Steel Products
Schnitzer Steel Reports Drop in Scrap Shipments
Written by Sandy Williams
January 9, 2013
Written by: Sandy Williams
Schnitzer Steel, one of the largest U.S. manufacturer and exporter of recycled ferrous materials, reported adjusted operating income of $3 million for the first quarter of 2013, a drop of 81 percent from $15 million reported in first quarter 2011. The adjustment reflected a $2 million pre-tax restructuring charge associated with cost reduction initiatives.
“As anticipated, during the first quarter of fiscal 2013 we continued to face difficult market conditions for recycled metals, including a sharp drop in both ferrous sales prices and volumes, due to soft demand resulting from slowing global growth and the weak domestic economic environment which continues to impact scrap generation,” said Tamara Lundgren, President and Chief Executive Officer. “Despite these challenges, each of our business segments remained profitable and our Auto Parts and Steel Manufacturing businesses improved operating margins sequentially.”
Schnitzer’s Metals Recycling sold 955,000 ferrous tons in the first quarter, with 71 percent as exports to 14 countries with Turkey, South Korea, Taiwan and Indonesia as the top consumers. Shipments were down 19 percent from fourth quarter and prices decreased 5 percent. Top nonferrous shipment destinations were China, U.S. and South Korea.
“The stronger markets are traditionally expected to be the emerging economies and are expected to grow in higher levels than the developed economies so we expect growth from our export market,” said Lundgren in the Schnitzer conference call.
When asked about export volumes on scrap, Lundgren said currently sales are 3-6 weeks forward. When asked about current spikes in iron ore prices she said, “We clearly do see that arbitrage taking place on pricing. We saw at the first of year China drop off in scrap purchasing and using more iron ore. We are continuing to see more players increase their use of scrap in blast furnaces. But price arbitrage takes precedence over other issues.”
The Steel Manufacturing Business sold 130 thousand tons in the first quarter, an increase of 3 percent from the previous quarter. The average net sales price for finished steel products was $680 per ton and comparable with fourth quarter pricing.
The Auto Parts Business revenues decreased 3 percent from fourth quarter but operating margins increased sequentially to 9 percent due to lower average inventory costs.
Sandy Williams
Read more from Sandy WilliamsLatest in Steel Products
Rig count update: US activity stable, Canada slips
The number of oil and gas rigs operating in the US remained unchanged this week for the second consecutive week, while Canadian activity declined, according to the latest data released from Baker Hughes.
SMU market survey results now available
SMU’s latest steel buyers market survey results are now available on our website to all premium members. After logging in at steelmarketupdate.com, visit the pricing and analysis tab and look under the “survey results” section for “latest survey results.” Past survey results are also available under that selection. If you need help accessing the survey results, or if […]
Domestic, offshore CRC prices steady
The price spread between US-produced cold-rolled (CR) coil and offshore products on a landed basis was unchanged in the week ended Dec. 20.
SMU Survey: Mill lead times contract slightly, remain short
Steel mill production times have seen very little change since September, according to buyers participating in our latest market survey.
Worthington Enterprises’ earnings dip in fiscal Q2’25
Worthington Enterprises' profits edged down in its fiscal second quarter of 205 vs. a year earlier. The company said a slump in sales in the quarter was due largely to the "deconsolidation" of the Sustainable Energy Solutions segment in the fourth quarter of fiscal 2024.