Steel Dynamics (STLD) is one of the lowest-cost steel producers, remaining competitive even in a lower pricing environment, and its investments into the company have allowed STLD to produce more today than before the financial crisis, says Shneur Gershuni, Executive Director at UBS Investment Bank.
“The company spent a lot of money throughout the recession and into the early part of the recovery making investments in their company. I think that both their trough and their peak earnings power is higher today for any given steel price because of those investments they made. Their ability today is stronger than when it was even pre the financial crisis,” Gershuni said.
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STLD has diversified products at their structural mill and has made investments in special bar quality products, allowing the company to produce more higher value-added product today than before and solidifying STLD‘s position in the steel market.
“So for example, they have a structural mill. Previously, that would just go up and down with construction cycles, but now they have made investments to diversify the products like rail and absorb latent capacity there. They have made investments in special bar quality, or SBQ…to develop these types of specialty products that command premium prices for and so forth,” Gershuni said.
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