SDI anticipates scrap shipments decline for third quarter

Global – Steel Dynamics, Inc. (SDI) is expecting profitability in its metals recycling platform to be lower for the third quarter of this year when compared to the previous three months.

The company, which is one of the USA’s largest steel producers and metals recyclers, says in its latest earnings guidance statement: ‘Both ferrous and non-ferrous shipments are expected to decline, and ferrous metal spread contraction is also expected as market prices have declined in the second half of the third quarter.’

In contrast, the profitability of SDI’s steel operations is expected to improve when compared to the second quarter based on ‘meaningful’ metal spread expansion. ‘Average quarterly realized steel product pricing is expected to increase more than additional costs derived from higher-priced ferrous scrap utilised in the quarter,’ the statement notes.

‘However, lower steel shipments across the platform are expected to offset some of the positive margin impact.’ In terms of steel product sales, demand from the heavy equipment, agricultural and energy sectors continues to be ‘challenged’ whereas the automotive sector ‘remains strong’ and the construction market is experiencing ‘gradual improvement’, according to SDI.