Core Viewpoint - Steel Dynamics, Inc. (STLD) has agreed to acquire the remaining 55% equity interest in New Process Steel, L.P., enhancing its position in the flat roll steel market and value-added manufacturing solutions [1][8]. Company Overview - New Process Steel is a significant metal and supply-chain solutions company based in Houston, TX, employing approximately 1,275 individuals and serving as STLD's largest flat roll steel customer [2][8]. - The acquisition will add six facilities, including two manufacturing locations in Mexico and four in the United States, to Steel Dynamics' operations [3][8]. Market Context - STLD stock has increased by 12.4% over the past year, contrasting with a 14.7% decline in the industry [5]. - The company anticipates improvements in trade uncertainties and tax impacts, with expectations for a better interest rate environment and a decline in unfairly traded imports, which will support pricing and demand in the manufacturing sector [6]. Strategic Implications - The acquisition is expected to enhance Steel Dynamics' exposure to value-added manufacturing solutions while maintaining its focus on legacy flat rolled steel solutions [2][6]. - The U.S. International Trade Commission's preliminary determinations on coated flat rolled steel are expected to improve STLD's operating platforms, although final determinations are pending [6].

[PART I. Financial Information](index=4&type=section&id=PART%20I.%20Financial%20Information) [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements for the three and six-month periods ended June 30, 2025, and 2024, detailing the company's financial position and performance [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total current assets | $5,690,599 | $5,431,338 | | Total assets | $15,548,638 | $14,935,233 | | Total current liabilities | $1,819,081 | $2,150,583 | | Long-term debt | $3,779,559 | $2,804,017 | | Total liabilities | $6,704,588 | $5,989,987 | | Total Steel Dynamics, Inc. equity | $8,864,052 | $8,934,287 | [Consolidated Statements of Income](index=6&type=section&id=Consolidated%20Statements%20of%20Income) Q2 2025 vs Q2 2024 Performance (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total net sales | $4,565,123 | $4,632,634 | | Gross profit | $618,468 | $774,837 | | Operating income | $382,855 | $559,123 | | Net income attributable to SDI | $298,726 | $427,998 | | Diluted EPS | $2.01 | $2.72 | H1 2025 vs H1 2024 Performance (in thousands, except per share data) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Total net sales | $8,934,318 | $9,326,637 | | Gross profit | $1,105,012 | $1,755,635 | | Operating income | $657,999 | $1,310,098 | | Net income attributable to SDI | $515,877 | $1,012,039 | | Diluted EPS | $3.44 | $6.39 | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Six-Month Cash Flow Summary (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $454,214 | $737,778 | | Net cash used in investing activities | ($484,455) | ($502,520) | | Net cash used in financing activities | ($101,488) | ($806,196) | | **Decrease in cash** | **($131,729)** | **($570,938)** | [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed explanations of the company's accounting policies and financial results, covering business segments, debt, inventory, equity, and segment performance - The company operates through four reporting segments: steel operations, metals recycling operations, steel fabrication operations, and aluminum operations. The aluminum operations segment was recently reorganized to include an entity previously in the metals recycling segment[14](index=14&type=chunk) - In March 2025, the company issued **$600.0 million** of 5.250% notes due 2035 and **$400.0 million** of 5.750% notes due 2055. Proceeds were used for general corporate purposes, including the repayment of **$400.0 million** notes that matured in June 2025[36](index=36&type=chunk)[38](index=38&type=chunk) Segment Operating Income (in thousands) | Segment | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Steel Operations | $381,094 | $438,620 | | Metals Recycling Operations | $21,290 | $22,839 | | Steel Fabrication Operations | $93,114 | $180,740 | | Aluminum Operations | ($40,627) | ($13,862) | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management analyzes the company's financial performance for Q2 and H1 2025 versus 2024, covering consolidated and segment results, liquidity, capital resources, and debt management - Consolidated operating income for Q2 2025 decreased **32%** YoY to **$382.9 million**, primarily due to metal spread contraction in the steel and steel fabrication segments[65](index=65&type=chunk) - For the first half of 2025, consolidated operating income fell **50%** YoY to **$658.0 million**, with net income attributable to SDI decreasing by **49%** to **$515.9 million**[66](index=66&type=chunk) [Segment Operating Results](index=23&type=section&id=Segment%20Operating%20Results) This section details the performance of each of the company's four operating segments, noting lower income for steel and fabrication, a slight decrease for recycling, and increased start-up costs for aluminum - **Steel Operations:** Q2 2025 operating income decreased **13%** YoY to **$381.1 million**. This was caused by a **3%** decrease in metal spread, as rising scrap costs outpaced flat average selling prices, and a **$32.3 million** write-off of consumable assets[74](index=74&type=chunk) - **Metals Recycling Operations:** Q2 2025 operating income decreased **7%** YoY to **$21.3 million**. While ferrous shipments hit a record high, a **9%** decrease in ferrous metal spreads offset these gains[78](index=78&type=chunk) - **Steel Fabrication Operations:** Q2 2025 operating income dropped **48%** YoY to **$93.1 million**. The decline was driven by a **15%** decrease in volume and a **19%** contraction in metal spread as selling prices fell faster than steel input costs[84](index=84&type=chunk)[85](index=85&type=chunk) - **Aluminum