1022671--2/27/2009--STEEL_DYNAMICS

related topics

{condition, economic, financial}

{cost, regulation, environmental}

{operation, international, foreign}

{gas, price, oil}

{debt, indebtedness, cash}

{acquisition, growth, future}

{loss, insurance, financial}

{system, service, information}

{operation, natural, condition}

{financial, litigation, operation}

Risks Related to Our Industry Our industry is affected by cyclical and global economic factors including the risk of a prolonged recession Imports of steel into the United States have in the past adversely affected, and may yet again adversely affect, U.S. steel prices, which could 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 imports into the United States. The worldwide economic downturn and difficult conditions in the global capital and credit markets have affected and may continue to adversely affect our business and our industry, as well as the industries of many of our customers and suppliers, which are also cyclical in nature. Volatility and major fluctuations in prices and limited availability of raw materials and energy, including energy prices, may constrain operating 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. Fluctuations in the value of the United States dollar relative to other currencies may adversely affect our business 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 are exposed to risks associated with the current financial crisis We may not have sufficient cash flow to make payments on our senior unsecured notes and our other debt. 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. Hedging transactions may expose us to loss or limit our potential gains We are subject to litigation which could adversely affect our profitability.

Full 10-K form ▸

1022671--2/27/2009--STEEL_DYNAMICS_INC