Steel Dynamics, Inc. (NASDAQ:STLD) Q2 2023 Earnings Call Transcript

It’s not just beer, it’s water, it’s all fluids. And then when you look at the automotive arena, we believe and we’ve – with our communications with virtually all the automotive folks, they have been restrained from developing greater volumes of aluminum through the lack of availability. We’re providing that availability going forward. And I think we – just as we’ve done in steel, we will gain market share quite rapidly. So from a market perspective, we are still very bullish that the amount of interest we have across the aluminum space is incredible. And I think I said it on our last call, in steel, we’ve never entered a market that is underserved. Every market we’ve gone into, we’ve had to differentiate ourselves to gain market share.

It’s refreshing for us that people are actually coming to us and when you combine that need with our ability to change the supply chain to provide much greater value to the customer base, I think we’re confident to gain that market share quite rapidly.

Theresa Wagler: Cleve, just as a quick reminder. In the last several years, they have had domestically the consumers of aluminum sheet actually had to import about 20% of their needs, and that had high tariffs associated with that imported costs. So there is definitely room for just 630,000 tons of additional supply.

Cleveland Rueckert: Good. Got it. I appreciate the confidence. And if I may just sneak in one follow-up question on Sinton. I think you had to replace a bearing on the caster. I’m just wondering if you’ve got – I didn’t hear it in the prepared remarks that maintenance work has been done and back on schedule.

Barry Schneider: Yes, this is Barry. I’d just like to comment that those bearing issues we talked about at the tail end of last year, our teams mitigated most of the effects of that. We have a supply chain now that is both a more robust design and a more robust supply chain. So we’re really excited about the quality improvements and really the reliability of those casting segment parts. We believe our long-term plans, we kind of approached it with several different prongs. And all of them are really being successful and it’s to the point now that we can manage it very well and we’re operating at full capacity, as Marc spoke, all capabilities of the machine right now are in place. So we believe long-term, that’s going to be not an issue going forward that it will just continue to be high reliability and continuing high quality.

Cleveland Rueckert: Thanks, Barry. But didn’t – wasn’t there an unplanned outage very recently?

Barry Schneider: Yes, that – we had a caster sheer issue just here at the beginning of July, not related to the bearing issue, perhaps as you mentioned with the casting machine. And it’s kind of a technical issue with the caster sheer. And suffice to say it’s large parts that we wanted to make sure we had put in properly and we are taking this opportunity to address a couple of other issues, but we anticipate that facility being up and operational in the next few days. Our team has done a phenomenal job for working together and getting the scope of a project. We’re super excited. Mark and I were down there for moral support, definitely not getting in the way of the guys making the repairs. But great to see this team just really owning their technology and bringing it forward. So we anticipate this problem to be behind us. And we think we’ve put in really good things to mitigate any future failures that are similar to this.

Cleveland Rueckert: Okay, got it. Thank you. Appreciate it.

Operator: Your next question is coming from Tristan Gresser with Exane BNP Paribas.