Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

American steelmaker Steel Dynamics, Inc’s (SDI) Q3 earnings are expected to improve over Q2 supported by strong ferrous scrap demand leading to higher shipments, according to the company’s guidance. 


The company’s Q3 earnings from steel operations are likely to be in the range of $0.46 to $0.50 per diluted share, lower than Q2 due to metal spread compression offsetting increased shipments on the back of improved demand from automotive and construction sectors. The earnings in Q3 of 2019 are forecast at $0.69 per diluted share.


Domestic steel production is expected to improve in Q3 from the trough experienced in the previous quarter, ferrous scrap demand will strengthened. Based on significantly higher scrap shipments, the company is expecting better earnings in the third quarter from the company’s metals recycling operations compared to Q2.


The company’s Q3 earnings from steel fabrication operations are likely to be at or near record results as product pricing is likely to improve while input cost would decline. Therefore, construction sector continues to remain robust as customers remain optimistic for non-residential construction projects.


The company’s average realised quarterly flat roll steel product pricing are forecast to decline in Q3, which are forecast to stabilise in the second half of the quarter backed by customer demand and raw material pricing.

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