Shares of steel companies are turning positive in afternoon trading following comments from Steel Dynamics' (STLD) executives on the company's third quarter earnings conference call earlier this morning.

WHAT'S NEW: After the close of trading on Wednesday, Steel Dynamics reported Q3 earnings per share of 65c on revenue of $2.1B. Analysts were expecting EPS of 67c on revenue of $2.09B.

EXECUTIVE COMMENTARY: On the company's earnings call this morning, Steel Dynamics President and CEO Mark Millett noted that demand from the automotive and construction sectors remains positive but that demand relative to heavy equipment, agriculture and energy, while not deteriorating further, is still anemic. Also noted on the call was the continued weakness of the recycling business. The CEO however, suggested that the weakest steel consuming sectors in the past year or more, namely energy, heavy equipment and agriculture, may have bottomed. "Relative to the macro environment, the steel consuming sectors that were weak in 2015 and into the first half of 2016 such as energy, heavy equipment and agriculture, remain so but are not deteriorating further. Those sectors that have been strong or recovering are continuing on this path, such as automotive and construction," noted Millett. Moreover, the executive pointed out that the environment for flat-rolled products is improving due to reduced imports, idling of domestic capacity and relatively higher global pricing coupled with the steady demand and rebalanced supply chain inventory. Additionally, management said the company "believe(s) we're at the bottom on the scrap side." The company has a constructive view on directional 2017 steel consumption. Despite the fact that domestic automotive production may be coming off record levels, the company is confident that total 2017 NAFTA automotive steel consumption will be steady as Mexico grows production. Also mentioned on the call was the possibility for additional growth in the construction sector, especially for larger public sector infrastructure projects. The company is also anticipating improved activity from the energy sector in 2017. Responding to a question on pricing, a company executive said he thinks we are "certainly at the bottom of the marketplace." The executive continued, "I think there's an inflection point around the corner. Whether that's next week or whether it's a month or two, your guess is as good as mine. I would tell you that I don't know whether one week makes a market, but the order activity and the inquiry activity just in the last week and a half is considerable compared to the last two or three months, for sure." The executive also noted that "If you look at the probability of price direction and inflection point, there are several factors that, in my mind, would suggest that pricing is going to be moving up. The import arbitrage is certainly reversed itself. Import pricing today is very, very unattractive."

PRICE ACTION: Steel Dynamics is up 3.7% to $26.18 in afternoon trading, reversing earlier losses.

OTHER STEEL STOCKS HIGHER: Several Steel Dynamics peers are higher this afternoon, with AK Steel (AKS) up 4.6%, United States Steel (X) higher by over 5% and Nucor (NUE) up about 0.3%.