Economy
Schnitzer Q3 Earnings Lifted Sequentially by Scrap Demand
June 27, 2023
Schnitzer Steel Industries reported lower earnings in its fiscal third quarter ended May 31 vs. a year earlier, but sequential performance was higher, driven by stronger demand for recycled metals.
The Portland, Ore.-based scrap recycler and long steel producer reported net income attributable to shareholders of $13.5 million in its fiscal Q3, down 82% from $74.6 million in the same period last year on revenues that slid 20% to $809.6 million. However, this is up from net income of $4.4 million on revenues of $756 million in the same comparison with Q2.
Sequentially, average net selling prices for ferrous and nonferrous products increased 13% and 2%, respectively, Schnitzer said.
The company said that sales volumes for finished steel products increased 30% to 142,000 net tons in its Q3 compared with Q2, benefiting from seasonally stronger demand for finished steel. Rolling mill utilization reached 97% in the quarter vs. 75% in the previous quarter and 96% a year earlier. Schnitzer added that average net selling prices for finished steel were lower sequentially by 2% in its Q3.
Tamara Lundgren, Schnitzer’s chairman and CEO, was bullish on her long-term outlook.
“While the near-term economic environment is showing some signs of slowdown, the long-term structural demand for recycled metals remains positive,” she said in a statement on Tuesday.
She said this is supported by (1) increased focus on decarbonization, (2) the transition to low-carbon technologies, (3) and the anticipated demand associated with the Infrastructure Investment and Jobs Act and the Inflation Reduction Act, including Buy Clean provisions.
By Ethan Bernard, ethan@steelmarketupdate.com
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