Steel Dynamics Q3 Profit Jumps as Steel Pricing Lifts Earnings

Steel Dynamics Inc. reported sharply higher third-quarter 2026 earnings as stronger steel pricing lifted its largest operating segment, while the company’s developing aluminum business reduced its operating loss and continued product qualification work.

The Fort Wayne, Indiana-based metals producer generated net sales of $6.51 billion, up 35% from $4.83 billion a year earlier and 7% from the second quarter. Operating income rose 98% year over year to $1.01 billion, while net income attributable to Steel Dynamics increased 87% to $756 million. Diluted earnings per share climbed 92% to $5.26.

Adjusted EBITDA, a non-GAAP measure, rose 79% to $1.19 billion, representing an 18% margin. Cash flow from operations was $846 million, and the company repurchased $276 million of shares during the quarter. Steel Dynamics’ presentation also showed $1.04 billion of free cash flow, defined as adjusted EBITDA less capital investments.

Steel pricing drives segment earnings

Steel operations produced $1.03 billion of operating income, more than double the $498 million reported in the third quarter of 2025 and 43% above the preceding quarter. The average external steel sales price increased 25% year over year to $1,400 per ton, outpacing a 6% rise in the average ferrous cost per ton melted to $404.

Total steel shipments increased 5% from a year earlier to 3.78 million tons. Long-products shipments rose 10% to 1.02 million tons, while flat-roll shipments increased 3% to 2.77 million tons. External steel shipments declined 2% to 3.11 million tons, indicating that the segment’s earnings growth was primarily associated with stronger selling prices rather than higher external volume.

Steel Dynamics said its mills operated at 92% utilization in the third quarter, including its Sinton facility, compared with a 77% domestic steel industry production utilization rate shown in the presentation. Excluding Sinton, the company’s utilization rate was 86%.

Steel fabrication operating income declined 15% year over year to $91 million even as shipments increased 25% to 190,000 tons. Its average sales price slipped 1% to $2,462 per ton. Metals recycling operating income increased 5% to $33 million, with ferrous shipments up 7% and nonferrous shipments down 17%.

The aluminum operations recorded a $26 million operating loss, compared with losses of $57 million a year earlier and $33 million in the second quarter. The business remains in its startup phase.

Aluminum ramp remains a key growth focus

Steel Dynamics said startup of its recycled aluminum flat-roll operations remains on track. Products have qualified for can-sheet applications, and the company recently received qualifications to supply automotive products, with automotive sales expected before the end of 2026.

The Mexico satellite recycling center was operating at more than 75% utilization, while the U.S. slab center is scheduled to begin operations in 2027. The company estimates an investment of $2.5 billion for the aluminum flat-roll mill and about $400 million for two recycled aluminum slab centers.

Management expects the aluminum platform to contribute $650 million to $700 million of annual consolidated EBITDA through the cycle. That estimate is based on historical pricing and margins, anticipated production capacity and product mix, and projected synergies and cost savings. Planned annual production is 650,000 tonnes, with an intended mix of 45% can sheet, 35% automotive products and 20% common alloy.

Year-to-date earnings and financial position

For the first nine months of 2026, net sales rose 29% to $17.81 billion, while operating income increased 93% to $2.25 billion. Net income attributable to Steel Dynamics was $1.69 billion, up 84%, and diluted EPS increased 90% to $11.72. Adjusted EBITDA advanced 71% to $2.81 billion.

Steel operations generated $2.31 billion of year-to-date operating income, up 108%. Metals recycling income rose 63% to $128 million, while steel fabrication income declined 16% to $265 million. Aluminum operations posted a $124 million loss, compared with a $126 million loss in the prior-year period.

Steel Dynamics ended September with $1.18 billion of cash and invested cash, $4.27 billion of total debt and $3.09 billion of net debt. Net leverage was 0.9 times trailing-12-month adjusted EBITDA, and total liquidity was approximately $2.37 billion. The company said it intends to manage net leverage at no more than 2.0 times through the cycle while funding growth and maintaining flexible shareholder distributions.

The outlook remains subject to economic conditions, steel and aluminum market cyclicality, global steelmaking overcapacity and imports, volatility in scrap and energy costs, and potential difficulties in launching or ramping new products. Steel Dynamics also identified customer concentration in its aluminum operations, unexpected equipment downtime, cybersecurity threats, regulatory requirements and execution of its growth strategy among its principal uncertainties.