Market
January 5, 2024
Schnitzer suffers in tougher market
Global metal recycler and steel producer Schnitzer Industries of the US posted a fiscal Q1 net loss of $18 M (€16.5 M) amid poorer prices and generally reduced shipments in the three months to 30 November.
“Operating performance in the first quarter reflected sequentially tighter supply flows for recycled metals, which, together with lower average net selling prices for the company’s products, resulted in a compression of metal spreads,” Oregon-based Schnitzer said. Gross margin was $39 M, down from $90 M the previous quarter, while sales revenue fell 6.3% to $673 M.
“Market conditions for recycled metals remained challenging during the quarter, primarily due to lower manufacturing activity in the US and the impact across Asia of the economic slowdown in China, including elevated levels of Chinese steel exports.”
However the company, which now does business as Radius Recycling, was able to point to some year-on-year positives: non-ferrous shipments up 11.7% to 182 Mlbs thanks to gains from an acquisition and production from Schnitzer’s advanced non-ferrous recovery technologies, plus finished steel sales volumes 9.3% higher at 129,000 s.tons, driven by healthy non-residential demand in western US markets. The company’s Cascade Steel mini-mill in McMinnville, Oregon, produces merchant bars, rebar and wire rod.
Chairwoman and CEO Tamara Lundgren added: “While the current market environment is challenging, we have demonstrated our ability to navigate effectively through periods of volatility and tight scrap availability by focusing on what we can control. This includes higher non-ferrous volumes from our strategic investments and delivering on our $30 million productivity-improvement programme that we announced last October.”
The $18 M net loss Schnitzer Industries posted in fiscal Q1 was lower than the negative $26 M in the previous quarter and the same as fiscal Q1 2023.
