Steel Dynamics Aktie

Good day, and welcome to the Steel Dynamics First Quarter 2026 Earnings Conference Call. [Operator Instructions] Please be advised this call is being recorded today, April 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, Tom. Good morning, and welcome to Steel Dynamics 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 Millett, Chairman and Chief Executive Officer of Steel Dynamics; Theresa Wagler, Executive Vice President and Chief Financial Officer; and Barry Schneider, President and Chief Operating Officer. The 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 and our steel, metals recycling, fabrication and aluminum businesses as well as to general business and economic conditions.

Examples of these are described in the related press release as well as in our annually filed SEC Form 10-K under the headings Forward-looking Statements and Risk Factors found on the Internet at www.sec.gov, and applicable in any later SEC Form 10-Q. You 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 Reports First Quarter 2026 results.

Now, I'm pleased to turn the call over to Mark.

Super. Thank you, David. Good morning, everyone. Thanks for sharing your time this morning for our first quarter '26 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 emphasize and keep safety top of mind.

We have an amazing group of people that achieved best-in-class performance each and every day, incredibly proud of the whole team. Our world-class safety culture continues to evolve and our team's dedication to our Take Control safety philosophy is extraordinary. Out of some 135 SDI locations, 94% operated in the first quarter without one lost time injury. I'm continually inspired by the commitment they have for one another. They consider themselves family and challenge the status quo each day. But as always, we will never be satisfied until we achieve a 0 incident environment.

But before I continue, I'd like to shift to Theresa and Barry for the commentary. Theresa?

Thanks, Mark. Good morning, everyone. Thank you for joining us this morning. As 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 -- excuse me, in the first quarter, today is over $1,000. Barry will talk more about the markets 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 price contracts, in aggregate, generally lagging 2 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 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 for 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 an operational start-up. 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 80 -- or sorry, an operating loss of $65 million. Operating costs were significantly higher in January as the team experienced normal start-up 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 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 by 6% and repurchased $115 million of our common stock with $687 million remaining authorized at the end of 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 profile 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 was 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 5-year period. And if you exclude our growth investments related to our Texas steel mill and our new aluminum investment, they averaged $3.2 billion per year. And there's more coming.

We've invested over $5 billion in 3 primary organic growth investments, including our Texas mill, our value-added flat-rolled coating lines and our aluminum investment. 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.

And I really want to give a shout also to our biocarbon team. Last week, we did something that I think probably hasn't been done anywhere else in the world. We had instead of a ribbon cutting ceremony, we had a log cutting ceremony. So kudos to that team that's doing very well as well.

So Barry?

Thank you, Theresa. Our steel fabrication operations performed well in the first quarter of 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 the fourth quarter of 2026. We continue to have high expectations for the business this year due to positive customer sentiment and 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.

Our 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 a strategic competitive advantage for both our steel mills and our scrap generating customers. In particular, our Mexican operations strengthened 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 ferrous scrap challenges over time and provide a meaningful advantage in increasing recycled content in our aluminum flat rolled products while expanding our earnings capabilities.

The steel team delivered a solid quarter with record shipments of 3.6 million tons. During the first quarter of 2026, 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 both achieving record months in production. SBQ markets are also improving across the 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 homebuilding. 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, with solar continuing to remain strong in our order books. Overall, we remain optimistic considering demand for our diversified value-added steel products in the coming year.

And with that, I'll return it to Mark.

Barry and Theresa, thank you. As you can see, everyone has been an incredibly good quarter, great performance by everyone, something to celebrate for sure, but we're also celebrating Barry's birthday today. So I just want to interject and it's really do we get donuts anymore in the office? And today was a special day. So we bring that too.

But again, the consistently sort of sustain the positive results just doesn't happen because I think you all realize it's the result or the strategies implemented and executed by the teams over time. We've continually invested strategically to provide scale of business, product market diversification, unique customer supply chains, and we've been linking operating platforms to optimize market opportunities throughout economic cycles.

When combined with our performance-driven incentive culture, we consistently achieved at the highest levels compared to our peers. Our foundational focus on market and product diversification into high-margin value-added products drive 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 and growing through-cycle cash generation profile while maintaining one of the highest ROIC metrics among our industrial peers. At the moment, our largest such investment is in the aluminum flat rolled products arena.

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

In '24 and 2025, that deficit was supplied through high-cost imports, which are now even higher as tariffs increased 10% in '24 to the current 50% level. And this investment is a clear alignment with SDI's core competencies. Our construction capabilities have once again been proven, both Columbus and our house in San Luis Potosi, a state-of-the-art facilities. And they were brought on in record time compared to other facilities and at a very, very reasonable cost on budget or near to budget.

We're using SDI'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. 2/3 of our existing carbon flat-rolled steel customers also consume and process aluminum flat rolled sheet. 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 will further enhance the consistency of our through-cycle cash generation.

Our raw material platform will also facilitate high recycled content. We're the largest North American metals recycler, which includes aluminum. And we've 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 the markets normalize, we're confident in the through-cycle EBITDA expectation for normalized markets, again, remains at $650 million to $700 million plus a further $40 million to $50 million for our recycling platform. As we've spoken in the past, the 4 key areas of Vantage from a labor efficiency standpoint, higher recycled content, high yield and optimize logistics. And it's 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 with additional diversification while further stabilizing and growing our cash generation capabilities.

We've seen that the customer base is Hungary 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 just financial value, but we will provide new supply chain solutions, 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's been fortuitous for us, allowing us to help the market while accelerating material qualification.

For all that said, all startups of the challenges, I would like to thank our customers for their patience as we fine-tune our operations and continue our ramp-up.

To date, 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. We believe we could receive acceptance 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 '27.

The hot side is fully operational now and has demonstrated the ability to run at full rated capacity. The last of 4 preheat furnaces will be in service at the end of the second quarter, and we have successfully rolled 3,000, 5,000 and 6,000 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 303 or 3003, 5052 and 3104 products. The first of two automotive continuous [ annealing ] solution heat treat lines or cash line is now operational and producing material for qualification for automotive customers. The team has brought that particular line on an absolute record speed. And 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 a testament to the incredible talent we have been able to embed throughout the facility. There's great energy and great momentum. We're extremely excited by the physical production and quality capability of the mill today, especially this earlier in the start-up, and we're focused on achieving operational and quality consistency. We continue to believe we'll be exiting 2026 at a monthly rate of 90% capacity.

So as we continue to be impassioned by our current and future growth plans, as 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 4 value-add lines and aluminum dynamics is basically complete, but the projected future through-cycle EBITDA contribution of $1.4 billion a year.

I'm excited as our teams, customers, 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 the pervasive sensing that will provide a level playing field through continued and appropriate trade mechanisms.

Fixed asset investment will continue to grow, which directly correlates with increased metal products demand. And reshoring and 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.

In decarbonization, itself will materially steepen the global cost curve, providing steel dynamics with a huge competitive advantage to gain market share and increase metal spreads. Our highly value-added product capabilities provide us with a very unique advantage to leverage this evolving business environment and amplify our relative earnings capability.

So in closing, I've said it a million times, I think they never tire of saying it that our people and our foundation -- or foundation. I think -- thank you to them for their passion and dedication. We're committed to them. And I remind those listening today that safety for yourselves, your families and each other is the highest priority. And we're 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 in creating new solutions to enhance the value proposition.

Our new aluminum partners are experiencing the same. And also to our suppliers and service providers who we value and trust and work with each and every day. Thank you. So we look forward to creating new opportunities for all of us today and in the years ahead. So thank you, and we'll take questions now.

[Operator Instructions] And the first question this morning is coming from Albert Reline from Jefferies.

So on aluminum, obviously, a lot of external moving parts impacting fundamentals here. So 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 kind of briefly touched on mark-to-market margins being higher than what was used in calculating the guided through-cycle EBITDA number for the business. So obviously, since that point, we've had some significant global supply impact. So just wondering if you could provide any further color in terms of how much potential upside to those numbers you see at spot prices or margins.

Well, at -- I'm not so sure our crystal ball is any clearer than yours for into the future. Obviously, the market today is absolutely phenomenal from a standpoint of entering a new facility. So qualifying our products quicker has been a very fortuitous thing. Margins today are obviously very, very strong, which is helping a start-up ramp. I guess, from the performance to date, looking at the yields, the efficiencies, et cetera, et cetera. Again, we're just we would say we're confident -- more than confident that with the $650 million, $700 million of EBITDA per year. And we can't see any downside in the future.

Yes. You're spot on. The spreads that we use from a profitability standpoint, just market related for each of the product sets are significantly lower than the spreads that are available today. And right now, I think what we'd like to do is get continue to have the teams perform incredibly well, but there's 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. So in the coming months, what we'd like to do is actually probably discuss what through cycle is. We think just like the steel industry went through a structural change in what that might look like the aluminum industry as well. So I would just say more to come on that.

Your next question is coming from Carlos De Alba from Morgan Stanley.

Just staying on with the aluminum business, congrats on the ramp-up. I just wanted to maybe get a little bit more color on the issues that you faced in the past quarter and related also to the inventory write-off that 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 basically put those behind and we continue to ramp up the volumes?

Thank you, Carlos. Essentially, it was principally limited to the January, leaked a little bit into February. It was -- you're right, it was a quality issue. It was a stain on the product issue. Should have caught it, should have seen it, but it's been resolved.

It wasn't an equipment issue, Carlos. It was a practice issue.

Got it. Okay. And maybe if I may add, any views on how you might ramp up the volumes? Clearly, as you just mentioned, current prices are significantly above what everyone expected. So the more you can produce and sell out the better. So any color on that that would be great.

Well, just as a ramp in Q4, we were around 14,000 tons. I think, of shipments, give or take a little bit. Q1, you saw it's around 22,000. We're expecting the exception of any unexpected just to qualify, unexpected disruptions, we should be around, we think, 60,000 tons to 70,000 tons in the second quarter. We have -- obviously, the cold reversal mill was running pretty well in the first quarter, but we have the full addition of the first tandem mill and that should change things dramatically down there.

And I think to speak to the quality, just to reemphasize that a majority of what we actually produced or shipped, I should say, more accurately in the first quarter and will be in the second quarter as well as can sheet. So it's high-quality material.

Your next question is coming from Timna Tanners from Wells Fargo.

I wanted to see if you could provide a little more color about your mix. I know with the coated lines ramping up? How is that progressing? I don't -- I didn't hear the breakout. I don't know if you still provide that. If so, that would be helpful. And if I could, a second question, just I know a lot of interest in what you're thinking about in terms of uses of cash with the strong free cash flow outlook, the fall in CapEx. So if you could provide some more color on that would be great.

Excellent. I'm sorry, I was -- So I think you're specifically looking for the flat-rolled shipments and the first quarter flat-rolled shipments for hot band was 1,017,000 tons. Hot rolls was 151,000 tons, and coated was 1,530,000 tons. And the 4 new value-added lines are actually operating incredibly well, Barry, percentage basis, do you have it?

They're operating at full capacity right now and the markets that they service are the markets that were the most impacted by the core cases. So we are enjoying high-quality production and making our customers happier and making sure that we have the right stuff in all of our mixes like we normally do.

And from a capital allocation perspective, we are focused on consistently doing what we've been doing, which we think has been really successful. So it's growing the business as our priority and then complementing that with a progressively positive dividend profile, which is complemented by the share repurchase program, which we're still engaging in. And I know we did take a bit of a pause in the first quarter related to the working capital growth that we saw coming both for the new operations that we have, but also just because we've had increased pricing across the business. But -- so you should continue to expect to see the same.

Your next question is coming from Martin Englert from Seaport Research Partners.

I had a question on unit conversion costs. If you could just qualitatively touch on some of the positive negative factors quarter-on-quarter, what moved higher, what moved lower? And curious if energy was any meaningful influence on the quarter.

Martin, this is Barry. We didn't see any huge increases. We have seen some structural increases in things like paint. But as far as energy goes, there was a small boost here and there, but not to a level that we're concerned about. Despite what's happening around the world, we have very good relationships, and we're very efficient with our energy. So our teams respond when there are immediate upsets in energy, but we're able to continue running at very high rates of production. And otherwise, it's not a major concern for what we've seen so far.

To Barry's point, Martin, there's nothing to point out, except remember that product mix really does have a pretty significant impact when you're viewing it from the outside in. And structural -- or long steel products just generally have higher conversion costs. So as they continue to have really robust shipments and volumes because of demand that does look from the outside in, like our conversion costs are a bit higher.

Your next question is coming from Tristan Gresser from BNP Paribas.

The question I have is on pricing. I just wanted to have your view on the market at the moment. I mean, if we look at a chart with historical steel prices in the U.S., I mean, up cycles have always been very brutal, big swings in prices. And this time, it's been very different, very gradual price increases almost on a weekly basis. So like to view how do you explain that? And most importantly, is that improving? You think the sustainability of the current rally -- how do you view the supply and demand at the moment for flat rolled? And any risk of imports picking up in the coming months and disrupt a bit the balance?

Tristan, when we look at the flat roll markets, we're seeing our customers have more confidence. And certainly, the tariff world we've delivered in the last 2 years is that impacts. But I think more importantly, a lot of our customers have seen the supply chains are very important. So when we have discussions with our customers, our supply chain position being so local to many of the businesses and having diverse products. It allows us to engage with them on a longer-term frame than just what we see in a quarter or perhaps half a year. So we do have confidence that this market is strong. It's demand driven. We do feel like the pricing has been responsive as capacity has gotten closer, ramped up across the industry.

Getting imports that are unfairly dumped in this contract -- into this country were very significant. Those are so disruptive and there are subsequent cases that have been filed regarding circumvention. All the steel tons that are at sea have to find a home. And when you have a global interruption like we have right now, I'm very happy that we have 232 protections. The executive orders early in April that helped to further define both steel products, aluminum products as well as derivative products is very helpful. because that encompasses the entire supply chain. So I think we are feeling the results right now of our businesses in America picking up and the supply chain excellence that we have is really taking hold. So I feel like we have a good position and we're strong, and we're super excited about long products. There's so many big projects out there that engineering and ownership of those projects is getting involved early with our long products team. We continue to market our long products and our fabrication teams together. That allows us to establish physicians with these projects, whether it's pharmaceuticals or electric vehicle production or energy we have solutions that help them. So it's a robust market we're in. And we hope globally, things calm down a little bit. Other than that, we're doing our best to make our customers happy.

Your next question is coming from Katja Jancic.

Maybe on the pig iron side, the prices are moving higher. Can you remind us how much of pig iron do you currently import? And are there any potential mitigating factors you're looking at taking?

Katja, I'll give you a brief overview. 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. Those -- that liquid iron is actually produced from recycled iron oxide products. So it's also a very sustainable product. So when we look at the Columbus mill and Sinton mill, that's our primary users of pig iron. And we will use anywhere between 12% and 22%, and we do that based on what the qualities required and the productivities required for those products. So what we do to mitigate that is really found through our relationships with -- our scrap provider. We have incredible connection between the scrap and the steel side. So the scrap is continually cleaning the Shred 1 product, we call it, so that we know exactly what we're going to get in the melting furnace when we want it. That's a big part of being able to capture value in that supply chain. So what we do to mitigate it is we put very clean shredded product, very clean busheling intentional when we need it. We use pig or to supplement that. So we look at the cost every day and the availability. So we've been very good at buying. I think we keep good position to pig iron. We're aware of the working capital. So we also don't just binge on it for sure. But I'm really proud of what the teams do between Omni on the scrap side and what our melt shops do. We've got a great iron team in the middle that helps coordinate that. So it's really a benefit of having our team so closely connected and free to make those decisions quickly. So it's real. Prices go up, but we continue to find better ways to minimize it and better ways to let our team do what they do best.

Your next question is coming from Samuel McKinney from KeyBanc.

I think I'll ask a birthday question for Barry after he called out the solid results in structural and rail, put up the best quarterly shipment number in a couple of years. And you guys noted demand there remains very strong. Maybe dig a little deeper into what's driving the uptick in activity there and how the '26 contracts shook out versus last year?

Well, on the long product side, I think the team, even after all the years, our incentive-based system drives our people to make better things and more of them. And that team has just been very efficient in putting together sequencing last month. The melt shop -- cash was 200,000 tons, which is a difficult achievement and a long product's bill because of the different sections they cast. So the efficiency of operations helps them put the right backlog on the ground, put the right inventory in place. But I can't say enough about how the sales team through the Long Products group is working together to make sure that Roanoke, Steel of West Virginia and Columbia City are all equally represented to customers so that we can get the best positions to make what they need.

So I think the optimization is really a part of just the ongoing challenge our mills operate with, with incentive. And there's been a shock to the railroad rail system over the last year. We were able to also increase some of those products with our customer base to help alleviate some other supply side problems that existed in rail, continues to be a good part of our product offering. And we also -- our SBQ mill with increased sales and relationships through the automotive, energy and other forging customers has also been purchasing from Columbia City. So we were able to work all the long products very efficiently together that allows. And I tell the guys good decisions you made 2, 3 years ago, you get to enjoy today. So they continue to make tough decisions to have to so that we can run better when we have a market in front of us. So we're excited about what we see. We don't see it slowing down. And we're happy to be engaging the projects early in the process. That helps with spec-ing and laying out the best solution through the fabricating networks.

Your next question is coming from Lawson Winder from Bank of America.