Operations:** The segment produced and sold its first aluminum coils late in Q2 2025. Results primarily reflect increasing construction, start-up, and commissioning costs, leading to a higher operating loss compared to the prior year[87](index=87&type=chunk) [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a strong liquidity position, with over $1.9 billion available as of June 30, 2025, and invested significantly in capital projects, dividends, and share repurchases during the first half of the year Liquidity Position as of June 30, 2025 (in thousands) | Component | Amount | | :--- | :--- | | Cash and equivalents | $458,048 | | Short-term and other investments | $285,455 | | Revolver availability | $1,190,673 | | **Total liquidity** | **$1,934,176** | - Total outstanding debt increased by **$550.0 million** from year-end 2024 to **$3.8 billion**, following the issuance of new senior notes in March 2025[99](index=99&type=chunk) - The company repurchased **$450.2 million** of its common stock in the first half of 2025. As of June 30, 2025, **$1.2 billion** remained available under the current share repurchase authorization[106](index=106&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=36&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company is exposed to market risk from commodity price fluctuations and uses fixed-price contracts and financial derivatives to manage this risk, particularly for nonferrous and ferrous metals - The company is exposed to price fluctuations in raw materials such as metallic scrap, electricity, natural gas, and zinc[108](index=108&type=chunk) - To mitigate risk, the company enters into base metal financial contracts to protect profit margins on certain fixed-price sales and purchase commitments. Most of these contracts settle within the next twelve months[110](index=110&type=chunk) [Controls and Procedures](index=36&type=section&id=Item%204.%20Controls%20and%20Procedures) As of June 30, 2025, the company's disclosure controls and procedures were deemed effective, with no material changes to internal control over financial reporting during the quarter - Management concluded that as of June 30, 2025, the company's disclosure controls and procedures were effective at a reasonable assurance level[111](index=111&type=chunk) - No changes occurred during the quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[112](index=112&type=chunk) [PART II. Other Information](index=38&type=section&id=PART%20II.%20Other%20Information) [Legal Proceedings](index=38&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various litigation matters arising in the ordinary course of business, none of which are expected to materially impact its financial condition, results of operations, or liquidity - Ongoing litigation, administrative proceedings, and environmental matters are not expected to have a material impact on the company[113](index=113&type=chunk) [Risk Factors](index=38&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes to the company's risk factors have occurred since the filing of the 2024 Form 10-K[115](index=115&type=chunk) [Issuer Purchases of Equity Securities](index=38&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's repurchases of its own common stock during the second quarter of 2025, all made under the publicly announced share repurchase program authorized in February 2025 Share Repurchases for Q2 2025 | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 2025 | 795,009 | $119.36 | | May 2025 | 515,824 | $132.19 | | June 2025 | 279,492 | $132.27 | | **Total Q2** | **1,590,325** | | - In February 2025, the board of directors authorized a new share repurchase program for up to **$1.5 billion** of the company's common stock[117](index=117&type=chunk) [Exhibits](index=40&type=section&id=Item%206.%20Exhibits) This section provides an index of all exhibits filed with the Form 10-Q, including corporate governance documents, officer certifications, and interactive data files (XBRL) - The exhibits filed with this report include CEO and CFO certifications under Sections 302 and 906 of the Sarbanes-Oxley Act, as well as XBRL financial data[124](index=124&type=chunk)[125](index=125&type=chunk)

Core Viewpoint - The U.S. Department of Commerce has preliminarily determined that Oman is circumventing anti-dumping and countervailing duties on similar products from China by using hot-rolled steel produced in China to manufacture circular welded carbon steel pipes (CWP) [1][3]. Group 1: Investigation and Findings - The investigation began on November 19, 2024, focusing on circumvention activities across Oman, with Al Jazeera Steel Products Company SAOG identified as the mandatory respondent [3]. - The average anti-dumping duty rate for Chinese CWP is 85.55%, while the countervailing duty rate is as high as 198.49% [3]. - The U.S. has intensified scrutiny on imported steel products, particularly those processed through third countries to evade tariffs [3][4]. Group 2: Market Impact - In 2024, the U.S. imported approximately 50,000 tons of CWP from Oman, accounting for 2.5% of total imports, with Chinese hot-rolled steel remaining competitive in the global market due to price advantages [4]. - The preliminary ruling may lead to the imposition of tariffs on Omani CWP similar to those on Chinese products, potentially exceeding 200%, which would significantly raise export costs for Oman and affect its competitiveness in the U.S. market [5]. - U.S. domestic steel producers like Nucor and Steel Dynamics may benefit from this situation as their market share could increase [5]. Group 3: Broader Context - The global steel market is currently facing an oversupply situation, with low-priced steel from China entering the U.S. market through third countries, leading to ongoing trade disputes [5]. - Similar circumvention issues have been observed in global trade, with countries like Vietnam and Thailand also facing investigations by the U.S. [4].

