Steel Dynamics, Inc. (SDI) reported fourth quarter 2023 net sales of $4.2 billion and net income of $424 million. Comparatively, the company's sequential third quarter 2023 net income was $577 million, and prior year fourth quarter net income was $635 million.
In a press release, SDI said fourth quarter 2023 operating income for the company's steel operations was $365 million, representing a 24 percent sequential decline, based on seasonally lower long product steel shipments and flat rolled steel metal spread compression, as average realized flat rolled steel selling values declined more than scrap costs.
The company said its steel fabrication operations achieved historically strong operating income of $250 million in the fourth quarter 2023, but below sequential third quarter results, based on lower shipments and metal spread compression, as realized selling values declined more than steel substrate costs.
Monthly order activity improved in the fourth quarter 2023, resulting in a well-priced order backlog that extends through the first half of 2024. The company said it believes that the continued onshoring of manufacturing, coupled with the robust US infrastructure and Inflation Reduction Act programs which will drive industrial construction activity, provide an environment for strong steel joist and deck demand, as well as flat rolled and long product steel demand.
As for full-year 2023 results, SDI reported net income was $2.5 billion with net sales of $18.8 billion, as compared to net income of $3.9 billion, with net sales of $22.3 billion for the same period in 2022. SDI said lower earnings were driven by metal spread contraction within the company's steel and steel fabrication operations, as lower realized product pricing outpaced lower primary raw material costs.
Looking ahead to this year, Mark D. Millett, SDI’s Chairman and CEO, said, “We believe the market dynamics are in place to support increased demand across our operating platforms in 2024. Steel pricing has firmed, and customer order entry activity continues to be solid across our steel operations, as demand continues to be steady and customer inventories remain at historically low levels.”
Millett added, “Steel Dynamics continues to be in a position of strength as we enter 2024. We are ramping up operations at our new state-of-the-art electric arc furnace flat rolled steel mill located in Texas, and just recently completed construction of four additional value-added flat rolled steel coating lines comprised of two paint lines and two galvanizing lines with Galvalume coating capability. These lines will increase our value-added flat rolled steel annual capacity by 1.1 million tons. We plan to commission these lines during the first quarter of 2024.”