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    STLD
    Earnings call· Mar 2026(Q1 FY26)

    STEEL DYNAMICS Q1 FY26 earnings call STLD

    Apr 21, 2026 Source

    Executive summary

    Steel Dynamics Q1 FY26 — Record Steel Shipments and Aluminum Ramp-up

    Steel Dynamics delivered a strong first quarter, marked by record steel shipments and significant progress in its aluminum operations despite initial start-up challenges. The company continues to benefit from its diversified business model and strategic investments, driving robust cash generation and a balanced capital allocation strategy focused on high-return growth and shareholder returns. Management remains optimistic about market conditions and future growth opportunities.

    Highlights

    5

    • Achieved record quarterly steel shipments of 3.6 million tons.

    • Reported adjusted EBITDA of $700 million.

    • Steel operations generated $557 million in operating income, a 73% sequential increase.

    • Metals recycling operating income increased 155% sequentially to $47 million.

    • Increased cash dividend by 6% and repurchased $115 million of common stock.

    Concerns

    3

    • Aluminum operations incurred an operating loss of $65 million due to Q1 start-up issues and an inventory write-down.

    • Cash flow from operations was reduced by $120 million for profit sharing and an additional $150 million for working capital growth related to aluminum.

    • Steel fabrication margins tightened due to increased steel input prices.

    Guidance & targets

    8
    CategoryTargetConfidence
    Capital investments
    $600 million
    high materiality
    High
    Aluminum operations capacity utilization
    90% capacity
    high materiality
    High
    Aluminum product mix
    45% can sheet, 35% automotive and 20% industrial
    medium materiality
    Medium
    Automotive product qualification (cash line)
    receive qualification from several customers
    medium materiality
    High
    Second cash line commissioning
    begin commissioning
    medium materiality
    High
    Third cold mill production
    begin producing
    medium materiality
    High
    Aluminum shipments
    60,000 tons to 70,000 tons
    high materiality
    High
    Finished automotive products qualification
    receive acceptance
    medium materiality
    High

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    Steel Operations
    Operating income increased significantly due to higher realized steel pricing and record steel volumes. Value-added spreads to HRC have improved, benefiting future performance as the largest coater in North America. Long product steel demand and pricing are strong.
    Operating income sequential increase: 73%Average selling prices per ton increase: $86Average HRC pricing Q4: $850/tonAverage HRC pricing Q1: $975/tonDomestic steel industry utilization rate: 77%SDI steel mills utilization rate: 89%Record quarterly steel shipments: 3.6 million tons
    		———$557 million operating income
    Metals Recycling
    Operating income more than doubled sequentially due to higher pricing for both ferrous and nonferrous scrap. Shipments were modestly lower in Q1 due to weather but are expected to increase seasonally and with support for aluminum operations.
    Operating income sequential increase: 155%
    		———$47 million operating income
    Steel Fabrication
    Operating income was aligned with Q4 results, with higher shipments offset by increased steel input prices. Order backlog is solid, extending into Q4 2026, driven by positive customer sentiment, manufacturing onshoring, and public funding for infrastructure.
    		———$90 million operating income
    Aluminum Operations
    Incurred an operating loss due to normal start-up issues in January, necessitating a temporary pause and inventory write-down. Operations are now smooth with increasing volumes. The hot side is fully operational, and two of three cold mills are ramping up.
    Q4 FY25 shipments: ~14,000 tonsQ1 FY26 shipments: ~22,000 tons
    		———operating loss of $65 million

    Operational metrics

    23
    Adjusted EBITDA
    $700 million
    Q1 FY26

    Strong first quarter financial and operational performance.

    Net income
    $403 million
    Q1 FY26

    Net income was $403 million or $2.78 per diluted share.

    Diluted EPS
    $2.78
    Q1 FY26

    Net income was $403 million or $2.78 per diluted share.

    Revenue
    $5.2 billion
    Q1 FY26

    First quarter 2026 revenues were $5.2 billion.

    Operating income
    $538 million
    Q1 FY26

    Operating income was $538 million, higher than sequential fourth quarter results.

    Cash and investments
    $800 million
    End of Q1 FY26

    At the end of the quarter, we had liquidity of $2 billion comprised of cash and investments of $800 million.

    Unsecured revolver availability
    $1.2 billion
    End of Q1 FY26

    our fully available unsecured revolver of $1.2 billion.