Group 1: Industrial Sector Overview - The industrial sector is currently experiencing neglect as investor focus and capital have shifted towards the artificial intelligence sector, indicating a potential future rotation back to industrials [1] - Implementing dollar-cost averaging (DCA) can help investors gradually expose their portfolios to the industrial sector, which shows significant upside potential [2] Group 2: Cleveland-Cliffs Inc. - Cleveland-Cliffs Inc. is highlighted as a potential catch-up play in the steel industry, currently trading at only 68% of its 52-week high, while peers are trading at an average of 90% [5] - Analyst Phillip Gibbs from KeyCorp upgraded Cleveland-Cliffs' rating from Sector Weight to Overweight, setting a price target of $14 per share, suggesting approximately 40% upside potential [6][7] - Institutional buyers, such as JB Capital, increased their holdings in Cleveland-Cliffs by 14.6%, indicating growing interest in building positions through DCA [8] Group 3: Commercial Metals Co. - Commercial Metals Co. is noted for its exposure to both aluminum and steel production in the U.S. and China, providing a valuable business opportunity amid trade tariff uncertainties [10] - Analysts project a significant increase in earnings per share (EPS) for Commercial Metals, estimating $1.25 for Q4 2025, a 70% increase from the current $0.74 EPS [11] - The stock is currently trading at a price-to-earnings (P/E) ratio of 167.3, reflecting market willingness to pay a premium for expected outperformance [12][13] Group 4: Steel Dynamics Inc. - Steel Dynamics is recognized as a strong performer in the steel industry, with analysts boosting its valuation target from $138 to $150 per share, indicating a potential 20% upside [14] - Expected EPS growth for Steel Dynamics is projected at $2.88 for Q4 2025, suggesting a 43% growth rate from the current $2.01 EPS [15][16] - Institutional investors, such as Robeco Institutional Asset Management, increased their holdings in Steel Dynamics by 40.6%, reflecting confidence in the stock's performance [18]

Core Viewpoint - Steel Dynamics Inc. reported second quarter 2025 earnings with slight misses on revenue and earnings per share, but investors remain optimistic about future growth due to expanding economic activity and operational expansions [2][3][5]. Financial Performance - Revenue for the quarter was $4.57 billion, missing expectations of $4.82 billion, but up from $4.37 billion in the previous quarter and only down about 1% year-over-year [2]. - Earnings per share (EPS) were $2.01, which was 21% lower than analysts' forecasts of $2.56 and down 26% year-over-year [2]. Operational Developments - The company has completed a new steel plant in Texas and is ramping up operations at its $2.7 billion aluminum plant in Mississippi, anticipating renewed economic activity [3]. - Steel Dynamics' steel fabrication business saw a decline of approximately 50% year-over-year and 20% from the prior quarter, but there is a backlog that is up 15% extending into 2026 [6]. Market Context - The Trump administration's tariffs on foreign steel are expected to make U.S. steel manufacturers like Steel Dynamics more attractive, particularly in flat-rolled steel, which is essential for infrastructure projects [4]. - Current analyst sentiment has a consensus price target of $149.33, indicating a potential upside of 14.16% from the current price [5][10]. Stock Performance - Steel Dynamics stock has been trading above its 50-day simple moving average, and if it can maintain this level, it may indicate a potential upward movement [9]. - The stock has gained 17% year-to-date, with a dividend yield of 1.5%, suggesting it may be approaching its three-year average total return of around 33% [10].

Financial Data and Key Metrics Changes - The company reported a net income of $299 million or $2.01 per diluted share for Q2 2025, with adjusted EBITDA of $533 million [13][19] - Revenue for Q2 2025 was $4.6 billion, exceeding the previous quarter due to higher realized pricing [13] - Operating income increased by 39% sequentially to $383 million, driven by steel metal spread expansion [14] Business Line Data and Key Metrics Changes - Steel operations generated operating income of $382 million in Q2, over 65% higher sequentially, despite a decline in flat rolled shipments [14][15] - Metal recycling operations reported operating income of $21 million, $4 million lower than the previous quarter due to lower ferrous pricing [15] - Steel fabrication achieved operating income of $93 million, lower than Q1 due to increased substrate costs [16] Market Data and Key Metrics Changes - The domestic steel industry operated at an estimated production utilization rate of 77%, while the company's mills operated at 85% [28] - Coated flat rolled steel volume and pricing compressed due to an inventory overhang related to imports [29] - The company is the largest North American metals recycler for ferrous and nonferrous metals, with ongoing growth in supplier relationships [15][27] Company Strategy and Development Direction - The company is focused on sustainability, with a target to reduce greenhouse gas emissions intensity by 15% by 2030 [21][22] - The aluminum operations are expected to ramp up production, with a projected EBITDA breakeven before the end of 2025 [18][45] - The company aims to leverage its competitive position in the aluminum market, which is experiencing a domestic supply deficit [39][41] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the steel demand and pricing dynamics, citing ongoing onshoring activities and infrastructure spending [35][47] - The company anticipates a significant increase in profitability for the aluminum operations in the second half of 2025 [18][90] - Management highlighted the importance of maintaining a strong safety culture and operational reliability [12][37] Other Important Information - The company repaid $400 million in senior notes and