Schnitzer Posts Best Fiscal First Quarter Results Ever

Schnitzer Steel Industries Inc. posted its best first quarter earnings on record thanks to high prices and strong demand for both ferrous and nonferrous scrap.

The Portland, Ore.-based scrap recycler and long steel producer recorded net income of $47 million in the first quarter of fiscal 2022 ended Nov. 30, 2021, more than triple the $15 million posted in the same quarter last year.

Revenue was $798 million in the quarter, down 5.7% from $846 million in the prior quarter, according to earnings data released on Thursday, Jan. 6.

The company said it benefited from strong global demand for recycled metals and a robust West Coast market for finished steel products. Results also reflected average selling prices at or near multi-year highs for ferrous, nonferrous, and finished steel products.

Schnitzer in addition saw increased contributions from its steel mill due to a continued ramp-up following a fire and outage in Q3, higher year-over-year ferrous and nonferrous sales volumes, and initial contributions from recently acquired Columbus Recycling.

“Our results this quarter are our company’s best first quarter earnings on record,” said Tamara Lundgren, Schnitzer’s chairman, president, and CEO. “Our strategic initiatives related to volume growth and productivity contributed to our expanded profitability, with higher ferrous and nonferrous sales volumes benefiting from our recent acquisition of the Columbus Recycling assets.”

Ferrous and nonferrous sales volumes in Q1 of fiscal 2022 were up year over year by 9% and 11%, respectively. The positive results were achieved despite supply chain disruptions, the company said.

Average ferrous and nonferrous net selling prices were up 66% and 64% year-over-year, respectively, but finished steel sales volumes were down 26% versus the prior year – a reflection of the fire at its Cascade Steel Rolling Mills in McMinnville, Ore.

Average net selling prices for finished steel products were up 58% compared with the year-ago quarter, the highest prices on record, the company said.

“We also benefited from positive market conditions supported by cyclical and structural trends, including the global focus on decarbonization and the increased use of recycled ferrous metals in steelmaking,” Lundgren said.

Schnitzer is one of the largest manufacturers and exporters of recycled metal products in North America with operating facilities located in 25 states, Puerto Rico and Western Canada. Its steel manufacturing operations produce finished steel products, including rebar, wire rod and other specialty products. Schnitzer has seven deep water export facilities located on both the East and West Coasts and in Hawaii and Puerto Rico.

By David Schollaert, David@SteelMarketUpdate.com