UNITED STATES September 28 2016 1:48 PM

NEW YORK (Scrap Register): USA's largest steel producer, Steel Dynamics, Inc (SDI) expects lower profitability in its metal recycling platform for the third quarter this year against the previous three months.

Both ferrous and non-ferrous shipments are expected to decline, and ferrous metal spread contraction is also expected as market prices have declined in the second half of the third quarter.

The profitability of SDI’s steel operations is expected to improve when compared to the second quarter based on metal spread expansion. ‘Average quarterly realized steel product pricing is expected to increase more than additional costs derived from higher-priced ferrous scrap utilized in the quarter.

Lower steel shipments across the platform are expected to kickoff some of the positive margin impact. In terms of steel product sales, demand from the heavy equipment, agricultural and energy sectors continues to be ‘challenged’ whereas the automotive sector ‘remains strong’ and the construction market is experiencing gradual improvement.