Steel Dynamics, Inc. was incorporated in Indiana in August 1993. The primary
sources of our revenues are from the manufacture and sale of steel products;
processing and sale of recycled ferrous and nonferrous metals; and to a lesser
degree, fabrication and sale of steel joist and decking products. Our operations
are managed and reported based on three operating segments: steel operations,
metals recycling and ferrous resources operations, and steel fabrication operations.
Hot rolled Products. Our flat roll mill produces hot rolled products that
include a variety of high quality mild and medium carbon and high strength low
alloy hot rolled bands in widths from 40 inches to 62 inches and in thicknesses
from .500 inches down to .043 inches. We also produce an array of lighter gauge
hot rolled products, including high strength low alloy and medium carbon steels.
These products are suitable for automobile suspension arms, frames, wheels,
and other unexposed parts in auto and truck bodies; truck, trailer and recreational
vehicle parts and components; mechanical and structural steel tubing; gas and
fluid transmission piping, building and construction products; rail cars; ships,
barges, and other marine equipment; agricultural equipment and farm implements;
lawn, garden, and recreation equipment, industrial machinery and shipping containers;
and highway guard rails. We believe that our basic hot rolled material has shape
characteristics that exceed those of other thin-slab flat roll steel mini-mills
and compares favorably with those of the integrated steel mills.
Cold Rolled Products. Cold rolled steel is hot rolled steel that has been
further processed through a pickler and then passed through a rolling mill until
the desired gauge, or thickness, and other physical properties have been achieved.
Cold rolling reduces gauge and hardens the steel and, when further processed
through an annealing furnace and a temper mill, improves uniformity, ductility
and formability. Cold rolling can also impart various surface finishes and textures.
Cold rolled steel is used in exposed steel applications that demand higher surface
quality or finish, such as exposed automobile and appliance panels. As a result
of higher processing costs, cold rolled prices are typically higher than hot
rolled prices. Cold rolled material is often coated or painted.
Coated Products. Hot rolled or cold rolled steel can be coated with zinc to
render it corrosion-resistant and to improve its paintability. Galvanized, galvannealed,
Galvalume®, electro-galvanized and aluminized products are types of coated
steels. These are also the highest value-added sheet products because they require
the greatest degree of processing and tend to have the strictest quality requirements.
Coated steel is used in high volume applications, such as automobiles, household
appliances, roofing and siding, heating and air conditioning equipment, air
ducts, switch boxes, chimney flues, awnings, garbage cans and food containers.
Our paint lines in Butler and Jeffersonville incorporate state-of-the-art coil
coating equipment with quick color change capability and on-line color matching
this allows us to produce pre-painted steel products that are used in many of
these same end products.
We produce various structural steel products such as wide flange beams, American
Standard beams, miscellaneous beams, H piling material, American Standard and
miscellaneous channels, bulb angles, and zee's.
We are currently capable of manufacturing standard rail grades in a range of
weights from 115 lbs. per yard to 141 lbs. per yard, in highly desirable 240
feet rail lengths, which no one else presently produces in or imports into the
United States or Canadian rail markets.
We are capable of producing a broad line of engineered SBQ products. SBQ products
are uniquely designed for applications ranging from gears and shafts to mining
equipment and oil patch tubing.
We are capable of producing a broad line of merchant steel products consisting
of angles, plain rounds, flats, channels, and reinforcing bars of various lengths
and sizes. We also produce various sizes and grades of billets.
We produce or fabricate specialty steel sections and custom-finished products,
which are placed directly into customers' assembly lines. Our flexible manufacturing
capabilities enable us to meet demand for a variety of custom-ordered and designed
products. Many of these products are produced in small quantities for low volume
end uses.
Our metals recycling operations primarily involve the purchase, processing
and resale of ferrous and nonferrous scrap metals into reusable forms and grades.
We produce an array of ferrous products used in foundry and steel mill applications
for use in our own steel mills or for resale to other customers through a variety
of methods, including sorting, shearing, cutting, torching, baling, shredding,
briquetting and breaking. Our major ferrous products include heavy melting steel,
busheling, bundled scrap, shredded scrap and other scrap metal products such
as steel turnings and cast iron. These products vary in properties or attributes
related to cleanness, size of individual pieces and residual alloys. These factors
are determined by the specific needs and requirements of the consumer and affect
the individual product's relative value. We process nonferrous products, including
aluminum, brass, copper, stainless steel and other nonferrous metals for use
in foundry, mill refining, and smelting applications. Our Superior Aluminum
Alloys operations produce specification aluminum alloys in the form of ingots,
sows and molten metal. In addition, we provide transportation logistics (truck,
rail, and river barge), management services, marketing, brokerage, and consulting
services related to the scrap industry.
Steel fabrication operations produce steel building components, including steel
joists, girders, and trusses. Our individual joist products include bowstring,
arched, scissor, double-pitched and single-pitched joists. Our Butler, Salem,
and Lake City plants also produce a full range of steel roof, form, and composite
floor decking.
