Q1 2026 Earnings Call Transcript

Good day, and welcome to the Steel Dynamics, Inc. First Quarter 2026 Earnings Conference Call. At this time, all participants are in a listen-only mode. After management's remarks, we will conduct a question-and-answer session, and instructions will follow at that time.

Please be advised this call is being recorded today, 04/21/2026, and your participation implies consent to our recording this call. If you do not agree to these terms, please disconnect. At this time, I would like to turn the conference over to David Lipschitz, Director, Investor Relations. Please go ahead.

Thank you. Good morning, and welcome to the Steel Dynamics, Inc. First Quarter 2026 Earnings Conference Call. As a reminder, today's call is being recorded and will be available on our website for replay later today.

Leading today's call are Mark D. Millett, Chairman and Chief Executive Officer; Theresa E. Wagler, Executive Vice President and Chief Financial Officer; and Barry T. Schneider, President and Chief Operating Officer.

Other members of our senior leadership team are joining us on the call individually. Some of today's statements, which speak only as of this date, may be forward-looking and predictive, typically preceded by believe, expect, anticipate, or words of similar meaning. They are intended to be protected by the Private Securities Litigation Reform Act of 1995 should actual results turn out differently. Such statements involve risks and uncertainties related to integrating or starting up new assets, the aluminum industry, the use of estimates and assumptions in connection with anticipated project returns in our steel, metals recycling, fabrication, and aluminum businesses, as well as to general business and economic conditions.

Examples of these are described in a related press release as well as in our annually filed SEC Form 10-Ks under the headings Forward-Looking Statements and Risk Factors, found at sec.gov, and applicable in any later SEC Form 10-Q. You will also find any referenced non-GAAP financial measures reconciled to the most directly comparable GAAP measures in the press release issued yesterday entitled Steel Dynamics, Inc. reports first quarter 2026 results. I will now turn the call over to Mark. Thank you, everyone, and good morning.

Thanks for sharing your time this morning for our first quarter 2026 earnings call. As reported, our teams achieved a very strong first quarter financial and operational performance. Several highlights for the quarter included record quarterly steel shipments of 3.6 million tons. We saw significant progress within our aluminum operations.

It really is exciting to see our vision coming to life there. We had adjusted EBITDA of $700 million. And, again, most importantly, our teams continue to keep safety top of mind. We have an amazing group of people that achieves best-in-class performance each and every day.

I am incredibly proud of them and the whole team. Our world-class safety culture continues to evolve, and our team's dedication to our controlled safety philosophy is extraordinary. At some 135 Steel Dynamics, Inc. locations, 94% operated in the first quarter without one lost-time injury. I am continually inspired by the commitment they have for one another, consider themselves family, and challenge the status quo each day.

But, as always, we will never be dissatisfied until we achieve a zero-incident environment. Before I continue, I would like to shift to Theresa and Barry for their commentary. Theresa?

Thanks, Mark. Good morning, everyone, and thank you for joining us this morning. For the first quarter 2026, our net income was $403 million, or $2.78 per diluted share, with adjusted EBITDA of $700 million. First quarter 2026 revenues were $5.2 billion and operating income was $538 million, higher than sequential fourth quarter results driven by higher realized steel pricing and record steel volumes.

Our steel operations generated operating income of $557 million in the first quarter, a 73% sequential increase as average selling prices per ton increased $86. From an index perspective, average HRC pricing increased from an average of $850 per ton in the fourth quarter to $975 per ton in the first quarter. Today it is over $1,000. Barry will talk more about the market in a moment. Value-added spreads to HRC have also improved. As the largest coater in North America, this will especially be helpful to our forward performance.

As a quick reminder, approximately 75% to 80% of our flat rolled steel business is linked to lagging priced contracts, in aggregate generally lagging two months. So the most recent flat rolled steel price increases will positively impact our second quarter results. Additionally, demand and related pricing for our long product steel is strong, with pricing also continuing to improve. From a metals recycling perspective, first quarter 2026 operating income was $47 million, or 155% higher than sequential earnings, based on higher pricing for both ferrous and nonferrous scrap.

Shipments were modestly lower in the first quarter due to inclement weather several weeks in January and February. Scrap flows are strong again with expectations for seasonally increased shipments in the second and third quarters, in addition to increases related to further support of our aluminum operations. Our steel fabrication team achieved first quarter operating income of $90 million, aligned with fourth quarter results, as a benefit from higher shipments was offset by the increase in steel input prices. Our fabrication business generally maintains between 10 to 12 weeks of steel inventory, which can tighten margins in a rising steel price environment.

