July 17 (Reuters) - Steel Dynamics ( STLD ) on Wednesday

reported a drop of 47% in second-quarter profit, amid declining

domestic steel prices.

Oversupply in the market, stemming from both domestic

production and imports, has led steel distributors to refrain

from purchases beyond immediate inventory needs.

The steelmaker and peers Nucor ( NUE ) and U.S. Steel,

a month earlier, had warned of a fall in quarterly profits on

account of the deteriorating steel prices.

"We experienced customer order inconsistency within the

steel platform despite the steady underlying demand dynamics, as

scrap prices further declined and customers continued to manage

to very low inventory levels," said Steel Dynamics ( STLD ) CEO Mark

Millett.

With prices anticipated to decline further through summer,

when steel consumption traditionally wanes, analysts expect

steelmakers to curb supply until domestic demand rebounds from

inflationary pressures.

The company is betting on sectors such as automotive,

non-residential construction and industrials, with a hope that

market conditions would support solid domestic steel consumption

in the second half of the year.

"Continued onshoring of manufacturing businesses, combined

with the expectation of significant fixed asset investment to be

derived from public funding... will competitively position the

domestic steel industry," Millett said.

The company's net profit for the quarter ended June 30 was

$427 million, or $2.73 per share, compared with $812 million or

$4.83 per share, a year earlier.

The total revenue for the quarter was $4.63 billion.