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Steel Dynamics Q3 Profit Jumps as Steel Shipments Hit Record
Steel Dynamics reported sharply higher third-quarter earnings as record steel shipments, stronger selling prices and lower scrap costs widened steel margins. Net income reached $756 million, while adjusted EBITDA climbed to $1.2 billion.
Key Points
- Net income: Increased to $756 million, or $5.26 per diluted share.
- Net sales: Reached $6.5 billion.
- Steel shipments: Hit a record 3.8 million tons.
- Steel margins: Improved as selling prices rose and scrap costs declined.
- Recycling: Operating income fell to $33 million as ferrous scrap pricing and metal spreads weakened.
SEATTLE (Scrap Monster): Steel Dynamics Inc. reported a strong third quarter of 2026, supported by record steel shipments, higher realized selling prices and lower ferrous scrap costs.
The Fort Wayne, Indiana-based producer posted net income of $756 million, or $5.26 per diluted share, for the quarter ended September 30.
That compares with net income of $534 million, or $3.69 per diluted share, in the second quarter and $404 million, or $2.74 per share, in the year-earlier period.
Quarterly net sales reached $6.5 billion, while adjusted EBITDA totaled approximately $1.2 billion.
Steel Operations Deliver Record Shipments
Steel operations generated approximately $1.03 billion in operating income, up 43% from the second quarter.
The improvement was driven by record steel shipments of 3.8 million tons and wider metal spreads.
The average external selling price for Steel Dynamics' steel operations increased by $102 per ton from the previous quarter to $1,400 per ton.
At the same time, the average ferrous scrap cost per ton melted declined by $8 to $404 per ton.
The combination of higher finished-steel prices and lower raw-material costs expanded margins across the company's steel platform.
ScrapMonster Edge: Mill Margins Rise While Recycling Spreads Tighten
Steel Dynamics' quarter produced an important split for the scrap industry.
Its steel mills benefited from lower scrap input costs, helping operating income rise sharply. The company's metals recycling business moved in the opposite direction.
Recycling operating income fell to $33 million, down $15 million from the second quarter, as lower ferrous scrap pricing and narrower metal spreads offset steady volumes.
For scrap processors, that distinction matters: strong steel demand and mill profitability do not automatically translate into stronger recycling margins when raw-material prices and trading spreads are under pressure.
Demand Remains Strong Across Key U.S. Markets
Steel Dynamics said demand remained healthy across energy, automotive, industrial and non-residential construction markets.
Customer inventories also remain relatively lean, supporting order activity and steel pricing.
The company continues to expect U.S. manufacturing investment, infrastructure spending and reshoring activity to support steel demand into 2027.
Steel Fabrication Earnings Improve
Steel fabrication operations generated $91 million in operating income, up from approximately $85 million in the second quarter.
Higher shipments and improved selling prices more than offset increased steel input costs.
The fabrication order backlog is approximately 50% above year-earlier levels and extends into the second quarter of 2027.
Commercial construction, manufacturing, warehouses, data centres and healthcare projects continue to support demand.
Aluminum Startup Loss Narrows
Steel Dynamics also reported continued progress at its aluminum flat-rolled products operation in Columbus, Mississippi.
Quarterly aluminum operating losses narrowed 21% sequentially to $26 million, while the platform reached EBITDA breakeven for the quarter.
Aluminum flat-rolled sheet shipments reached 55,000 metric tons, while hot-band production increased to 91,000 metric tons.
All three cold mills are now operational.
The first Continuous Annealing and Solution Heat line is operating and is expected to begin commercial shipments during the fourth quarter. The second line is expected to begin producing material for customer qualification before year-end.
Operating Cash Flow Reaches $846 Million
Steel Dynamics generated $846 million in operating cash flow during the quarter.
The company invested $150 million in capital projects, paid $76 million in cash dividends and repurchased $276 million of common stock, equivalent to roughly 1% of outstanding shares.
Liquidity stood at approximately $2.4 billion as of September 30.
Year-to-Date Earnings Rise Sharply
For the first nine months of 2026, Steel Dynamics reported net income of approximately $1.7 billion, or $11.72 per diluted share.
Net sales totaled $17.8 billion.
That compares with net income of roughly $920 million and sales of $13.8 billion during the corresponding period in 2025.
ScrapMonster Market Read
Steel Dynamics' results point to a strong operating environment for domestic electric-arc-furnace steelmaking.
Record shipments, improving finished-steel prices and lower scrap costs widened mill margins substantially during the quarter.
The recycling segment provides the more cautious signal. Ferrous scrap pricing weakened and spreads narrowed even as mill demand remained healthy.
For the scrap market, the next issue to watch is whether strong steel production and lean customer inventories eventually translate into firmer mill demand for ferrous feedstock, or whether adequate scrap availability keeps raw-material costs contained.
Source: Steel Dynamics third-quarter 2026 results.