    Capital investments
    $138 million
    Q1 FY26

    In the first quarter, we invested $138 million in capital investments.

    Common stock repurchased
    $115 million
    Q1 FY26

    repurchased $115 million of our common stock.

    Remaining share repurchase authorization
    $687 million
    End of March

    with $687 million remaining authorized at the end of March.

    Estimated through-cycle annual EBITDA from organic growth investments
    $1.4 billion
    Annual

    These projects have an estimated through-cycle annual EBITDA of approximately $1.4 billion.

    Aluminum through-cycle EBITDA expectation
    $650 million to $700 million
    Normalized markets

    When the markets normalize, we're confident in the through-cycle EBITDA expectation for normalized markets, again, remains at $650 million to $700 million plus a further $40 million to $50 million for our recycling platform.

    Aluminum recycling platform EBITDA contribution
    $40 million to $50 million
    Annual

    plus a further $40 million to $50 million for our recycling platform.

    North American automotive production estimates
    similar to 2025similar YoY
    2026

    North American automotive production estimates for 2026 are expected to be similar to 2025.

    Domestic supply deficit of aluminum sheet
    over 1.4 million tonsforecasted to grow
    Current

    There's a significant and fundamental domestic supply deficit of over 1.4 million tons of aluminum sheet.

    Aluminum tariffs increase
    50%increased from 10% in '24
    Current

    tariffs increased 10% in '24 to the current 50% level.

    Flat-rolled steel business linked to lagging price contracts
    75% to 80%
    Current

    approximately 75% to 80% of our flat-rolled steel business is linked to lagging price contracts, in aggregate, generally lagging 2 months.

    Steel fabrication inventory duration
    10 to 12 weeks
    Current

    Our steel fabrication business generally maintains between 10 to 12 weeks of steel inventory.

    Aluminum product mix (existing carbon flat-rolled steel customers)
    2/3
    Current

    2/3 of our existing carbon flat-rolled steel customers also consume and process aluminum flat rolled sheet.

    Aluminum hot band alloys rolled
    3,000, 5,000 and 6,000 alloys
    To date

    We have successfully rolled 3,000, 5,000 and 6,000 alloys.

    Aluminum cold reversing mill products
    303 or 3003, 5052 and 3104 products
    Current

    The cold reversing mill, in particular, is successfully producing shippable 303 or 3003, 5052 and 3104 products.

    SDI locations without lost time injury
    94%
    Q1 FY26

    Out of some 135 SDI locations, 94% operated in the first quarter without one lost time injury.

    Pig iron usage at flat rolled mills
    12% and 22%
    Current

    We will use anywhere between 12% and 22% [pig iron] at our flat rolled mills.

    Industry KPIs

    3
    MetricValueDetails
    Safety94%%
    Realized price vs benchmark$86USD
    Production sales volume by metal and by mine3.6 million tonstons

    Orderbook & backlog

    3
    Steel joist and deck order backlogsolidquarter end

    extends into the fourth quarter of 2026

    Pipe mills order bookbooked well into the summerQ1 FY26
    Solar order bookscontinuing to remain strongQ1 FY26

    Product announcements

    4
    ProductTypeDetails
    Industrial and can sheet finished productsmilestone
    Automotive aluminum hot bandmilestone
    Finished automotive products (aluminum)milestone
    First automotive continuous annealing solution heat treat line (cash line)launch

    Deals & partnerships

    1
    BlueScopeAcquisition (attempted)

    SDI presented a "best and final" joint offer in February, which was summarily rejected by BlueScope, with no constructive engagement since.

    Capital programs

    4
    Organic growth investments (Texas steel mill, value-added flat-rolled coating lines, aluminum investment)complete$5 billion
    Funding: capital funding... basically complete

    Benefit: estimated through-cycle annual EBITDA of approximately $1.4 billion

    We've invested over $5 billion in 3 primary organic growth investments, including our Texas mill, our value-added flat-rolled coating lines and our aluminum investment. These projects have an estimated through-cycle annual EBITDA of approximately $1.4 billion. The capital funding for Sinton, the 4 value-add lines and aluminum dynamics is basically complete.

    Aluminum operations (4 preheat furnaces)underway

    The last of 4 preheat furnaces will be in service at the end of the second quarter.

