SDI trims Sinton volumes expectations on delays

Electric arc furnace (EAF) steelmaker Steel Dynamics (SDI) has lowered its production outlook for its new Texas mill with the melt shop scheduled to start up by the end of February.

The 3mn st/yr flat-rolled steel mill in Sinton, near the port city of Corpus Christi, is expected to ship 2mn st in 2022, down from a range of 2mn-2.2mn st given in October.

Chief executive Mark Millett blamed supply chain issues and the Covid-19 pandemic for delays to the mill, which was originally expected to start up in mid-2021. SDI said today that the mill's melt shop is now expected to be on line by the end of February, which sources had previously confirmed.

Millett said SDI's continued backlogs in non-residential construction, which extend through most of 2022, point to increased steel consumption and demand for the next year. He also expects the supply issues that have plagued the automotive industry to ease in 2022, leading to more automotive steel consumption.

SDI's cost to invest in four new processing lines, including two paint lines and two galvanizing lines, has increased from an original estimate of $400mn-425mn to $500mn. One set of value-add lines will be added at Sinton, while the other will be placed in Terre Haute, Indiana, where SDI has its Heartland flat-rolled division.

The average steel price per ton SDI received in the fourth quarter was $1,662/st, more than double the prior year.

SDI's fourth quarter flat-rolled shipments fell by 2pc to 1.42mn st, which the company blamed on seasonality.

Total steel shipments were up by 1.1pc, buoyed by increased shipments in the structural and rail, engineered bar, and Roanoke bar divisions.

Fourth quarter steel mill production rose year-over-year by 5.4pc to 2.4mn st.

SDI made a record fourth quarter profit of $1.1bn compared with $197mn in the same period of 2020.

By Rye Druzin