Steel Dynamics, look, like you guys have never been one to pass up on an opportunity for growth or expansion. And I was just thinking, your prior discussion there of long products and all the opportunity there. I mean can you make a compelling case today for a material expansion in that long products market? And I'm going to try and tap on a second sort of related question, which is -- and I brought it up on these calls before, but it's just like the aluminum market rolling market in the U.S. is like, I think, a great opportunity. But today, with the benefit of now being really active in the market, same question. I mean do you see a case for investment by Steel Dynamics into that market as well for new capacity?

But, I think we -- Well, you, I think, know our team perhaps. But it's incredibly inspiring as to the opportunities and the ideas that they bring forth. We've got a pipeline -- a broad pipeline of strategic opportunities, greenfield growth for sure across all the spaces. It's aluminum dynamics for sure has opportunity. We see an industry that was a little bit like the steel industry 30-plus years ago that they haven't been able to earn the cost of capital consistently and reinvest in their facilities and grow. We would like to take advantage of that. And so there are products, for sure, certain product lines that we feel we could invest in long term. And obviously, there's a massive deficit -- supply deficit there, which will continue to grow. So we do see tremendous opportunity in aluminum. But at the same time, we're a steel company, and the steel guys have got their own innovative projects. So we're assessing them. And as we see fit, we will invest accordingly.

Your next question is coming from Bill Peterson from JPMorgan.

This is Bennett on for Bill. I wanted to ask about steel substitution, mid-to-updated aluminum price environment. I mean over the past few weeks, you've heard from companies both sectors actually that this may be starting to unfold. And given that Steel Dynamics not uniquely sits on both sides of the fence, are you hearing about this from your customers? Are you seeing any evidence of it to date?

Well, the good thing there is we do have that 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, Ben. And I don't believe you're going to see it. The investments that the automotive companies have made in their production facilities is massive. And you don't change that overnight. The pricing environment that we see today will change for sure and will revert to a more normalized level at some point, albeit at a high level and a very good opportunity for us for Steel Dynamics.

I think even counter to the idea of substitution, there's just been recent announcements from a major automotive producer where they're adding additional aluminum in the auto bodies in the Midwest. And so there will be increasing demand from that perspective. So I think that further supports the idea of lack of substitution.

Your next question is coming from Tristan Gresser from BNP Paribas.

Just two quick ones. Was the I know you mentioned in December that the plant was -- the aluminum plant was EBITDA positive. I was wondering if you could share some information about March, if the plant was EBITDA positive in March already? And just regarding BlueScope, what is the situation at the moment? Or still discussion ongoing? What can you tell us? Yes, that would be it.

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

Mark, do you want to handle the BlueScope question?

Yes. I think obviously, we never talk with any great specificity as to what we're doing from a strategic standpoint. But suffice it to say, we have a -- an incredibly strong partnership with Ryan Stokes and the SGH organization. And as you know, we presented what we consider a best and final sort of joint offer. And it's our belief it was absolutely full and fair, and that was back in February. As you have seen, that best and final offer was summarily rejected and there has been no constructive engagement by the company...

Your next question is coming from Timna Tanners from Wells Fargo.

I was going to also ask about BlueScope and since you just addressed it, I guess I'll try another angle. But I think it'd be interesting to hear how you think about downstream versus steel growth versus maybe organic projects? And in the way past a long time ago, there was talk of a new plate mill plate is really strong. Teams, I here, are sold out. I think maybe are there other expansion opportunities there? Or are you thinking about kind of more of a downstream approach? So just any color on how you're thinking about your growth options generally would be great.

Thank you, Timna. I think, again, our strategic philosophy hasn't changed at all. We pursue and explore all opportunities. I can't remember ever saying there might be interest in plate. Barry, do you an interesting play...

Well, the Sinton does address some plate needs. It's part of the reason the technology was chosen, but, yes.

Again, with Nucor's entry there, I think that the plate market is well served. I believe our focus will be -- has been and will be sort of downstream, innovative ways to improve and bring value to the supply chain in different products that we're not in today. Again, as you know, we're not in business just to grow to get bigger. We like to continue a focus on sort of value-add differentiating products and supply chains. And the team has a myriad of opportunities that continue to get explored, took a little bit of a hiatus given our CapEx for Sinton and aluminum dynamics. Now that's behind us. We will continue to explore those opportunities. In aluminum, there is -- it's phenomenal where we could go.

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

Well, thank you very much. Thank you for those still on the call. Again, those that have supported us in the past and do so today, we will endeavor to do our best to spend your money wisely and continue to have the best shareholder return in the steel business. Our team, again, phenomenal job. It's incredible what you do. You inspire me personally, and just make sure you're safe, look after each other out there. And for those that help us each and every day, both customers and service providers, we can't do it without you either. Thanks for your patience with us. I know we can be tough at times. But we're doing tough challenging things. And together, we will succeed. So thank you, everybody. Appreciate your support. See you next quarter.

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

Good day, and welcome to the Steel Dynamics Fourth Quarter and Full Year 2025 Earnings Conference Call.

[Operator Instructions] Please be advised this call is being recorded today, January 26, 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 Mr. David Lipschitz, Director, Investor Relations. Please go ahead.

Thank you, Ali. Good morning, and welcome to Steel Dynamics Fourth Quarter and Full Year 2025 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 Millett, Chairman and Chief Executive Officer of Steel Dynamics; Theresa Wagler, Executive Vice President and Chief Financial Officer; and Barry Schneider, President and Chief Operating Officer. The 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 and our steel, metal recycling and fabrication businesses as well as to general business and economic conditions.

Examples of these are described in the related press release as well as in our annually filed SEC Form 10-K under the headings Forward-Looking Statements and Risk Factors, found on the Internet at www.sec.gov and if 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 this morning entitled Steel Dynamics Reports Fourth Quarter and Full Year 2025 Results.

And now I'm pleased to turn the call over to Mark.

Super. Thank you, David, and good morning, everyone. I hope you're all a little warmer than we are in the Midwest and Indiana here in Fort Wayne. But nonetheless, we appreciate you taking the time to join us for our fourth quarter and full year 2025 earnings call. As you have seen, our teams achieved a solid 2025 financial and operational performance in what was a challenging market environment through the year. This is a testament to our diversification, the scale and circular manufacturing business model that we have.

The highlights were record annual steel shipments of 13.7 million tons, cash from operations of $1.4 billion and adjusted EBITDA of $2.2 billion. And most importantly, we had another strong year in terms of safety. At Sinton, consistent operational execution has been achieved. The downstream value-add coating and prepaint product quality has matured.

At Aluminum Dynamics, we have produced and shipped finished aluminum flat-rolled products for the industrial and beverage can markets as well as hot band for the automotive sector. Although there's still work ahead, the team has strong momentum, positioning us well as commissioning continues and operations ramp.

As always, I'm extremely proud of the entire Steel Dynamics team. They are the foundation of our company, and there's no doubt their passion, innovative spirit and commitment drive our success, and they inspire me each and every day. I am very -- also very excited actually to welcome our new team members joining us through the final acquisition of New Process Steel, which occurred this past December. We are certainly excited to grow with you.

As I mentioned, the most gratifying achievement was having a strong safety performance. Our world-class safety culture continues to evolve and our team's dedication to take control of safety philosophy is extraordinary. I'm continually inspired by the commitment they have for one another. They consider themselves family and challenge the status quo each and every day. That said, we will never be satisfied, though, until we achieve a 0 incident environment.

Before I transition the call to Theresa and Barry, I'd like to provide some perspectives arising from the press release and investor presentation we posted on Monday, January 5, related to the proposed BlueScope transaction. During the past 5 years, we have focused on strategic organic investments in steel and aluminum products. The associated additional free cash flow generation is meaningful and as you know, very close at hand. We are well positioned with substantial liquidity, low leverage and significant expected free cash flow generation to support the continuation of our consistent, disciplined and balanced capital allocation strategy.

Our criteria for growth has not changed. We grow to differentiate our product offerings, supply chains and to create value for all our stakeholders. Our long-standing track record of best-in-class return on invested capital and other return metrics is testament to our disciplined approach to both greenfield and acquisitional growth. We have a well-deserved reputation for excellent execution, clear long-term strategy, a business model that enables strong cash flow generation through market cycles and a culture second to none.

Our actions are intentional and strategic, not opportunistic. We pay fair value for good businesses that enhance value for all constituents. In December 2025, we submitted an offer to purchase BlueScope together with our Australian partner, SGH. The offer proposed SGH acquire 100% of BlueScope on an all-cash basis with a subsequent on sale of the U.S. assets to Steel Dynamics, providing all BlueScope shareholders with a tax-effective cash realization opportunity. The proposal was the most recent in a series of constructive approaches to provide BlueScope shareholders the opportunity to unlock the trapped value of the North American businesses and to find the right home for their businesses in Australia, New Zealand and Asia. That home is clearly with SGH, given their track record of value creation across the industrial space, which closely mirrors the focus on delivery, capital allocation and free cash flow generation of SDI.

The offer is compelling, reflecting the value of BlueScope's business appropriately and is significantly higher than the value its shares have ever realized in over 15 years. The deal construct is simple and straightforward. We requested a customary but short 30-day due diligence period, which provides the opportunity for an effective and speedy process. However, our offer was rejected by the BlueScope Board without any engagement. And the commentary within BlueScope's subsequent public releases regarding the proposal has to be seen as very disappointing. The premise for the Board's rejection was principally based on insufficient value that they provided shareholders with no reasonable executable alternative strategy that would provide the same certainty of similar shareholder return.

Our cash offer is certain, immediate and tax effective with no financing contingency. It eliminates the significant execution risk and hopes that financial improvement might come from improved market spreads and currency exchange rates that are far from predictable. We agree that the North American assets and their operating teams are of quality as we know them well. In fact, for many years, our steel operators have frequently worked closely with the BlueScope teams, exchanging best operating practices and safety initiatives. The BlueScope North American assets, teams and senior leadership are not the problem. Rather, BlueScope's long-term financial and share price underperformance are the result of conservative incomplete growth strategies.

As a case in point, North Star BlueScope and the recently acquired coating businesses are a severe structural disadvantages. The steel mill is essentially a stranded asset and does not have the physical structural capability to provide the necessary value-add products required to supply the geographically disparate coil coating operations. They are missing essential equipment at a minimum, cold rolling and galvanizing. The required investment today could be as much as AUD 1.5 billion to AUD 2 billion, not to mention the years of waiting on equipment and the construction risks.

In February 2024, BlueScope publicly discussed an associated plan to invest at that time, USD 1.2 billion, about AUD 1.8 billion today for a greenfield project to achieve a similar outcome. Yet they officially deferred the project a year later in February 2025 due to market uncertainty and the pivot to acquisitions. Recently, BlueScope wrote down the asset value of nearly AUD 0.5 billion associated with its recent 2022 acquisition of the North American Coatings business, noting that the business was not achieving expectations. More recently, rather than investing for long-term growth, the Board announced a onetime tax ineffective nonrecurring unfranked special dividend of AUD 453 million, providing no recurring long-term benefit to shareholders. We would suggest the North American BlueScope strategy isn't working.

Steel Dynamics operational interactions with the BlueScope organization has spanned over 20 years. Discussions with senior leadership have explored various value-creating concepts along the way. We have both enjoyed considerable business interaction through the sale of scrap, coated coil, joist and construction products to the BlueScope business, and we purchased substantial steel from North Star BlueScope. Suffice it to say, we have a unique and clearly qualified perspective on BlueScope's North American strategy and business model, along with the associated earnings capability of their assets. And our respective leadership teams have long understood that industrial logic of combining our businesses.

Our proposal to purchase BlueScope along with SGH is not an opportunistic foray to acquire assets on the cheap. It represents a long-standing desire to maximize shareholder value for all stakeholders. Our investment premise is straightforward. SDI is the logical owner of the North American assets as we can unlock the latent value. Currently, North Star BlueScope is a stranded commodity-centric single-site steel mill. It will be pressured by additional hot-rolled coil production capacity coming online in the U.S. within the next 24 months. Product diversification is critical for it to sustain earnings power and an imperative for the desired value creation within their acquired coating business. These challenges are self-evident from the recent massive asset write-down that I mentioned earlier. The scale, supply chains and business model of SDI would provide immediate resolution.

Additionally, BlueScope has publicly emphasized the monetization of industrial and rural land located in remote regions of Australia and New Zealand. We believe there are likely significant zoning and environmental challenges, not to mention development timelines spanning what could be decades. BlueScope's plan for earnings uplift will take considerable time to realize with substantial execution and market risk.

So for us, Steel Dynamics, our pipeline for growth investments is robust. Our track record of delivering profitable growth is without comparison. The acquisition of BlueScope North America makes sense for Steel Dynamics strategically but we will be led by our focus on value creation and will be guided by rationale and not hope, and we will remain disciplined as always.

So with all that said, and given the public nature of how this has evolved, we won't be making any further comments or taking questions related to the BlueScope transaction after our commentary. And we thank you for appreciating and respecting that request.

So with all that said, I love to talk about the exciting things going on within Steel Dynamics. So Theresa?

Thank you, Mark. Happy New Year, everyone. Thanks for being on the call. I am going to be brief with my comments today. In 2025, we achieved operating income of $1.5 billion and net income of $1.2 billion or $7.99 per diluted share. Cash flow from operations was $1.4 billion and liquidity remained strong at over $2.2 billion as we continued strong shareholder returns and near the completion of a significant organic growth phase with the associated cash flow close at hand.

For the fourth quarter specifically, our net income was $266 million or $1.82 per diluted share. As some of you noted, our effective tax rate benefited the quarter by approximately $15 million due to state adjustments and other benefits related to certain reserve items. Fourth quarter 2025 revenue were $4.4 billion and operating income was $310 million, lower than sequential third quarter results driven by lower realized steel pricing and lower volume.

For the full year 2025, operating income from our steel operations was $1.4 billion versus prior year income of $1.6 billion. Record steel shipments, as Mark mentioned, of 13.7 million tons were more than offset by compressed flat-rolled steel metal margins. In the fourth quarter, our steel operations generated operating income of $322 million, sequentially lower driven by seasonally lower shipments combined with planned maintenance outages at our 3 flat-rolled steel mills. Barry will provide more context regarding the outages in a moment.

For those of you tracking the flat-rolled shipments for your models, fourth quarter hot-rolled shipments were 942,000 tons, cold-rolled 122,000 tons and coated products were 1,395,000 tons. For the full year 2025 operating income from our metals recycling operations, it was $97 million, almost 30% higher than 2024 results based on improved pricing and volume and gains the team continues to achieve in operating efficiencies. For the fourth quarter, operating income actually declined about $13 million from a sequential basis based on lower pricing and seasonally lower shipments.

Our metals recycling platform provides a significant competitive advantage for our steel, aluminum and copper operations using innovative new separation technologies and growing supplier relationships to support their customers and our growing internal needs.

For the full year 2025 earnings from our steel fabrication platform, they were $407 million, representing a solid year, yet lower than the prior year earnings as average realized pricing and volume declined. However, pricing and metal margins actually moderately expanded in the fourth quarter as our steel fabrication team achieved operating income of $91 million.

Our steel joist and deck demand remains solid with good order activity. December was one of the strongest activity months in 2025, setting up 2026 very well.

We're incredibly excited for our Aluminum team's operational and commercial progress. Mark will provide specifics later on, on this call. But as planned, the team was EBITDA positive in December based on 10,000 metric tons of shipments and improving cost structures, a true achievement as there is still ongoing construction and equipment commissioning in various parts of the operations.

For the full year and fourth quarter 2025, we generated cash flow from operations of $1.4 billion and $273 million, respectively. Of note, there was a structural increase in working capital related to our new aluminum investments, which reduced full year cash flow by approximately $450 million and fourth quarter cash flow by approximately $155 million. Our cash generation is consistently strong based on our differentiated circular business model and highly variable low-cost structure. At the end of the year, we had liquidity of over $2.2 billion.

On November 21, 2025, we did issue $800 million in investment-grade unsecured notes comprised of $650 million of 4% notes due 2028 and $150 million of 5.25% notes due in 2035. The net proceeds from the notes were used to redeem our $400 million notes due 2026 and for other general corporate purposes.

During 2025, we invested $948 million in capital investments. We currently believe capital investments for 2026 will be in the range of $600 million. Some of the aluminum CapEx did shift from the fourth quarter into the first quarter just from a timing perspective.

We also completed the purchase of the remaining 55% equity interest in New Process Steel effective December 1, as Mark mentioned, and I also want to welcome the teams. In 2025, we purchased $900 million of our common stock or over 4% of our outstanding shares and $240 million during the fourth quarter. At December 31, we still had $801 million remaining authorized for share repurchases. These actions reflect the strength of our capital foundation and consistently strong cash flow generation capability and the continued optimism and confidence in our future.

Our capital allocation strategy prioritizes high-return growth with shareholder distributions comprised of a base positive dividend profile that's 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 5 years from an annual average of $540 million per year for the 5-year period 2011 to 2015 to $2.2 billion for the most recent 5-year period. And if you exclude the recent investments in Sinton and Aluminum, it actually would be $3.2 billion per year. And there's still more coming. We've invested over $5 billion in 3 primary organic growth investments. These projects have estimated through-cycle annual EBITDA capability of approximately $1.4 billion.

We have 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 investment-grade metrics. We are squarely positioned for the continuation of sustainable optimized long-term value creation.

Thank you. Barry?

