, which will add 325,000 tons of
product, is on schedule to ramp up through 2014.
SDI is also adding
premium rail production capacity at its structural and rail
division in Columbia City, Ind., which will produce up to
300,000 tons of standard-strength and premium rail for the
domestic industry. It will likely start in December and ramp up
In terms of trade, the
company said that it isnt a "big enough rebar producer to
really worry or participate" in a rumored trade case on Turkish
rebar, adding that the recent oil country tubular goods filing
would be beneficial to its sheet market (
amm.com, July 3) even though it ships low volumes
into the energy tubular market.
Looking forward, the
companys outlook is rosy. This year "is a little bit of
an implementation year for us," Millett said. "We have a lot of
good things going on in 2014."