Our steel joist and deck demand remains solid, evidenced by very strong order activity with March representing the current high point. We were with the aluminum management team last week, and things are going incredibly well. That said, a quick reminder that we are still constructing and commissioning while we are in operational startup. Mark will provide specifics in a moment.

As for the related first quarter financial impact, earnings for aluminum were lower than we originally expected, with an operating loss of $65 million. Operating costs were significantly higher in January as the team experienced normal startup issues necessitating a temporary pause in operations and a write-down of some inventory. Things were resolved quickly and are operating smoothly now with increasing volumes already being realized. We generated cash flow from operations of $148 million in the first quarter.

Cash was reduced by $120 million related to our annual company-wide retirement profit-sharing funding and an additional $150 million related to working capital growth specifically associated with our new aluminum investment. We also experienced significant working capital growth related to increased pricing across our businesses, increasing both customer accounts and inventory values. Our cash generation is consistently strong based on our differentiated circular business model and highly variable low-cost structure. At the end of the quarter, we had liquidity of $2 billion, comprised of cash and investments of $800 million and our fully available unsecured revolver of $1.2 billion.

During the first quarter, we invested $138 million in capital investments. We believe total investments for the entirety of 2026 will be in the range of $600 million. In the first quarter, we increased our cash dividend and repurchased $115 million of our common stock, with $687 million remaining authorized at March. These actions reflect the strength of our capital foundation and consistently strong cash flow generation, and our continued confidence in our future.

Our capital allocation strategy prioritizes high-return growth, with shareholder distributions comprised of a base positive dividend that is complemented with a variable share repurchase program, while we remain dedicated to maintaining our investment-grade credit designation. Our free cash flow profile has fundamentally changed over the last number of years, from an annual average of $540 million from 2011 to 2015, to $2.4 billion for the most recent five-year period. If you exclude our growth investments related to our Texas steel mill and our new aluminum investment, the average is $3.2 billion per year.

And there is more coming. We have invested over $5 billion in three primary organic growth investments, including our Texas mill, our value-added flat roll coating lines, and our aluminum platform. These projects have an estimated through-cycle annual EBITDA of approximately $1.4 billion. We placed ourselves in a position of strength to have a sustainable capital foundation that provides the opportunity for meaningful strategic growth and strong shareholder returns while maintaining our investment-grade metrics.

I also want to give a shout-out to our Biocarbon team. Last week, instead of a ribbon-cutting ceremony, we had a log-cutting ceremony, which I think probably has not been done anywhere else in the world. Kudos to that team—it is doing very well as well. Barry?

Thank you, Theresa. Our steel fabrication operations performed well in 2026, delivering strong earnings. Steel joist and deck order backlog was solid at quarter-end, with December through March representing some of the strongest order entry we have seen in the past 18 months. This backlog extends into 2026. We continue to have high expectations for the business this year due to positive customer sentiment, quoting activity, continued manufacturing onshoring, and public funding for infrastructure and other fixed asset investment programs.

The uplift from this macro environment could be considerable. Our steel fabrication platform provides meaningful volume support for our steel mills, particularly critical in softer demand environments, allowing us to operate at higher through-cycle utilization rates than our peers. This also helps mitigate the financial risks associated with lower steel prices. Metals recycling operations also performed well in the quarter as scrap prices increased during the quarter, more than doubling operating income—congratulations to the team.

They had some tough weather earlier in the year. The North American geographic footprint of our metals recycling platform provides strategic competitive advantage for both our steel mills and our scrap-generating customers. In particular, our Mexican operations strengthen the raw material positions of our Columbus and Sinton facilities. They also provide strategic support for aluminum scrap procurement for our flat rolled aluminum investments.

Our metals recycling team is partnering even more closely with our steel and aluminum teams to expand scrap separation capabilities through enhanced processes and technology. This will help mitigate potential prime scrap challenges over time and provide a meaningful advantage in increasing recycled content in our aluminum flat roll products, while expanding our earnings capabilities. The steel team delivered a solid quarter with record shipments of 3.6 million tons. During 2026, the domestic steel industry operated at an estimated production utilization rate of 77%, while our steel mills operated at 89%.

