US steelmaker Steel Dynamics (SDI) expects domestic ferrous scrap flows to remain stable over the next two quarters, after inclement weather tightened supply and lifted prices earlier this year.
Harsh winter weather earlier this year disrupted scrap collection rates, processing and logistics, which supported domestic obsolete ferrous scrap prices. Seasonally stronger obsolete scrap flows in April weighed on domestic shredded and #1 HMS scrap prices for the first time since October.
SDI's recycling segment posted an operating profit of $47mn in the first quarter, up from $26mn a year earlier, underpinned by higher ferrous scrap prices and shipments. The company shipped 1.47mn gross tons (gt) of ferrous scrap in the first quarter, up by 1pc from a year earlier, though external shipments fell marginally to 553,000gt.
Average external finished steel sales prices rose to $1,193/short ton (st), up from $998/st a year earlier, while ferrous scrap costs averaged $396/st, up from $386/st a year earlier. The increase in external steel sales prices outpaced the slight increase in ferrous costs, widening SDI's scrap/steel spreads to $797/st, up by $185/st from a year earlier.
SDI has leaned more heavily on low-copper shred and #1 busheling in its melt mixes to help mitigate rising pig iron costs, the company said. Basic pig iron cfr New Orleans reached $495/metric tonne on 14 April, the highest level since June 2023.
SDI posted a profit of $403mn in the first quarter, up from $217mn a year earlier.