Thank you, Theresa. Our steel fabrication operations performed well throughout 2025, achieving strong earnings. At the end of the year, our steel joist and deck order backlog was solid with December being the third strongest bookings month of the year. The backlog extends through the first half of 2026. We continue to have high expectations for this business this year due to the positive customer sentiment and quoting activity, moderating interest rates, 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, critical in softer demand environments, allowing for higher through-cycle steel mill utilization compared to our peers. It also helps mitigate the financial risk of lower steel prices. Our metals recycling operations also performed well this year, increasing operating income by almost 30%. Congratulations to the team.

The North American geographic footprint of our metals recycling platform provides a strategic competitive advantage for our steel mills and for our scrap generating customers. In particular, our Mexican locations competitively advantage our Columbus and Sinton raw material positions. They also strategically support aluminum scrap procurement for our flat-rolled aluminum investments. Our metals recycling team is also partnering even more closely with both our steel and aluminum teams to expand scrap separation capabilities through process and technology solutions. This will help mitigate potential prime ferrous scrap supply issues in the future. It will also provide us with a significant advantage to materially increase the recycled content for our aluminum flat rolled products and increase our earnings opportunities.

Steel team had another solid year with record shipments of 13.7 million tons. During 2025, the domestic steel industry operated at an estimated production utilization rate of 77%, while our steel mills operated at 86%. We consistently operate at higher utilization due to our value-added steel product diversification, our comprehensive differentiated customer supply chain solutions and the support of our internal manufacturing businesses. This higher through-cycle utilization of our steel mills is a key competitive advantage, supporting our strong and growing cash generation capability and best-in-class financial metrics.

Operationally, we did have some downtime in the fourth quarter related to planned outages at our 3 flat-rolled steel mills. There were some additional delays, which inhibited production by 140,000 to 150,000 tons. Regarding the flat-rolled steel markets, prices have recently improved, supported by stable demand and lower imports. Lead times have extended and customers remain optimistic about the outlook. Long product steel markets were a highlight throughout 2025, and we expect another solid year as demand and pricing remains strong, particularly in structural steel and railroad rail.

Regarding the steel market environment, North American automotive production estimates for 2026 are expected to be similar to 2025. Automotive dealer inventories continue to remain below historical norms and actually declined further in December. Our specific automotive customer base has not only remained stable but have 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 should benefit from ongoing onshoring activity, recently announced domestic manufacturing projects and continued infrastructure spending. In the energy sector, oil and gas remained steady with solar continuing to be very strong. Overall, we remain optimistic concerning demand for our diversified value-added steel products in the coming year.

With that, back to you, Mark.

Super. Well, thank you, Theresa. Thank you, Barry. I think everyone can appreciate sustaining such positive results don't just happen. They result from the strategies implemented and executed by the teams over time. We have invested strategically to provide scale, product and market diversification, unique customer supply chains and linked operating platforms to optimize market opportunities throughout market cycles. When combined with our performance-driven culture, we consistently achieve at the highest levels. We optimize cash generation, allowing for a consistent and balanced cash allocation strategy that has delivered strong shareholder returns. And our disciplined investment approach continues to support a strong and growing through-cycle cash generation profile while maintaining the highest return on invested capital among our industrial peers.

In aluminum, we just grew more and more excited each and every day as we watch the aluminum teams execute, moving from construction through commissioning to serving the customers with high-quality products. I believe we enjoy a unique market environment. There is a significant domestic supply deficit of over 1.4 million tons for aluminum sheet, and this deficit is forecasted to grow along with demand. In 2024, that deficit was supplied through high-cost imports, which are now even higher cost as the tariffs increased from 10% in '24 to the current 50% level.

We've seen that there's clear alignment with many of our SDI's core competencies. Our construction capabilities have once again been proven both Columbus and San Luis Potosi are state-of-the-art facilities. We are using our deep operational know-how in combination with the technical expertise of aluminum industry experts that have joined us. And our proven performance-driven culture will drive higher efficiency and low-cost operations as compared to our peers.

We believe we have an advantaged commercial position. 2/3 of our existing carbon flat-rolled steel customers also consume and process aluminum flat rolled sheet. 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 will further enhance the consistency of our through-cycle cash generation.

Our raw material platform will facilitate higher recycled content. We're the largest North American metals recycler, which includes aluminum. And that team has done an incredible job successfully developing new separation technologies, allowing us to have both more access to usable aluminum scrap and at a lower cost. Production to date, even in its early stages, is already confirming our expected earnings differentiation. Through cycle EBITDA expectation remains clearly at $650 million to $700 million for the mill itself, plus another $40 million to $50 million for the Omni platform. As we spoke in the past, the 4 key areas of advantage being labor efficiency, the higher recycled content, the higher yield through the process and optimized logistics, all of which are driven by our low-cost culture. This strategic investment is a cost-effective and high-return growth opportunity, providing SDI with additional countercyclical diversification, further stabilizing and growing our cash generation capabilities.

As the industry already knows, the 650,000 metric ton project is no longer a vision. It's clearly here and clearly having a positive impact in the industry. The customer base is excited to have a new market entrant that is known to be innovative, customer-focused and responsive to their needs. For us, business relationships are long term, founded on trust with a continuous goal of creating mutual value. And that's not just simply financial value but new supply chain solutions, new products, better quality and better service, and we are seeing to react surprising speed.

Many customers have seen that with recent supply side challenges in the aluminum flat-rolled products market, the timing of our ramp-up has been fortuitous, allowing us to help the market while accelerating our material qualifications. Start-ups have the challenges, and I would like to thank our customers for their patience as we fine-tune our operations. To date, those customers have been very responsive, and thank you for that. We have received certification from many customers for industrial and can sheet finished products and for automotive aluminum hot band. This accelerated certification should allow us to shift our product mix to a higher-margin mix in 2026, reaching optimization sometime in 2027 as compared to our earlier expectation of 2028.

Three of the 4 melt cast houses are fully commissioned and have produced all 3,000, 5,000 and 6,000 series ingots for industrial, can sheet and automotive sectors for rolling mill commissioning, product development and commercial shipments. And the team there is doing an absolutely phenomenal job actually as they are through the whole mill, I guess. The hot mill is completely commissioning, having ran 303, 5052 industrial, 3104 can sheet, 5754 and 5182 automotive-grade material. The cold reversing mill is successfully producing 3003, 5052 and 3104. The first tandem mill is in commissioning and starting to produce. The second tandem cold mill and the first of 2 CASH lines are on schedule to be operating before the end of the first quarter '26.

The team is incredibly excited with the earlier-than-anticipated product certifications for sure. It's a testament to the phenomenal talent we have embedded in the team, and there's so much great energy and momentum throughout the mill. We're extremely excited by the physical production and quality capability of the mill this early in the start-up and are focused on achieving optimal consistency. We ended the year shipping 10,000 tons in December, which is about 20% of our capability -- eventual capability and are confident we will be exiting 2026 at a rate approaching 90% capacity.

We're impassioned by our current and future growth plans as they will continue to drive the high-return growth momentum we have consistently demonstrated over the years. The earnings growth of these new projects is compelling. The capital spending for Sinton, the 4 value-add lines and aluminum dynamics is largely spent with a projected future through-cycle EBITDA contribution of over $1.4 billion. I'm excited as investors to recognize the power and the 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 that will provide a level playing field through continued and appropriate trade mechanism. Fixed asset investment will continue to grow, which directly correlates with increased metal products demand. Continued reshoring, AI and cloud computing will support nonresidential construction. And decarbonization will materially steepen the global cost curve, providing Steel Dynamics with a huge competitive advantage to gain market share and increase metal spreads. Our highly diversified value product capabilities provide us with a very unique advantage to leverage this evolving metals business environment and will amplify our relative earnings capability.

In closing, as I always say and always believe our people are our foundation. I thank them, some 14,000 of our teammates. And when you include the partners in life, their spouses and their children, there are 63,000 people in the SDI family. And I thank each and every one of them for their passion and their dedication. And we're committed to them. And I remind those listening today that safety for yourselves and your families and each other is the highest priority.

I'd 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. And our new aluminum partners will experience the same. And as I said earlier, I appreciate their patience as we work together to get Columbus up and running.

And finally, to our suppliers and service providers who we value and trust, and thank you. We can't do what we do without you. We look forward to creating new opportunities for all of us today and the years ahead.

And with that, Ali, we would love to take questions.

[Operator Instructions] Our first question today is coming from Katja Jancic with BMO Capital Markets.

Maybe starting on the aluminum rolling mill. Mark, I think you said that the mill is expected to reach 90% utilization by the end of '26. Is that correct?

That's correct. And I think -- that's a little sooner than we've, I think, talked in the past. But what we're seeing from the team and from the equipment, it's given us a strong confidence that, that can be achieved.

And then given that the mill reached or was EBITDA positive in December, and when looking at the current aluminum and the Midwest premium environment, how should we think about the profitability over the next few quarters?

Well, I would -- we anticipated that, that positive EBITDA profile will continue through the year.

So Katja, we're going to be ramping up. So there's still -- as Mark mentioned on his opening remarks, we're still commissioning and constructing some of the downstream facilities, if you will. And so that will have an impact to the first half of the year. But we do expect to remain and be improving EBITDA throughout the first half of the year. And then the second half of the year really is about product mix optimization.

Our next question is coming from Lawson Winder with Bank of America Securities.

What I'd like to do is just kind of ask a question along the lines of investment and not necessarily M&A, but into growth, too. When you think about your balance sheet and the amount of debt that you could potentially take on, whether for some sort of acquisition or for a major investment into new capacity, where do you kind of see the upper limits of your comfort level?

Thanks for the question, Lawson. So we do have a balance sheet that actually has a considerable amount of capacity. When we look at where we'd like to be on a through-cycle basis, we're very direct about being less than 2x on a net realized basis, and we're well under 2x today as we said from a liquidity and debt perspective. So there is room to move. And that is also in light of the fact that our structural EBITDA is actually improving. So that $1.4 billion that we talk about associated with aluminum and sitting in the 4 value-added lines hasn't really begun to be realized in any meaningful way yet. So all of that is adding extra capacity to the balance sheet as well.

We are incredibly committed to the investment-grade markets but there's a lot of room in our ratings to be able to add that capacity. So I won't talk about necessarily a top range. I'll just say on a through-cycle basis, we definitely will remain under a 2x net levered basis.

Our next question is coming from Tristan Gresser with BNP Paribas.

Just a quick follow-up on the aluminum. If you expect to reach kind of targeted utilization rate by year-end, and I understand your product mix might not be fully optimal by then. But given the current pricing environment, is it fair that by year-end this year, you should get to your -- at least to your targeted margin profile into Q4, at least those months in Q4?

If you're referring to the through-cycle $650 million to $700 million EBITDA estimate, is that what you're trying to...

Yes.

So what we've said in the past is that actually the margins that we are achieving -- not achieving today. The margins on a market basis that are available today are actually higher than what we projected on a through-cycle basis for the investment itself, just given where the Midwest transaction price, et cetera. So there is that opportunity, I think, more quickly. Yet, we're still working through start-up. We're still working through all of those items. So we're not prepared today to talk about what profitability might look like in the fourth quarter of this coming year but all the market factors are positioned to actually give us a significant advantage over what we had modeled on a through-cycle basis.

All right. That's clear. And if you allow me a quick follow-up. Just on Sinton, if you can give us an update. I think there were a press report of some incident in January. And if you could talk a little bit about the volume outlook into Q1 for the steel business, that would be also appreciated.

Lawson, this is Barry. With regards to the incident here at the beginning of the year, we did have a transformer failure at the Sinton facility. It was one of the high-voltage transformers in the yard. This was an original transformer. And I think as we talked about publicly, we had some transformer issues at that facility we were starting up. We believe this transformer was subjected to some of that stress on the system early. So we have been monitoring it.

We took the opportunity a couple of years ago to actually go out and buy significant amounts of other transformers that we have engineered into the system. So we don't have any concerns of ongoing problems. We believe we've rectified the original engineering and locational challenges we had down there. So all in all, it was a great job by the Sinton Fire Department. It was rather demonstrative, the failure, but nobody was injured. The damage was limited to the transformer itself and operations resumed shortly after the plant was safe, which was within the 12 hours or so of the incident.

So we don't expect any ongoing concerns. And the team has done a good job of getting the backup resources. It's very difficult to get transformers in this world. So they acted quickly a couple of years ago to make sure we had the right stuff spared and installed. So we feel good about where we're going. And it was unfortunate but onward, upward with Sinton.

Our next question is coming from Tim Tanners with Wells Fargo.

Regarding the $1.4 billion structural contribution, I feel like we talked about aluminum. But just can you give us any updated thoughts on the status of the 4 value-added lines that have been ramping up? And just remind us where Sinton is. I know it's still -- the Slide 9 shows us that it's still running a little lighter than the rest of your operations. When can we expect that to maybe converge?

Yes. Thank you. It's good to talk to you again, Timna. So from the perspective of the $1.4 billion, just to outline where that is on a through-cycle basis, Sinton represents $475 million to $525 million of that. As we mentioned, aluminum is $650 million to $700 million. And then generally on the value-added lines, we think about it more like maybe $50 million per line. So that would be like around $200 million. So the value-added lines last year for the whole year, we were operating each one differently, but around 60% of their capability, the 4 lines.

And then as far as Sinton, Sinton still had a lot of the additional costs to product quality embedded in 2025 that have since been resolved kind of in that fourth quarter, first part of this year time frame. So Sinton really has the capability now like all of our other facilities to operate wherever the market will drive it.

Theresa, if I could add a little color to that. The 4 value-added lines, 2 galvanizing lines and 2 paint lines are actually operating very well. As you are aware, we had the core cases that we had filed a couple of years ago. Those core cases were against corrosion-resistant steels that were being dumped into this country, 10 different countries were at play. We won a substantial awards against those countries that will continue to limit the ability for those countries to just dump material into the United States.

And the new process lines really were pressured because of that dumped material. We had excess of 1 million tons that have already been removed from the market that have been coming from these 10 countries around the world. So as we've ramped through that, we've fine-tuned our quality, and we've made sure that the customer base is excited about the product they're receiving from those lines. They are operating full at this point in time. And because of our supply chain, being able to take bans, hot-rolled coil and convert them into galvanized and painted coils, it's really structurally helped respond quickly as markets change. Our supply chain was the innovation with painting, and it remains our strength and the quality and innovation of the product. So we're really excited about what those lines will do now for us that we aren't competing with the dumped tons from all across the world.

Our next question is coming from Bill Peterson with JPMorgan.

I guess I'd like to follow up on an earlier question on Sinton but broadened out a little bit. It sounds like the Sinton impact in the current quarter was fairly modest in terms of impact but I understand there may have been some other outages in your network in the late fourth quarter. Just trying to get a sense, is there -- can you help us quantify the impact on outages? And maybe more broadly, is there any planned maintenance in the first quarter that may impact your shipment profile?

Bill, this is Barry. Our outages, we're really good in making a priority to take care of our equipment. And as you can imagine, our major flat-rolled mills are of different ages with Butler at 30 and Columbus around 20 and Sinton brand new. There's different things we do at all these plants. It's part of our long-term strategic plans to take care of our assets. Some cases, we add capabilities. Other cases, it's just good old-fashioned maintenance. It just coincided that all 3 of these -- the 3 big flat-rolled mills had outages in the fourth quarter. We don't -- we typically do 1 or 2 outages a year depending on what our projects have.

So quarter 1, we don't have anything on the table for us. We're looking more towards the second quarter right now for our planning. So we got a lot of good work done. A lot of that is, as I said, it's making sure that we continue to make state-of-the-art products for our customers and that the machines are running as well as possible. So outside of that, nothing structurally different from what we do.

Our next question is coming from Phil Gibbs with KeyBanc Capital Markets.

Mark, I understand you don't want to talk further about the BlueScope deal. It obviously appears very compelling. But curious if you're prohibited from buying back stock for any reason given there's now a potential deal that's been publicly disclosed.

There's nothing that is regulatory or structural in place, Phil. No.

Okay. And then just a follow-up just on kind of the energy cost wildness we've seen. I know you don't use a lot of natural gas relative to electricity but perhaps there is a little bit of a knock-on effect on electricity as well. I know it's been ramping in some parts of the country, at least for consumers. So just curious in terms of how you're thinking about your energy cost basket heading into the early stages of the year here.

Phil, this is Barry. I think with energy, we have very unique contracts everywhere. Even here in Indiana, we have 3 different electrical contracts. We try to be a good response in the market. So we buy smart. We take market signals for when we buy and sometimes we do take small downtime to help the system grids. With regard to electricity, we really haven't seen anything meaningful. There are times of the day. There are times of a week that it might get expensive. Many of our operations don't see that short term. Some do, and they plan for that.

With regard to natural gas, we typically don't -- we take positions future buys, and we make sure that what we're doing is responsible. When we see cold weather coming, we make sure we buy our transportation so that we can't be interrupted. And typically, as we get into the winter, where it's prudent, we'll make sure more of that product is prepaid or prebought. So we don't see huge swings with energy. We do see local impacts. But in general, we have good relationships with our providers.

And as you -- I'm sure you know, the mini mill process, we use considerably less natural gas per ton because in the flat rolled mills when we cast, it goes directly into a rolling mill shortly after it's cast. So that's the efficiency we get, which helps us with energy quite a bit.

And Phil, just to add on there, just to sort of calibrate where our energy cost or percentage of energy cost is, it's running around about 10% of our production cost, both that's gas and electricity. So even some fluctuation isn't a material impact to us.

Our next question is coming from John Tumazos with John Tumazos Very Independent Research.