We consistently achieve higher utilization due to our value-added product diversification, differentiated customer supply chain solutions, and the support of our internal manufacturing businesses. This higher through-cycle utilization is a key competitive advantage supporting our strong and growing cash generation and best-in-class financial metrics. Regarding the flat rolled steel markets, conditions continue to improve, supported by strong demand and lower imports. Lead times remain elevated and customers remain optimistic about the outlook.

Specifically, in flat rolled steel, we see improving value-added spreads returning with the impact of the core trade cases that we won in 2025. Long product steel markets continue to be strong in 2026, and we expect another solid year as demand and pricing remain favorable, particularly in structural steel and railroad rail, with our Columbia City and Roanoke mills both achieving record months in production. SBQ markets are also improving across various sectors with increasing manufacturing and energy product support. Regarding the steel market environment, North American automotive production estimates for 2026 are expected to be similar to 2025. Our specific automotive customer base has not only remained stable, but has provided opportunities for growth.

We have become a supplier of choice for many U.S.-based European and Asian automotive producers due in part to our lower carbon content capabilities. Nonresidential construction remains strong, led by data centers and an increase in multifamily home building. Our platforms continue to benefit from ongoing onshoring activity and domestic manufacturing projects. In the energy sector, oil and gas activity has been strong, with the pipe mills already booked well into the summer, and solar continuing to remain strong in our order books.

Overall, we remain optimistic concerning demand for our diversified value-added steel products in the coming year. And with that, I will return it to Mark.

Alright. Theresa, thank you. As you can see, it has been an incredibly good quarter, with great performance by everyone—something to celebrate for sure. We are also celebrating Barry's birthday today, and it is rarely that we get donuts anymore in the office, but today was a special day, so we are celebrating that too.

Sustaining positive results does not just happen. It is the result of the strategies implemented and executed by the teams over time. We have continually invested strategically to provide scale of business, product and market diversification, unique customer supply chains, and we have been linking operating platforms to optimize market opportunities throughout economic cycles. When combined with our performance-driven incentive culture, we consistently achieve at the highest levels compared to our peers.

Our foundational focus on market and product diversification into high-margin, value-added products drives higher through-cycle utilization and superior financial metrics. We optimize cash generation, allowing for a consistent and balanced cash allocation strategy that has consistently delivered strong shareholder returns. Our disciplined investment approach continues to support a strong, growing, through-cycle cash generation profile, while maintaining one of the highest ROIC metrics among our industrial peers. At the moment, our largest current investment is in the aluminum flat rolled products arena.

When touring the facilities there, the excitement of the aluminum team is palpable as you watch them perform, now transitioning from construction and commissioning to production and serving customers with high-quality products. They are also constructively navigating a roiling aluminum market, manifested by the tragic impacts of the Iranian war and domestic supply chain challenges. But beyond these hopefully near-term constraints, we are also experiencing a unique and very favorable long-term market environment. There is a significant and fundamental domestic supply deficit of over 1.4 million tons of aluminum sheet, and this deficit is forecast to grow with additional demand in the coming years.

In 2024 and 2025, that deficit was supplied through high-cost imports, which are now even higher as tariffs increased from 10% in 2024 to the current 50% level. This investment is in clear alignment with Steel Dynamics, Inc.’s core competencies. Our construction capabilities have once again been proven. Both Columbus and our cathouse in Saint Louis Portoci are state-of-the-art facilities, brought on in record time compared to other facilities and at a very reasonable cost, on budget, or near to budget.

We are using Steel Dynamics, Inc.’s deep operational know-how in combination with the technical expertise of aluminum industry experts, and our proven incentive-driven performance culture will drive higher efficiency and lower-cost operations compared to our competitors. We also believe we have an advantaged commercial position. Two-thirds of our existing carbon flat rolled steel customers also consume and process aluminum flat rolled sheets. Our growth in the automotive sector will complement our existing steel position and provide customer material optionality.

The beverage can market provides countercyclical market diversification and a more stable earnings profile within the aluminum space, further enhancing the consistency of our through-cycle cash generation. Our raw material platform will also facilitate high recycled content. We are the largest North American metals recycler, which includes aluminum, and we have successfully developed new separation technologies allowing us to have more access to usable aluminum scrap at a lower cost. Production to date, even at its early stages, is already confirming our expected earnings differentiation.

