US steelmaker Steel Dynamics (SDI) expects domestic steel consumption to remain strong through 2018 after its second-quarter steel shipments rose to a record level on increased demand across its products.
"Based on strong domestic steel fundamentals and customer optimism, we believe steel consumption will continue to be strong for the remainder of the year," SDI chief executive Mark Millett said.
Millett also pointed to domestic steel inventory levels that remain "reasonably balanced" as supportive of consumption.
SDI said it expects its recently-acquired Terre Haute, Indiana, Heartland rolling mill to ramp production up to 40,000st/month (36,287t) in the second half of 2018 and reach an annual run-rate of 800,000-900,000 st/yr of value-added flat-roll products by mid-2019. The Fort Wayne, Indiana-based company in June completed the $400mn purchase of the facility from Brazilian steelmaker CSN.
SDI shipped 2.5mn st of steel to external customers in the second quarter ended 30 June, up from 2.2mn st in the same period a year earlier.
Flat-roll shipments ticked up to 1.8mn st from 1.7mn st, while long product shipments rose by 33pc to 910,135st on stronger volumes from the company's Columbia City, Indiana, structural and rail operations as well as its Pittsboro, Indiana, engineered bar mill. Shipments by product group include internal and external sales.
Capacity utilization across SDI's mills increased to 99pc in the quarter from 91pc in the prior year as overall production ticked up to 2.8mn st from 2.5mn st.
Strong flat-roll demand also helped boost margins as selling prices outpaced the EAF-based producer's scrap input cost.
The average selling price across its steel products rose by $153/st to $932/st in the quarter from a year earlier, while the average ferrous input cost increased by $45/st to $348/st melted.
But higher steel prices raised input costs for the company's fabricated steel products segment, where margin fell even as shipments ticked up to 157,902st from 151,052st.
SDI's recycling segment Omnisource benefited from stronger demand from the company's steel mills.
Omnisource's ferrous scrap shipments ticked up to 1.3mn gt from 1.2mn gt as the share of sales to external customers remained little changed at 466,125gt.
Non-ferrous scrap shipments rose to 304mn lbs from 270mn lbs.
Operating profit in the segment climbed to $26mn from $20mn as the impact of increased shipments was offset by higher unprocessed scrap procurement costs from a year earlier.
SDI's revenue across its segments rose to $3.1bn in the quarter from $2.4bn in the prior year as wider margins helped lift profit to $363mn from $153mn.
Through the first six months of 2018, external steel shipments ticked up by 6pc to 4.8mn st from the same period a year earlier. Profit for the six months rose by 67pc to $588mn as selling prices rose to $879/st from $761/st, boosting metal margins by $67/st.