I'm unfamiliar with what are hot-rolled aluminum automotive products. I'm sort of asking an innocent question. I don't want to make it sound like I'm skeptical. I'm just unaware. What are finished applications on a car for hot-rolled aluminum? And is it possible that you're also selling hot-rolled aluminum to another aluminum roller whose cold rolling capacity is bigger than their hot-rolled capacity or for whom you have quality specs they can't make?

The -- your question, as always, is on point, John, and I wouldn't say it's naive in any way, shape or form. There's not a real market for direct hot band aluminum going into an automobile. It does get converted. That conversion is being done by others today because we don't have the full downstream capability, and we don't have the CASH line. So others in the industry are converting that. And I think it's been part of the -- just a great sort of entrance into the whole aluminum market itself. Obviously, that market has been challenged on the supply side. And we have gone out and wherever we can, we're helping the industry generally, and part of that is supplying hot band to folks.

When will you -- excuse me, Mark, when will you have all the capabilities to coat and cold rolled the automotive aluminum to sell the final product 100% on your own?

The restriction is essentially the CASH line and the first CASH line is due to be operational at the end of the first quarter.

And CASH stands for what? What is the acronym mean, excuse me?

Continuous...

Continuous anneal surface hardening. It's a final heat treatment so that it can be at the right strength when it goes to the mill.

I thought we took cash to the bank that you will.

John, in my naivety, I thought it was C-A-C-H-E for the longest time.

Congratulations.

[Operator Instructions] Our next question is coming from Lawson Winder with Bank of America Securities.

When you look at the aluminum market today and the success you've had so far with the start-up, and you look out maybe a couple of years, do you see the potential for Steel Dynamics to add additional aluminum rolling capacity?

There's absolutely no doubt that aluminum will be a growth platform for us going forward. And that's not to substitute or replace growth opportunities in steel or any of our other businesses. And just in general, we -- you got to compliment or I compliment our team. They do a phenomenal job ensuring that we've got a pipeline of really effective value-add opportunities. And so yes, we will continue to expand in steel. And obviously, aluminum is a new platform for us. And given the kind of the profile of that industry, there's a lot of -- and the supply-demand dislocation, there's certainly phenomenal opportunities there for us.

Okay. Fantastic. And if I could also just ask on your thoughts or prescriptions for the dividend this year, you would normally look to update your thinking on the dividend in March. At this point, do you see any other investment considerations that might constrain the extent to which the dividend could be increased this year, particularly when thinking about this very significant positive free cash flow inflection that's anticipated at Steel Dynamics in 2026?

So Lawson, the capital allocation strategy that we use for shareholder distributions are to keep the dividend growing as we have structural growth in cash flow. We have increased the dividend very significantly already for the advent of Sinton starting up, et cetera. So as we have further structural changes, we will increase the dividend appropriately. So aluminum could be part of that this year or maybe it's next year but we'll let you know. In the absence of that, we definitely lean in with the variable share repurchase program.

Our next question is coming from Phil Gibbs with KeyBanc Capital Markets.

You mentioned aluminum expected to be running at 90% by year-end '26. I think your previous view was 75%. What's given you the added confidence to, I guess, say that this morning and also meaning kind of what's changed?

Well, I think given our experience in Sinton, we've been sort of retaining more of a conservative position, I would say. So that on top of what I see as a phenomenal team down in Columbus doing phenomenal things with an absolutely amazing piece of kit. The -- Barry, I think, has said it in past calls but just the nature of the aluminum process and production sort of steps or units, it's a lot more forgiving from a start-up standpoint. We've explained it in the past, a thin slab or steel mill such as a Sinton or a Butler or whatever, because the whole mill, melt through refining, through casting, through rolling is just one continuous thing, one hiccup in one spot can take you down. And it sort of compounds itself through the system. Whereas in aluminum, we have -- just at Columbus, we have the 4 melt cast units, got the hot mill, you've got -- we will have 3 cold-rolling units. It's just a lot more forgiving. So given all that, we just see.

It's the redundancy in it, in the system.

Yes. That's right. And so we just have a high confidence level.

Just a follow-up to that. Can you give us an idea of where you're running at right now? I know there's a lot of trials and things going on, and you may not want to double count stuff that's not purely commercial but trying to just understand where you are from a capacity utilization standpoint.

I would prefer not to be that specific. I would say that the -- our shipping rates are not necessarily a reflection of the production rates. because of the quality, it just evolves. We're ramping up. That needs to be refined and optimized, and it's getting optimized almost on a weekly basis. But the actual physical capability of the equipment is very sound.

Our next question is coming from Carlos De Alba with Morgan Stanley.

Hopefully, you can hear me. But just maybe, Theresa, can you comment a little bit on working capital? How do you expect that to move throughout the year given that you will continue to ramp up the [ alu ] business? And then CapEx beyond 2026, any comments there?

Yes. Thanks, Carlos. I think I got both questions. From a working capital perspective, a majority of the build that was required for aluminum, given the current pricing dynamics of aluminum, just the pure metal itself. Most of that has been captured already in 2025. There'll be some slight fluctuations between now and the end of the year. Nothing that I think would be material enough to be noted. First quarter, however, just remember that we actually pay our profit sharing to all of our employees in that first quarter time frame. So generally, that has some pressure on the working capital and the cash flow. Otherwise, everything looks like it's pretty steady for the year.

As it relates to capital expenditures beyond 2026, as a reminder, our maintenance or what we refer to as our sustaining capital really is fairly low. It's generally around $250 million, maybe upwards of $300 million now. And beyond that, we haven't really named any specific material projects at this point in time.

Thank you. This concludes our question-and-answer session. I'd like to turn the call back over to Mr. Millett for any closing remarks.

Super, Ali. I appreciate that. And for those remaining on the call, again, thank you for your support and for your time today for sure. Our teams aspire to create that shareholder value creation that we seem to be able to do year in, year out and 2025 was a reflection of that. Most importantly, to our employees that might be on the line, you've all done an absolutely phenomenal job. You continue to do an absolutely phenomenal job. And what you do each and every day, that execution drives our success, and it drives that in the marketplace as well.

So thank you. And each and every one of you, be safe for yourselves, for each other and for your family. So thank you very much. Have a great day, everyone. Bye-bye.

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

Good day, and welcome to the Steel Dynamics Third Quarter 2025 Earnings Conference Call. [Operator Instructions] Please be advised this call is being recorded today, October 21, 2025, and your participants 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. Sir, please go ahead.

Thank you, Elie. Good morning, and welcome to Steel Dynamics' Third Quarter 2025 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 Millett, Chairman and Chief Executive Officer of Steel Dynamics; Theresa Wagler, Executive Vice President and Chief Financial Officer; and Barry Schneider, President and Chief Operating Officer. The 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 and our steel, metals recycling and fabrication businesses as well as to general business and economic conditions.

Examples of these are described in the related press release as well as in our annually filed SEC Form 10-K under the headings forward-looking Statements and Risk Factors found on the Internet, at www.sec.gov and, if applicable, in any later SEC Form 10-Q. You will also find any referenced non-GAAP financial measures reconciled to the most directly compared GAAP measures in the press release issued yesterday entitled Steel Dynamics Reports Third Quarter 2025 Results.

And now I'm pleased to turn the call over to Mark.

Super. Thank you, David. Well, good morning, everybody. Thank you for being with us on our third quarter 2025 earnings call. Some may suggest hyperbole, but I often said that we have the best teams on the planet and they proved it once again in the third quarter.

Operationally, they executed incredibly well while keeping each other safe, and achieve pivotal successes in furthering our significant growth projects. Financially, even with some interim market headwinds in flat roll, we achieve a number of key operational milestones. We had a record steel shipments of 3.6 million tons. Revenues were $4.8 billion, adjusted EBITDA was $664 million, and we had a healthy cash flow from operations of $723 million. At Sinton, we believe consistent operational execution has been achieved.

It was a record quarter for shipments, downstream coating and prepaint product quality has matured, and the value-add product portfolio is expanding nicely. Industry participants are recognizing that this is the middle of the future. Our Linen team continues to make strong progress in commissioning and ramping operations, receiving a number of quality certifications in September and October.

In particular, our can sheet has been performing extremely well with equivalent results to competitive material. Much more to do, but incredibly exciting performance today. In our biocarbon team shipped their first product in September. We're extremely excited to have this new tool in our decarbonization journey that will further reduce our carbon footprint from an already industry-leading low level.

I continue to be proud of the entire Steel Dynamics team because they are just the foundation of our company, and they continue to amaze me. And so we're laser-focused on providing the very best for their health and safety. It is an everyday conversation at every level. Our world-class safety culture continues to mature and our team's dedication to our tape controller safety program is extraordinary and continues to produce strong results.

Their commitment is inspiring. They consider themselves family and challenge the status quo each day to keep you other safe. But that said, there will always be more to do as we drive toward a 0 incident environment as there is nothing more important for us.

So with that, I'll hand it to Theresa and to Barry to give some color to the quarter.

Excellent. Thank you, Mark. Good morning, everyone. Thank you for joining us, and thanks to the team for an exceptional performance. Our third quarter 2025 earnings per diluted share were $2.74 with adjusted EBITDA of $664 million. Both third quarter 2025 revenue of $4.8 billion and operating income of $508 million were higher than the second quarter results driven by record steel shipments and metal spread expansion as scrap raw material costs declined more than steel prices.

As we discuss our business this morning, we continue to focus and execute on our transformational growth initiatives. Our steel operations generated operating income of $498 million in the third quarter, 30% higher sequentially based on record shipments, supported by an almost 20% improvement in shipments from Sinton and metal spread expansion.

Average scrap costs declined $27 per ton, while average realized pricing only declined $15 per ton. For modeling purposes, this quarter's hot band shipments were 1,097 000 tons. Cold-rolled shipments were 120,000 tons; and finally, coated shipments were 1,486,000 tons. Additionally, we also highlight that our 3 flat-rolled steel production divisions have planned maintenance outages in the fourth quarter, which could reduce volume by as much as 85,000 tons.

For the third quarter, operating income from our mills recycling operations was $32 million, significantly above our sequential second quarter results driven by near-record shipments supported by domestic steel demand and study nonferrous volume coupled with metal spread expansion. We're the largest North American metals recycling processing ferrous scrap and non-ferrous aluminum, copper and other metals, and we're growing to support our increased steel capacity and aluminum flat-rolled operations through new and expanded supplier relationships and through the use of innovative separation technologies.

Our metals recycling platform is a significant competitive advantage for all of our platforms. Our steel fabrication team achieved operating income of $107 million in the third quarter, 15% higher than second quarter sequential results due to increased volume, coupled with relatively flat metal spread. Our [ joists ] and deck backlog extends through the first quarter of 2026 with solid pricing. And federal programs, manufacturing growth and onshoring are expected to support domestic fixed asset investment and therefore, related steel joist index consumption in the coming years.

Congratulations to the aluminum teams in Columbus and San Luis Potosi, hitting so many early quality milestones, the energy and momentum are contagious. Related startup operating losses of $57 million were somewhat higher in the third quarter than previously expected as the team's continued construction and commissioning of various areas while also accelerating testing for beverage can and automotive products.

We currently estimate comparative losses to be in the range of $40 million for the fourth quarter of 2025. Based on current expectations, we continue to believe our aluminum operations will achieve monthly EBITDA breakeven or better in the fourth quarter of this year. During the third quarter of 2025, as Mark mentioned, we generated strong cash flow from operations of $723 million, of that, operational working capital was a funding source of $126 million.

We ended September with liquidity of over $2.2 billion. For the fourth quarter of 2025, we believe capital investments will be in the range of $200 million and early estimates for capital expenditures for the full year 2026 are in the range of $500 million to $600 million.

During 2025, we've repurchased $661 million of our common stock or 3.4% of our outstanding shares. At September 30, $1 billion remained available for share repurchases. Since 2017, we've increased our cash dividend per share by 223% and we've repurchased $7.4 billion of our common stock. That's over 40% of our outstanding shares, all while maintaining investment-grade ratings and growing.

These actions reflect the strength of our capital foundation and consistently strong cash flow generation capability. Our capital allocation strategy prioritizes high-return strategic growth with shareholder distributions comprised of a base positive dividend profile that's complemented with a variable share repurchase program while we remain dedicated to preserving our investment-grade credit designation.

Our free cash flow profile has fundamentally increased over the last 5 years to $3 billion, excluding our large strategic Sinton and aluminum investments. We've truly 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.

We recently announced that each of our company's steel mills achieved global steel Climate Council product certifications. For our customers, this means greater transparency and confidence when sourcing lower and body carbon steel products from us.

And I'm incredibly proud and excited to announce that our biocarbon solution team safely produced and shipped their first biocarbon material in September and it was successfully used as a carbon replacement at our Columbus Flat Rolled Steel division, providing an even lower carbon supply chain for our steel customers in the future.

The team plans to continue to refine operations and increase production into the first quarter of next year. This achievement marks a pivotal SEP in our decarbonization journey and verse demonstrates our ability to translate innovative concepts into tangible results, a personal thank you to all 73 biocarbon team members. Decarbonization is a meaningful part of our long-term value creation strategy, and we're dedicated to our people, our communities and our environment.

We are committed to operating our business with the highest integrity. We uniquely have an actual path forward that's intentional and manageable, and we believe considerably less expensive than may lay ahead for many of our peers. We're squarely positioned for the continuation of sustainable, optimized long-term value creation. Thank you. Barry?

Thank you, Theresa. Our steel fabrication operations improved their sequential results as volumes increased 12% sequentially, more than offsetting slight metal spread compression. Order activity remained steady in the quarter, and our backlog now extends through the first quarter of 2026.

Pricing for steel joist and deck bookings remained relatively stable throughout the quarter. We continue to be optimistic for our Steel [indiscernible] platform based on the continued onshoring of manufacturing, continued announcements of significant privately funded manufacturing projects and public funding for infrastructure and other fixed asset investment programs.

The long-term uplift of this backdrop could be considerable for all of our platforms. Our steel fabrication platform provides meaningful volume support for our steel operations, critical and softer demand environments allowing for higher through-cycle steel utilization compared to our peers. It also helps mitigate the impact of lower steel prices.

Earnings for our metals recycling operations were much higher in the third quarter as metal spreads improved and shipments were at near record levels. We believe [ fares ] scrap prices have stabilized and are likely to remain relatively steady throughout the rest of the year, aside from typical seasonal fluctuations. Additionally, the team continues to expand its access to recycled aluminum for our aluminum flat-rolled operations.

North American geographic footprint of our metals recycling platform provides a strategic competitive advantage for our steel, aluminum and copper operations and for our scrap generating customers. Our metals recycling team partners closely with our metals production and manufacturing teams to expand scrap separation capabilities through advanced process and technology solutions.

This collaboration helps mitigate supply risk by making more grades of ferrous and nonferrous scrap usable for operating platforms and generally at a lower cost. Additionally, it positions us to significantly increase the recycled content in our products, unlocking enhanced earnings capabilities.

The steel team delivered a solid quarter with record shipments of 3.6 million tons. In the third quarter of 2025, the domestic steel industry operated at an estimated production utilization rate of 78%, while our steel mills operated at a notably higher rate of 88%. This consistently higher utilization reflects our value-added steel product diversification, differentiated customer supply chain solutions and strong support from our internal manufacturing businesses.

Our elevated through-cycle utilization rate is a key competitive advantage, underpinning our growing cash generation capability. Overall realized steel pricing slightly declined in the quarter due to lower flat-rolled steel pricing tied to lagging contracts, which more than offset increasing structural and railroad rail pricing.

Overall, domestic steel inventories remain lean from a historical basis. However, coated flat-rolled steel volume and pricing compressed during the quarter due to an inventory overhang related to imports received earlier in the year prior to the positive related trade rolling. We do believe that prices have bottomed out and will improve as we head into 2026.

Last month, the ITC unanimously voted affirmatively on the final determination that imports of corrosion-resistant steel from 10 countries injured the U.S. steel industry. This uniquely positions us as we are the largest producer of nonautomotive coated flat-rolled steel products in North America.

Together with the announced Section 232 steel tariffs, these developments are expected to positively impact demand for lower carbon emission U.S.-produced steel products. The underlying steel demand remains steady, However, customers continue to exercise caution in placing orders to ongoing changes in trade policies.

That said, we believe steel prices have stabilized in the near term with potential for upward movement in 2026. Our Sinton, Texas flat-rolled steel mill achieved higher earnings in the third quarter, driven by record shipments and the continued efficiency and quality gains. Congratulations to the team.

The team continues to make improvements in yield cost reduction and quality. They are also continuing towards additional product development to expand our current flat-rolled steel capabilities. Meaningful progress has been made on unique high-quality API pipe grades, high-strength grade 10 110, pressure vessel quality and OEM qualification packages for our automotive customers.

We are seeing increased shipments from SIM's value-added coating lines which are strengthening the facilities product mix and boosting its through-cycle earnings capabilities. Regarding the steel market environment, North American automotive production estimates for 2026 were recently revised modestly upward yet currently remain modestly below 2025 forecast.

Fortunately, our specific automotive customer base has not only remained stable but have provided opportunities for growth. We have become a supplier of choice for many U.S.-based European and Asian automotive producers due to our superior carbon content capabilities. Additionally, numerous announcements have been made concerning a considerable volume of automotive production moving to the U.S. from foreign locations in the coming years.

We continue to grow market share in both flat-rolled and SBQ steels within the automotive sector. Nonresidential construction should benefit from ongoing onshoring activity, recently announced domestic manufacturing projects and continued infrastructure spending that are expected to further support fixed asset investment construction-related demand.