ended the quarter with liquidity of $1.9 billion [19] - Capital investments for the second half of 2025 are expected to be around $400 million, primarily for aluminum and biocarbon projects [19][20] - The company has a strong cash flow generation capability, with free cash flow increasing from an average of $540 million to $3 billion over the past five years [20] Q&A Session Summary Question: Insights on the aluminum business and utilization rates - Management confirmed that there is no material change in expectations for aluminum operations, with confidence in achieving EBITDA positivity in the second half of the year [54][57] Question: Sinton mill's EBITDA performance - Management did not disclose specific financial metrics for Sinton but indicated significant improvement compared to Q1, with expectations for further increases in the second half [60][62] Question: Market environment for aluminum ramp-up - Management noted a positive market environment for aluminum, with a growing supply deficit and strong customer interest [65][68] Question: Impact of tariffs on pig iron sourcing - Management clarified that their long products mills do not use pig iron, and they are monitoring the tariff situation closely [72][74] Question: Benefits of biocarbon - Biocarbon is expected to reduce carbon footprint by up to 35% and could potentially replace a significant portion of anthracite usage in steelmaking [83][84]

Financial Data and Key Metrics Changes - The second quarter 2025 net income was $299 million, or $2.01 per diluted share, with adjusted EBITDA of $533 million [13] - Revenue for the second quarter 2025 was $4.6 billion, exceeding first quarter results due to higher realized deal pricing [13] - Operating income for the second quarter was $383 million, a 39% increase from the first quarter, driven by steel metal spread expansion [14] Business Line Data and Key Metrics Changes - Steel operations generated operating income of $382 million in the second quarter, over 65% higher sequentially due to an increase in average realized pricing [14] - Metal recycling operations reported operating income of $21 million, $4 million lower than the first quarter due to lower realized ferrous pricing [15] - Steel fabrication achieved operating income of $93 million, lower than the first quarter due to increased steel substrate costs [16] Market Data and Key Metrics Changes - Domestic steel industry operated at an estimated production utilization rate of 77%, while the company's steel mills operated at a higher rate of 85% [28] - Coated flat rolled steel volume and pricing compressed during the quarter due to an inventory overhang related to imports [29] - North American automotive production estimates for 2025 were revised downward, but the company's specific automotive customer base remained stable [32] Company Strategy and Development Direction - The company is focused on sustainability and has set emissions intensity targets aligned with the Paris Agreement [21] - The aluminum operations are expected to ramp up production, with a goal of achieving monthly EBITDA positive results before the end of 2025 [17] - The company aims to leverage its position as the largest North American metals recycler to enhance its competitive advantage [15][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving increased profitability in the third quarter, driven by higher volume and value-added product mix [92] - The company anticipates a meaningful positive shift in financial performance for the Sinton facility for the remainder of the year [37] - Management remains optimistic about steel demand and pricing dynamics, supported by ongoing onshoring activities and infrastructure spending [35] Other Important Information - The company repurchased $200 million of its common stock in the second quarter, representing over 1% of outstanding shares [19] - The company has a liquidity position of $1.9 billion, including cash and short-term investments [18] - The first biocarbon production facility is expected to begin production in the coming months, potentially reducing greenhouse gas emissions by 35% [22] Q&A Session Summary Question: Insights on aluminum business and EBITDA profitability - Management confirmed that there is no material change in expectations for aluminum operations achieving EBITDA positivity in the second half of the year [55][58] Question: Sinton mill's EBITDA generation - Management did not disclose specific EBITDA figures for Sinton but indicated significant improvement compared to the first quarter [61][62] Question: Market environment for aluminum ramp-up - Management noted a positive market environment with a growing supply deficit for aluminum, which is beneficial for the company [65][66] Question: Tariff exposure and pig iron sourcing - Management clarified that their long products mills do not use pig iron and emphasized their ability to manage supply chain challenges effectively [73][75] Question: Benefits of biocarbon - Management explained that biocarbon will allow for a reduction in carbon footprint and could potentially replace a portion of anthracite usage in steelmaking [84][86]

Financial Performance - Steel Dynamics reported a net income of $299 million[12], with diluted earnings per share (EPS) of $2.01[12] - The company's adjusted EBITDA was $533 million, representing a 12% margin[12] - Steel Dynamics generated $302 million in cash flow from operations[12] - The company repurchased 1.1% of its outstanding shares, amounting to $200 million[12] - Net sales reached $4.6 billion[12] Operational Highlights - Steel average external sales price per ton was $1,134, a 14% sequential increase[16] - Total steel shipments amounted to 3,350 thousand tons[16] - Ferrous recycling shipments reached 1,597 thousand gross tons[16] - Nonferrous recycling shipments totaled 246 million pounds[16] Strategic Investments and Growth - The company is ramping up operations at its new Sinton, Texas flat roll steel mill, a $1.9 billion greenfield investment[34] - Steel Dynamics is investing $2.7 billion in a greenfield aluminum flat roll mill with a production capacity of 650,000 tonnes[34] - The company is investing approximately $300 million in a biocarbon production facility with a planned capacity of 228,000 metric tons[34] Sustainability - Steel Dynamics aims to reduce Scope 1 steelmaking GHG emissions by as much as 35% with its biocarbon investment[34, 80] - The company increased its use of renewable electrical energy to 14% within its steel mills[52]

