Steel Dynamics Sees Record $3.2 Billion Profit for 2021, Looks Next to New Coating Lines

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Researched by Industrial Info Resources (Sugar Land, Texas)--Buoyed by a record $3.2 billion dollars in net income for 2021 and the completion of a flat-roll steel mill in Texas, executives with Steel Dynamics Incorporated (NASDAQ/GS:STLD) (Fort Wayne, Indiana) said Tuesday they were preparing to build four new flat-roll coating lines in Indiana and Texas. Industrial Info is tracking more than $2.5 billion in active capital projects by the steel producer.

The company's profits for 2021 compare with about $571 million in 2020, as the steelmaker enjoyed rising demand and strong pricing. Steel Dynamics reported record steel and steel-fabrication shipments of 11.2 million tons and 789,000 tons, respectively, for 2021. Net income for just the fourth quarter of last year was more than $1 billion, compared with about $197 million for the same quarter of 2020.

"Domestic steel demand was strong throughout the year, supported most significantly by the construction, automotive, and industrial sectors," Chief Executive Officer Mark Millett said in a Tuesday press release. "Customer steel inventories also remained historically low, as steel supply was not sufficient to meet robust demand requirements during much of the year."

The company spent more than $1 billion last year on capital projects, with the lion's share going to its new 3 million-ton-per-year flat-roll steel mill in Sinton, Texas.

"We had planned to be further along with commissioning the hot (steel) side of the steel mill, but supply-chain and COVID challenges delayed the project by several weeks," Millett said.

"These disruptions resulted in hot-side (steel) production shifting from the end of 2021 to a planned start before the end of February 2022," Millett said during the company's earnings conference call. The company expects shipments from the steel mill to be about 2 million tons in 2022. Subscribers to Industrial Info's Global Market Intelligence (GMI) Metals & Minerals Project Database can click here for a project report.

Looking forward, "we believe the market dynamics are in place for domestic steel consumption to further increase in 2022 when compared to 2021," Millett continued.

Steel consumption by the automotive sector should increase this year as the computer chip shortage eases, Millett said. He noted an "extreme lack in (auto) dealer inventory, which is 60% below normal, and strong pent-up demand."

He continued, "The automotive sector operated lower than normalized levels in 2020 and 2021, at 13 million units, and is expected to grow to about 15 million units this year, and 17 million units in 2023."

The non-residential construction sector is going strong, Millett said, especially for warehouse and distribution facilities. Also, the U.S. oil and gas rig count is on the rise, which points to more demand for pipes.

For 2022, Steel Dynamics plans about $750 million for capital investments, with most of that earmarked for two new flat-roll coating lines at the Sinton facility and two at the company's Heartland facility near Terra Haute, Indiana. The facilities will each have a new galvanizing line and paint line, Millett said, and will increase flat-roll capacity by 545,000 tons per year. "We expect these lines will begin operating in mid-2023," he added.

Subscribers can view the project reports for the Sinton Flat-Roll Coating Line Addition #1, Sinton Coating Line Addition #2, and Heartland Steel Cold Rolling Mill Expansion .

. 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.