Reports related to this article:
Project(s): View 2 related projects in PECWeb
Plant(s): View 2 related plants in PECWeb
Released January 24, 2020 | SUGAR LAND
en
Researched by Industrial Info Resources (Sugar Land, Texas)--Steel Dynamics Incorporated (NASDAQ:STLD) (Fort Wayne, Indiana) plans to spend $1.4 billion this year on capital projects, with the lion's share of that amount earmarked for its flat-rolled steel mill in Sinton, Texas, company officials said Thursday.
Industrial Info is tracking active Steel Dynamics projects worth $2.35 billion.
Click on the image at right for a graph showing Steel Dynamics project activity by state.
The 2020 planned capital expenditures (capex) are up slightly from an estimate of between $1.2 billion and $1.3 billion given last fall by Steel Dynamics. For more information, see October 18, 2020, article - Steel Dynamics' Capex Plans for 2020 Appear Unfazed by Tougher Market.
Speaking during the company's fourth-quarter 2019 earnings conference call with industry analysts, Chief Financial Officer Theresa Wagler said $1.2 billion will be allocated to the Sinton project this year; $60 million will go for the completion of a third galvanizing line at Steel Dynamics' Galvanizing Line #3 Addition project at its Columbus Steel Mill in Mississippi; and the remaining $140 million will be spent on smaller growth and sustaining projects. Capex in 2019 totaled $452 million, she said.
Steel Dynamics made a final investment decision last year to build the 3 million-ton-per-year, flat-rolled, electric-arc-furnace (EAF) steel mill in Sinton. The $1.9 billion mill will serve markets in both Mexico and the U.S. Construction is underway, with infrastructure, such as road and rail, completed, and building foundations initiated. Operations are expected in midyear 2021.
Located about 30 miles northwest of the port of Corpus Christi, Texas, the facility will target Southwest U.S. and Mexico market regions. The mill will have proximity to customers in the four-state area of Texas, Louisiana, Oklahoma and Arkansas, along with the U.S. West Coast and Mexico, representing about 27 million tons of flat roll steel consumption, according to the company. It will benefit from on-site access to two class I railroads, transloading opportunities with a third class I railroad, proximity to a major U.S. highway system and access to the deepwater port of Corpus Christi. For related information, see July 24, 2019, article - New $1.9 Billion Steel Mill to Serve Both U.S., Mexican Markets.
Wagler said the project received environmental approvals last week, allowing full construction to begin. The project has received $155 million in state and local incentive benefits, she added. The mill is expected to begin operations in mid-2021.
"This is big news for the U.S. steel industry, which is in the middle of a period of reinvention and modernization," said Joseph Govreau, vice president metals & minerals research for Industrial Info. "New state-of-the art mills like this and Big River Steel in Arkansas are displacing older, integrated steel-making technology."
For more information, see Industrial Info's project report and January 23, 2020, market brief - Steel Dynamics Starts Construction of Mill in Texas.
The company expects to start operations at its 400,000-ton-per-year galvanizing line addition in Columbus, Mississippi, by mid-2020. For more information, see Industrial Info's project report.
"Collectively, our strategic growth investments provide an estimated incremental annual future EBITDA (earnings before interest, taxes, depreciation and amortization) of over $425 million on a through-cycle, historical-spread basis," Wagler said. The estimate includes earnings from the Sinton steel mill, the third galvanizing line in Mississippi and two now-operational rebar expansions.
Company executives indicated they were optimistic regarding the company's earnings for 2020, despite the low steel prices that bedeviled the U.S. industry last year.
Chief Executive Officer Mark Millett said customers have largely destocked the large steel product inventories that led to those low prices, adding that underlying steel demand remains intact.
"We believe North American steel consumption will experience modest growth and will be supported by further steel import reductions and the end of steel inventory destocking," Millett said in the company's earnings release. "We believe recent and possible trade actions could have a positive impact in further reducing unfairly traded steel imports into the United States, including coated flat-roll steel, which could have a significant positive impact for Steel Dynamics, as we are the largest non-automotive flat-roll steel coater in the United States."
The American Iron and Steel Institute (AISI) reported in December that the amount of steel imported by the U.S. for the first 11 months of 2019 was down 17.3% from the same period in 2018.