When markets normalize, we are confident the through-cycle EBITDA expectation for normalized markets remains at $650 million to $700 million, plus a further $40 million to $50 million for our recycling platform. As we have spoken in the past, the four key areas of advantage result from labor efficiency, higher recycled content, high yield, and optimized logistics, all driven by our performance-based operating culture utilizing state-of-the-art equipment. This strategic investment is a cost-effective and high-return growth opportunity providing Steel Dynamics, Inc. with additional countercyclical diversification while further stabilizing and growing our cash generation capabilities.

We have seen that the customer base is hungry for a new market entrant—one that is known to be innovative, customer-focused, and responsive. We view business relationships as long term, founded on trust with a continuous goal of creating mutual value—not simply financial value—by providing new supply chain solutions and new products with preferred quality and service. Many customers have already experienced this through the actions we have taken to help solve some of the recent supply chain challenges. It has been fortuitous for us, allowing us to help the market while accelerating material qualification.

All startups have their challenges, and I would like to thank our customers for their patience as we fine-tune our operations and continue our ramp-up. Today, we have received certifications from multiple customers for industrial and can sheet finished products, as well as certification for automotive aluminum hot band. What is incredible to me is that even finished automotive products are currently in the qualification process with several automotive customers, and we believe we can receive approvals in the coming weeks. This accelerated certification should allow us to shift our product mix to a higher-margin mix this year, reaching the planned optimized mix of 45% can sheet, 35% automotive, and 20% industrial sometime in 2027. The hot side is fully operational now and has demonstrated the ability to run at full rated capacity.

The last of four preheat furnaces will be in service at the end of the second quarter, and we have successfully rolled 3000, 5000, and 6000 alloys. Two of our three cold mills are now ramping operations and producing prime product. The third cold mill is expected to begin producing in the third quarter. The cold reversing mill in particular is successfully producing shippable 3003, 5052, and 3104 product.

The first of two automotive continuous anneal and solution heat treat lines (CASH lines) is now operational and producing material for qualification for automotive customers. The team has brought that particular line on in absolute record speed; it truly is testimony to the team we have there, and we believe we should receive qualification from several customers in the coming weeks. The second CASH line is expected to begin commissioning in the third quarter. The team is incredibly excited with the earlier-than-anticipated product certifications, and again it is testament to the incredible talent we have embedded throughout the facility.

There is great energy and great momentum. We are extremely excited by the physical production and quality capability of the mill today, especially this early in the startup. We are focused on achieving operational and quality consistency. We continue to believe we will be exiting 2026 at a monthly rate of 90% capacity.

As we continue to be impassioned by our current and future growth plans, they will continue to drive the high-return growth momentum we have consistently demonstrated over the years. The earnings growth of our most recent projects is compelling. The capital funding for Sinton, the four value-add lines, and Aluminum Dynamics is basically complete for the projected future through-cycle EBITDA contribution at $1.4 billion a year. I am excited as our teams, customers, and investors recognize the power and consistency of our strong cash generation combined with our disciplined, high-return capital allocation strategy.

It is our belief that the steel industry has undergone a paradigm shift in recent years. Supported by a pervasive sense of mercantilism, appropriate trade mechanisms will provide a level playing field. Fixed asset investment will continue to grow, which directly correlates with increased metal products demand. Reshoring of manufacturing continues to increase and, along with AI and cloud computing, will support nonresidential construction—further strengthening what is an already robust long products market.

Decarbonization itself will materially steepen the global cost curve, providing Steel Dynamics, Inc. with a huge competitive advantage to gain market share and increase metal spreads. Our diversified value-added product capabilities provide us with a very unique advantage to leverage this evolving business environment and amplify our relative earnings capability. In closing, I never tire of saying that our people are our foundation. Thank you to them for their passion and dedication.

We are committed to them, and I remind those listening today that safety for yourselves, your families, and each other is the highest priority. We would be remiss not to thank our loyal customers, many of whom have supported us since our inception. These partnerships are based on trust—on doing what we say we will do—and creating new solutions to enhance the value proposition. Our new aluminum partners are experiencing the same.

Also, to our suppliers and service providers, who we value and trust and work with each and every day—thank you. We look forward to creating new opportunities for all of us today and in the years ahead. Thank you, and we will take questions now.

Thank you. We will now open the call for questions. If you would like to ask a question, please signal by pressing the star key followed by the digit one on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment.

