SDI recycling operations hit by snow damage

United States – US-based Steel Dynamics, Inc. (SDI) has reported a 25% decline in its consolidated operating income for the opening three months of this year when compared to the fourth quarter of 2013. ‘The first quarter 2014 was one of the most severe winter periods in recent history across much of the United States, especially in the Midwest where a majority of our operations are located,’ explains ceo Mark Millett. ‘The uncharacteristically severe and prolonged winter weather conditions resulted in increased energy costs, reduced production, diminished availability of transportation and lower shipments.’
Operating income from the company’€™s metals recycling operations was US$ 10 million for the first quarter, a drop of US$ 2 million from the final three months of last year. This reduction in profitability was attributed directly to ‘costs associated with building damage related to excessive snow accumulation’.
Operationally, external ferrous volumes and overall metal spreads ‘were somewhat lower as transportation was hindered, while non-ferrous volumes and metal spreads were somewhat improved’, the company notes. The average ferrous scrap cost per ton melted increased by US$ 24 per ton in the opening quarter of this year, according to SDI.
Looking ahead, Millett expresses ‘confidence that the broader US economy will continue to improve’. And he adds: ‘Steel consuming industries such as manufacturing, automotive, heavy machinery and the construction market continue to grow, indicative of underlying strength in steel demand. We are poised to be the beneficiaries.’