Schnitzer Expects Best FYQ4 Results in a Decade

Schnitzer Steel Industries, Inc., expects to deliver its best fiscal fourth quarter operating performance since 2011 thanks to high prices and strong demand for both ferrous and nonferrous scrap, as well as strong demand for finished steel products.

The Portland Ore.-based scrap recycler and long steel producer announced preliminary results for its fourth quarter and fiscal year ended Aug. 31, 2021, expecting net income of $43 million to $45 million.

Despite logistical delays and constrained sales due to tight container availability, ferrous and nonferrous sales volumes are expected to rise 9% and 3%, respectively, compared to the same year-ago period.

Finished steel sales volumes for the quarter are expected to be down 53% year over year due to the May 2021 steel mill fire. The mill began ramping up production in mid-August after replacement and repair of the extensively damaged property and equipment was completed. Even with the impact of the fire, Schnitzer said it delivered its best fiscal fourth quarter operating performance in a decade.

Market conditions for recycled metals were strong with Schnitzer’s average ferrous selling prices reaching the highest level since 2008 and nonferrous market selling prices trading at or near multi-year highs. Market selling prices for finished steel products also continued to increase on strong demand and reached their highest levels in more than a decade.

The company expects strong operating cash flow of approximately $139 million in the fourth quarter, resulting in a $79 million sequential reduction in debt to $75 million, its lowest level since 2005.

By David Schollaert, David@SteelMarketUpdate.com