Schnitzer Steel Q3 sales drop but prices hit record high

Schnitzer Steel Industries Inc, one of the largest manufacturers and exporters of recycled metal products, announced its results for its third quarter ended 31 Sept’21.

Although the recycled metals market was strong, the company’s, sales volumes were adversely impacted by the delayed arrival of ships.

Despite the delay, the company’s average finished steel selling prices touched their highest level since 2008.

Tamara Lundgren, the company’s Chairman and Chief Executive Officer, stated, “Our third quarter reflects our best operating performance in a decade..”We stayed focused on our sustainability framework of People, Planet and Profit, delivering strong financial performance, strengthening our core operations through productivity initiatives, progressing strategic investments in advanced metal recovery technologies and increasing our sales volumes.”

Ms Lundgren continued, “We recently completed the acquisition of eight metals recycling facilities from Columbus Recycling, a leading provider of ferrous and non-ferrous recycled metal products and services in the south-eastern US. Combined with our existing facilities, this acquisition increases Schnitzer’s footprint to 22 operating facilities in the south east, a region that is expected to see a significant increase in electric arc furnace steelmaking capacity in the coming years.”

Highlights of the quarterly results

• Ferrous sales volumes drop in Q3 CY’21: Ferrous sales volumes were slightly down in Q3CY21. Sales volumes of ferrous scrap in 3Q fell by 4% to 1,163,000 tonnes (t). However, y-o-y sales volumes were up by 9%. Export customers reported 73% of total ferrous sales volumes in this quarter.

• Chinese scrap consumption expected to increase: The electric arc furnace steelmaker, which uses scrap as its primary raw material, has been expanding and is projected to do so further. In China, scrap usage in steelmaking is expected to increase by 50% from the 20% seen in 2020.

• Finished steel sales down: Due to the fire in May’21 and production outage, the company’s finished steel sales volumes for the quarter were down by 53%. In contrast, market selling prices for finished steel products increased, touching their highest levels in more than a decade. The company began ramping up production at its steel mill ahead of schedule in mid-August.