FORT WAYNE — Top executives of Steel Dynamics Inc. gave a positive forecast for 2021 in a telephone conference with investors Wednesday.
“We’re anticipating a remarkable year, in all honesty,” said Mark Millett of Auburn, president and chief executive officer for the steel company, which is DeKalb County’s largest employer.
Millet described the strength of the steel market as “absolutely incredible.”
“As we discuss our business this morning, you’ll find that we are positive heading into 2021, considering underlying steel fundamentals, and confident in our unique earnings catalyst,” said Theresa Wagler, SDI’s executive vice president and chief financial officer.
DeKalb County is home to SDI’s first steel mill, built in the mid-1990s southwest of Butler, and its neighboring New Millennium Building Systems factory. One of the company’s OmniSource metals recycling stations operates on Auburn’s south side.
“All three of our operating platforms performed well in 2020 and in the fourth quarter, with the steel metals recycling teams achieving their best quarterly performance of the year,” Wagler said.
“We achieved revenues of $9.6 billion derived from record fabrication shipments and our second highest annual steel shipments,” Wagler said. She called it “a truly extraordinary performance” amid the economic challenges of 2020.
Millett described SDI’s past year as “simply a phenomenal performance, given the conditions.”
SDI’s steel mills operated at 84% of their capability during the fourth quarter of 2020, well above the industry average of 72%, Wagler said.
“Even more remarkable, our flat-rolled steel mills achieved utilization of 97% through the year,” Millett said. The Butler mill produces flat-rolled steel.
“For the full year 2020, our steel facilities achieved numerous production and shipment records. The platform’s full-year operating income was $906 million with shipments of 10.7 million tons, again, representing our second- highest volume and only 1% less than our record, a truly phenomenal performance,” Wagler said.
Looking at SDI’s customers, Miller said the North American automotive sector “has experienced the most rapid rebound, already operating at pre-COVID levels,” and the nonresidential construction sector remains steady.
“We see residential construction is very, very strong. We can’t supply enough steel currently to appliance, HVAC,” Millett said. Metal garage door panels are incredibly strong, he added.
“We ended the year with a record fabrication customer backlog, which is atypical for this time of year, as seasonality tends to impact order activity. So I think it bodes well for the future,” Millett said.
Millett said he expects SDI’s new steel mill in Sinton, Texas, to begin production this summer. It will increase SDI’s annual shipping capacity by 25%, from over 13 million tons to more than 16 million tons. Construction of the Texas mill is expected to be on target for its $1.9 billion budget, Wagler said.
“During 2021, we plan to also adopt quantitative goals to reduce greenhouse gas emissions, participate in greater renewable energy use and continue to invest in energy-efficiency opportunities,” Wagler said. “We are currently in the process of assessing the use of renewable energy alternatives at our new Texas steel mill, as well.”
Millet added that with all of SDI’s accomplishments in 2020, “none of it matters unless everyone goes home safely at the end of each day. Our safety performance improved in the fourth quarter and notably, our annual 2020 injury severity rate was the lowest in our history. … Our safety performance is significantly better than industry statistics, but our aim is to have no injuries, and we will work tirelessly to get there.”