    Aluminum operations (Third cold mill)underway

    The third cold mill is expected to begin producing in the third quarter.

    Aluminum operations (Second automotive continuous annealing solution heat treat line - cash line)underway

    The second cash line is expected to begin commissioning in the third quarter.

    Risks & headwinds

    5
    Aluminum operations start-up issues and inventory write-downQ1 FY26

    $65 million operating loss

    Mitigation: Things were resolved quickly and are operating smoothly now with increasing volumes already being realized.

    Working capital growthQ1 FY26

    $120 million related to annual company-wide retirement profit sharing funding and an additional $150 million related to working capital growth, specifically associated with our new aluminum investment.

    Mitigation: Paused share repurchases in Q1.

    Increased steel input pricesQ1 FY26

    offset by the increase in steel input prices

    Mitigation: Steel fabrication business generally maintains 10-12 weeks of steel inventory, which can tighten margins in a rising price environment.

    Rolling aluminum market impactsnear-term constraints

    traffic impacts of the Iranian war and the domestic supply chain challenges

    Mitigation: Accelerating material qualification and product certifications.

    Potential prime ferrous scrap challengesover time

    null

    Mitigation: Expanding scrap separation capabilities through enhanced processes and technology.

    Q&A highlights

    7

    How will tariffs impact the aluminum business, and given current strong market conditions, is there upside to the previously guided through-cycle EBITDA of $650M-$700M?

    Mark Millett noted the current market is "absolutely phenomenal" and "fortuitous" for the start-up. Theresa Wagler added that current market spreads are significantly higher than those used in their profitability assumptions, suggesting a "structural shift" in the aluminum industry, and they will discuss through-cycle expectations in coming months.

    “The spreads that we use from a profitability standpoint, just market related for each of the product sets are significantly lower than the spreads that are available today.”

    asked by Albert Reline · answered by Mark Millett, Theresa Wagler

    2 min read6 chapters

    Detailed Narrative

    01

    Strong Q1 Performance & Safety Focus

    Steel Dynamics reported a very strong first quarter 2026, achieving record quarterly steel shipments of 3.6 million tons and adjusted EBITDA of $700 million. The company emphasized its commitment to safety, with 94% of its 135 locations operating without a lost-time injury in Q1, reflecting a strong safety culture and dedication to a zero-incident environment.

    02

    Aluminum Operations Ramp-up

    The aluminum operations are making significant progress, transitioning from construction and commissioning to production. Despite an initial operating loss of $65 million in Q1 due to start-up issues and an inventory write-down in January, operations are now smooth with increasing volumes. The hot side is fully operational, and two of three cold mills are ramping up, with the third expected in Q3. Product certifications are accelerating, with finished automotive products in qualification.

    03

    Steel Market Conditions & Diversification

    Domestic steel industry utilization was 77% in Q1, while SDI's mills operated at 89% due to value-added product diversification and internal manufacturing support. Flat-rolled steel markets are improving with strong demand and lower imports, leading to elevated lead times. Long product steel markets, including structural steel and railroad rail, remain strong, supported by nonresidential construction, manufacturing onshoring, and public funding.

    04

    Capital Allocation & Growth Strategy

    SDI maintains a disciplined capital allocation strategy, prioritizing high-return growth, a progressively positive dividend, and a variable share repurchase program, while preserving an investment-grade credit rating. The company has invested over $5 billion in organic growth projects, including the Texas steel mill, value-added coating lines, and aluminum, which are expected to contribute $1.4 billion in annual through-cycle EBITDA.

    05

    Strategic Advantages & Market Outlook

    Steel Dynamics leverages its circular business model, low-cost structure, and market diversification to optimize cash generation. The company sees a unique and favorable long-term aluminum market environment with a significant domestic supply deficit. In steel, a paradigm shift is noted with pervasive sensing, trade mechanisms, and increased fixed asset investment, driving demand for metal products, especially with reshoring and infrastructure spending.

    06

    Raw Material Platform & Sustainability

    The company's metals recycling platform, as the largest in North America, provides a strategic competitive advantage by supplying raw materials for both steel and aluminum operations. New separation technologies are being developed to increase access to usable aluminum scrap at lower costs, facilitating high recycled content and mitigating prime ferrous scrap challenges. The biocarbon team also achieved a significant milestone with a "log cutting ceremony."

    AI-generated summary of the company’s earnings call. Not investment advice.