Oversupply in the market, stemming from both domestic production and imports, has led steel distributors to refrain from purchases beyond immediate inventory needs.
The steelmaker and peers Nucor and U.S. Steel, a month earlier, had warned of a fall in quarterly profits on account of the deteriorating steel prices.
"We experienced customer order inconsistency within the steel platform despite the steady underlying demand dynamics, as scrap prices further declined and customers continued to manage to very low inventory levels," said Steel Dynamics CEO Mark Millett.
With prices anticipated to decline further through summer, when steel consumption traditionally wanes, analysts expect steelmakers to curb supply until domestic demand rebounds from inflationary pressures.
The company is betting on sectors such as automotive, non-residential construction and industrials, with a hope that market conditions would support solid domestic steel consumption in the second half of the year.
"Continued onshoring of manufacturing businesses, combined with the expectation of significant fixed asset investment to be derived from public funding... will competitively position the domestic steel industry," Millett said.
The company's net profit for the quarter ended June 30 was USD 427 million, or USD 2.73 per share, compared with USD 812 million or USD 4.83 per share, a year earlier.
The total revenue for the quarter was USD 4.63 billion.
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