Schnitzer Steel Industries, Inc., expects to deliver its best fiscal fourth quarter operating performance since 2011 thanks to high prices and strong demand for both ferrous and nonferrous scrap, as well as strong demand for finished steel products.
The Portland Ore.-based scrap recycler and long steel producer announced preliminary results for its fourth quarter and fiscal year ended Aug. 31, 2021, expecting net income of $43 million to $45 million.
Despite logistical delays and constrained sales due to tight container availability, ferrous and nonferrous sales volumes are expected to rise 9% and 3%, respectively, compared to the same year-ago period.
Finished steel sales volumes for the quarter are expected to be down 53% year over year due to the May 2021 steel mill fire. The mill began ramping up production in mid-August after replacement and repair of the extensively damaged property and equipment was completed. Even with the impact of the fire, Schnitzer said it delivered its best fiscal fourth quarter operating performance in a decade.
Market conditions for recycled metals were strong with Schnitzer’s average ferrous selling prices reaching the highest level since 2008 and nonferrous market selling prices trading at or near multi-year highs. Market selling prices for finished steel products also continued to increase on strong demand and reached their highest levels in more than a decade.
The company expects strong operating cash flow of approximately $139 million in the fourth quarter, resulting in a $79 million sequential reduction in debt to $75 million, its lowest level since 2005.
By David Schollaert, David@SteelMarketUpdate.com
David SchollaertRead more from David Schollaert
Latest in Scrap Prices North America
Hoffman on scrap: March scrap outlook roundup
The news in the West was that a mill in the Rocky Mountain region made a significant reduction in their usual purchase program, while still another small mill in the region also apparently reduced their buying program for February.
Miller on scrap: Ferrous raw materials markets trending down for March
The March outlook for most ferrous products is trending down faster than most participants thought as recently as a week ago.
Miller on scrap: Mid-month dealer sentiment focus on uncertainty
The Mid-American ISRI Chapter held its annual meeting in St. Louis this month. Over the years, this event has become a “must attend” for the scrap community nationwide.
Hoffman on scrap: Weak Japanese yen weighs on West Coast export market
Having just attended the historically significant ISRI Mid-America Chapter Consumers Night Banquet in St. Louis and waiting for my delayed flight, it seemed I had the perfect opportunity to inform the industry of a few items that came out while wheeling and dealing in the beautiful Union Train Station Hotel. For the West Coast export […]
Sims sees US as bright spot in scrap world
While seaborne trade has been challenging due to weak global steel production, demand for ferrous scrap in the US remains strong, according to Sims Ltd.