Release Date: April 23, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Steel Dynamics Inc (STLD, Financial) achieved record steel shipments of 3.5 million tons in the first quarter of 2025.
• The company reported an adjusted EBITDA of $448 million, showcasing strong financial performance.
• The ramp-up of four new value-add flat-rolled steel coating lines is expected to contribute significantly to earnings later in the year.
• Aluminum Dynamics successfully cast its first aluminum ingot, with commercial quality coil shipments expected by June 2025.
• Steel Dynamics Inc (STLD) maintains a strong liquidity position with $2.6 billion available, supporting future growth and investment.

Negative Points

• The company faced a decline in average realized external steel prices by $13 per ton, impacting metal spread.
• Operating income from steel fabrication was lower due to a 4% decline in realized pricing and seasonal shipment decreases.
• Increased imports have affected demand for certain steel products, particularly coated flat-rolled steel.
• Non-capitalizable expenses related to aluminum operations increased SG&A by approximately $37 million in the first quarter.
• The company anticipates some impact from tariffs on pig iron and aluminum slab imports, which could affect costs.

Q & A Highlights

Q: Can you discuss your exposure to importing raw materials and the impact of tariffs and trade actions? A: Mark Millett, CEO: Tariffs and trade actions have been beneficial for us, especially with the recent trade case against coated steels, which is already having a positive impact. We import scrap from Canada and Mexico, which is not currently affected by tariffs. The tariffs on aluminum are absorbed through the Midwest premium and passed on to customers. We might see some impact from tariffs on pig iron, but we can adjust our scrap mix to mitigate this. Overall, we are well-positioned relative to our peers.

Q: What changed at the Sinton facility that led to it being profitable, contrary to prior guidance? A: Theresa Wagler, CFO: The Sinton facility captured some price appreciation in March due to its exposure to spot pricing, unlike our other facilities. This, along with improved line utilization rates, contributed to its profitability. Barry Schneider, COO, added that the team is maturing and improving operations, which is promising for future performance.

Q: With March being the strongest order entry month in two years for fabrication, does this indicate a volume increase moving forward? A: Barry Schneider, COO: Yes, we are seeing robust activity and expect volumes to grow through the second quarter and into the second half of the year. The projects we are involved in are materializing, and some previously on-hold projects are starting to proceed.

Q: How do you view the strategic growth and capital return plans moving forward? A: Mark Millett, CEO: We are in a strong cash position and will continue a balanced cash allocation strategy. Growth in aluminum and steel will continue, with opportunities in market spaces we currently do not serve. Theresa Wagler, CFO, added that while we are in a period of execution and optimization, we remain open to acquisitions and will continue to provide strong shareholder returns.

Q: Can you provide more details on the $19 million unrealized gain/loss in adjusted EBITDA? A: Theresa Wagler, CFO: This relates to our risk commodities team managing risk around scrap copper and aluminum. The unrealized loss in the first quarter was due to sharp moves in nonferrous pricing, but this typically balances out over time.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.