Steel Dynamics reported net income of $121.4 million for fourth-quarter 2019, less than half of the $270 million in earnings it had reported for the same period of 2018. Among other things, earnings were impacted by planned annual maintenance outages at the company's Columbus, Mississippi, and Butler, Indiana, flat-rolled steel operations, which cost $15 million and reduced flat-rolled steel shipments by an estimated 70,000 to 80,000 tons.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
Click on the image at right for a graph showing Steel Dynamics project activity by state.
The 2020 planned capital expenditures (capex) are up slightly from an estimate of between $1.2 billion and $1.3 billion given last fall by Steel Dynamics. For more information, see October 18, 2020, article - Steel Dynamics' Capex Plans for 2020 Appear Unfazed by Tougher Market.
Speaking during the company's fourth-quarter 2019 earnings conference call with industry analysts, Chief Financial Officer Theresa Wagler said $1.2 billion will be allocated to the Sinton project this year; $60 million will go for the completion of a third galvanizing line at Steel Dynamics' Galvanizing Line #3 Addition project at its Columbus Steel Mill in Mississippi; and the remaining $140 million will be spent on smaller growth and sustaining projects. Capex in 2019 totaled $452 million, she said.
Steel Dynamics made a final investment decision last year to build the 3 million-ton-per-year, flat-rolled, electric-arc-furnace (EAF) steel mill in Sinton. The $1.9 billion mill will serve markets in both Mexico and the U.S. Construction is underway, with infrastructure, such as road and rail, completed, and building foundations initiated. Operations are expected in midyear 2021.
Located about 30 miles northwest of the port of Corpus Christi, Texas, the facility will target Southwest U.S. and Mexico market regions. The mill will have proximity to customers in the four-state area of Texas, Louisiana, Oklahoma and Arkansas, along with the U.S. West Coast and Mexico, representing about 27 million tons of flat roll steel consumption, according to the company. It will benefit from on-site access to two class I railroads, transloading opportunities with a third class I railroad, proximity to a major U.S. highway system and access to the deepwater port of Corpus Christi. For related information, see July 24, 2019, article - New $1.9 Billion Steel Mill to Serve Both U.S., Mexican Markets.
Wagler said the project received environmental approvals last week, allowing full construction to begin. The project has received $155 million in state and local incentive benefits, she added. The mill is expected to begin operations in mid-2021.
"This is big news for the U.S. steel industry, which is in the middle of a period of reinvention and modernization," said Joseph Govreau, vice president metals & minerals research for Industrial Info. "New state-of-the art mills like this and Big River Steel in Arkansas are displacing older, integrated steel-making technology."
For more information, see Industrial Info's project report and January 23, 2020, market brief - Steel Dynamics Starts Construction of Mill in Texas.
The company expects to start operations at its 400,000-ton-per-year galvanizing line addition in Columbus, Mississippi, by mid-2020. For more information, see Industrial Info's project report.
"Collectively, our strategic growth investments provide an estimated incremental annual future EBITDA (earnings before interest, taxes, depreciation and amortization) of over $425 million on a through-cycle, historical-spread basis," Wagler said. The estimate includes earnings from the Sinton steel mill, the third galvanizing line in Mississippi and two now-operational rebar expansions.
Company executives indicated they were optimistic regarding the company's earnings for 2020, despite the low steel prices that bedeviled the U.S. industry last year.
Chief Executive Officer Mark Millett said customers have largely destocked the large steel product inventories that led to those low prices, adding that underlying steel demand remains intact.
"We believe North American steel consumption will experience modest growth and will be supported by further steel import reductions and the end of steel inventory destocking," Millett said in the company's earnings release. "We believe recent and possible trade actions could have a positive impact in further reducing unfairly traded steel imports into the United States, including coated flat-roll steel, which could have a significant positive impact for Steel Dynamics, as we are the largest non-automotive flat-roll steel coater in the United States."
The American Iron and Steel Institute (AISI) reported in December that the amount of steel imported by the U.S. for the first 11 months of 2019 was down 17.3% from the same period in 2018.
Steel Dynamics reported net income of $121.4 million for fourth-quarter 2019, less than half of the $270 million in earnings it had reported for the same period of 2018. Among other things, earnings were impacted by planned annual maintenance outages at the company's Columbus, Mississippi, and Butler, Indiana, flat-rolled steel operations, which cost $15 million and reduced flat-rolled steel shipments by an estimated 70,000 to 80,000 tons.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
