By Mary de Wet
Steel Dynamics Inc. said it sees strong demand for steel from the construction industry and the energy sector.
On its outlook:
“We remain confident that market conditions are in place for domestic steel consumption to continue to be strong this year and into 2023,” said Chairman, President and Chief Executive Mark D. Millett.
“Order entry activity continues to be robust across all of our businesses. We believe steel prices will remain supported by strong demand, balanced customer inventory levels and elevated raw material costs. We believe the automotive, industrial and energy sectors will remain solid steel consumers this year, with demand from the construction sector at the lead. Our steel fabrication operations order backlog remains at record volume and forward pricing levels. This combined with continued robust order activity and broad customer optimism, supports strong overall demand dynamics for the construction industry. We believe this overall momentum will continue and that our second-quarter 2022 consolidated earnings should represent another record quarterly performance.
“Based on our current forecast, we estimate 2022 shipments to be in the range of 1.5 million tons.”
Steel mill production rose to 2.51 million tons in the first quarter from 2.48 million tons a year ago.
Shipments totaled 2.89 million tons, up from 2.82 million tons.
The average external sales price rose to $1,561 a ton from $1,041 a ton. Compared with the fourth quarter, “the first-quarter 2022 average external product selling price for the company’s steel operations decreased just over $100” per ton, the U.S. steel producer and metal recycler said.
“Flat roll steel prices have recently firmed with extending delivery lead times, related to strong demand dynamics, coupled with higher input costs and global flat roll steel supply disruptions. The automotive, construction and industrial sectors continue to lead steel demand. We are also starting to see a significant increase in steel demand from the energy sector,” Mr. Millett said.
On metals recycling:
Nonferrous shipments fell to 260.9 million pounds in the first quarter from 280.8 million pounds a year ago. Ferrous shipments fell to 1.3 million gross tons from 1.4 million tons.
On steel fabrication:
Steel-fabrication shipments rose to 210,237 tons in the first quarter from 184,243 tons a year ago, while the average sales price jumped to $4,424 a ton from $1,406 a ton.
“The non-residential construction sector remains strong, resulting in a record order backlog with record forward-pricing for the company’s steel fabrication platform. The company anticipates this momentum to continue through 2022 based on these dynamics.”
Write to Mary de Wet at [email protected]