SDI Stock Record Breaking

01/10/2018
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Article by Doug LeDuc | KPC News | January 4, 2018 
 
Shares of Steel Dynamics Inc. closed at all-time highs in the year’s first week of market activity, as traders bet on increased global demand for the metal produced by the Fort Wayne-based company.
 
SDI stock closed Thursday at $45.95, which was 6.5 percent above its previous closing price of $43.13 on 2017’s last trading day. It hit an all-time high of 46.32 earlier in the day Thursday.
 
SDI’s steel mills include operations in Butler and Columbia City.
 
Its stock had been trading around $43 for more than a week and had closed at $38.32 on Dec. 1.
 
SDI went public in November 1996. Before climbing above $40 last month, the company’s stock had reached a previous peak of $39.07 on June 1, 2008.
 
That was about six months after the Great Recession officially started in December 2007 and three months prior to the recession’s international banking crisis. The recession ended in June 2009.
 
Favorable developments for the U.S. steel industry last month included the corporate tax cuts put in place with the tax reform Congress enacted and a Commerce Department announcement that the United States would impose import duties on some Vietnamese steel.
 
These developments came in addition to the general strengthening of the U.S. economy and the Trump administration’s continued strong vocal support for infrastructure investment and U.S. manufacturing growth.
 
Executives at Steel Dynamics Inc. said shortly after the Commerce Department announcement that they were happy with its decision to impose duties on some of the steel imported from Vietnam that originates from China.
 
The preliminary ruling announced Dec. 5 imposes duties on alloy imports that originated as hot-rolled steel in China and were made corrosion resistant or cold-rolled through processing in Vietnam.
 
As a U.S. steel mini-mill operator, SDI had requested a circumvention investigation in September 2016 partly because imports of corrosion-resistant steel from Vietnam had increased from $2 million to $80 million after preliminary duties were imposed on Chinese products in 2015.
 
Shipments of cold-rolled steel to the United States from Vietnam had likewise increased from $9 million to $215 million during the same period.
 
“We are very pleased that (Commerce) Secretary Ross is taking steps to aggressively enforce U.S. trade laws,” Mark Millett, SDI president and CEO, said in a statement. “Stopping the circumvention of enacted trade laws will ensure a level playing field for the domestic steel industry. As the largest non-automotive flatroll steel coater in the U.S., it could be a meaningful positive tailwind for Steel Dynamics.”
 
SDI makes corrosion-resistant steel, including its galvanized product, Galvalume, as well as painted flat roll steel at facilities in Indiana, Mississippi and Pennsylvania. The steel is used in construction, automotive and other industries.
 
The Commerce Department plans to impose combined anti-dumping and anti-subsidy duties of 522 percent on cold-rolled steel and combined duties of 238 percent on corrosion-resistant steel imported from Vietnam on or after Nov. 4, 2016.
 
The department will finalize its circumvention determination by Feb. 16.
 
Gordon Johnson, an analyst with Axiom Capital, said the department’s decision is “virtually irrelevant in terms of supply/demand,” according to Seeking Alpha, partly because cold-rolled and hot-dip galvanizing steel imports have collapsed since November 2016.
 
Johnson takes continued purchasing by U.S. importers of Vietnamese steel to mean that about half of it will be banned incrementally, the online business information service reported.
 
Chinese steel prices strengthened last month as some less-efficient production capacity shut down and as some production was reduced temporarily to lower air pollution levels in cities there during the winter, according to business media reports. 
 




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