In the energy sector, oil and gas activity remains steady, with solar continuing to be very strong as producers adapt to benefit from expiring incentives. Overall, we remain extremely optimistic concerning steel demand and pricing dynamics for the domestic producers in the coming years based on the expected demand from new manufacturing and U.S.-produced steel content requirements.

With that, I'll return it to Mark Millet.

Super. [indiscernible] I appreciate that. Thank you, Theresa. So after many years, I think it's clearly evident that our performance-driven team-based culture in combination with a proven, diversified and value-added business model drive superior financial metrics.

This consistently strong operating and financial performance continues to support our cash generation and growth investment strategies, allowing a very balanced cash allocation strategy that has delivered the highest shareholder returns, not only among our metals peers for the best of domestic manufacturers.

Our disciplined investment approach continues to support a strong and growing cash generation profile while maintaining a best-in-class return on invested capital. Our aluminum investments are now a reality and are extremely compelling. Initial operations and commercial activity are confirming our initial investment premise.

We believe we will enjoy a unique commercial position. Unlike our entry into the oversupplied steel market some years ago, there's a significant domestic supply deficit of over 1.4 million tons for aluminum sheet. And this deficit is forecasted to grow even before tariffs. In 2024, that deficit was supplied through high-cost imports, which are now at an even higher cost as the tariffs increased from 10% from 24% to the current 50% level.

There's a clear alignment with many of SDI's core competencies. Our construction capabilities have been once again proven. Both Columbus and SLP are state-of-the-art assets. And if you just think about it for a second, we shipped our first coil within 24 months of groundbreaking.

And here we stand today, 27 months from groundbreaking and we're shipping a prime product to the can sheet in automotive markets. That's an absolutely incredible, incredible performance. My hats off to the team down there to Glen pushes into Greg Wigan everyone for making that happen. It's an absolutely beautiful, beautiful facility, work of art.

We also lever our deep operational know-how, have an extensive and successful experience operating melting, casting rolling type assets. And our performance-driven culture will drive higher efficiency and lower cost operations, just as we did when we entered the steel industry some 30-plus years ago. It's demonstrated and the teams will achieve.

We have an advantaged commercial position. 2/3 of our carbon flat rolled steel customers also consume and process aluminum flat rolled sheet. Our growth and penetration into the automotive sector will complement our existing steel position and give customers product optionality. The countercyclical beverage can market which, in conjunction with the more stable earnings profile experienced through the use within the aluminum space will further enhance the consistency of our through-cycle cash generation.

Our own material platform will facilitate higher recycled content. We are the largest North American metal recycle, including aluminum, we recycle already around about GBP 0.5 billion of [ linen ] per year. And we've successfully developed new separation technologies, allowing us to have both more access to usable aluminum scrap at a lower cost.

Operational experience thus far is confirming our earnings differentiation. We've advertised and do believe that through-cycle EBITDA of $650 million to $700 million is absolutely achievable, plus an additional $40 million to $50 million for our omni operations.

The key areas of advantage remain labor efficiency, higher recycled content, higher yield and optimize logistics along with our low-cost culture. There is no doubt the strategic investment is a cost-effective and high return growth opportunity, providing SDI with additional [indiscernible] diversification further stabilizing and growing our cash generation capabilities.

And for those that have been there, you understand it. The 650,000 metric ton [indiscernible] is no longer a vision. It's clearly here. As our aluminum growth has become a reality and our reputation permeates the industry, aluminum professionals with vast experience have joined us in this excelling project. They see the vision and are energized by our culture where they realize that they will be heard and can have a real impact.

They have helped us build a phenomenal team that combines in-depth knowledge of aluminum flat-roll operations, commercial markets, process technology and custom service complementing our SDI professionals that bring our performance-driven entrepreneurial culture. We're finding the customer base is excited to have a new market entrant that is known to be innovative, customer-focused and responsive to their needs.

For us, as in with steel, business relationships are long term founded on trust and the continuous goal of creating mutual value, not simply financial value, for new supply chain solutions, new products, better quality and better service. We are seen to react with surprising speed. Many customers have just seen that with the recent supply side challenges in the market.

The timing of our ramp-up has been fortuitous, allowing us to help the market while accelerating our material qualification. We received approvals for industrial and can sheet finished products and for automotive aluminum hot band earlier this month. This accelerated certification should allow us to shift our product mix to a higher-margin mix in 2026, reaching optimization sometime in 2017.

Three of the 4 melt [ casthouses ] are fully commissioned at Columbus and have produced 3,000 5,000 6,000 series ingots for the industrial, can sheet and automotive sectors for rolling mill commissioning product development and commercial shipment. The hot mill is completing its commissioning, having run 3003 and 5052 industrial, 3104 can [indiscernible] and 754 auto grade material.

The code reversing mill is in startup and is successfully producing 3003, 5052 and 3104 alloys. Tandem mill #1 will be starting up in November and then Tandem mill #2 and the cash line are on schedule to be available in the first quarter of 2026 and it's absolutely incredible if you walk through the plan because the team is incredibly excited with the earlier-than-anticipated product certification.

It is a testament to the phenomenal talent that we have on the team and is great energy, great momentum. We anticipate exiting 2026 at a rate of 75% capability, and we expect to achieve monthly EBITDA breakeven sometime in the fourth quarter and increasing thereafter as we continue to ramp and optimize our product mix.

Across our business, evolving market dynamics provide an opportunity for us to further enhance our earnings potential. The renewed focus on strategic mercantilist policies to ensure fair and sustainable competition will further improve market strength. The recent coated flat-rolled steel positive trade determination will further curb core and prepaying imports. We're seeing that already. The administration will continue to hold a firm position on tariffs on steel and aluminum imports.

And the inclusion of tariffs on steel content or derivative products, including fabricated structural steel, which has played the domestic industry for years will be substantial benefit. One has to consider that in '24 some 30 million to 35 million ton of steel came in through actual products. And then last year, obviously, the successful sunset reviews of Section 201 and 301 trade cases will remain in place for some years, stopping dumped Chinese steel for accessing our markets.

We will benefit from growing fixed asset investment, which correlates directly with increased steel demand. Risk mitigation to address numerous supply chain dislocations as accelerated reshoring of manufacturing by many OEMs. I AI and cloud computing will support the need for more nonresidential construction, along with data centers, chip factories and battery plants.

We believe that obviously will be associated positive stimulus through the inevitable interest rate reductions that should happen this year and the next. And finally, decarbonization. We're materially steepen the global cost curve providing steel dynamics with a meaningful competitive advantage to gain market share and increase margins. More importantly, we continue to be in passion by our current and future growth plans.

As they will continue to drive the high return growth momentum we have consistently demonstrated over the years. The earnings growth of these new projects is compelling. Capital spending for symptom, the 4 value add lines and alum Dynamics is largely spent for the projected future through-cycle EBITDA contribution of over $1.4 billion.

Steel Dynamics has grown to an incredibly resilient cash-generating business of scale and diversification, driven by the best teams, as I already said, in the world. The model has now demonstrated itself year after year. delivering financial metrics equivalent to best-in-class manufacturing companies. We are fortunate and at the heart of that good fortune are our people.

They are the foundation of everything we do, and I want to personally thank each of them for their passion, their commitment and unwavering dedication. And we are committed to them. And I remind those listening today that safety for yourselves, your families and each other is our highest priority, always. And I would also be remiss not to express my gratitude to our loyal customers, many of whom have been with us since the beginning.

These partnerships are built on mutual trust keeping our word and delivering innovative solutions that enhance your value. Our new aluminum partners can expect the same level of commitment and collaboration and to our suppliers and service providers thank you. We value your continued support and the strong relationships we've built together.

Our culture and business model continue to differentiate our performance, leading best-in-class financial performance. and as a circular metals business, we are uniquely positioned to offer lower carbon supply chain solutions, enhancing sustainability while helping to mitigate cash flow volatility through all market cycles.

This positions us to deliver superior shareholder returns and create lasting value for all stakeholders. So we look forward to creating new opportunities for all of us and today and in the years ahead. And with that said, Elie, we would love to open the line for questions.

[Operator Instructions] Our first question is coming from Katja Jancic with BMO.

Maybe starting on the aluminum rolling mill and the quality qualifications for the products you received so far. Can you talk a bit more what that means for your commercial activity, specifically does that open the door for you to start negotiating more longer-term contracts?

Well, I guess, firstly, the accelerated qualifications that we've been receiving is absolutely incredible, given where we are on our learning curve as you might recognize. Can sheet has been supplied to most of the principal carmakers today for qualification.

Early performance is, again, it's just incredible. And when the team sent me a video of the very first coil going through a can line flawlessly, it was a some to be home. And obviously, we are also having some good progress within automotive. I think what it does it accelerates the value or the product portfolio mix into next year.

And we've always said that we hit our target mix in 2027. I think we'll see that earlier in 2017 than we were expecting.

But to answer your other question, Katja, we are negotiating longer-term contracts, both in the sheet, the can sheet as well as the automotive -- so yes, that has helped, but we had considerable traction, I think, throughout the third quarter as we were starting up. So more to follow on that.

Maybe if I just can quickly squeeze one more. On the 26, how should we think about the mix between industrial, can and auto.

The most significant difference, Katja, is that earlier on, we wouldn't have expected to have very much volume in automotive specifically. And we have full confidence and we were getting to, I think, appropriate amount of mix as it relates to can sheet in 2026.

As you'll remember, the optimized mix for us is it's automotive, I think, is it 40% [indiscernible] sorry. 45% in sheet in the remainder industrial. So we feel pretty confident in that can sheet mix for 2026. But what's changed is we would expect to not reach full optimization in automotive in 2026, but we'll provide more feedback as we get further certified.

Because as Mark pointed out, for automotive right now, we're just certified on the hot band side.

Our next question is coming from Tristan Gresser with BNP Paribas.

Just following up on aluminum, if you could provide maybe an update on the target exit run rate for this year or maybe what you expect in Q1 so we can get a better sense on what to expect in terms of volumes. And I think you were initially expecting positive EBITDA in Q4. So what drove the lower number? Any sort of delay or anything you can share there, that would be great.

So Tristan, I just want to clarify. So we are still expecting to be a positive breakeven to -- sorry, EBITDA breakeven to positive in the fourth quarter. So that hasn't changed. What has changed is this the certification of the more complicated products is taking place more quickly than we expected.

So there are some higher costs associated with that. So that was 1 of the things that I talked about in my opening comments as it relates to the third quarter impact. That said, we haven't been specific about how we're going to ramp in 2026. But what we have done is provided substantiation that we still are very confident in exiting the year at least at a 75% utilization rate.

And as it relates to 2025, there's just a lot of moving pieces right now. So we don't want to get into utilization because it depends on the product mix to a large extent.

Okay. All right. That's fair. And maybe just a quick one on the free cash flow. I mean, you have a very strong free cash flow look -- if you can talk a little bit about your priority in terms of capital allocation into next year, you mentioned CapEx will be between $500 million, $600 million. is growth on the agenda for next year?

And if so, what are the options you may consider upstream steel, aluminum, are you considering maybe different types of metallics asset that could be on play in the region? So any color there would be great.

Mark can speak to what things might look like, but just to give you some specificity around the $500 million to $600 million, Justin. As a reminder, our sustaining capital is generally around $200 million to $250 million. And then we still will have a tail associated with the aluminum project and a little bit on the biocarbon project as well.

It just depends on the timing as we proceed through the end of this year. So that is a preliminary number. But Mark, I don't know if you want to give any context to what other growth opportunities we might be looking towards.

Well, just generally, on the cash allocation broadly. I think with our strong liquidity position and the through-cycle cash generation that will come through next year and the years after. We can retain our balanced cash allocation profile. So one can expect an increase in the dividend, I would think our positive profile will continue into next year.

We feel that the company is selling at an accruable discount today relative to other potential investments one might make -- so we'll continue to buy our shares back. And again, we're doing that not because necessary, our shareholders just want us to or we think it's a flavor of the month. It really is buying a company that is discounted, a quality company that we know with a phenomenal team, phenomenal assets.

Extending from that -- we still have a team that is innovative and creative. They've got a pipeline of organic possibilities, both in steel and aluminum and that will access new products, new product lines for us. Now those aren't massive $3 billion greenfield steel mills, but smaller projects but very, very high return, high reward.

And then obviously, there's the possibility of M&A activity out there. you, but just one highlight, I guess. But you will continue to see us adhere to our disciplined investment approach. I think we have the highest return on invested capital in our space for a reason.

We're disciplined, and we bought good assets with real return, real future return. And you'll see that going forward.

Our next question is coming from Timna Tanners with Wells Fargo.

I wanted to follow up, if I could, on the aluminum questions. So you're starting up and getting qualified on hot band just when there's a player in the market that needs hot band. So could you address that ability to supply Novelis, if possible. And then if you could just comment on the additional CapEx, I believe comparing the presentation that there's another $200 million that was attributed to the aluminum start-up, if you could elaborate on that?

Well, Timna, again, thanks for your questions. We will not comment on where our material is going. I think the aluminum space is a lot more shielded from a confidentiality standpoint relative to steel. And so most of our relationships are under CA or NDAs.

So I can't really speak to that other than it's absolutely phenomenal that the team in such a short period of time is accessing those sorts of markets. Relative to the CapEx, yes, it did expand. Again, in all honestly, it's kind of the wind down of the project and just clearing up all the construction contracts.

But I think more importantly, the last 3 months -- it has been -- in particular, it's been incredibly difficult to get electrical talent with all the data centers, et cetera, being built. We found our contractors sort of drifting away from us and there was a substantial increase in the cost to cover that and maintain our schedule.

Got it. If I could squeeze one more in. There was a comment yesterday that there is a view that customers would be switching away from aluminum back to steel because of the availability, not something we'd heard before? And just would be interested to get your thoughts on that as you're now in both markets.

Well, I think, obviously, if you're a lion consumer and you've seen the sort of supply chain risk that they've just gone through, you've got to ask that question. I think and you've heard us say this before, as we got into the aluminum space and looking for -- just looking -- doing our due diligence for the ADI project.

Automotive makers would have actually consumed more aluminum over recent years if there was more supply. So it's -- are they questioning Alum? I don't think so. Aluminum is an incredibly important material for the future plans. We coming on to -- coming into the marketplace will allow them optionality and create redundancies through the supply chain.

So I think that issue or that question will sort of be mitigated going forward.

Our next question is coming from Lawson Winder with Bank of America.

Great. And good morning, Mark, Theresa and Barry. It's nice to hear from you. And a sincere congratulations on the success of aluminum dynamics. What I wanted to do is just a follow-up, Mark, on your comments on capital allocation and that you noted that M&A might be a possibility. Can you give us a flavor of where there might be opportunities to improve the business through M&A, whether that be in downstream or upstream or raw materials or otherwise?

It -- we would steer away from raw materials I do believe. I think it's it would be aligned or parallel our previous commentary in downstream strategic sort of pull-through volume type opportunities where we can either lever or exploit our core strengths. So downstream in coating, the painting, those value-add opportunities, for sure in value-add sort of manufacturing to some degree, as long as the volumes are there, and it makes sense.

But no, not upstream. Our raw materials space with OmniSource, we're the largest North American recycler of Ferris [indiscernible] today. that's in great shape. You might see a little -- from a regional standpoint, a yard here or there, but no major thing.

Yes, downstream value-add as we've pursued in the past.

Thank you. Our next question is coming from Phil Gibbs with KeyBanc Capital Markets.

It sounds like based on your comments that rail is pretty strong. any context just broadly you can give on that market? And then maybe give us a feel for how much of the rail mix is a part of your structural shipments right now?.

Phil, this is Barry. We committed many years ago to be in the rail market because it's essential that they have a reliable. So when wide plant is strong, you might see a smaller ratio. But in general, we try to say exactly where the customers need us to be. It remains within percentage points of where it always is coming out of Columbia City. And we're resolving our contract relationships for next year right now, but we anticipate growth in that segment, and the team is doing an excellent job with availability of trains to get the product distributed easier, quicker.

And quality-wise, we're working on even better products coming in the next year or so based on some trials they've been doing. So it remains a good part of our business. But in the window that we always keep it. So we try to not to surge it too much 1 way or the other.

And I just have a follow-up on the flat rolled side of the business. And specifically at Sinton and just an update maybe on how the downstream lines are running and how much yield improvement you have left there?

And then Theresa, I also missed the comments you made on the flat rolled mix.

Sure. No problem. I'll grab that, and then Barry can comment.

I'll comment on the downstream units. We're very excited about the quality that the team is getting out of the new lines are added as well as the existing paint and galvanizing line. [ Galbaloom ] is a very difficult product to make. The team has really risen to the occasion. There is a learning curve. And we went through that earlier this year to the point where we are seeing excellent yields, excellent produced prime products.

And our distribution system and our customer base is going through approvals. A lot of the product there goes into contract-type business with OEMs. And those trials are ongoing and very good. So we believe Synta will have the full breadth of product mix to offer as the markets return. As I mentioned, there's a little overhang in the Galvanize still out there.

We think that's diminished. We think it's going to be behind us here in months. The imports coming in the country have substantially tapered off. So we believe the playing field is going to be level. And based on good feelings. We think next year is going to be outstanding for sending to really realize all the hard work they've been putting in.

So Phil, for the shipment, the hot band was 1,097,000 cold-rolled 120,000 and coated 1,486,000.

