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Steel Dynamics (STLD) Expands Production Capacity in Indiana
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Steel Dynamics, Inc. (STLD - Free Report) is set to expand its Structural and Rail Division in Columbia City, Indiana. The $75 million expansion project will use its excess melting and casting capability and diversify the company’s product portfolio and market sector exposure.
The project involves addition of a rolling mill, supported by other specific infrastructure and equipment requirements. It has the annual capacity to produce about 240,000 tons of reinforcing bars in various sizes, including customized cut-to-length smooth and coiled bars in sizes varying from #3 to #8 reinforcing bars. The size offerings correspond to roughly 70% of total domestic consumption of reinforcing bar in 2016.
According to Steel Dynamics, this investment will expand its capabilities in the Structural and Rail Division efficiently and position it as the largest independent rebar supplier in the region, without competing with new customer base. Further, the intended business model has the potential to provide customers with working capital gains along with saving yield and time-losses.
The project complements the newly added 200,000 tons of reinforcing bar capacity at the company’s Roanoke Bar Division, which is expected to initiate operations by the end of this year. Steel Dynamics expects the project to add about 33 jobs in the local market.
Steel Dynamics also confirmed that the project is scheduled to be completed during the fourth quarter 2018, subject to receipt of necessary permits and support of local and state government.
Steel Dynamics’ shares have rallied 6.1% in the last three months, outperforming the Zacks categorized Steel-Producers industry’s decline of 2.3%.
The company, last month, provided its earnings guidance for the second quarter of 2017. Steel Dynamics expects its earnings for the second quarter to be in the band of 60 cents to 64 cents per share.
The company expects profitability from its steel operations to fall on a sequential comparison basis in the second quarter on lower shipments and higher average scrap costs. Steel Dynamics said that demand from automotive and construction sectors remained strong while the energy sector continued to strengthen, during the quarter.
Moreover, the profitability of metals recycling platform is anticipated to remain steady on sequential basis owing to higher average sales price offsetting lower shipments.
During the second quarter, the company faced some issues related to the start-up of its new Galvalume and paint line at the Columbus Flat Roll Division. This resulted in increased costs and lesser value-added shipments, which the company expects to reduce its pre-tax earnings by $15 million in the second quarter.
Sherwin-Williams has expected long-term earnings growth rate of 11.4%.
POSCO has expected long-term earnings growth rate of 5%.
Quaker Chemical has expected long-term earnings growth rate of 8.5%.
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Steel Dynamics (STLD) Expands Production Capacity in Indiana
Steel Dynamics, Inc. (STLD - Free Report) is set to expand its Structural and Rail Division in Columbia City, Indiana. The $75 million expansion project will use its excess melting and casting capability and diversify the company’s product portfolio and market sector exposure.
The project involves addition of a rolling mill, supported by other specific infrastructure and equipment requirements. It has the annual capacity to produce about 240,000 tons of reinforcing bars in various sizes, including customized cut-to-length smooth and coiled bars in sizes varying from #3 to #8 reinforcing bars. The size offerings correspond to roughly 70% of total domestic consumption of reinforcing bar in 2016.
According to Steel Dynamics, this investment will expand its capabilities in the Structural and Rail Division efficiently and position it as the largest independent rebar supplier in the region, without competing with new customer base. Further, the intended business model has the potential to provide customers with working capital gains along with saving yield and time-losses.
The project complements the newly added 200,000 tons of reinforcing bar capacity at the company’s Roanoke Bar Division, which is expected to initiate operations by the end of this year. Steel Dynamics expects the project to add about 33 jobs in the local market.
Steel Dynamics also confirmed that the project is scheduled to be completed during the fourth quarter 2018, subject to receipt of necessary permits and support of local and state government.
Steel Dynamics’ shares have rallied 6.1% in the last three months, outperforming the Zacks categorized Steel-Producers industry’s decline of 2.3%.
The company, last month, provided its earnings guidance for the second quarter of 2017. Steel Dynamics expects its earnings for the second quarter to be in the band of 60 cents to 64 cents per share.
The company expects profitability from its steel operations to fall on a sequential comparison basis in the second quarter on lower shipments and higher average scrap costs. Steel Dynamics said that demand from automotive and construction sectors remained strong while the energy sector continued to strengthen, during the quarter.
Moreover, the profitability of metals recycling platform is anticipated to remain steady on sequential basis owing to higher average sales price offsetting lower shipments.
During the second quarter, the company faced some issues related to the start-up of its new Galvalume and paint line at the Columbus Flat Roll Division. This resulted in increased costs and lesser value-added shipments, which the company expects to reduce its pre-tax earnings by $15 million in the second quarter.
Steel Dynamics, Inc. Price and Consensus
Steel Dynamics, Inc. Price and Consensus | Steel Dynamics, Inc. Quote
Steel Dynamics currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked companies in the basic materials space include The Sherwin-Williams Company (SHW - Free Report) , POSCO (PKX - Free Report) and Quaker Chemical Corporation (KWR - Free Report) . All three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.
Sherwin-Williams has expected long-term earnings growth rate of 11.4%.
POSCO has expected long-term earnings growth rate of 5%.
Quaker Chemical has expected long-term earnings growth rate of 8.5%.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
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