Steel Dynamics clocks record profits as Trump tariffs drive up steel prices

Profits at Steel Dynamics, a company President Trump touted as proof his double-digit tariffs on steel imports were bringing back industry jobs to the U.S., jumped to record amounts for 2018 as the new duties helped spur an increase in the average cost of the metal.

Net income at the Fort Wayne, Indiana-based steel manufacturer were up nearly 60 percent in the past fiscal year to $1.3 billion, or $5.35 per share, the company said Tuesday. Annual sales grew to $11.8 billion in the period, up from $9.5 billion in 2017.

Underscoring the surge was a record number of steel shipments and an increase in the average selling price for the metal to $922 per ton.

Chief Executive Officer Mark Millett expects the “strong domestic steel demand” to continue into 2019.

“We believe North American steel consumption will experience steady growth,” he said in a statement. “We are well-positioned for growth and remain focused on delivering shareholder value through organic and transactional growth opportunities.”

Steel Dynamics announced last year that it would invest up to $1.8 billion in a new plant in the southwestern region of the U.S. Trump said the decision was proof that "Steel JOBS are coming back to America, just like I predicted,” he wrote in a Twitter post.

Alcor, another top U.S. steelmaker, also recently broadcasted plans to construct a $1.35 billion plant in the Midwest, creating as many as 400 full-time jobs.

While the steel industry continues to profit off of Trump’s new tariffs, other industries are reducing profit outlooks and warning that the levies on both steel and aluminum imports -- as well as the duties on $250 billion in shipments of Chinese products to the U.S. -- will continue to weigh on earnings in 2019.

Apple, citing a slowdown in sales in China due to the trade skirmish, cut its outlook for the fourth quarter, while Ford Motor Co. and other car manufacturers say the increased commodity costs that plagued the industry in 2018 will continue into next year.

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The Trump administration is in the midst of negotiations with China over a broader trade deal and White House officials are confident that an agreement can be reached to address long-standing issues like Beijing’s theft of intellectual property and forced technology transfers.

Should a deal not be reached, the administration says it is prepared to increase the existing levies on Chinese goods from 10 percent to 25 percent, as well as extend the tariffs to an additional $267 billion in shipments, effectively covering all imports from the communist nation.