Steel Dynamics, Inc. today announced third quarter 2022 financial results. The company reported third quarter 2022 net sales of $5.7 billion and net income of $914 million, or $5.03 per diluted share. Comparatively, the company's sequential second quarter 2022 earnings were $6.44 per diluted share.
Third quarter 2022 operating income for the company's steel operations was $658 million, or 41 percent lower than sequential second quarter results, due to metal spread compression within the company's flat rolled steel operations, as lower average flat rolled steel pricing more than offset higher flat rolled steel shipments. Demand for the company's long product steel continued to be strong, supporting steady to expanded metal margins. Third quarter 2022 average external product selling price for the company's steel operations decreased $158 sequentially to $1,381 per ton. The average ferrous scrap cost per ton melted at the company's steel mills decreased $66 sequentially to $472 per ton.
Third quarter 2022 operating income from the company's metals recycling operations meaningfully declined sequentially to $10 million, as a result of lower sequential ferrous and non-ferrous scrap pricing and lower volume. The company's realized average ferrous scrap pricing declined almost 30 percent during the third quarter. The company believes scrap prices have stabilized for the remainder of the year.
The company's steel fabrication operations reported record operating income of $677 million in the third quarter 2022, 13 percent higher than second quarter results, due to higher selling values, lower steel input costs, and record shipments. The non-residential construction sector remains strong, as evidenced by realized product pricing and the company's order backlog extending well into the first half of 2023.
As for an outlook, Mark D. Millett, Chairman, President, and Chief Executive Officer, said, "Customer order entry activity continues to be healthy across our businesses, with expectations for seasonally moderated volume for our steel and metals recycling operations in the coming months. Despite weaker flat rolled steel pricing, our order activity and backlogs remain solid. We believe North American steel consumption will remain steady, and that demand for lower-carbon, US produced steel products coupled with lower imports will support steel pricing. Our steel fabrication operations order backlog also remains historically high based on volume and forward pricing levels. This, in combination with our existing and recently announced expansion initiatives, are firm drivers for our continued growth in the coming years.”