Phil, if I could just add because the question rent structural tended to be rail-centric. Just looking at the long products market in general, we're finding that to be incredibly strong and robust and believe that we'll certainly continue nonresidential is in good great shape.

And we see on the fabrication side, there's a lot of engineering sort of permitting detailing work going on -- and it would be our view that come the first quarter in 2016, we're going to see a nice return of that volume as well.

Our next question is coming from Carlos De Alba with Morgan Stanley.

So I wanted to check, Mark, you mentioned that you saw some headwinds in the flow roll business. Has the situation improved as we get into the fourth quarter, if you can give us a little bit more color as to how that part of your steel business is shaping out.

Yes. I think the headwind obviously was principally the inventory overhang, which, as Barry just suggested is it's eroding and should be depleted by the end of this fourth quarter. And with the almost nonexistent import profile, first quarter should be in good shape.

I think you started to see that hot band pricing softened through the quarter yet in mid-September, it kind of turned up. And I think we will see sort of slow but positive move through the end of this year. And as Barry said, we are quite, quite optimistic or robust for Q1 and Q2 through the rest of.

Fair enough. And then just maybe complementing on the growth ahead. Given the early success that you have had on the aluminum business, and your comments on demand being limited perhaps by supply. Would you -- I know that you didn't talk about potentially getting more into the aluminum business. Is this something that you might consider? Is it too early? Any color there?

Well, we want to make sure we walk before we run. I got to say here, the team down there is starting to Sprint because they're incredibly excited. And I'm on to see incredibly excited by what those folks are doing is an incredible mill. There's absolute opportunity, call us in alumina.

There's no doubt about it. We will see how things go over the next a month or so, but there is definitely growth opportunity there, both in downstream we could envision sort of exploiting or leveraging our pre-paint capabilities. It's one of our highest margin product lines today, and the team would be incredibly effective to coat the thousands or millions of pounds of alum that gets painted every year.

And then we do believe there's still clear room for a larger asset, the mill asset.

Yes. Just as a reminder, Carlos, and I know some of you would have this top of mind, but for those that may not even prior to 50% tariffs, the deficit of flat-rolled sheet in the U.S. was over 1.5 million metric tons. We're only adding $650,000. And I think there's another project that may add another incremental amount, but that deficits growing, and that's without tariffs.

So then when you place that 50% tariff into the equation, it just really does we would never invest based on that. But the point is that there's a real need structurally independent of trade action.

Our next question is coming from Andrew Jones with UBS.

A couple of questions. Just firstly, on [indiscernible] idea as to how much that's adding to the EBITDA. Can you give us any sort of breakout for the profitability of that? And I've got a second question on tax, if you want that first.

Sure, Andrew. And as soon as you said, taxes, both Barry and Mark looked away No, I think I want to -- so symptoms specifically, Andrew, as a reminder, we've said that they're through-cycle EBITDA capability on an annual basis but it's through cycle. So we're not making a determination where the market is at this point in time is between $475 million and $525 million.

And what I want to do is take a step back because I think there's a bigger picture item that we -- it would be helpful to discuss a little bit. And that's -- Mark mentioned and we've talked about in the past that in the last 5 years, the fixed asset investments in aluminum, in Sinton and in the floor flat-rolled coating lines has been over $5 billion, just about $5 billion. Associated with those 3 projects is about $1.4 billion of through-cycle EBITDA capability.

And we really haven't been able to utilize that up until this point. And so as we think about 2026, and we think about where the facilities will be from a maturity standpoint, including the ramping of aluminum. Of that incremental additional earnings power we think that we should have the ability to access on a through-cycle basis.

So again, we're not making a determination of what that market will be like. But if it were through cycle, we really think we would have the ability to access it somewhere at least no less than 60% to 65% of that number. So there's a lot of earnings potential that people may not understand is incremental structurally to Steel Dynamics because of the investments we've made over the last 5 years.

Yes. No, that's why I ask [indiscernible] I guess, I'm just wondering what the annualized contribution was in the third quarter, and therefore, what's the delta of Sinton specifically going forward?

So we won't give that specific information. Suffice to say, Sinton was EBITDA positive, but not to the magnitude of that through cycle number. And then you said you had a tax question?

Yes. No, it's about the deferred tax movement on the cash flow, which boost to free cash this quarter. Just wondering if you could explain the origin about and how you're -- what the moving parts are in the coming quarters with regard to tax? Because I guess you've got a few things, obviously, you flagged this $250 million impact the Vale project and you've also -- I mean, there's obviously this big beautiful bill, accelerate depreciation stuff going on.

I mean can you just give us an idea of how we should think about like effective tax rates and the actual equivalent of the actual cash tax profile in the coming quarters?

Yes, certainly. So it was a big boost to the third quarter because that's when we were able to adjust for the tax bill changes. Which included additional research and development benefits as well as most importantly, the acceleration and depreciation as our aluminum assets are getting placed into operations, so that benefit of $147 million you're referring to.

Most of that was in the third quarter. You won't see that magnitude of increase in the fourth quarter. the way you should model cash taxes for 2025 is probably at a rate of about 8% to 9%. And then for 2026, I would model cash taxes closer to 15% to 16%. And the effective rate, probably closer to 23%.

Our next question is coming from Mike Harris with Goldman Sachs.

Yes. As we look at you consuming more biocarbon material to lower your carbon footprint. How should we think about what that could potentially do to your cost structure?

It's a good question, Mike. So from a cost structure perspective, it really probably won't have a material impact for you to be able to observe from the outside in. It is a joint venture, so we are transacting as we would at a market price to our steel mills. The joint ventures with [indiscernible] who has the IP associated with it. But what it does offer is an opportunity for us to offer an even lower carbon product.

And we do believe we're already seeing some customers that are providing premiums, not something that we're talking about at this point more broadly in specifics, but we think it will open the door for even more opportunity on market share, specifically in OEMs, specifically more in the flat rolled side of the business. So there's a lot more we'll talk about as it relates to biocarbon in the future.

They should be operating continuously here starting in November. So it will take a minute before we're supplying as much into the steel mills as we'd like. But you shouldn't see a dramatic impact on the cost side at this point.

Okay. That's very helpful. And then just one last one, if I could. Of the record shipments you saw in the third quarter, were there any material onetime sales included in that?

No. So it was just ramping up of Sinton and then we had some record shipments at a couple of them under of our flat-rolled facilities as well as really a lot of strength in demand, as Mark pointed out, in the structural arena.

Our next question is coming from Bill Peterson with JPMorgan.

I wanted to talk about the steel mill shipments in the fourth quarter. You called out the 85,000 planned maintenance. But I guess is there anything else that we should be taking under consideration for example, other things seasonal trends or also take into account imports, which seem to be at a very low level or maybe potentially abate in further trying to get a sense of how to think about shipments relative to maybe the last 5 years of flat to down 5%.

You guys are so crafty. You always try to come at it from a different angle. And that's a complement, Bill. For the fourth quarter, we just wanted to call out the maintenance because generally, we don't have all the maintenance same quarter as we are this time. So we felt like it was impactful enough to call out.

But we do still believe there's going to be seasonality, whether it's the same as it's been in the last 5 years. I can't really comment to that. But you will see seasonality in the volumes in addition to what you're seeing from a maintenance perspective. Barry, Mark, do you have anything to add?

The outages are just our regular attempt to keep our assets performing at the absolute tiptop condition. We play out long in advance. And this is strange that we have all the mills taking some time in the fourth quarter but all are great projects that continue to make our shops, the safest in the industry and the most efficient possible.

Okay. And I'm not sure if this is crafty or not, but I think about your overall strategy in auto. I know you're an emerging player in aluminum, but thinking about your steel, is this -- is this a market where you're looking to gain share?

And if so, how should we think of that unfolding in the coming years? Or is really this business going to kind of grow with your existing partners, assuming they grow their U.S. footprint in order to avoid tariffs.

We are really excited about the automotive business that we're doing. I think the opportunity for our customers to purchase a low carbon content product, really enhance our relationship early. And since starting to do business with us, our teams operate very efficiently, very smoothly and without much bureaucracy.

So I believe our teams have a great position relationship -- they've been working really hard this past year with all the tariff changes to allow us to continue to do what we do best for the automotive industry. We do see it growing when we built in.

That was part of the design to be close to the Mexican automotive base with some high-value steel products. The facility was designed with that in mind. So as that ramps up and we have OEM packages into all of our customers from that facility. We anticipate the growth organically happening.

We see it as good products. And we're appreciative that the customer base recognizes that. We received an outstanding award from Volkswagen in the second quarter, which was really surprised and we were absolutely thankful to receive that, but it really highlights our position. We have a very low carbon footprint. We

have a very engaging position going forward that doesn't change our cost structure. We've engaged on renewable energy and nuclear energy across our flat-rolled platforms. So we are ideally situated to grow our business there. And we're going to grow it where it makes sense and listen to our customers and have great discussions with them.

Our final question today will be coming from John Tumazos with Independent Research.

Could you explain the $27 drop in scrap costs given that the steel business is strong, Calvert, Alabama, starts up a new melt shop right now, et cetera. Is it from lower iron ore and coal prices and China selling lots of swabs and other steel, et cetera?

And then second, would a reasonable guess for aluminum be $2.40 to $2.50 a pound sales realization with the big Midwest premium and maybe $40 a production cost with 93 sets UBCs?

Well, taking number one, the scrap dropping off $27. It -- obviously, John, as you know, scrap is the -- in my mind, the most transparent fluid commodity out there, and it's just supply and demand. And honestly, in '20, whether it's the $27 in the broad scheme of things is not it's more noise than anything else.

Directionally, I think it's important, but it's more noise. In the old days, $10, $15, $20 move would be monumental today, it's not too much. But again, in the dynamics of scrapped with the segregation technologies out there today, the Shred 1 and all these things, there's greater optionality of flow. And I think that's just bearing fruit. And we've always said, I always suggested that we don't have a major concern that others have had over the years that, oh, my goodness, flat roll is going to continue to grow and scrap is going to be a problem.

In fact, if you look at a lot of the new projects coming online, most of them anyway are having some CRI type virgin iron associated with them. So even though the the production capability of the domestic industry is increasing. It's not a -- the scrap consumption is not at that same rate.

So we still remain confident that scrap will remain in reasonable -- at a reasonable level and that going forward, spreads will remain very high, if not increase, to be honest, going forward. Relative to your question on aluminum, I will refrain. To be honest, it's a little bit more complicated as you can appreciate also.

It depends on which grade -- is it automotive? Is it can sheet? Is it industrial? It is all over the map. Suffice it to say, we do believe that our returns that we've advertised are more than achievable.

I'm glad to be a shareholder.

John, we appreciate you being a shareholder all those years and challenging us for sure. And just to finish up, I would like to thank all shareholders that support us that are on the call. As I asked to joke to them, if you're not a shareholder, you should be because we will endeavor to perform and use your dollars just as though they were our dollars.

A couple of just point. I've had customers that are on the line, thank you. Thank you for your support. Particularly, I would like to welcome any ally customers that are on the line. It's been a pleasure to engage with you and just in the last 3, 4, 5 weeks of market chaos, in the space. It really has been refreshing for us and hopefully refreshing to you because we do bring a different approach from a sort of customer relationship standpoint.

We truly will partner with you going forward. And lastly, any SDI folks on the call, absolutely hats off to you. You do a phenomenal job each and every day, you do make a difference. You are the best deal metals team in -- on the planet. Just make sure you keep safe and keep each other safe. Thank you all.

Thank you. Once again, ladies and gentlemen, this does conclude today's call. We thank you for your participation, and have a great and safe day.

Good day, and welcome to the Steel Dynamics Second Quarter 2025 Earnings Conference Call. [Operator Instructions].

Please be advised this call is being recorded today, July 22, 2025 and 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, Holly. Good morning, and welcome to Steel Dynamics Second Quarter 2025 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 Millett, Chairman and Chief Executive Officer of Steel Dynamics; Theresa Wagler, Executive Vice President and Chief Financial Officer; and Barry Schneider, President and Chief Operating Officer.

The 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 the anticipated project returns and our steel, metals recycling and fabrication businesses as well as to general business and economic conditions.

Examples of these are described in the related press release as well as in our annual filed SEC Form 10-K under the headings -- forward-looking Statements and Risk Factors found on the Internet at www.sec.gov and if 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 Reports Second Quarter 2025 results.

And now I'm pleased to turn the call over to Mark.

Super. Thank you, David, and good morning, everyone. Thank you for being with us on our second quarter 2025 earnings call. As evident in our release, our teams achieved a solid second quarter performance, and most fulfilling to me was the team's overall safety performance. They achieved an all-time low quarterly recordable and lost time injury rates. In fact, 80% of our over 100 locations didn't even have a single recordable injury. It's a supreme achievement by the team. My sincere thanks to everyone involved.

Although experiencing some challenges in the second quarter relating to vendor oxygen supply that inhibited steel production, the Sinton team continued their progress. They increased sequential earnings achieving pretax breakeven and another positive EBITDA quarter. We expect a steep acceleration of profitability for the remainder of this year and next. We believe we have reached an earnings inflection point for steel fabrication with expectations for increased profitability in the third quarter.

We achieved record quarterly metals recycling shipments -- adjusted EBITDA was $533 million. Biocarbon is in the midst of commissioning with expectations for product shipments to begin later in the third quarter. We were awarded the Volkswagen Global Group Award for Sustainability is a testament to our low carbon steel program and its associated impact on us becoming the supplier of choice for auto groups expanding in the U.S.

And aluminum is here. We shipped our first commercial quality aluminum flat rolled coils on June 16. So congratulations to absolutely everyone involved in the phenomenal progress. So we are successfully executing on many fronts, and I'm proud of the entire Steel Dynamics team. There's no doubt the other foundation of our company and remain our first and foremost priority.

As such, we are focused on providing the very best for their health and safety. We're building a world-class safety culture. Our team's dedication to our tape controller safety program is absolutely extraordinary and resulted in the record metrics this quarter. Continually inspired by the commitment of our team members have for one another. They consider themselves family and challenge the status quo each and every day. With that said, there will always be more to do as we strive for a 0 incident environment.

So with that introduction, Teresa, some sales on the quarter.

Thank you, Mark. Good morning, everyone. Thanks for joining us. Our second quarter 2025 net income was $299 million or $2.01 per diluted share. which -- with adjusted EBITDA of $533 million. Second quarter 2025 revenue of $4.6 billion was above sequential first quarter results due to higher realized steel pricing across the platform.

Our second quarter operating income of $383 million was 39% higher than the first quarter results, driven by steel metal spread expansion as pricing increased more than scrap raw material costs. As we discuss our business this morning, we continue to focus and execute on our transformational growth initiatives.

Our steel operations generated operating income of $382 million in the second quarter, over 65% higher sequentially due to average realized pricing increasing $136 to $1,134 per ton, while total shipments were modestly lower due to a decline in flat rolled shipments.

Earnings from the steel platform were reduced in the second quarter by approximately $32 million due to a noncash write-off of consumable assets. They were also negatively impacted as seen shipments were reduced by approximately 55,000 tons due to a reduced vendor supply of oxygen, which has since been restored.

For those -- for modeling purposes for shipments in the second quarter, hot rolled shipments were 930,000 tons, cold-rolled shipments were 114,000 tons and finally, coated shipments were 1,387,000 tons. For the second quarter, operating income from our med recycling operations was $21 million or $4 million lower than sequential first quarter results, due to lower realized ferrous pricing as primes were down about $50 per ton and other grades $80 per ton.

The price differential more than offset the team's record shipments. We are already the largest North American metals recycler for ferrous and nonferrous metals and we're growing in support of our increased steel capacity and aluminum flat-roll operations through new and expanded supplier relationships and through the use of innovative new separation technologies. Our melt recycling platform is a significant competitive advantage for our steel, aluminum and copper operations.

Our steel fabrication team achieved operating income of $93 million in the second quarter lower than first quarter results as realized pricing declined modestly and steel substrate cost increase compressing margins. Federal programs, manufacturing growth and onshoring are expected to support domestic fixed asset investment and related flat and long product steel and steel joist and deck consumption in the coming years.

As for our aluminum operations, I also want to send a huge congratulations to the team on their first shipment. It truly is an exceptional accomplishment. Operating losses from the aluminum operations totaled $69 million in the first half of 2025. We estimate comparative losses to be in the range of $40 million for the third quarter of 2025, which is consistent with second quarter results, then improving to between $15 million and $20 million for the fourth quarter as we complete commissioning, commenced product certifications and ramp production.

Based on current dynamics, we continue to believe we will achieve monthly EBITDA positive results before the end of 2025. Additionally, in connection with startup, we will stop capitalizing interest expense associated with the aluminum project. As such, we estimate interest expense to increase to about $30 million in the coming third quarter and to the full $45 million in the fourth quarter.

Related to cash flow, during the second quarter of 2025, we generated cash flow from operations of $302 million. Working capital grew $131 million in the quarter as we grew inventories for our new aluminum investments. In June, we repaid our 2.4% $400 million senior note that matured. We ended the quarter with liquidity of $1.9 billion comprised of cash and short-term investments of $744 million and are fully available unsecured revolver.

For the second half of 2025, we believe capital investments will be in the range of $400 million, with the majority related to the completion of our aluminum and biocarbon growth investments. In February, we increased our quarterly cash dividend 9% to $0.50 per common share, continuing our positive dividend profile.