Core Insights - Steel Dynamics, Inc. (STLD) reported second-quarter 2025 earnings of $2.01 per share, a decrease from $2.72 in the same quarter last year, missing the Zacks Consensus Estimate of $2.05 [1][10] - Net sales for the quarter were approximately $4,565.1 million, down about 1.5% year over year, also missing the Zacks Consensus Estimate of $4,627 million [1][10] Financial Performance - Steel operations net sales were $3,275.6 million, reflecting a year-over-year increase of around 4.6% [3] - Steel shipments totaled approximately 3.3 million tons, slightly below the estimate of 3.34 million tons [3] - The average external product selling price for steel was $1,134 per ton, down from $1,138 in the previous year but up from $998 in the prior quarter, exceeding the estimate of $1,061 per ton [3] - Metal recycling operations generated net sales of $522.7 million, up about 1.1% year over year, with ferrous shipments of around 1.59 million gross tons, a 5.7% increase year over year, though below the estimate of 1.78 million gross tons [4] - Steel fabrication operations reported sales of approximately $340.6 million, down roughly 28% year over year, with shipments of 135,347 tons, a decline of about 14.9% year over year, missing the estimate of 150,193 tons [5] Financial Position - The company ended the quarter with cash and cash equivalents of $458 million, a decrease of around 44.8% year over year [6] - Long-term debt rose to $3,779.6 million, an increase of roughly 70.8% from the previous year [6] - Cash flow from operations was $301.6 million, down about 21.2% year over year [6] Market Outlook - The company anticipates a mitigation of trade uncertainties and tax impacts, with hopes for an improved interest rate environment and a decline in unfairly traded imports, which could support pricing and demand [7] - The U.S. International Trade Commission's preliminary determinations on coated flat rolled steel are expected to enhance operating platforms, although final determinations are pending [7] - The aluminum teams are projected to increase volumes, with expected exit utilization rates of 40-50% in 2025 and 75% in 2026 [8] Stock Performance - Shares of Steel Dynamics have increased by 6.9% over the past year, contrasting with a 24.7% decline in its industry [9]

[Executive Summary & Performance Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Performance%20Highlights) Steel Dynamics achieved strong sequential improvement in Q2 2025 with increased net sales and net income, driven by expanded steel margins and strategic aluminum product shipments [Q2 2025 Financial Highlights](index=1&type=section&id=Q2%202025%20Financial%20Highlights) Steel Dynamics reported strong sequential improvement in Q2 2025, with net sales of $4.6 billion and net income of $299 million, or $2.01 per diluted share, driven by stabilized steel pricing and expanded margins Q2 2025 Key Financial Results | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :------------------- | :-------- | :-------- | :-------- | | Net Sales | $4.6 billion | - | $4.63 billion | | Net Income | $299 million | $217 million | $428 million | | Diluted EPS | $2.01 | $1.44 | $2.72 | Q2 2025 Key Operating Metrics | Metric | Q2 2025 | | :----------------------- | :-------- | | Operating Income | $383 million | | Adjusted EBITDA | $533 million | | Cash Flow from Operations | $302 million | - The company shipped its first aluminum flat rolled product coils on June 16, 2025[7](index=7&type=chunk) - Maintained liquidity of **$1.9 billion** as of June 30, 2025, after repaying **$400 million** of senior notes and repurchasing **$200 million** of common stock[7](index=7&type=chunk) [CEO Commentary & Market Overview](index=1&type=section&id=CEO%20Commentary%20%26%20Market%20Overview) The CEO highlighted significant sequential improvement in consolidated operating income (39%) and adjusted EBITDA (19%) due to expanded steel margins and stronger long product shipments - Consolidated operating income improved **39 percent** sequentially, and adjusted EBITDA improved **19 percent**[4](index=4&type=chunk) - Uncertainty regarding trade policy continues to cause hesitancy in customer order patterns, despite healthy underlying demand factors such as manufacturing onshoring, infrastructure program funding, and increased regionalization of supply chains in the U.S.[5](index=5&type=chunk) - The company is firmly positioned for continued growth and long-term value creation, coupled with its expansion in value-added steel and now aluminum flat rolled products[5](index=5&type=chunk) [Segment Performance - Second Quarter 2025](index=1&type=section&id=Segment%20Performance%20-%20Second%20Quarter%202025) This section details the Q2 2025 operational and financial performance of Steel, Metals Recycling, and Steel Fabrication segments, highlighting key drivers and sequential changes [Steel Operations](index=1&type=section&id=Steel%20Operations) Steel operations' operating income surged 66% sequentially to $382 million in Q2 2025, primarily due to expanded metal spread as average realized selling prices increased significantly more than scrap costs Steel Operations Operating Income (Sequential Change) | Metric | Q2 2025 | Q1 2025 | Sequential Change | | :----------------- | :-------- | :-------- | :---------------- | | Operating Income | $382 million | $229.96 million | +66% | Steel Operations Pricing & Cost (Sequential