Prices
Sims sees US as bright spot in scrap world
Written by Laura Miller
February 20, 2024
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.
The Australia-based global metal recycler reported some weaker segments in its fiscal 2024 half-year report. However, it said steel demand in the US is solid due to its reliance on EAF steelmaking, which in turn is bolstering robust demand for ferrous scrap.
The Sims Metal recycling business division has operations in North America, Australia, New Zealand, and the UK, and includes its North America Metal (NAM) segment.
Commenting on the six-month period ended Dec. 31, 2023, Sims said, “The seaborne ferrous scrap market was negatively impacted by two significant factors: a global manufacturing slowdown and escalating geopolitical tensions, resulting in a reduction in metal scrap demand in international trade.”
Sims’ NAM segment relies more heavily on the export market, so its results were more impacted by the slowdown in trade, Sims said.
The performance of the SA Recycling joint venture showed more resilience due to its “strong domestic sales and procurement of scrap at source.”
North America Metal
Sims’ NAM division posted an underlying EBIT loss of AUS$8.8 million (US$5.76 million) in the six-months ended Dec. 31, a drop of 6.3% from a year earlier. Intense competition in scrap sourcing and challenging export markets were cited as reasons for the decline.
NAM’s intake volumes rose 6.5% to more than 2.47 million metric tons (mt) in the six-month period. However, excluding the impact of the acquisitions of Baltimore Scrap Corp. (BSC) in August and Northeast Metal Traders in March 2023, intake was “flat due to challenging market dynamics,” the company said.
NAM’s sales volumes of 2.47 million mt were 0.8% higher than a year earlier, but excluding acquisitions were down 4.5%.
Sim’s acquisition of BSC and the integration of nonferrous NMT mark important steps “in realigning NAM with US market trends,” Sims commented.
Sims’ NAM division operates 59 metal facilities and 48 shredders.
SA Recycling
SA Recycling’s EBIT grew 13% year over year (y/y) to AU$59.6 million. Its focus on the US domestic market, as well as recent acquisitions, were cited as reasons for the growth.
SA Recycling’s sales were 10.7% higher y/y at 2.431 million mt.
Since 2007, Orange, California-based SA Recycling has been a 50/50 joint venture between Sims and the Adams family. It operates 24 shredders and 130 locations across 16 US states, according to Sims’ 2023 annual report.
Laura Miller
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