Steel Dynamics (NASDAQ:STLD) reported what executives described as a “very strong” first quarter of 2026, highlighted by record quarterly steel shipments, improved realized steel pricing, and continued progress ramping its new aluminum flat-rolled operations.
First-quarter financial results and segment performance
Executive Vice President and Chief Financial Officer Theresa Wagler said the company posted first-quarter net income of $403 million, or $2.78 per diluted share, on revenue of $5.2 billion. Operating income was $538 million, and adjusted EBITDA was $700 million.
Wagler also said value-added spreads to HRC improved and should benefit results, particularly given Steel Dynamics’ coating exposure. She reiterated that roughly 75% to 80% of the flat-rolled business is linked to lagging-price contracts that generally lag by about two months, meaning recent price increases should be reflected more fully in second-quarter results.
In metals recycling, Wagler said first-quarter operating income was $47 million, up 155% sequentially, driven by higher ferrous and non-ferrous scrap pricing. She said shipments were “modestly lower” due to several weeks of inclement weather in January and February, but added that scrap flows have strengthened again with expectations for seasonally higher shipments in the second and third quarters, including incremental support tied to aluminum operations.
Steel fabrication generated operating income of $90 million, in line with the fourth quarter. Wagler said higher shipments were offset by higher steel input prices, noting the business typically carries 10 to 12 weeks of steel inventory, which can pressure margins in a rising-price environment. She said demand remained solid, with “very strong order activity” and March representing a current high point.
Steel shipments hit a quarterly record as demand improves
Chairman and CEO Mark Millett highlighted record quarterly steel shipments of 3.6 million tons. President and COO Barry Schneider said the domestic steel industry operated at an estimated 77% utilization rate during the quarter, while Steel Dynamics’ mills ran at 89%.
Schneider said flat-rolled market conditions continue to improve on strong demand and lower imports, with lead times elevated and customers optimistic. He cited “improving value-added spreads returning with the impact of the core trade cases that we won in 2025.” Long products markets also remained strong, he said, pointing to favorable demand and pricing in structural steel and railroad rail, with the Columbia City and Roanoke facilities achieving record production months.
On end markets, Schneider said North American automotive production estimates for 2026 are expected to be similar to 2025, while Steel Dynamics’ automotive customer base has remained stable and presented opportunities for growth. He also cited strength in non-residential construction “led by data centers” and an increase in multifamily building, alongside onshoring-related manufacturing projects. In energy, Schneider said oil and gas activity has been strong, pipe mills are “already booked well into the summer,” and solar remains strong in the order book.
During Q&A, Wagler provided a flat-rolled shipment breakdown for the quarter:
- Hot band: 1,017,000 tons
- Cold rolled: 151,000 tons
- Coated: 1,530,000 tons
Schneider said the company’s four new value-added lines are “operating at full capacity right now,” adding that they serve markets that were “the most impacted by the court cases.”
Aluminum startup: early challenges, accelerating certifications, ramp targets
Steel Dynamics’ aluminum operations posted an operating loss of $65 million in the first quarter. Wagler said results were lower than expected due to significantly higher operating costs in January as the team faced “normal startup issues,” including a temporary pause in operations and a write-down of some inventory. She said issues were resolved quickly and operations are now running smoothly with increasing volumes.
Asked about the inventory write-off, Millett said the issue was largely confined to January and “was a quality issue,” specifically “a stain on the product issue.” Wagler added that it “wasn’t an equipment issue,” calling it “a practice issue.”
Millett provided shipment figures and near-term expectations for the aluminum ramp. He said fourth-quarter shipments were around 14,000 tons, first-quarter shipments were around 22,000 tons, and the company expects approximately 60,000 to 70,000 tons in the second quarter, barring “unexpected disruptions.”
Millett said the hot side is now fully operational and has demonstrated the ability to run at full rated capacity. He said the last of four preheat furnaces is expected to be in service at the end of the second quarter, while two of three cold mills are ramping and the third is expected to begin producing in the third quarter. He also said the first of two automotive continuous anneal and solution heat treat (CASH) lines is operational and producing qualification material, with the second CASH line expected to begin commissioning in the third quarter.
On certifications, Millett said the facility has received certifications from multiple customers for industrial and can sheet finished products, and for automotive aluminum hot band. He said finished automotive products are in the qualification process with several customers and “we believe we could receive acceptance in the coming weeks.” He added that accelerated certifications could help shift product mix toward higher-margin products, and reiterated a targeted optimized mix of 45% can sheet, 35% automotive, and 20% industrial.
Wagler said that while the plant was not EBITDA-positive for the full quarter, it was “basically break even combined February and March” due to the January pause, and she expressed “full expectations for the remainder of the year to be very positive from an EBITDA perspective.” Millett said the company remains confident in its through-cycle EBITDA expectations of $650 million to $700 million for the aluminum operation, plus an additional $40 million to $50 million tied to the recycling platform.
Cash flow, capital allocation, and strategic priorities
Wagler said Steel Dynamics generated $148 million of operating cash flow in the first quarter. She cited a $120 million reduction tied to annual retirement profit-sharing funding and $150 million related to working capital growth associated with the aluminum investment, along with working capital growth tied to higher pricing across businesses. Liquidity totaled $2 billion at quarter end, including $800 million in cash and investments and a fully available $1.2 billion unsecured revolver.
The company invested $138 million in capital projects during the quarter and expects total 2026 capital investments of about $600 million. Wagler said the company increased its dividend by 6% and repurchased $115 million of stock in the quarter, with $687 million remaining authorized as of the end of March. She said the company’s approach remains consistent: prioritize high-return growth, support a “progressively positive dividend profile,” and complement returns with share repurchases while maintaining investment-grade credit.
In response to questions about expansion and M&A, Millett said the company has a “broad pipeline of strategic opportunities” across businesses, including aluminum, while emphasizing a focus on “value add differentiating products and supply chains.” On BlueScope, Millett said Steel Dynamics and its partner presented what they considered a “best and final” joint offer in February that was rejected and that there has been “no constructive engagement” since.
Millett also said the company has not seen “any substantial substitution” of steel for aluminum despite elevated aluminum prices, citing the scale of automotive manufacturing investments and his expectation that pricing will eventually normalize.
Separately, Millett highlighted safety performance, saying 94% of Steel Dynamics’ roughly 135 locations operated in the first quarter without a lost-time injury.
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.
