Steel Dynamics CEO says 'has been buyer hesitancy'
"Steel customer inventory levels remain lower than historical levels and year-over-year steel imports have declined approximately 20 percent," said CEO Millett. "However, there has been buyer hesitancy in anticipation of possible declines in scrap pricing, with an expectation that this might further pressure steel prices. Additionally, we are heading into a seasonally lower demand environment and customers are hesitant to significantly increase inventories before the end of the year. Due to these factors, we anticipate lower sequential volumes in our operating platforms, which is seasonally typical for the calendar fourth quarter and sequentially weaker realized steel pricing. Although domestic automotive production may be coming off record levels, we believe 2017 automotive steel consumption will be steady with Mexico growing production, and that there will be additional growth in the construction sector, especially for larger, public sector infrastructure projects. We could also see some improved activity within the energy sector next year. We continue to see progress at our Columbus Flat Roll Division. The successful market and product diversification that we achieved at Columbus during 2015 is one of our key differentiators for anticipated improved annual profitability in 2016. Columbus achieved near record nine month production levels for 2016, while continuing to improve and diversify its value-added production capability. The team successfully added the capability to produce value-added Galvalume(R) flat roll products during the third quarter 2016, and the $100 million paint line addition is on schedule to begin production in the first quarter 2017, adding 250,000 tons of value-added painting capability. We continue to strengthen our financial position through strong cash flow generation and the execution of our long-term strategy. We are pleased that due to our strong balance sheet and continued free cash flow generation, we are able to add the optionality of a share repurchase program to our capital allocation strategy. We are well-positioned for growth, and remain focused on delivering shareholder value through organic and strategic growth opportunities."