USA: Schnitzer Steel posts 48% growth in ferrous scrap sales in Q2FY23

Schnitzer Steel Industries Inc, one of the largest manufacturers and exporters of recycled metal products in North America, has announced its financial results for the second quarter of the fiscal year 2023 ending 28 February.

Q2FY23 highlights

Recycled metals demand and selling prices strengthened throughout the quarter in both the export and domestic markets amid stronger global steel demand, tight availability of scrap, strong rebar demand in Turkey, and inventory restocking. Sequential performance benefited from higher sales volumes and average net selling prices for recycled metals. The expansion in metals spreads in the higher price environment was limited by the tight supply flow environment.

• Ferrous scrap sales rise: Ferrous sales volumes increased by 48%, benefitting from a drawdown of inventories, including several ferrous shipments that slipped from the previous quarter into December, and the resumption of full operations at the Everett and Oakland facilities in mid-November.

  
  
  

• Non-ferrous scrap sales up slightly: Non-ferrous sales volumes were up marginally by 1%. Average net selling prices for non-ferrous metals increased by 10% in Q2 against last quarter.

  
  
  

• Finished steel sales drop: Finished steel sales volumes went down 7% on construction seasonality and lower West Coast demand for wire rod products. Average utilisation rate was 75% in Q2.

  
  
  

Tamara Lundgren, Chairman and Chief Executive Officer, said, "Our strong sequential performance improvement reflects strengthening demand and prices for recycled metals. We achieved these results and generated strong operating cash flow despite tighter than expected supply flows."

Ms. Lundgren continued, "Looking forward, we expect a further improvement in results in the third quarter driven by an expansion of metal margins as we realize the benefit of shipments contracted at higher prices and as supply flows improve seasonally."