Davis Index – Daily metal prices, scrap prices & global metal market

US-based Steel Dynamics’ (SDI) total steel shipments in 2019 rose by 2pc to 10.82nt (9.82mt) from the prior year, but net sales declined by 11pc to $10.48bn. SDI’s steel production remained unchanged in 2019 at 10.90nt while external shipments from all steel operations decreased by 2pc to 9.40nt from a year ago.

 

In 2019, SDI’s recycling materials volumes declined for both ferrous and non-ferrous materials. Non-ferrous shipments decreased by 6pc to 1,068,208lb while ferrous shipments decreased by 10pc to 4,627,214gt (4,701,466.48mt) of which 1,565,957gt were shipped externally. Ferrous shipments to external consumers also decreased by 12pc from the prior year.

 

Non-ferrous shipments declined every quarter in 2019 with 252,861lb shipped in December quarter, down by 9pc compared to the same quarter in 2018. Ferrous shipments of 1,096,211gt decreased 10pc in December quarter from the prior year and was the lowest quarterly shipment level in the year. Shipments to external customers were also the lowest compared to the rest of the quarters at 361,504gt, down by 13pc against December quarter of 2018.

 

Steel Dynamic’s consolidated operating income decreased by 43pc to $987mn in 2019 from $1.72bn in 2018, while net income dropped by 41pc to $671mn from $1.26bn in the prior year. Operating income from steel operations decreased by 40pc to $1.20bn compared to the prior year. Cost of goods sold surged in 2019 to 85pc of sales against 80pc in 2018, despite ferrous scrap prices declining in eight of the twelve months. EBITDA of $1.28mn decreased by 37pc against $2.04bn in 2018.

 

External net sales for steel in 2019 fell by 11pc to $7.92bn, fabrication sales rose by 4pc to $962mn, metals recycling decreased by 23pc to $1.198bn, and other sales decreased by 6pc to $400mn. Of total net sales, steel comprised 76pc, up 1pc from the prior year, while metal recycling sales fell to 11pc of total sales in 2019 from 13pc in 2018.

 

Average external steel sales prices decreased by 9pc to $839/nt in 2019 from $922/nt in 2018 compared to the larger drop in average ferrous scrap prices of 14pc to $293/mt in the same period.

 

Shipments of fabricated steel increased marginally to 644,411nt in 2019, with average sales price up by 4pc to $1,437/nt from the prior year.

 

Weak financial performance, despite firm steel demand in the domestic market, was attributed to a challenging steel pricing environment as customers destocked inventories, lower ferrous and non-ferrous selling prices, and higher maintenance costs.

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