SDI expects 1Q shipments to be higher than 4Q

Electric arc furnace (EAF) steelmaker Steel Dynamics (SDI) expects its first quarter shipments to rise from fourth quarter levels.

The steelmaker expects first quarter 2023 shipments to be higher than the 2.99mn short tons (st) of steel it shipped in the fourth quarter of 2022, which was a 3.4pc increase over the 2.89mn st it shipped in the first quarter of 2022.

While SDI said steel prices remained under pressure during much of the first quarter, prices have risen recently and lead times have extended with the company saying "steel demand is strong," according to an earnings guidance released today.

Demand is being led by the automotive, non-residential construction, energy, and industrial sectors.

High priced pig iron bought in early 2022 that SDI continues to work through is expected to weigh on overall earnings by $64mn.

SDI's steel fabrication business continues to have extended backlogs and shipments are expected to fall compared to the fourth quarter's 209,000st, as a lack of labor and supply chain issues continue to weigh on the construction industry. The company says reshoring of industry into the US and the government-backed infrastructure programs "supports strong demand in the coming years."

SDI expects first quarter earnings to range between $3.47-3.51/share, down by 39pc compared with the prior year.

By Rye Druzin