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January. 2023
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Steel Dynamics Pushes Forward with Aluminum Mill Project

Steel Dynamics Incorporated (NASDAQ:STLD) (Fort Wayne, Indiana) seems to be on a roll. The steel producer announced in December it was added to the S&P 500 Index, which is a "great honor," according Chief Executive Officer Mark Millett.

The company is not sitting on its laurels, however. In November, it announced Columbus, Mississippi, as the location for its new $1.9 billion recycled aluminum flat-rolled mill.

"We are eager to move this significant growth investment forward," said Millett in a press release. "We have intentionally grown with our customers' needs, providing efficient sustainable supply-chain solutions for the highest quality products. Thus far, this has primarily been achieved within the carbon steel industry--however, a significant number of our flat-rolled carbon steel customers are also consumers and processors of aluminum flat-rolled products. This investment broadens our ability to serve our existing and new customers by adding high-quality, low-carbon footprint flat-rolled aluminum to our product portfolio."

He added, "Our customers are excited for us to enter the aluminum flat rolled market, as we have been discussing plans for several of them to co-locate onsite with us."

The mill is designed to have an annual production capacity of 650,000 tonnes of finished products, serving the sustainable beverage packaging, automotive, and common alloy industrial sectors. The facility will be supported by various value-added finishing lines, including CASH (continuous annealing solutions heat treating) lines, continuous coating, and various slitting and packaging operations, according to the company. The rolling mill is expected to begin operations in mid-2025. Subscribers to Industrial Info's Global Market Intelligence (GMI) Metals & Minerals Project Database can click here for the project report.

Industrial Info is tracking 37 projects from Steel Dynamics, worth more than $2.9 billion. Subscribers can click here for the project reports.

See graph below showing Steel Dynamics' project activity by project type.

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Steel Dynamics also has picked Columbus as the site for its initial SDI Biocarbon Solutions biocarbon production operations, a joint venture between the company and Minnesota-based Aymium.

"The site is strategically located in close proximity to one of the company's largest electric-arc-furnace steel mills, which will consume a significant portion of the biocarbon as a replacement for anthracite, and is also central to plentiful fiber raw material sources," Steel Dynamics said in a press release.

Using biomass such as recovered and unusable wood, the facility will produce more than 160,000 metric tons per year of biocarbon for the steelmaking process. Operations are planned to begin early 2024.

"We have successfully trialed Aymium's biocarbon product in our steel operations, and estimate this first facility will reduce our Scope 1 steelmaking greenhouse gas emissions intensity between 20 and 25 percent," the company said in a press release. Subscribers can click here for the project report.

In its fourth-quarter earnings guidance release, Steel Dynamics said it expects to see "significantly lower" profitability from its steel operations than what it had in the third quarter. The company cited "seasonally lower shipments and metal-spread compression, particularly within the flat roll operations. Metal-spread compression was amplified by higher raw material costs, as the flat-roll operations work through higher-than-current-market-priced pig iron inventories ordered in early 2022 in reaction to the Ukraine and Russia supply-chain disruptions."

The company said it believes flat-roll steel prices "have bottomed and expects them to increase into 2023 as underlying steel demand and corresponding order activity remain intact from the automotive, non-residential construction, industrial, and energy sectors with some weakness in the residential sector."

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