Steel Dynamics’ net income narrows in Q4

Steel Dynamics Inc. (SDI), Fort Wayne, Indiana, has reported fourth-quarter 2024 net income of $207 million, or $1.36 per diluted share, which represents a more than 30 percent drop compared with the prior quarter and nearly a 50 percent drop in profits compared with one year earlier.

The recycled-content electric arc furnace (EAF) mill operator, which also operates the OmniSource network of recycling facilities, reported net fourth-quarter sales of $3.9 billion and 2024 full-year sales of $17.5 billion. The annual figure is down by more than 6.5 percent compared with 2023.

“Based on the team’s performance, we demonstrated the strength and consistency of our cash generation with annual cash flow from operations of $1.8 billion and liquidity of $2.2 billion, all while continuing to grow our business with significant organic growth investments, coupled with strong shareholder distributions through our positive dividend growth profile and meaningful share repurchases,” SDI co-founder and CEO Mark D. Millett says.

“Despite some headwinds in 2024, our steel operations achieved near-record annual shipments of 12.7 million tons and historically strong operating income of $1.6 billion. Despite a challenging pricing environment throughout much of the year, our metals recycling team achieved operating income of $77 million. Our steel fabrication business also achieved historically strong earnings with operating income of $667 million.

“Underlying domestic steel demand was stable throughout 2024 supported by the construction, automotive, industrial and energy sectors. However, steel imports of certain products, most notably coated flat rolled steels, increased significantly in 2024, negatively impacting the supply-demand balance, causing pricing pressure for flat rolled steel products.”

Earlier this month, the Washington-based American Iron & Steel Association (AISI), citing Commerce Department data, said finished steel imports totaled 29.1 million tons in 2024, and more than 22.5 million tons of semifinished steel came into the U.S. last year. According to AISI, those totals are up by 3.5 percent and 3.9 percent, respectively.

“We do expect to see unfairly traded steel imports decline in 2025, based on the recent corrosion-resistant flat-rolled steel (CORE) trade case we initiated in late 2024,” Millett says. “Declining steel imports, coupled with steady to increasing North American steel demand, provides a positive commercial environment for 2025. We have experienced strong order activity for flat-rolled steel so far in 2025, and prices have stabilized with continued positive customer outlook.”

In the October through December 2024 quarter, SDI says the average ferrous scrap cost per ton melted at the company’s steel mills increased to $370 per ton, or $3 per ton, compared with the prior quarter.

For the entire year, the steelmaker says the average ferrous scrap cost per ton melted at its mills decreased $28 per ton (or 6.8 percent) to an $386-per-ton annual average.

SDI says fourth-quarter 2024 operating income at its metals recycling operations was $23 million, representing a $13 million increase compared with third-quarter results “as metal spread improvement and continued cost efficiencies more than offset lower seasonal shipments.”

“We believe the market dynamics are in place to support increased demand across our operating platforms in 2025," Millett says. "Steel pricing has stabilized, and customer optimism continues to be solid across our steel operations, as demand continues to be steady.”

Trends Millett cites include demand for lower-carbon emission, U.S.-produced steel products.

“The continued onshoring of manufacturing businesses, combined with the expectation of significant fixed asset investment to be derived from public funding related to the U.S. Infrastructure, Inflation Reduction Act, and Department of Energy programs, will competitively position the domestic steel industry," he adds.

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“We believe current trade actions could also reduce volumes of unfairly traded steel imports into the U.S., especially for coated flat-rolled steel, which could have a significant positive impact for us.”

The steelmaker is poised to become a more horizontal metals producer this year as equipment ramps up at its Aluminum Dynamics plant in Mississippi.

“Our aluminum team is executing exceptionally well,” Millett says. “The team successfully cast their first industrial and beverage can ingots on Cast Complex Number 1 in Columbus, Mississippi, on Jan. 12, 2025. We plan to continue commissioning throughout the facility during the coming months, and to produce commercially viable products before mid-year 2025.

“We are pleased to further diversify our end markets with plans to supply aluminum flat rolled products with high recycled content to the countercyclical sustainable beverage can and packaging industry, in addition to the automotive, industrial and construction sectors. We continue to strengthen our financial position through strong cash flow generation and the execution of our long-term strategy.”