The US: Strong finished steel prices boost Schnitzer Q2 CY’21 results

Strong demand for recycled metals globally and finished steel selling prices, which touched multi-year highs during the quarter, helped Schnitzer Steel achieve its best-ever second quarter financial and operational results in over a decade.

Tamara Lundgren, Chairman and Chief Executive Officer, while announcing the quarterly results for Q2 CY’21, said: “Prices for recycled ferrous and non-ferrous metals during the quarter rose to multi-year highs, with peaks and troughs in prices at respectively higher levels than we’ve seen in the past decade. The post-pandemic economic recovery and positive structural commodity trends are contributing to the higher price levels.”

Schnitzer Steel, one of the largest manufacturers and exporters of recycled metal products in the US, benefitted from significantly higher ferrous, non-ferrous, and finished steel sales volumes sequentially.

Highlights of the investor conference call

• Ferrous sales volumes rise in Q2 CY’21: Sales volumes of ferrous scrap in 2Q’21 went up significantly by 24% to 1,215,000 tonnes (t) amid strong global demand and the benefits of delayed shipments from the previous quarter.
• Prominent export destinations: Turkey, Bangladesh, and Vietnam were the topmost exporting destination in 2Q’21. Export customers accounted for 66% of total ferrous sales volumes in 2Q’21.

• Chinese scrap consumption expected to increase: Electric arc furnace steelmaker, which uses scrap as its primary raw material, has been expanding and is projected to increase further. In China, scrap usage in steelmaking is expected to increase by 50% from the current levels of over 100 million tonnes (mn t) by 2025.

• Average scrap selling prices lift in Q2 CY’21: The sharp increase in selling prices for recycled metals during the quarter rose sharply.
• Finished steel market on uptrend: With steady demand the sales volume of finished steel was highest after 4Q’14, driven by robust demand. Finished steel sale volumes increased from 136,000 t in Q1 CY’21 to 153,000 t in Q2 CY’21. Rolling mill utilization in this quarter was 98%, due to increased production.