The company is turning increasingly upbeat

The company is turning increasingly upbeat Zooming out to the company's consolidated outcome, however, we find the root causes of Steel Dynamics' lower sequential operating margin and anemic net profit of only 8 million for the fourth quarter of 2010. Although the metals recycling and ferrous resources segment continued to bolster the profitability of Steel Dynamics' mills, that segment reversed to an operating loss from a modest third-quarter profit.

Continued challenges associated with the start-up of the company's 81%-owned iron nugget production facility in Minnesota led to a 13 million hit during the quarter, and affected full-year 2010 earnings by 42 million. However, with several modifications now in place, the company is turning increasingly upbeat about the facility's ramp-up process during 2011.

Longtime observers will have grown accustomed to persistent weakness in domestic demand for fabricated steel products. Severely impaired demand for construction-related items like joists and decking led competitor Commercial Metals to sever that limb from its corporate corpus last year. Despite a 68% increase in shipments over its prior-year quarter, the segment yielded a $500,000 operating loss before a 13 million impairment charge from a change recalibration of the unit's fair value.