Change) | Metric | Q2 2025 | Q1 2025 | Sequential Change | | :-------------------------- | :-------- | :-------- | :---------------- | | Average External Selling Price | $1,134/ton | $998/ton | +$136/ton | | Average Ferrous Scrap Cost | $408/ton | $386/ton | +$22/ton | - The Sinton, Texas Flat Roll Division's access to oxygen was limited for over **65 days**, negatively impacting volume by an estimated **55,000 tons** in Q2 2025[6](index=6&type=chunk) [Metals Recycling Operations](index=2&type=section&id=Metals%20Recycling%20Operations) Metals recycling operations generated $21 million in operating income in Q2 2025, a $4 million sequential decrease, primarily due to lower realized ferrous scrap pricing, which more than offset record quarterly shipments Metals Recycling Operating Income (Sequential Change) | Metric | Q2 2025 | Q1 2025 | Sequential Change | | :----------------- | :-------- | :-------- | :---------------- | | Operating Income | $21 million | $25.71 million | -$4 million | - Lower realized ferrous scrap pricing more than offset record quarterly shipments[8](index=8&type=chunk) [Steel Fabrication Operations](index=2&type=section&id=Steel%20Fabrication%20Operations) Steel fabrication operations reported $93 million in operating income for Q2 2025, a sequential decline due to metal spread compression, with order backlog increasing 15% year-to-date and extending into 2026 Steel Fabrication Operating Income (Sequential Change) | Metric | Q2 2025 | Q1 2025 | Sequential Change | | :----------------- | :-------- | :-------- | :---------------- | | Operating Income | $93 million | $117 million | -$24 million | - Order backlog increased **15 percent** since the beginning of the year and now extends into 2026[9](index=9&type=chunk) - Profitability from steel fabrication operations is expected to improve in the sequential third quarter[9](index=9&type=chunk) [Financial Position & Cash Flow](index=2&type=section&id=Financial%20Position%20%26%20Cash%20Flow) Steel Dynamics generated significant cash flow from operations in Q2 2025, strategically allocating capital to investments, debt repayment, dividends, and share repurchases while maintaining strong liquidity [Cash Flow from Operations & Capital Allocation (Q2 2025)](index=2&type=section&id=Cash%20Flow%20from%20Operations%20%26%20Capital%20Allocation%20(Q2%202025)) In Q2 2025, Steel Dynamics generated $302 million in cash flow from operations, strategically allocating capital by investing $288 million, repaying $400 million in senior notes, distributing $75 million in dividends, and repurchasing $200 million of common stock Q2 2025 Cash Flow and Capital Allocation | Activity | Amount | | :-------------------------- | :----------- | | Cash Flow from Operations | $302 million | | Capital Investments | $288 million | | Senior Notes Repaid | $400 million | | Cash Dividends Paid | $75 million | | Common Stock Repurchases | $200 million | | Liquidity (as of June 30, 2025) | $1.9 billion | [Year-to-Date June 30, 2025 Comparison](index=2&type=section&id=Year-to-Date%20June%2030%2C%202025%20Comparison) This section compares Steel Dynamics' financial performance and capital allocation for the first half of 2025 against the prior year, noting changes in net income, sales, and operational metrics [Year-to-Date Financial Performance](index=2&type=section&id=Year-to-Date%20Financial%20Performance) For the first half of 2025, net income was $516 million on $8.9 billion in net sales, a significant decrease compared to $1.0 billion net income and $9.3 billion net sales in H1 2024, primarily due to lower realized pricing H1 2025 vs H1 2024 Key Financials | Metric | H1 2025 | H1 2024 | YoY Change | | :----------------- | :-------- | :-------- | :--------- | | Net Income | $516 million | $1.0 billion | -48.4% | | Net Sales | $8.9 billion | $9.3 billion | -4.3% | | Operating Income | $658 million | $1.31 billion | -49.8% | H1 2025 vs H1 2024 Steel Operations Pricing & Cost | Metric | H1 2025 | H1 2024 | YoY Change | | :-------------------------- | :-------- | :-------- | :--------- | | Average External Selling Price | $1,064/ton | $1,169/ton | -$105/ton | | Average Ferrous Scrap Cost | $397/ton | $403/ton | -$6/ton | [Year-to-Date Cash Flow & Capital Allocation](index=3&type=section&id=Year-to-Date%20Cash%20Flow%20%26%20Capital%20Allocation) For the first half of 2025, cash flow from operations totaled $454 million, with capital allocated to investments, senior note repayments, dividends, and share repurchases, maintaining $1.9 billion in liquidity H1 2025 Cash Flow and Capital Allocation | Activity | Amount | | :-------------------------- | :----------- | | Cash Flow from Operations | $454 million | | Capital Investments | $594 million | | Senior Notes Repaid | $400 million | | Cash Dividends Paid | $144 million | | Common Stock Repurchases | $450 million | | Liquidity (as of June 30, 2025) | $1.9 billion | [Outlook & Strategic Initiatives](index=3&type=section&id=Outlook%20%26%20Strategic%20Initiatives) The company anticipates robust domestic steel and aluminum consumption, supported by favorable trade policies and strategic expansion into value-added aluminum flat rolled products [Market Outlook](index=3&type=section&id=Market%20Outlook) Steel Dynamics anticipates strong domestic steel and aluminum consumption in the coming years, driven by the mitigation of trade and tax policy uncertainties and an improved interest rate environment - The company remains confident that market factors are in place to support strong domestic steel and aluminum product consumption in the coming years, as trade and tax policy uncertainty is mitigated and the interest rate environment improves[14](index=14&type=chunk) - The U.S. International Trade Commission's preliminary determinations on coated flat rolled steel are viewed as a significant positive development, with final determinations expected before the end of the third quarter 2025[15](index=15&type=chunk) [Aluminum Expansion & Diversification](index=3&type=section&id=Aluminum%20Expansion%20%26%20Diversification) The company successfully shipped its first aluminum flat rolled product coils in June 2025 and projects a utilization rate of 40-50% by the end of 2025 and 75% by the end of 2026, diversifying into counter-cyclical markets - Successfully produced and sold the first aluminum coils last month (June 2025)[16](index=16&type=chunk) Aluminum Mill Utilization Rate Projections | Period | Projected Utilization Rate | | :----- | :------------------------- | | End of 2025 | 40-50% | | End of 2026 | 75% | - Expanding and diversifying end markets by supplying aluminum flat rolled products with high recycled content to the counter-cyclical, sustainability-driven beverage can and packaging industry, as well as the automotive, industrial, and construction sectors[17](index=17&type=chunk) [Company Information & Disclosures](index=4&type=section&id=Company%20Information%20%26%20Disclosures) This section provides an overview of Steel Dynamics' business model, defines key financial metrics, and includes standard forward-looking statements and risk factor disclosures [About Steel Dynamics, Inc.](index=4&type=section&id=About%20Steel%20Dynamics%2C%20Inc.) Steel Dynamics is a leading industrial metals solutions company, utilizing a circular manufacturing model to produce lower-carbon-emission products from recycled scrap, and is diversifying into aluminum operations - Operates using a circular manufacturing model, producing lower-carbon-emission, quality products with recycled scrap as the primary input[20](index=20&type=chunk) - One of the largest domestic steel producers and metal recyclers in North America, combined with a meaningful downstream steel fabrication platform[20](index=20&type=chunk) - Currently investing in aluminum operations to further diversify its product offerings, with plans to supply aluminum flat rolled products with high recycled content to the countercyclical sustainable beverage can industry, in addition to the automotive and industrial sectors[20](index=20&type=chunk) [Financial Metric Notes & Forward-Looking Statements](index=4&type=section&id=Financial%20Metric%20Notes%20%26%20Forward-Looking%20Statements) This section defines After-tax Return-on-Invested Capital (ROIC) and clarifies the use of non-GAAP financial measures like EBITDA and Adjusted EBITDA, emphasizing they supplement, not replace, GAAP results - After-tax ROIC is calculated as Net Income Attributable to Steel Dynamics, Inc. divided by (Quarterly Average Current Maturities of Long-term Debt + Long-term Debt + Total Equity)[21](index=21&type=chunk) - Non-GAAP financial measures (EBITDA and Adjusted EBITDA) provide additional meaningful information but should be viewed in addition to and not as an alternative for GAAP results[22](index=22&type=chunk) - The press release contains predictive statements about future events, subject to many risks and uncertainties, as detailed in the company's SEC filings[23](index=23&type=chunk) [Consolidated Financial Statements](index=6&type=section&id=Consolidated%20Financial%20Statements) This section presents Steel Dynamics' complete consolidated statements of income, balance sheets, and cash flows for the specified periods, offering a comprehensive financial overview [Consolidated Statements of Income](index=6&type=section&id=Consolidated%20Statements%20of%20Income) The consolidated statements of income provide a detailed overview of Steel Dynamics' financial performance for the three and six months ended June 30, 2025, and comparative periods, showing key figures such as net sales, gross profit, operating income, net income, and diluted earnings per share Consolidated Statements of Income (Selected Data) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | Q1 2025 | | :-------------------------------------- | :-------- | :-------- | :-------- | :-------- | :-------- | | Net sales | $4,565,123 | $4,632,634 | $8,934,318 | $9,326,637 | $4,369,195 | | Gross profit | $618,468 | $774,837 | $1,105,012 | $1,755,635 | $486,544 | | Operating income | $382,855 | $559,123 | $657,999 | $1,310,098 | $275,144 | | Net income attributable to Steel Dynamics, Inc. | $298,726 | $427,998 | $515,877 | $1,012,039 | $217,151 | | Diluted earnings per share | $2.01 | $2.72 | $3.44 | $6.39 | $1.44 | | Dividends declared per share | $0.50 | $0.46 | $1.00 | $0.92 | $0.50 | [Consolidated Balance Sheets](index=7&type=section&id=Consolidated%20Balance%20Sheets) The consolidated balance sheets present the company's financial position as of June 30, 2025, and December 31, 2024, detailing assets (cash, receivables, inventories, property), liabilities (accounts payable, debt), and equity, reflecting changes over the period Consolidated Balance Sheets (Selected Data) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------- | :-------------- | :---------------- | | Total current assets | $5,690,599 | $5,431,338 | | Total assets | $15,548,638 | $14,935,233 | | Total current liabilities | $1,819,081 | $2,150,583 | | Long-term debt | $3,779,559 | $2,804,017 | | Total liabilities | $6,704,588 | $5,989,987 | | Total equity | $8,702,824 | $8,774,034 | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) The consolidated statements of cash flows illustrate the movement of cash for the three and six months ended June 30, 2025, and comparative periods, categorizing cash flows from operating, investing, and financing activities, and showing the overall change in cash and equivalents Consolidated Statements of Cash Flows (Selected Data) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :-------------------------------------------------- | :-------- | :-------- | :-------- | :-------- | | Net cash provided by operating activities | $301,611 | $382,561 | $454,214 | $737,778 | | Net cash used in investing activities | $(305,696) | $(209,586) | $(484,455) | $(502,520) | | Net cash used in financing activities | $(724,783) | $(382,350) | $(101,488) | $(806,196) | | Decrease in cash, cash equivalents, and restricted cash | $(728,868) | $(209,375) | $(131,729) | $(570,938) | | Cash, cash equivalents, and restricted cash at end of period | $463,281 | $835,526 | $463,281 | $835,526 | [Supplemental Segment Information](index=9&type=section&id=Supplemental%20Segment%20Information) This section provides detailed financial and operational data for Steel Dynamics' various segments, including net sales, operating income, and key production and shipment metrics [Segment Net Sales](index=9&type=section&id=Segment%20Net%20Sales) This section provides a detailed breakdown of external net sales across Steel, Steel Fabrication, Metals Recycling, and Aluminum segments for Q2 2025 and year-to-date, illustrating the revenue contribution from each business unit External Net Sales by Segment (in thousands) | Segment | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | 1Q 2025 | | :------------------ | :-------- | :-------- | :-------- | :-------- | :-------- | | Steel | $3,275,551 | $3,132,232 | $6,342,567 | $6,498,469 | $3,067,016 | | Steel Fabrication | $340,648 | $472,832 | $692,955 | $920,011 | $352,307 | | Metals Recycling | $522,721 | $517,167 | $1,057,616 | $1,024,437 | $534,895 | | Aluminum | $65,632 | $69,265 | $132,208 | $131,468 | $66,576 | | Other | $360,571 | $441,138 | $708,972 | $752,252 | $348,401 | | Consolidated Net Sales | $4,565,123 | $4,632,634 | $8,934,318 | $9,326,637 | $4,369,195 | [Segment Operating Income (Loss)](index=9&type=section&id=Segment%20Operating%20Income%20(Loss)) This section details the operating income or loss for each segment, including Steel, Steel Fabrication, Metals Recycling, and Aluminum, along with non-cash adjustments and non-segment operations, contributing to the consolidated operating income Operating Income (Loss) by Segment (in thousands) | Segment | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | 1Q 2025 | | :---------------------------------- | :-------- | :-------- | :-------- | :-------- | :-------- | | Steel | $382,196 | $442,317 | $612,159 | $1,116,965 | $229,963 | | Steel Fabrication | $93,115 | $180,780 | $209,860 | $359,161 | $116,745 | | Metals Recycling | $21,290 | $26,746 | $47,000 | $43,405 | $25,710 | | Aluminum | $(40,627) | $(13,862) | $(69,362) | $(21,417) | $(28,735) | | Non-cash amortization of intangible assets | $(6,897) | $(7,645) | $(13,794) | $(15,309) | $(6,897) | | Profit sharing expense | $(30,706) | $(48,053) | $(53,401) | $(110,705) | $(22,695) | | Non-segment operations | $(35,516) | $(21,160) | $(74,463) | $(62,002) | $(38,947) | | Consolidated Operating Income | $382,855 | $559,123 | $657,999 | $1,310,098 | $275,144 | [Adjusted EBITDA Reconciliation](index=9&type=section&id=Adjusted%20EBITDA%20Reconciliation) This section reconciles net income to EBITDA and Adjusted EBITDA for Q2 2025 and year-to-date, detailing adjustments for income taxes, interest, depreciation, amortization, and non-cash items to offer a comprehensive view of the company's operational performance Adjusted EBITDA Reconciliation (in thousands) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | 1Q 2025 | | :------------------------------------------ | :-------- | :-------- | :-------- | :-------- | :-------- | | Net income | $301,191 | $431,690 | $518,870 | $1,019,190 | $217,679 | | Income taxes | $86,675 | $133,422 | $149,650 | $311,703 | $62,975 | | Net interest expense (income) | $7,025 | $(7,867) | $9,341 | $(22,194) | $2,316 | | Depreciation | $124,003 | $107,849 | $249,125 | $213,879 | $125,122 | | Amortization of intangible assets | $6,897 | $7,645 | $13,794 | $15,309 | $6,897 | | EBITDA | $525,791 | $672,739 | $940,780 | $1,537,887 | $414,989 | | Unrealized (gains) losses on derivatives and currency remeasurement | $(6,197) | $818 | $12,956 | $(529) | $19,153 | | Equity-based compensation | $13,819 | $12,855 | $28,000 | $27,680 | $14,181 | | Adjusted EBITDA | $533,413 | $686,412 | $981,736 | $1,565,038 | $448,323 | [Other Operating Information](index=9&type=section&id=Other%20Operating%20Information) This section offers detailed operational metrics for the Steel, Metals Recycling, and Steel Fabrication segments, including average sales prices, average ferrous costs, and various shipment and production volumes, providing granular insights into operational performance Steel Segment Operating Metrics | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | 1Q 2025 | | :-------------------------------- | :-------- | :-------- | :-------- | :-------- | :-------- | | Average external sales price (Per ton) | $1,134 | $1,138 | $1,064 | $1,169 | $998 | | Average ferrous cost (Per ton melted) | $408 | $388 | $397 | $403 | $386 | | Flat Roll shipments | 1,952,228 | 1,943,583 | 4,071,415 | 3,936,888 | 2,119,187 | | Long Product shipments | 918,468 | 830,338 | 1,788,103 | 1,674,079 | 869,725 | | Total Shipments (Tons) | 3,349,798 | 3,203,200 | 6,831,337 | 6,458,794 | 3,481,539 | | External Shipments (Tons) | 2,888,916 | 2,753,117 | 5,960,651 | 5,556,686 | 3,071,735 | | Steel Mill Production (Tons) | 2,949,936 | 2,802,086 | 5,971,529 | 5,794,104 | 3,021,593 | Metals Recycling Segment Operating Metrics | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | 1Q 2025 | | :-------------------------------- | :-------- | :-------- | :-------- | :-------- | :-------- | | Nonferrous shipments (000's of pounds) | 245,577 | 253,815 | 478,657 | 497,765 | 233,080 | | Ferrous shipments (Gross tons) | 1,596,583 | 1,509,924 | 3,049,015 | 2,967,713 | 1,452,432 | | External ferrous shipments (Gross tons) | 545,022 | 591,120 | 1,102,640 | 1,128,093 | 557,618 | Steel Fabrication Segment Operating Metrics | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | 1Q 2025 | | :-------------------------- | :-------- | :-------- | :-------- | :-------- | :-------- | | Average sales price (Per ton) | $2,517 | $2,978 | $2,558 | $3,055 | $2,599 | | Shipments (Tons) | 135,347 | 159,069 | 270,928 | 302,911 | 135,581 |