Fort Wayne, Indiana-based Steel Dynamics, Inc. (SDI) reported late Monday that Q4 2012 net income of $61 million on net sales of $1.7 billion more than doubled earnings of $30 million on sales of $1.9 billion in Q4 2011. Q4 earnings were also up significantly from Q3 2012 income of $13 million on sales of $1.7 billion. Full-year 2012 net income was $164 million on net sales of $7.3 billion, compared to prior year net income of $278 million on net sales of $8 billion.
The company's steel mill capacity utilization was 80 percent in Q4 from 78 percent in Q3, while shipments increased 4 percent. Improved overall volume and product mix more than offset decreased steel margins, resulting in increased operating income of $8 million in the quarter. The average selling price per ton shipped decreased $25 to $784 in Q4, and the average ferrous scrap cost per ton melted decreased $9 per ton. Operating income attributable to the company's sheet operations increased 15 percent when compared to the sequential quarter, while earnings from long product operations decreased 3 percent. Despite lower volumes, profitability from the company's metals recycling operations improved as ferrous metal spreads expanded 10 percent and when compared to Q3 2012.
The average annual selling price per ton shipped for the company's steel operations in 2012 was $831, a decrease of $66 per ton compared to 2011. The 2012 average scrap cost per ton melted decreased $32. Operating income from the company's metals recycling operations also decreased 23 percent during 2012, as both volumes and metal margins compressed.
"We remain optimistic that the organic growth projects we identified in 2012 will position us to continue to build a strong enterprise," SDI president and CEO Mark Millett said. "We believe there is potential for certain market sectors, such as automotive and manufacturing, to build momentum in 2013. Recent housing start data suggests potential improvements in residential construction, and there are areas across the US indicating signs of strengthening in the nonresidential construction sector, although levels remain historically low. We look forward to executing our strategic growth plans. Demand for high-quality steel products has not abated, and we believe our current capital projects will deliver products that exceed customers' expectations. We remain confident that with our exceptional team, coupled with our superior, low-cost operating culture, we are uniquely prepared to capitalize on the opportunities ahead."