Steel processors and service centers typically act as intermediaries between
primary steel producers and the many end-user manufacturers that require further
processing of hot rolled coils. The additional processing performed by the intermediate
steel processors and service centers include pickling, galvanizing, cutting
to length, slitting to size, leveling, blanking, shape correcting, edge rolling,
shearing and stamping.
The principal customers for our structural steel products are steel service
centers, steel fabricators and various manufacturers. Service centers, though
not the ultimate end-user, provide valuable mill distribution functions to the
fabricators and manufacturers, including small quantity sales, repackaging,
cutting, preliminary processing and warehousing.
Merchant bar products are sold primarily to steel service centers as well as
joist, rebar, OEM fabricators, while billets are sold to other steel mills.
Steel of West Virginia operations generally sell into smaller niche markets.
We sell processed ferrous scrap to end-users such as steel producing mini-mills
like ours, integrated steelmakers, foundries, secondary smelters and metal brokers
who aggregate materials for other large users. Most of our ferrous-scrap customers
purchase processed scrap through negotiated spot sales contracts which establish
a quantity purchase for the month. The price we charge for ferrous scrap depends
upon market demand and transportation costs, as well as, the quality and grade
of the scrap. In many cases, our selling price also includes the cost of transportation
to the end-user.
Our fabrication primary customers are non-residential steel fabricators. Other
customers include metal building companies, general construction contractors,
developers, brokers and governmental entities. Our customers are located throughout
the United States with a concentration in the eastern half of the country.
Competitors. Our Flat Roll Division's products compete with many North American
integrated hot rolled coil producers, such as U.S. Steel's plants near Detroit,
Michigan, Granite City, Illinois, Gary, Indiana, Dravosburg, Pennsylvania, and
Fairfield, Alabama; AK Steel Corporation's plant in Middletown, Ohio; and Mittal
Steel's facilities in East Chicago, Illinois, Riverdale, Illinois, Cleveland,
Ohio, Indiana Harbor, Indiana, Burns Harbor, Indiana, and Sparrow's Point, Maryland.
Our hot rolled products also compete with the products of a number of hot rolled
mini-mills, such as Nucor Corporation's plants in Crawfordsville, Indiana, Hickman,
Arkansas, Decatur, Alabama, and Berkeley, South Carolina; Gallatin Steel Company's
plant in Ghent, Kentucky; and North Star Bluescope Steel's plant in Delta, Ohio.
Our flat rolled products compete as well with companies that convert steel slabs
into sheet steel, such as Duferco Steel in Farrell, Pennsylvania.
Our structural steel products compete with various electric arc furnace structural
steelmakers, some of which have cost structures and flexible management cultures
similar to our own. Notable competitors include Nucor Steel in Berkeley, South
Carolina; Nucor-Yamato Steel in Blytheville, Arkansas; Gerdau Ameristeel in
Midlothian, Texas and Petersburg, Virginia; and Arcelor Mittal in LaPlace, Louisiana.
The Nucor mini-mills and the Gerdau Ameristeel mini-mills, have accounted for
the majority of tons produced in North America over the past three years. We
also believe, however, that both geography and product choice play significant
roles. There are currently no other structural mills located in the Midwest,
one of the largest structural steel consuming regions in the United States,
and we believe we provide freight-savings and customer service benefits to service
centers, fabricators and manufacturers located in the region. We also believe
that most of Canada's structural steel consumption is located in Canada's eastern
provinces, closer to us than to either of our two largest competitors. Moreover,
we provide a broad product mix, focusing on the mid-range and larger section
served only by Nucor-Yamato Steel and Gerdau Ameristeel from locations more
remote than our facility.
Our major competitors for SBQ products include Republic Engineered Products
of Akron, Ohio; The Timken Company of Canton, Ohio; and Gerdau MacSteel in Jackson,
Michigan and Monroe, Michigan.
The markets for scrap metals are highly competitive, both in the purchase
of raw scrap and the sale of processed scrap. With regard to the purchase of
raw scrap, we compete with numerous independent recyclers, as well as smaller
scrap companies engaged only in collecting industrial scrap. In many cases we
also purchase unprocessed scrap metal from smaller scrap dealers and other processors.
Successful procurement of materials is determined primarily by the price offered
by the purchaser for the raw scrap and the proximity of our processing facility
to the source of the raw scrap. Both ferrous and nonferrous scrap sells as a
commodity in both national and international markets, which are affected by
relative economic conditions, currency fluctuations and the availability and
cost of transportation. Competition for sales of processed scrap is based primarily
on the price, quality and location of the scrap metals, as well as the level
of service provided in terms of reliability and timing of delivery.
Our main competitors in the joist business are Vulcraft, a division of Nucor
Corporation; Canam Group; Quincy Joist Co.; and CMC, a division of Commercial
Metals Company. In the steel decking business, New Millennium's main competitors
are Vulcraft; Wheeling Corrugating Co., Quincy Joist Co.; and CMC.