We also repurchased $200 million of our common stock in the second quarter representing over 1% of our outstanding shares. At June 30, $1.2 billion remained authorized and available for share repurchases. These actions reflect the strength of our capital foundation in consistently strong cash flow generation capability and the continued optimism and confidence in our future.

Our capital allocation strategy prioritizes high-return strategic growth with shareholder distributions comprised of a base positive dividend profile that's complemented with a variable share repurchase program, while we remain dedicated to preserving our investment-grade credit designation.

Our free cash flow profile has fundamentally changed over the last 5 years from an annual average of $540 million to $3 billion, excluding our large strategic Sinton and aluminum investments. We placed ourselves in a position of strength to have sustainable capital foundation that provides the opportunity for meaningful strategic growth and strong shareholder returns while maintaining investment-grade credit metrics.

We're squarely positioned for the continuation of sustainable optimized long-term value creation. In alignment with the 1.5-degree scenario set forth in the Paris agreement, we have an interim 2030 emissions intensity target, which represents a 15% reduction in our greenhouse gas intensity and a 2050 emissions intensity target. We announced during the second quarter that each of our company's steel mills achieved global steel Climate Council product certification.

For our customers, this means greater transparency and confidence when sourcing lower embodied carbon steel products. The GSCC certification verifies emissions data through a certified science-based standard aligned with the Paris agreement. Decarbonization is a meaningful part of our long-term value creation strategy, and we're dedicated to our people, our communities and our environment.

We're committing to operating our business with the highest integrity. In that regard, we grow in our excitement considering our first biocarbon production facility as it transitions from construction to commissioning, with expectations, as Mark mentioned, for production to begin in the coming months.

We believe our first facility could decrease our Steel Scope 1 greenhouse gas emissions by as much as 35% and more importantly, provide unique value and supply chain opportunities for many of our OEM flat-rolled steel customers. We uniquely have an actionable path that is more manageable and we believe considerably less expensive than may lay ahead for many of our industry peers. Our carbon reduction strategy is an ongoing journey and we're moving forward with the intention to make a positive difference. Thank you.

Thank you, Theresa. Our steel fabrication operations achieved a solid performance in the second quarter in a somewhat challenging environment, as steel input costs increased and customer hesitancy prevented any meaningful increase in volume. However, order activity remains solid with the order backlog increasing by 15% since the beginning of the year and now extending into 2026.

Pricing for steel joist and deck bookings has remained relatively stable through the first half of the year. Based on the current market environment, we believe we have reached an inflection point in profitability from our fabrication operations and expect third quarter earnings to improve sequentially. We continue to have high expectations for the business based on continued onshoring of manufacturing, recently announced significant privately funded manufacturing projects and public funding for infrastructure and other fixed asset investment programs, the long-term uplift from this backdrop could be considerable for all of our platforms.

Our steel fabrication platform provides meaningful volume support for our steel operations critical and softer demand environments, allowing for higher through-cycle steel utilization compared to our peers. It also helps mitigate the impact of lower steel prices.

Earnings from our metals recycling operations were modestly lower in the second quarter despite record shipments due to lower realized ferrous scrap prices as scrap flows were steady and exports declined. We believe ferrous scrap prices have stabilized and are likely to remain relatively steady throughout the rest of the year, aside from the typical seasonal fluctuations.

Additionally, the team continues to expand its access to recycled aluminum in preparation for the ramp-up of our aluminum flat-rolled operations. The North American geographic footprint of our metals recycling platform provides a strategic competitive advantage for our steel mills and for our scrap generating customers.

Our Metals Recycling team is also partnering more closely with both our steel and aluminum teams to expand scrap separation capabilities through advanced process and technology solutions. This collaboration helps mitigate supply risk by making more grades of ferrous and nonferrous scrap usable for our steel and aluminum production.

Additionally, it positions us to significantly increase the recycled content in our aluminum flat rolled products, unlocking enhanced earnings opportunities. The steel team delivered a solid quarter with shipments of 3.3 million tons. In the second quarter of 2025, the domestic steel industry operated at an estimated production utilization rate of 77%, while our steel mills operated at a notably higher rate of 85%, this consistently higher utilization reflects our value-added steel product diversification, differentiated customer supplied solutions and strong support from our internal manufacturing businesses.

Our elevated through-cycle utilization rate is a key competitive advantage, underpinning our growing cash generation capability. Our realized steel pricing increased throughout our product portfolio in the second quarter. And just last week, long products saw additional price improvement. Overall, domestic steel inventories remain lean from a historical basis. However, coated flat-rolled steel volume and pricing compressed during the quarter due to an inventory overhang related to imports that we received just ahead of the final ruling related to the associated industry trade case.

Last fall, we and other industry participants initiated a trade case related to these products and have since received favorable preliminary countervailing and antidumping rulings. We anticipate final rulings to be determined before the end of September. This uniquely positions us as we are the largest producer of nonautomotive coated flat-rolled steel products in North America.

Together with the announced Section 232 steel tariffs, these developments are expected to positively impact demand for lower carbon emission U.S.-produced steel. The underlying steel demand remains steady. However, customers continue to exercise caution in placing orders due to ongoing uncertainty related to trade policies and interest rates. That said, we believe steel prices have stabilized in the near term, with potential for upward movement in the future.

Our Sinton, Texas flat roll mill achieved higher earnings in the second quarter despite operating a lower utilization rate of 71% due primarily to lack of sufficient oxygen supply caused by a vendor. We believe this impact to our operations could be as much as 55,000 tons. Sufficient oxygen, as Theresa mentioned, has been restored and the bill is operating very well. The team continues to make improvements in yield, cost reduction and quality. They are also continuing towards additional product development to expand our current flat-rolled steel capabilities. Meaningful progress is being made on API pipe grades, high-strength grades, Grade 1 110, pressure vessel quality and OEM qualification packages for our automotive customers.

We are seeing increased shipments from SIMs value-added coating lines, which are strengthening the facility's product mix and boosting its through-cycle earnings capabilities. Regarding the steel market environment, North American automotive production estimates for 2025 were recently revised modestly downward reflecting ongoing uncertainty related to trade discussions. Fortunately, our specific automotive customer base has not only remained stable, but have provided opportunities for growth.

We have become a supplier of choice for many U.S.-based European and Asian automotive producers due to our current and planned future superior carbon content capabilities. Additionally, numerous announcements have been made concerning its considerable volume of automotive production moving to the U.S. from foreign locations in the coming years.

Meanwhile, we continue to grow market share in both flat-rolled and SBQ deals within the sector. Nonresidential construction remained stable despite broader predictions of a potential slowdown. So far this year, construction sector employment and spending have been stable. Pricing for most long products has generally improved, supported by strong backlogs.

Looking ahead, ongoing onshoring activities, recently announced domestic manufacturing projects and continued infrastructure spending are expected to further support fixed asset investment in construction-related demand. In the energy sector, oil and gas activity remains steady with encouraging signs of increased demand for both flat-rolled and SBQ products heading into the third quarter.

Additionally, Solar is particularly strong currently as the producers attempt to benefit from expiring incentives. Overall, we remain extremely optimistic concerning steel demand and pricing dynamics for the domestic producers in the coming years based on the expected demand from new manufacturing and U.S.-produced steel content requirements.

With that, I'll return it to Mark Millet.

Thank you Mr. Schneider, I appreciate that. Well, as you've seen these past years, I believe it's more than evident that our performance-driven team-based culture in combination with a proven, diversified and value-add business model drives consistently superior financial metrics. This consistently strong performance continues to support our cash generation and growth investment strategies, allowing a balanced cash allocation strategy that has delivered high shareholder returns.

Our disciplined investment approach continues to support a strong and growing through-cycle cash generation profile while maintaining one of the highest return on invested capital amongst our peers. As mentioned, Sinton did face some action and supply challenges in the quarter, which have since been corrected, then productivity has been reestablished here around about 80% and growing.

The facility continues to improve operational reliability, enhance its downstream operations. Despite the hurdles, Sinton increased its EBITDA, as we said, and we expect a meaningful positive shift in its financial performance for the remainder of the year. The 4 flat-rolled steel coating lines are also continuing to increase volume and achieve high-quality standards.

These types of high-return investments are key to our value-added product and supply chain differentiation strategies. Theresa, I already shared the exciting update for biocarbon. This is an ingrown part of our sustainability program. that is truly differentiating us in the eyes of our customers.

As I said, finally, we're incredibly excited to be officially part of the aluminum flat rolled product supply chain. Our aluminum investments are compelling and parallel our entry into then antiquated steel industry over 30 years ago, and there are distinct similarities. An industry with generally older inefficient assets at a considerable cost disadvantage and company's challenge to earn their cost of capital, thereby unable to reinvest in facilities and new technology due to lack of funds.

So we believe we have a significant competitive position with aluminum. Unlike our entry into the oversupplied steel market, there is a significant domestic supply deficit of over 1.4 million tonnes for aluminum sheet. And this deficit is forecast to grow. In 2024, that deficit was supplied through high-cost imports, which are now even higher cost as the tariffs increased from 10% in '24 to the current 50% level.

There's clear alignment with many of SDI's core competencies of construction and operational know-how. Our ability to build large capital-intensive assets has been proven once again at Columbus. It's a phenomenal facility. That customers are in all our team did a great job. We have a deep experience operating melting, rolling and finishing facilities, our differentiating performance-driven culture will drive higher efficiency and lower cost operations.

There's also excellent commercial alignment. 2/3 of our carbon flat rolled steel customers consume and process aluminum flat rolled sheet. We will have both steel and aluminum product offerings, as we gain market share in the automotive sector. And our new penetration into the countercyclical beverage can market sector is a new market for us.

We can take great advantage of our raw material platform to drive higher recycled content. As noted by Theresa earlier, we are the largest North American metals recycler, including aluminum, and we developed new separation technologies allowing us to have access to use of all aluminum scrap at lower cost. Feel confident in our earnings differentiation through cycle EBITDA of $650 million to $700 million plus $40 million to $50 million for Omni, as we discussed in the past, the 4 key areas of advantage and labor efficiency, higher recycled content, higher yield and optimize logistics.

This strategic investment is a cost-effective and high return growth opportunity, providing SDI with a new product offering and growth platform. And obviously, the project is no longer just a vision, it's here. The customer base is excited to have a new market entrant that is known to be innovative, customer-focused and responsive to their needs. For us, business relationships are long term, founded on trust and the continuous goal of creating mutual value.

As our aluminum growth has become a reality and our reputation permeates the industry, aluminum professionals with the vast experience have joined us in this exciting project. They see the vision and are energized by our culture, where they realize they will be heard and can have an impact. They have helped us build a phenomenal team that combines in-depth knowledge of aluminum flat-rolled aluminum operations commercial markets, process technology and customer service, complementing our SDI professionals that bring our performance-driven entrepreneurial culture.

Conversations with existing and new customers remain robust, as they need and desire new supply options. We have several automotive and beverage can producers that plan to aid us in the product development and rapid product certification as we ramp operations.

In the interim, we will be selling a lot of industrial and can sheet products with the expectation to reach our optimized product mix sometime in 2027. Three of our 4 melt cast houses are fully commissioned at Columbus and are producing all 3,000, 5,000 and 6,000 series ingots for industrial, can sheet and automotive sectors.

The hot mill and coal mill are in start-up and on schedule and have successfully produced 3,000 series industrial coils. The numerous them streamlines are also in various stages of commissioning and start-up, all on schedule. Based on our current pace, we anticipate exiting 2025 at a utilization rate of between 40% to 50% and exit 2026 at a rate of 75% as product certifications occur.

We expect to be EBITDA breakeven to slightly positive before the end of '25 and increasing thereafter as we continue to ramp and optimize our product mix. You have to be there, but there's a real sense of excitement across our company and the plan, driven by a passion to build on our legacy in steel and lead a transformation in the North American aluminum market.

We're impassioned by our current and future growth plans as they will continue to drive the high return growth momentum we have constantly demonstrated. The earnings growth of these new projects is compelling. The capital spending for Sinton with 4 value add lines and aluminum [ Dana ] largely complete with a projected future through-cycle EBITDA contribution from these projects alone of over $1.4 billion. teams has grown to an incredibly resilient cash-generating business of scale and diversification, driven by the best teams in the world. They will maximize opportunity as the industry continues to undergo a paradigm shift, where we have a renewed focus on strategic mercantilist policies to ensure fair and sustainable competition.

It's already evident by the recent positive trade determinations for coated flat roll and obviously, all the 232 tariff initiatives on steel and aluminum. And importantly, the inclusion of tariffs on steel content and derivative products particularly fabricated structural steel, which has played the domestic industry for years.

And risk mitigation to address supply chain dislocations as accelerated reshoring of manufacturing. AI and cloud computing will support the need for more nonresidential construction for data centers, chip factories, battery plants, along with growing fixed asset investment associated with public and private dollars.

Decarbonization itself will materially steepen the global cost curve, providing steel dynamics with a meaningful competitive advantage to gain market share and increase margins. The evolving metals industry landscape provides an opportunity for us to further enhance our earnings potential. As we've said before, we really are blessed in our people on the foundation and fuel of our success.

I want to personally thank each of them for their passion, commitment and unwavering dedication. And we are committed to them. And I remind us listening today that safety for yourselves, your families and to each other is our highest priority. I'd also be remiss not to express my gratitude to our loyal customers, many of whom have been with us since the beginning. These partnerships are built on mutual trust, keeping our word and delivering innovative solutions that enhance their value.

Our new aluminum partners can expect the same level of commitment and collaboration. And to our suppliers and service providers, thank you. We value your continued support and the strong relationships we've built together. Our culture and business model continue to differentiate our performance, leading to best-in-class financial performance.

And as a circular metals business, we're uniquely positioned to offer lower carbon supply chain solutions, enhancing sustainability while helping to mitigate cash flow volatility through all market cycles. This positions us to deliver superior shareholder returns and create lasting value for us all. We look forward to creating even more new opportunities for everyone today and in the years ahead.

And with that said, Holly, we would love to answer the questions of the group.

[Operator Instructions]. Your first question for today is from Carlos De Alba with Morgan Stanley.

Yes. Just on the [ Ali ] business, congrats on producing and shipping the first call. Just wanted to maybe get a little bit more color on what drove the slightly lower utilization rate in 2025 and 2020 and also the delta in the EBITDA profitability, which I think before it was said that in the second half of the year will be EBITDA positive, maybe just the semantics and it's still the same message, but it felt that now that I felt that the EBITDA positive now is coming at the very back end of the year, whereas before, maybe it was my expectation that it would be more earlier in the second half of the year.

Well, I don't think there's any material change in our view, to be honest I guess 50% -- 40% to 50% given that we're in a startup, I think having a specific number is -- might be problematic, but there's no underlying change in our thought process, our mill capability or anything to have that change, I guess. [indiscernible]. question. I didn't quite hear all that.

No, Carlos, we still are confident that as we progress, we do believe that we're still going to be EBITDA positive in the second half of the year. I guess we got a little more specific in our notes saying in the fourth quarter, but whether that's September, October, November, December or October, I'm not sure that there's a significant difference. So I think the takeaway should be that we still have full confidence in the aluminum operation. The team is doing an incredible job, and we weren't trying to message anything specifically otherwise.

Your next question for today is from Katja Jancic with BMO Capital Markets.

Maybe on Sinton, can you disclose how much of EBITDA the mill generated in 2Q?

Katja, I'm sorry, we -- I think beginning at the end of -- or the beginning of this year, we're not specifically giving the financial metrics as it relates to Sinton. Suffice it to say, it was significantly better than the first quarter. That said, there's still a step function increase that we're expecting in the second half of the year. [.

And when we do look at the second half of the year, is the mill now at a point where it could generate closer to that $500 million annualized rate? Or are there any lingering issues still?

It's a good question, Katja. So they're still not operating at that pace given that they need to continue with the product development. As Barry mentioned, we're really excited because they're doing automotive grades now, API grades but we need to be able to get the facility with the proper mix of that value-added opportunity, and that will take some time. So that will likely take through the second half of the year. So I would view 2026 is that opportunity for Sinton to be at the, what we say, through cycle run rate to your point of around $500 million.

Your next question for today is from Tristan Gresser with Exane BNP Paribas.

Maybe just a follow-up on the aluminum venture. If you can discuss the market environment in which you'll be ramping up your new aluminum facility. I mean it looks very different from what was the initial base case or initial market environment. So from a trade, from a demand perspective, where do you see the new opportunities and also maybe the risk associated?

Well, I think the -- if anything, the environment has become even more positive, obviously, the deficit is -- supply deficit is definitely there. That will continue to grow. And it's being supplied, obviously, by imports with a huge tariff attached to it. So us bringing volume on in that environment is very, very positive for us and then honestly, for the customer base as well.

So I don't think we see any issues there. I think conversations with our customers has been absolutely incredible. We've started to bring the larger folks through our mill, and I said it earlier that they are absolutely blown away by the facility and the capabilities. And I think even more so our approach as we talk through supply arrangements and product capability, they recognize that we truly do partner with the customer. And I think they're finding that refreshing. So there's no no blemishes, I guess. I think we're excited, if not more excited today than we ever have been.

Interested to add to what Mark just described as a more positive environment. When we modeled and projected the $650 million to $700 million of through-cycle EBITDA associated with our aluminum investments, the spreads that we actually used from a product set are more conservative than what we're seeing in the market environment today. So there is a lot of upside opportunity.

All right. That's clear. And I was maybe referring to potential demand disruption, especially when it comes to can and beverage. We know price elasticity is what could be high, but I guess from your conversation with customers, it doesn't seem there is a risk there, if I understood correctly.

