Schnitzer Steel: Ferrous scrap sales volumes up 17% in Q3 CY'20

Schnitzer Steel announced its quarterly results for Q3 CY'20 yesterday. Schnitzer Steel is one of the largest recyclers of scrap metal in the USA. Schnitzer's metals recycling facilities collect, broker, process and recycle metal, both ferrous and nonferrous. The key highlights of the investor conference call conducted are -

• Ferrous sales volumes up by 17% in Q3 CY'20 - Ferrous sales volumes were up by 17% from 912,000 t in Q3 versus 779,000 t in Q2. These higher volumes were supported by increased supply flows, the higher price environment, higher shredder production and a strong commercial performance in all of our regions which boosted ferrous sales and continued production improvements.
  
  
• Ferrous scrap export prices rebounded in Sep'20 -Export ferrous scrap prices plunged in March and April and then strengthened steadily through September, reaching levels higher than we saw pre-pandemic. Demand off the West Coast from Asia during the quarter has also increased, driven by steel import demand from China as well as a quicker rebound in economic activity. The pricing increased in September as all grades of scrap were in shorter supply than what was needed. U.S. manufacturing, including auto production, restarted post the COVID-19 shutdowns
  
  

• Turkey, Vietnam and Bangladesh remained major destinations -Demand for the recycled ferrous metals in Q3 CY'20 was stronger as economies continue to recover and benefited from the government stimulus. Turkey, Vietnam, Bangladesh remained top destinations in Q3. Export customers accounted for 65% of total ferrous sales volumes in Q3 CY'20. This shows a rapid economic recovery from COVID in some overseas markets which also increases recovery in the U.S domestic market
  
  

• Strong cash flow and capital management increases productivity -Strong operating cash flow of $69 million in Q3 CY'20. Reduced net debt to $87 million which is lowest level since FY10. It is expected that this run rate will increase by approximately 15% as major capital projects are completed and become operational. Strong progress continued on productivity initiatives, and also delivered $6 million of improvements as compared to last year