Steel Dynamics NASDAQ: STLD reported a stronger sequential second quarter for 2026, with record steel shipments, higher realized steel prices and continued progress on its aluminum platform, executives said on the company’s earnings call Tuesday.
Chairman and Chief Executive Officer Mark Millett said the company achieved “a strong second quarter financial and operational performance,” highlighted by record quarterly steel shipments of 3.7 million tons and adjusted EBITDA of $921 million. He also noted operational milestones at the company’s Sinton steel platform and its aluminum investments.
Millett opened his remarks by addressing the death of Elijah Jones, a New Process Steel employee who was fatally injured in an April equipment-related accident. He said the company remains committed to achieving a zero-incident safety environment.
Revenue and Earnings Improve Sequentially
Executive Vice President and Chief Financial Officer Theresa Wagler said Steel Dynamics generated second-quarter net income of $534 million, or $3.69 per diluted share. Revenue totaled $6.1 billion, while operating income was $700 million.
Wagler said the sequential improvement from the first quarter was driven by higher realized steel pricing and record steel shipments. Steel operations generated operating income of $721 million, up 30% from the prior quarter, as average selling prices rose $105 per ton.
She added that value-added spreads to hot band improved by $70 per ton from the lows seen in the fourth quarter of 2025. Because roughly 80% or more of Steel Dynamics’ flat-rolled steel business is tied to lagging price contracts, Wagler said recent flat-rolled price increases and improved value-added spreads should benefit third-quarter results.
Second-quarter operating income from the metals recycling platform was $48 million, roughly in line with the first quarter, as higher shipments offset lower ferrous metal spreads. Steel fabrication operating income was $85 million, compared with $90 million in the first quarter, as higher volume and steady pricing were offset by increased steel raw material costs.
Steel Dynamics generated $428 million in operating cash flow during the quarter. Working capital reduced cash by $225 million, primarily due to higher customer account values as pricing improved and aluminum sheet sales increased. Wagler said working capital should be neutral to a funding source in the second half of the year.
Steel Demand Remains Strong Across Multiple Markets
President and Chief Operating Officer Barry Schneider said Steel Dynamics’ steel mills operated at 90% utilization in the second quarter, compared with an estimated 81% utilization rate for the domestic steel industry. He attributed the company’s higher utilization to value-added product diversification, customer supply chain solutions and internal manufacturing demand.
Schneider described flat-rolled steel market conditions as strong, citing solid demand, lean inventories, elevated lead times and customer optimism. He said value-added pricing spreads within flat-rolled steel have returned to more normalized levels, aided by trade cases resolved last year.
Long product steel markets also remain strong, driven by non-residential construction demand, particularly structural steel and railroad products. Schneider said special bar quality markets are improving across industrial, manufacturing and energy-related sectors. He also said oil and gas demand remains strong, pipe manufacturers are already evaluating 2027 projects, solar demand remains robust and agricultural demand is improving, though residential construction remains relatively subdued.
In automotive, Schneider said North American production forecasts for 2026 remain in line with the prior year, but Steel Dynamics continues to see opportunities with its customer base, including U.S.-based European and Asian automakers.
Fabrication Backlog Rises Sharply
The company’s steel fabrication business saw a significant increase in demand. Wagler said the order backlog is 45% higher than at the same point last year, while Schneider said order activity is stronger than it has been in several years.
Schneider pointed to the Dodge Momentum Index, which he said generally leads construction spending by 12 to 18 months and recently reached its highest level in several years, up more than 30% year over year. He said the increase was driven by commercial planning and accelerating institutional activity led by healthcare.
In response to an analyst question, Wagler clarified that the 45% backlog increase is volume-specific, not driven by pricing. She said pricing entering the backlog has improved, but much of that work will not be realized until the fourth quarter or 2027. She said realized pricing should remain relatively stable in the near term, while volume is expected to be strong in the second half of 2026 and into next year.
Aluminum Ramp Continues, With Higher Volumes Expected
Executives emphasized progress at Steel Dynamics’ aluminum flat-rolled products platform, while acknowledging ongoing startup costs and operational ramp challenges. Wagler said second-quarter operating losses tied to startup and commissioning of aluminum operations were $33 million, a 48% improvement from the first quarter. The company also recorded a $16 million non-cash impairment charge related to relocating its second planned recycled slab center.
Aluminum flat-rolled sheet shipments rose to 53,000 metric tons from 22,500 metric tons in the first quarter. Millett said the increase was primarily in can sheet, with additional automotive hot band and industrial shipments.
Millett said the aluminum mill produced 84,000 metric tons in the second quarter, about 50% of capability, and the company expects to exit 2026 at a monthly production rate of at least 90% capacity. Wagler said the company expects the aluminum platform to be earnings positive in the second half of the year.
The hot side of the aluminum mill is fully operational and able to run at rated capacity, according to Millett. Two of the three cold mills are increasing production, and the third cold mill started in July. He said this will support the full 650,000 metric ton annual capability. The first of two automotive Continuous Annealing and Solution Heat treating lines is fully operational, and the second is expected to begin commissioning in the fourth quarter.
Millett said Steel Dynamics has achieved finished product qualification status at multiple automotive manufacturers for 5182 and 5754 products and is in trials for 6000 series alloys. He said the company continues to expect normalized through-cycle EBITDA of $650 million to $700 million from the aluminum platform, plus $40 million to $50 million from the metals recycling platform.
Capital Allocation and Policy Priorities
Wagler said Steel Dynamics ended the quarter with $2 billion in liquidity, including $800 million in cash and investments and a fully available $1.2 billion unsecured revolver. The company invested $124 million in capital projects during the quarter and $262 million year to date. Second-half 2026 capital investments are expected to be between $300 million and $350 million.
During the first half of 2026, Steel Dynamics increased its cash dividend and repurchased $350 million of common stock. As of the end of June, $489 million remained authorized for repurchases. Wagler said the company’s capital allocation strategy prioritizes high-return growth opportunities, shareholder returns and preservation of its investment-grade credit profile.
On trade policy, Schneider said the company supports the current 50% Section 232 tariff on imported steel and is engaged with the U.S. Trade Representative on the USMCA review. He said Steel Dynamics is advocating for Section 301 remedies to be additive to existing steel tariffs and is working with Congress on Buy American steel requirements tied to shipbuilding and highway legislation.
Millett closed by saying the company remains focused on optimizing recently built steel and aluminum assets and expects recent growth projects to contribute more than $1.4 billion in through-cycle annual EBITDA capability.
About Steel Dynamics (NASDAQ:STLD)
Steel Dynamics, Inc is a U.S.-based, diversified steel producer and metals recycler that operates an integrated network of mini-mills, finishing lines and fabrication facilities. Founded in 1993 and headquartered in Fort Wayne, Indiana, the company manufactures a broad range of steel products and provides downstream processing, coating and fabrication services to industrial customers. Its operations combine steelmaking using electric-arc furnaces with extensive metals recycling capabilities, allowing Steel Dynamics to convert scrap ferrous and nonferrous materials into finished steel products.
The company's product portfolio includes flat-rolled steel (coiled and sheet products), structural steel and fabricated components, along with coated and painted steel used in consumer, industrial and construction applications.
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