If you pressed star 1 earlier during today's call, please press star 1 again to ensure our equipment has captured your signal. Also, we ask that you please limit yourself to one question to facilitate time for everyone. Any additional questions can be addressed upon reentering the queue. Please hold a moment while we poll for questions.

The first question this morning is coming from Albert Bellini from Jefferies. Albert, your line is live. Please go ahead.

Hi. Good morning, all. Thank you for taking my question. So on aluminum, obviously a lot of external moving parts impacting fundamentals here.

One, maybe if you could just talk through some of the impacts you expect to see on the business going forward from the recent change in tariff policy? And then I believe last quarter you briefly touched on mark-to-market margins being higher than what was used in calculating the guided through-cycle EBITDA number for the business. Since that point, we have had some significant global supply impact. Could you provide any further color in terms of how much potential upside to those numbers you see at spot prices or margins?

Thank you.

I am not so sure our crystal ball is any clearer than yours for the future. Obviously, the market today is absolutely phenomenal from the standpoint of entering a new facility, so qualifying products quicker has been very fortuitous. Margins today are very strong, which is helping a startup ramp. From the performance today—looking at yields, efficiencies, etc.—we are more than confident in the $650 million to $700 million of EBITDA per year, and we do not see downside in the future.

You are spot on. The spreads that we used from a profitability standpoint—just market-related for each of the product sets—are significantly lower than the spreads available today. Right now, we would like to continue to have the teams perform incredibly well, but there is a significant difference and a significant benefit that would inure to us in today’s spread environment that we think does have more of a structural shift. In the coming months, we would like to discuss what we think through-cycle is.

Just like the steel industry went through a structural change and what that might look like, the aluminum industry as well. So I would just say more to come on that.

Thank you. Your next question is coming from Carlos De Alba from Morgan Stanley. Carlos, your line is live. Please go ahead.

Thank you very much. Just staying with the aluminum business—congrats on the ramp-up. I wanted to get a little more color on the issues that you faced in the past quarter and related to the inventory write-off you had. Was that due to quality issues, or maybe just more color in general on what happened in the business?

And what makes you feel comfortable that you have put those behind and will continue to ramp volumes? Thank you.

Thank you, Carlos. Essentially it was principally limited to January and leaked a little into February. You are right; it was a quality issue. It was a stain on the product. We should have caught it, should have seen it, but it has been resolved.

It was not an equipment issue, Carlos. It was a process issue.

Got it. If I may add, any views on how you might ramp up the volumes? Clearly, as you mentioned, current prices are significantly above what everyone expected, so the more you can produce and sell, the better. Any color on that would be great. Thank you.

As a ramp—in Q4 we were around 14,000 tons of shipments, give or take. Q1 was around 22,000. Barring any unexpected disruptions, we think we should be around 60,000 to 70,000 tons in the second quarter. The cold reversing mill was running pretty well in the first quarter, and we have the full addition of the first tandem mill, which should change things dramatically.

To reemphasize the quality point, a majority of what we shipped in the first quarter—and will be in the second quarter as well—is can sheet. So it is high-quality material.

Your next question is coming from Timna Tanners from Wells Fargo. Timna, your line is live. Please go ahead.

Good morning. Wanted to see if you could provide a little more color about your mix. With the coated lines ramping up, how is that progressing? I did not hear the breakout—if you still provide that, it would be helpful. And a second question: given the strong free cash flow outlook and the fall in CapEx, what are you thinking about in terms of uses of cash?

Good morning, Timna. Apologies for not covering that earlier. First quarter flat rolled shipments: hot band was 1.017 million tons; cold rolled was 151,000 tons; and coated was 1.53 million tons. The four new value-added lines are operating incredibly well and at full capacity right now, and the markets they service were the most impacted by the court cases.

So we are enjoying high-quality production, making our customers happier, and ensuring we have the right mix. From a capital allocation perspective, we are focused on consistently doing what we have been doing: growing the business as our priority, complemented by a progressively positive dividend profile and our share repurchase program, which we are still engaging in. We did take a bit of a pause in the first quarter related to working capital growth for the new operations and increased pricing across the business, but you should continue to expect to see the same balanced approach.

Your next question is coming from Martin Engler from Seaport Research Partners. Martin, your line is live. Please go ahead.

Good morning. Had a question on unit conversion costs. Could you qualitatively touch on positives and negatives quarter-on-quarter—what moved higher, what moved lower—and whether energy was a meaningful influence in the quarter?