Again, talking to the end consumer is not with can makers themselves, but they do not see that. There's still an overwhelming desire from a societal and environmental perspective to eliminate plastic bottles. And there is a clear desire the can makers and from the bottlers and from the Coca-Colas, the Pepsis, the beer, the beer guys, they're all wanting aluminum right now.

Okay. And maybe just then a follow-up on the tariff situation. I think you discussed it already in Q1, but wanted to see if there are any changes regarding your your exposure to pig iron. If you could comment on how much do you source maybe from Brazil? And if -- I mean, I understand with the 10%, it was not a big deal, but if we get 50% on pig iron, imports from Brazil starting August. So what could you -- what could you do? What could you put in place to mitigate those impacts? And then I have a follow-up.

Yes, Tristan, this is Barry Schneider. The pig iron topic is 1 that we're watching closely. I want to make it clear that our long product mills do not use any iron substitutes or pig iron, so this is a flat-rolled issue. In our 3 flat roll producing plants, our Butler facility has an iron producing facility where we use waste oxides and recycled iron content to generate our pig iron, so the Butler mill is largely independent of the merchant trade, which brings us to the products we do purchase.

The tariff is concerning. Historically, the United States government has not looked at raw materials is something that would be tariffed going way back to the founding of our country. The $201 million to $301 million and the $232 million previously did not tariff pig iron coming into the country. We maintain a supply chain that has been under quite a bit of duress in the past 5 years. Historically, pig iron is produced in Russia and Ukraine. Since Russia launched the war against Ukraine, those materials have been severely reduced.

We still maintain a relationship with Ukrainian producers, to the extent that they can supply, we're happy to buy from them. But we have shifted a lot of our production to Brazil. So as we look at the tariff landscape, we balance our metallic spreads One of the things we talk about a lot is being able to get more value out of the scrap recycled supply chain. So one of the powerful benefits of having Omni as a captive scrap supplier to us, that we can bring in the highest quality materials and continuously balance based on cost, productivity and quality. So we'll manage as we always do. There are alternatives we can explore. And we'll continue to work with the government and hope that there is some kind of relief when it comes to raw materials and the tariff strategy.

So to that point, the specifics are always changing based on the various cost inputs. It's literally a model our people can work every day, depending on what scrap assets and iron assets they have at their disposal. So we continue to look at it as a challenge for us to thrive in our cultures, developed a good competency and we attack it every day.

All right. That's very clear. And if you allow me a last one, just the big pictures on tariff on Section 232 tariffs and do you think this time is different versus 2018, are you confident we won't see a dilution in the tariffs and that those sectoral tariffs are going to stay. And I'm talking about steel, but also obviously now aluminum.

Well, this is Mark. I don't see -- well, I would say the situation will -- there's no doubt that it will change. But we do believe that TAM will be a mainstay of the trade agreements going forward. I think the -- when you look at the first time of the administration, the renegotiation of NAFTA into the USMCA was an incredible advance on the relationship between Canada and Mexico and ourselves.

The increased domestic content and other things than that really, really has helped the U.S., but even more importantly, the North America as a whole. The USMCA is up for renegotiation again in 2026. And it's our belief that the TAF discussions and the trade policy discussions that have gone on between the 3 countries are a prelude to that. But we are confident that, that will get renegotiated into an even better solution for the U.S.

Principally, in preventing the -- having poured and melted language in the supply agreement such that it will prevent the leakage of Chinese and Asian and other unfairly traded commodities coming through Canada and coming through Mexico into the states. So I think net-net, I don't believe you'll see these -- the levels as it is today. But I think it's all going to lead to a much better, better trade environment going forward for the long term.

Your next question for today is from Phil Gibbs with KeyBanc.

Can you explain the benefit of biocarbon and the potential ability to replace other materials. I think I just wanted a better understanding of what it brings to the table.

So yes, so what we initially intended biocarbon for is that it will allow us to replace a large portion, the first facility, not the entirety of our anthracite usage as carbon inputs for our steelmaking, so we'll be sending this to our own steel mills so that we can actually reduce the carbon footprint by as much as 35%, but there's also attributes related to the process where we produce some hydrogen as well. So it's pretty unique.

There'll be more to come as we start to ramp up the facility. It's very modular based, so we can grow it. And what that can likely help us do in the long term is a couple of things. One, we've talked about in the past is -- we talked about pig iron for a bit already on the call this morning. And if we had additional supply of biocarbon, we could potentially have our own supply of pig iron in the U.S., and it would be considered when to use the terminology green, but would be low carbon.

So there's kind of a long investment thesis related to the biocarbon product for us, but it also we found with certain of our OEM customers, it's not something that we'll get into this morning, but they feel like there will be opportunity for different credits to a newer to them as well from a carbon perspective. Where it would really be a superior product that we could certify to in the flat-rolled steel arena. So there's more to come for biocarbon. Just let us get started this quarter, and we'll keep talking about it.

Yes. Just to add to that, I think you need to look at it in the broader sense of our whole sort of sustainability strategy and the path to carbon neutrality. There's absolutely no doubt that there's no dilution of focus, particularly from the European automakers and as Barry said, say, the domestic auto sector has suffered a little bit on mainstay or main volume is actually slowing through Mercedes and BMW and VW and a little bit maybe through Volvo.

But nonetheless, we're very focused on the European supply. They have not taken their foot off the accelerator relative to carbon footprint and to sustainability. And I think if you look at the penetration that our team has achieved in auto is squarely driven by our sustainability position. And we're leveraging the fact that we already are or already have the lowest carbon footprint mills in the world today. And that's not us saying that, that's European manufacturers and.

So it is totally differentiating us in the marketplace. And I think just the award from VW for sustainability here that Barry and Volkswagen went over to Europe to pick up. I mean it was incredible.

Thanks, Mark and Theresa. And then as a follow-up, in terms of expectations for Sinton in the third quarter, is there expected to be sequential profit improvement and if there is, what drives it? And then also, what are you -- what are -- what can we define as the dollar headwind associated with that lost production in the second quarter at Sinton?

Phil, again, I know everyone is interested in the profitability of sitting specifically. I would say what we believe will drive the significant increase in third and then fourth quarter earnings from Sinton will be one volume, volume, volume, volume. So we do believe that we're going to have higher volume, but also higher value-added product mix, which is key to the profitability at Sinton. And we won't have had the curtailment of the oxygen, and we also had a maintenance outage in April. So there are some key things high level that we have confidence in that will drive that increased profitability.

And Theresa, I'd like to add to that. The value-added lines having 2 galvanizing facilities down there now in 2 paint lines, the cost of quality of starting those facilities up, they're expensive products to make. So as we ramp up and get more yielded product to the marketplace, that really significantly reduces the loss cost -- the loss cost on making high quality.

So we're very excited about where the teams are getting with the yields and the percent prime that they ship to marketplace. We're also very excited about the antidumping countervailing duties because the -- when you really look at the inventories that surged ahead of the AD CVD rulings, we've been competing with a lot of warehouse material that came from 10 different countries into our country. And those inventories remain and are slowly being worked out the promise of having an actual final rulings here by September helps substantiate that the markets will return to more normal profit contributions.

So we're excited about that cost of quality. It was ambitious putting lines in at once, but we're starting to benefit from the team just really becoming professional painters and coaters. So we're excited about that future position because of the improvements the team makes every day.

Your next question is from Alex Hacking with Citi.

You mentioned that you expect fab to see an inflection point. Is that being driven by price or volume or both?

Alex, the primary driver of the inflection point for fabrication in coming up here in the third quarter is volume, but there's also stability in the price, which is very supportive.

Okay. Can I ask a follow-up or just stick to one.

Go ahead, everyone else's.

Okay. So I guess, Barry, in your comments, you talked about some of the enhanced sourcing technology that's available with aluminum scrap, right, and the potential there that you could source more for your rolling mill.

In a world where Canada is 50% tariff on primary material, it's a big if, right, going forward, but we'll see. Could you maybe quantify or discuss like the opportunity for Steel Dynamics and more broadly for the U.S. to use more of the scrap that we basically currently export because we can't sort it or for various other reasons. I'm just -- is this something that could be material for Steel Dynamics?

The investments that Omni have made have really been focused on the existing scrap supply streams. In the United States, over 70% of the steel generated is from arc furnaces and recycled scrap. So the more value we can extract the more those products can find their way back into a high-quality application. So our teams are very focused on all of the different technologies together. We continue to see value with partnering with our customers to be able to segregate that scrap at the very beginning of the supply chain. Those are all products that the American steel producers are very good at getting.

OmniSource separates us from the rest because it's such a captive loop that we provide real-time benefit from the scrap yards, the suppliers right into our melt shops. So the secret of getting that value is having a system that allows you to know when you can get the best products into the furnace, 24 hours a day, 7 days a week. And that's the competency our teams have worked very hard together and having a scrap and steel company that are so closely partnered has really allowed us that benefit. So we'll continue to do that. That's where value is.

Anytime we can find higher value recycled content, that's what we're all about.

And to add to that, obviously, P1020, the tariff is appreciating the cost of that. So the increased recycled content obviously is compounding. But also UBCs today are selling around, it's got back to where they were a year or so ago a 58% discount. It's a 58% discount of a bigger number. And so the spread opportunity enhanced in our minds quite considerably.

Your next question for today is from Lawson Winder with Bank of America Securities.

Nice to hear from you, and thank you for the update. On the coated steel overhang that you discussed, are you seeing this overhang dissipated at all now into Q3? And could this potentially mean a sales flow-through benefit into Q3 '25? So could we be potentially modeling an unusual pickup in sales in Q3?

I wouldn't call it unusual. I would think it's more returning to levels that we would historically have seen, with spreads between coated and hot-rolled products. We do see the inventories winding down. And more importantly, we don't see more material coming in behind that. And I think that's the significance of the antidumping CBD cases. Those are based on existing trade law and have a long-term window where we look at sunset reviews. -- to watch behavior of certain countries and companies within those countries.

So to establish these precedents now in and amongst the 232 discussions -- this creates a level playing field where we can do what we do best. And we see it as returning to the normal profitability levels you would see with these value-added products.

Okay, sure. If I could just add 1 follow-up. On the oxygen availability, could you elaborate on what was driving the supplier's decision to limit that supply? And then just like stepping back and looking at this from like from like a sourcing point of view, is that market particularly tight in the Southwest that it somehow prevents you from finding a backup supply?

Well, I think when you think about the Texas community, the petroleum industry is very large down there, as we all know, so we had the opportunity to actually receive the oxygen through a pipeline agreement, whereas sometimes we would more typically have an air separation plant on our site.

So this provided us with a good alternative, we believe. We believe it is a good long-term alternative. But when there was a maintenance problem at the supply facility, the entire region to some extent, actually backed off of what they consumed. So we are definitely evaluating whether or not we can invest other technologies on site. That make it more reliable. This isn't something we would anticipate being a regular event, quite surprised that it happened, but happy how we work through it. And so we'll always look at supply chain problems, but we think we have a good supply chain solution here. And going forward, we don't expect it to be an issue.

Your next question is from Mike Harris with Goldman Sachs.

Just one for me here. you guys highlighted that your steel and aluminum products have overlapping customer bases. But what about the internal sales organization? Is that the same? Or is it a separate sales force? And if the latter, how should we think about the potential SG&A impact as you ramp up on aluminum?

Well, actually, we have independent sales teams. There are certain markets where our people will overlap for sure because we have such good relationships. So there are some construction areas and in automotive, where our teams will work closer together. But the materials are quite different, particularly in automotive, where the product has to be developed. So we believe it will be positive, but it doesn't allow us to have just one sales team. It will be unique.

So Mike, your specific question around ramp-up of the SG&A, you actually are going to see the opposite uniquely because up until this point, because we were on construction, all the costs that weren't capitalizable related to the project actually had to be recorded in SG&A. Now that we're in start-up you're going to start to see those operational costs be appropriately and cost of goods sold. So you're going to see a decline overall in SG&A on the income statement.

Your next question for today is from Andrew Jones with UBS.

I have a couple. Just firstly, on the fab side, you're talking about stable price into 3Q. I mean, obviously, post tariffs the substrate price has obviously moved up quite a bit when those were first introduced. I mean do you expect to pass on those higher substrate prices like into 4Q later in the year? Or have we sort of met buyer resistance given current demand levels? And I've got a second one if I follow after it was.

Andrew, related to the substrate costs, yes, steel prices as they go up, we only keep around 8 to 10 weeks of steel substrate on the ground in our fabrication operations. So it will go up. But what one has to remember is that volume has a significant cost compression in fabrication. There's not a lot of fixed asset investment. It's more manpower. And so with that, as we have incremental volume, really that profitability drops very quickly to the bottom line. And that's the main driver for what we expect to see for improved profitability in the second half of the year.

But you don't see any scope for really increasing price the current environment?

No, I didn't say that, but we don't really talk about pricing commercial aspects or my commercial team is going to get excited with me. So no, that would couldn't be your takeaway.

Yes, sure. And just on -- I mean, follow-up since no one's asked a lot of questions about it. But the -- I don't know if you can give us a ballpark utilization in 2Q or ballpark where the sort of proportion of value-add was that in 2Q? And like just as we go into 3Q, 4Q, how much that's likely to uplift, so we can understand the sort of potential for profitability improvement.

I don't have it top of mind, specifically from a percentage basis, Andrew. What I would suggest is if you look at -- we give you the coated volumes for Flat Rolled Products. And if you look at the coated volumes over the last kind of 4 quarters and look at how it's kind of trailed down because of that inventory import situation that we've had in flat roll. Take that into consideration what we consider most of structurals and most of engineered bars value-add, you'll get a pretty good indication of the room we have to grow that volume in the second half of this year. But I'm sorry, I just don't have those metrics top of mind.

And this is question just on the ABI business. I mean you obviously flagged the more supportive market conditions that we're seeing now. I mean I mean it might be difficult to answer it, but that $650 million to $700 million, I mean, what would that look like if we if we put everything on spot today, I mean, do you have any sort of ballpark for how profitable that operation could be at full capacity?

Andrew, I'm sorry, that's not something that we would share at this point. We're still leaning in. We like to talk through cycle. That's how we make our investment decisions, both from an acquisition perspective and from greenfield. So we're -- we will stick with the $650 million to $700 million on a through-cycle basis and then let our results speak for themselves in the coming months.

Your next question is from John Tumazos, a private investor.

First, you mentioned some aluminum allowing numbers in your presentation, and they were unfamiliar to me. Maybe if David could circulate a message afterwards repeating the alloy numbers and maybe what their chemistries are that would help to educate us on aluminum. More important, -- in terms of qualifying for can sheet and auto sheet in aluminum, what are the dimensions of qualification or the theaters, the customer scrutinizes -- do you have to separately qualify the cleanliness of the scrap, the slab metallurgy gauge in shape, futility, surface coatings, techs what the hurdles are.

And it's always good to talk to you because you always seem to be the last question. I don't know why that is. But nonetheless, talking about the series 3,000, 5,000, 6,000. Those are the principal grade groups. So 3,000, you got -- and I'm not super expert on this, but 10 3,000. They tend to be the -- a lot of the industrial grades and the can sheet grades. 5,000 series is more of a heat treated, and then 6,000 tends to be focused principally in automotive. So those are just the different sort of great groups that one has. The -- relative to qualification, it's not dissimilar to qualify and steel, in all honesty, relative to -- from a process standpoint, the will -- in the automotive world, a little bit more detail, but they will look at the whole process from start to finish and have the ISO, whatever and the automotive quality criteria.

Can sheet a little different, that tends to be sort of a use type of qualification. Obviously, cleanliness for can sheet given that it's real, real thin it holds beer at pressure, the cleanliness is crucial there. But no great difference, I would say, John, relative between steel and aluminum.

Your next question is from Bill Peterson with JPMorgan.

A lot of my questions have been asked, but I wanted to ask about utilization for the mill. So I guess outside of the normalization of Sinton coming off the oxygen supply issue. How should we think about mill shipments in the third quarter? Does the demand environment you see today support a return of utilization approaching or exceeding 90% in the third quarter?

Yes. I think if you look at overall utilization quarter-over-quarter, it was a little disappointing for us, but it was a confluence principally of the oxygen issue in Sinton and then we had our scheduled maintenance outages actually all 3 mills in the quarter, so Butler, Columbus and Sinton. So I think a large portion of that will turn into the third quarter.

Okay. And I know you don't like to get precise on pricing in the downstream fab business. But wanted to see if there's anything you wanted to call out in terms of mix impacts, mix between joist and deck as it may relate to some of the projects you're expect in the third quarter. Just anything that we should be mindful of?

Thanks for the question, Bill. That shift, I know you know fairly well that we've started to get more and more into deck, but consistently now probably for at least the last year, is basically about 50% deck and 50% joist and I don't see that changing in the second half of the year.

That concludes our question-and-answer session. I'd now like to turn the floor back over to Mr. Millett for any closing remarks.

Thank you, Holly. And just quickly, thank you to everyone on the call today. Thank you for listening and for your time. For those that are investing in us, thank you for your direct support. I would love to have everyone else that's not join the family and talking to family team members, SDI folks had the -- thank you. Thank you for a phenomenal job each and every day. And remember to be absolutely safe for yourselves, for your colleagues and for your family in general.

And to the new members join us and partners to SDI through aluminum -- we look forward to working with you in the future. And hopefully, we'll show that we are a totally differentiated company for you to work with. So thank you, everybody. Have a great day. Be safe.

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