The steel market has not only stayed stronger than I expected early in the second half of the year, it’s gotten even stronger as high prices and limited capacity growth have done nothing to temper buyers’ demand
Steel Dynamics Thriving As Efficient Operations Meet Record Prices
Summary
- Steel Dynamics came up very slightly short of Q2 earnings expectations, but those expectations had risen considerably in recent months, and the company is doing very well amid soaring steel prices.
- The industry has been shockingly disciplined about supply, leading to steel prices approaching $1,900/t and long lead-times for orders.
- Steel prices likely won't stay at these levels as customers rebuild stocks and capacity and imports fill the gap, but Steel Dynamics is likely to see strong earnings for '21-'22.
- Steel Dynamics shares still have some appeal at these prices.
Stephen Simpson is a freelance financial writer and investor.Spent close to 15 years on the Street (sell-side, buy-side, equities, bonds).
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