Martin, we did not see any huge increases. We have seen some increases in things like paint. As for energy, there were small boosts here and there, but not to a level that concerns us. Despite what is happening around the world, we have very good relationships and we are very efficient with our energy.

Our teams respond when there are immediate upsets in energy, and we are able to continue running at very high rates of production. Otherwise, it is not a major concern based on what we have seen so far.

To Barry’s point, there is nothing specific to point out—just remember product mix has a pretty significant impact when viewed from the outside in. Structural or long steel products generally have higher conversion costs, so as they continue to have robust shipments and volumes due to demand, it can look like our conversion costs are a bit higher.

Your next question is coming from Tristan Gresser from BNP Paribas. Tristan, your line is live. Please go ahead.

Thank you, and happy birthday, Barry. On pricing—upcycles have historically seen big swings, but this time increases have been gradual, almost weekly. How do you explain that, and does it improve the sustainability of the current rally? How do you view supply and demand for flat rolled, and any risk of imports picking up?

We are seeing more customer confidence. The tariff environment of the last two years has had impacts, but more importantly, customers have learned supply chains matter. Our local, diverse supply chain position allows us to engage with customers on a longer-term frame than a quarter or half year. We have confidence the market is strong and demand-driven.

Pricing has been responsive as capacity has ramped up across the industry. Unfairly dumped imports are very disruptive. Subsequent cases have been filed regarding circumvention. All those steel tons at sea have to find a home.

With global interruptions right now, we are happy to have Section 232 protections. The executive orders in early April that further defined steel and aluminum products and derivative products are very helpful because they encompass the entire supply chain. We are feeling the results of U.S. businesses picking up and our supply chain excellence taking hold. We are super excited about long products.

There are many big projects where engineering and ownership are getting involved early with our long products team. We market long products and fabrication together to establish positions across projects—pharma, EV production, energy—offering solutions. It is a robust market. We hope globally things calm down, and we will keep making our customers happy.

Your next question is coming from Kashyyanik Kashia. Your line is live. Please go ahead.

Thank you. Maybe on the pig iron side—prices are moving higher. How much pig iron do you currently import, and any mitigating factors you are taking?

We only use pig iron at our flat rolled mills. Our Butler mill has its own technology for making liquid iron that takes care of about 90% of Butler’s needs, produced from recycled iron oxide products—very sustainable. Columbus and Sinton are the primary users of pig iron. We will use anywhere between 12% to 22%, based on the quality and product requirements.

Mitigation really comes through our relationship with Omni, our scrap provider. We have an incredible connection between scrap and steel. Scrap is continually cleaning the shred (what we call Shred 1) so we know exactly what we will get in the melting furnace. We put very clean shredded product and very clean busheling in intentionally when we need it, and use pig iron to supplement.

We look at cost and availability every day. We keep good positions, mindful of working capital, and do not binge. Our teams between Omni and scrap and our melt shops do a great job, coordinated by a strong iron team. It is a benefit of our teams being closely connected and empowered to make decisions quickly.

Prices go up, but we keep finding better ways to minimize impact.

Your next question is coming from Samuel McKinney from KeyBanc. Samuel, your line is live. Please go ahead.

Good morning. After the solid results in structural and rail—you put up the best quarterly shipment number in a couple of years, and demand remains very strong—could you dig deeper into what is driving the uptick in activity and how the 2026 contracts shook out versus last year?

On long products, our incentive-based system drives our people to make better things and more of them. The team has been very efficient in sequencing. Last month, the melt shop in Columbia City cast 200,000 tons, a difficult achievement for a long products mill due to section changes. Operational efficiency helps put the right backlog and inventory in place.

Our sales team across long products is working together to ensure Roanoke, Soelia (West Virginia), and Columbia City are equally represented to customers, securing the best positions to make what they need. Optimization is part of our ongoing challenge. Our mills operate with incentives. There has been a shock to the railroad rail system over the last year; we were able to increase some of those products to help alleviate supply-side problems in rail.

It continues to be a good part of our offering. Our SBQ mill, with increased sales and relationships in automotive, energy, and forging customers, has also been purchasing from Columbia City. We worked all long products efficiently together. Good decisions made two to three years ago we get to enjoy today.

We do not see it slowing down and are engaging projects early to help with spec’ing and laying out the best solution through our fabricating networks.

Your next question is coming from Lawson Winder from Bank of America. Lawson, your line is live. Please go ahead.

