1022671--2/27/2008--STEEL_DYNAMICS

related topics

{gas, price, oil}

{cost, regulation, environmental}

{operation, international, foreign}

{acquisition, growth, future}

{cost, operation, labor}

{operation, natural, condition}

{competitive, industry, competition}

{debt, indebtedness, cash}

{system, service, information}

{condition, economic, financial}

Risks Related to our Industry In recent years, imports of steel into the United States have adversely affected, and may yet again adversely affect, U.S. steel prices, which would impact our sales, margins and profitability. China's current steelmaking overcapacity coupled with a reduction or slowdown in China's steel consumption could have a material adverse effect on domestic and global steel pricing and could result in increased steel exports into the United States. Increases in prices and limited availability of raw materials and energy, including crude oil prices, may constrain operation levels and reduce profit margins. Our level of production and our sales and earnings are subject to significant fluctuations as a result of the cyclical nature of the steel industry, the scrap metal recycling industry and some of the industries we serve. Some of our operations entail significant risk of injury or death. Compliance with and changes in environmental and remediation requirements could result in substantially increased capital requirements and operating costs. Risks Relating to our Business Our senior secured credit agreement contains, and any future financing agreements may contain, restrictive covenants that may limit our flexibility. We may face significant price and other forms of competition from other steel producers and scrap processors, which could have a material adverse effect on our business, financial condition, results of operation or prospects. We may be unable to pass on increases in the cost of steel scrap and other raw materials to our customers which would reduce our earnings. Competition from other materials may have a material adverse effect on our business, financial condition, results of operations or prospects. Equipment downtime or shutdowns could adversely affect our business, financial condition, results of operations or prospects. We may face risks associated with the implementation of our growth strategy. There are risks associated with the development and operation of new businesses or acquisitions. Technology, operating and start-up risks associated with our announced Mesabi Nugget project may prevent us from realizing the anticipated benefits and could result in a loss of our investment. We may not be able to negotiate some future labor contracts on acceptable terms, which could result in strikes or labor actions.

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1022671--2/27/2008--STEEL_DYNAMICS_INC