Steel Dynamics Stock Has One Thing Left To Prove

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Steel Dynamics (STLD) built a new aluminum rolling mill alongside its steel business. The bet could provide a new income source for a company that still earns most of its profit from steel. The mill is not yet paying its way: the aluminum business lost money in the third quarter of 2026, and production problems delayed the ramp-up. Steel Dynamics has yet to show that the new plant can reach full speed.

Steel Dynamics’ Aluminum Mill Is Still Below Full Speed

The aluminum plant is making progress, but it is not there yet. The hot strip mill has operated at 75% so far in October, management said. The company still expects the mill to reach 90% by the end of 2026, although the facility is running about a month behind schedule.

A surface quality problem emerged as the mill sped up to roll thinner product, causing large yield losses, management said. Changing the coolant to fix the issue cost several weeks of lower production in the third quarter. Since the coolant change, yields across the facility have improved sharply, management said.

During Steel Dynamics’ October 20, 2026, call, 6 of the 13 analyst questions touched on the company’s capacity. Five different analysts posed those questions, and most focused on aluminum.

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How Much Profit Could Aluminum Add For Steel Dynamics?

Once the mill runs at full capacity with its planned product mix, management expects it to earn $650 million to $700 million in EBITDA, a measure of operating profit, through the cycle in normal market conditions. It expects a further $40 million to $50 million on top of that for what it called its metals recycling platform.

That is a long way from today. In the third quarter of 2026, the aluminum business posted an operating loss of $26 million, against operating income of $1 billion from steel operations. The loss was 21% smaller than in the second quarter. Sales grew last year: the aluminum business brought in $474 million in 2025, up 48.7% from 2024.

Management has said aluminum should also make Steel Dynamics’ earnings and cash flow steadier, because earnings in that industry are generally less volatile. It has also said the United States faces a supply shortfall of more than 1.4 million tons of aluminum sheet, a gap forecast to widen as demand grows.

When Will Steel Dynamics’ Aluminum Business Turn A Profit?

Probably not for the second half of 2026 as a whole, by management’s account. It has said the result will definitely be positive from the first quarter of 2027 onward.

The full profit will take longer. Steel Dynamics plans to ship finished automotive products before the end of 2026, but management expects the product mix to be at its best only around 2028, because the mill needs to get onto automakers’ new platforms.

Aluminum’s operating result is the figure to watch, first in the fourth-quarter 2026 report Steel Dynamics is expected to release in January 2027, and then in its first-quarter 2027 results.

Is Too Much Of Your Wealth Riding On One Stock?

Steel Dynamics holders are waiting for the aluminum mill to deliver on management’s timeline. When one position grows into a large part of your wealth, a sharp fall can hurt your whole plan, and selling to spread the money out can bring a large tax bill. Our partner advisory firm offers a free strategy review of ways to protect a concentrated position and unwind it with less tax.

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