Economy
Schnitzer Q3 Earnings Lifted Sequentially by Scrap Demand
June 27, 2023
Schnitzer Steel Industries reported lower earnings in its fiscal third quarter ended May 31 vs. a year earlier, but sequential performance was higher, driven by stronger demand for recycled metals.
The Portland, Ore.-based scrap recycler and long steel producer reported net income attributable to shareholders of $13.5 million in its fiscal Q3, down 82% from $74.6 million in the same period last year on revenues that slid 20% to $809.6 million. However, this is up from net income of $4.4 million on revenues of $756 million in the same comparison with Q2.
Sequentially, average net selling prices for ferrous and nonferrous products increased 13% and 2%, respectively, Schnitzer said.
The company said that sales volumes for finished steel products increased 30% to 142,000 net tons in its Q3 compared with Q2, benefiting from seasonally stronger demand for finished steel. Rolling mill utilization reached 97% in the quarter vs. 75% in the previous quarter and 96% a year earlier. Schnitzer added that average net selling prices for finished steel were lower sequentially by 2% in its Q3.
Tamara Lundgren, Schnitzer’s chairman and CEO, was bullish on her long-term outlook.
“While the near-term economic environment is showing some signs of slowdown, the long-term structural demand for recycled metals remains positive,” she said in a statement on Tuesday.
She said this is supported by (1) increased focus on decarbonization, (2) the transition to low-carbon technologies, (3) and the anticipated demand associated with the Infrastructure Investment and Jobs Act and the Inflation Reduction Act, including Buy Clean provisions.
By Ethan Bernard, ethan@steelmarketupdate.com
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We all know the American news cycle moves pretty fast. Viral today, cached tomorrow. So it is with the US presidential election on Tuesday, Nov. 5. People have election fatigue. They've moved on to other things like planning holiday parties, debating Super Bowl hopefuls, or even starting to look forward to our Tampa Steel Conference in February.