Thank you, operator. Good morning, Mark, Theresa, and Barry—and happy birthday, Barry. You have never passed up an opportunity for growth. Given the opportunity in long products, can you make a compelling case today for a material expansion there?

And similarly, now that you are active in aluminum rolling, do you see a case for investment by Steel Dynamics, Inc. into that market as well for new capacity?

You know our team—it is incredibly inspiring to see the opportunities and ideas they bring forth. We have a broad pipeline of strategic opportunities—greenfield growth across all the spaces. Aluminum Dynamics for sure has opportunity. The industry reminds us of the steel industry 30-plus years ago—has not consistently earned cost of capital, reinvested, or grown.

We would like to take advantage of that. There are product lines where we feel we could invest long term, and there is a massive supply deficit that will continue to grow. We see tremendous opportunity in aluminum. At the same time, we are a steel company, and the steel teams have their own innovative projects.

As we see fit, we will invest accordingly.

Your next question is coming from William Chapman Peterson from JPMorgan. Bill, your line is live. Please go ahead.

Good morning. This is Bennett on for Bill. Thank you for taking my questions. I wanted to ask about steel substitution amid the elevated aluminum price environment. We have heard from companies in both sectors that this may be starting to unfold. Given that Steel Dynamics, Inc. now sits on both sides, are you hearing about this from customers, or seeing evidence to date?

The good thing is we have optionality and can take advantage of whatever direction the market may go. We have not seen or heard of any substantial substitution, to be honest.

Counter to the idea of substitution, there were recent announcements from a major automotive producer adding additional aluminum in auto bodies in the Midwest, increasing demand. That further supports the idea of lack of substitution.

Your next question is coming from Tristan Gresser from BNP Paribas. Tristan, your line is live. Please go ahead.

Two quick follow-ups. First, you mentioned in December that the aluminum plant was EBITDA positive—could you share if it was EBITDA positive in March? Second, regarding BlueScope—what is the situation at the moment? Are discussions ongoing?

Thanks, Tristan. From an aluminum perspective, the plant was not EBITDA positive on a full quarter basis, but it was basically breakeven combined for February and March because we had that pause in January. They are doing an incredible job now, with full expectations for the remainder of the year to be very positive from an EBITDA perspective. Mark, on BlueScope?

Obviously, we never talk with great specificity as to what we are doing from a strategic standpoint. Suffice it to say, we have an incredibly strong partnership with Ryan Stokes and the SGH organization. As you know, we presented what we consider a best-and-final joint offer. It was, in our view, full and fair—that was back in February.

As you have seen, that offer was summarily rejected, and there has been no constructive engagement by the company since.

Your next question is coming from Timna Tanners from Wells Fargo. Timna, your line is live. Please go ahead.

Since you addressed BlueScope, I will try another angle. How are you thinking about downstream versus steel growth versus organic projects? In the way past there was talk of a new plate mill—plates are really strong; beams I hear are sold out. Are there other expansion opportunities there, or are you thinking more of a downstream approach?

Thank you, Timna. Our strategic philosophy has not changed. We pursue and explore all opportunities. I cannot remember ever saying there might be interest in plate.

When Sinton does address sub-plate needs—that is part of the reason the technology was chosen. With Nucor’s entry there, the plate market is well served. Our focus has been and will be downstream—innovative ways to improve and bring value to the supply chain in different products we are not in today. We are not in business just to grow to get bigger.

We focus on value-add, differentiating products and supply chains. The team has a myriad of opportunities under exploration. We took a bit of a hiatus given CapEx for Sinton and Aluminum Dynamics. Now that is behind us, we will continue to explore those opportunities.

In aluminum, it is phenomenal where we could go.

That concludes our question-and-answer session. I would like to turn the call back over to Mr. Millett for any closing remarks.

Thank you. For those still on the call and those that have supported us in the past and today, we will endeavor to spend your money wisely and continue to deliver the best shareholder return in the steel business. Our team—phenomenal job. It is incredible what you do.

You inspire me personally. Make sure you are safe and look after each other out there. To our customers and service providers, we cannot do it without you. Thanks for your patience with us—we can be tough at times, but we are doing tough, challenging things, and together we will succeed.

Thank you, everybody. Appreciate your support. See you next quarter. Bye.

Once again, ladies and gentlemen, that concludes today's call. Thank you for your participation, and have a great and safe day.