United States – Major US steel producer Steel Dynamics, Inc. (SDI) is expecting to report a first-quarter improvement in the profitability of its metal recycling operations, according to its latest guidance note.
The anticipated upturn in earnings when compared to last year’s final quarter is based on ‘higher ferrous scrap demand and metal spread expansion from increased domestic steel mill utilisation’.
Earnings from the company’s steel operations are also expected to climb ‘meaningfully’ from last year’s fourth quarter as a result of higher shipments and metal spread expansion.
‘First quarter 2017 average steel product pricing is expected to increase, more than offsetting the additional expense derived from higher ferrous scrap costs,’ the company explains. The higher earnings are being driven by SDI’s flat roll operations ‘as demand remains strong and customer inventory levels continue to be positioned at historically low levels’.
The guidance note concludes by reiterating SDI’s belief that ‘current and anticipated macro-economic and market conditions are in place to benefit the domestic steel industry in the coming year’.
The construction and automotive sectors remain strong and the energy sector has begun to strengthen, it adds.
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