Radius loss narrows, volumes climb in 'healthy' West Coast market

Radius Recycling on Tuesday reported a narrower loss in its most recent quarterly earnings report. Stronger steel demand, rising scrap flows, and improved rolling mill utilization drove sequential gains. Additionally, the company said solid construction activity and firm nonferrous pricing helped offset lingering macroeconomic uncertainty.

The Portland, Ore.-based metals recycler and long steel producer reported a net loss of $16 million in its fiscal third quarter ended May 31. Although still in the red, this was a marked improvement from the $33 million loss in the prior quarter and the $199 million loss in the same quarter last year.

Revenues rose to $727 million, up from the previous quarter’s $643 million and Q3 last year’s $674 million.

Recycling results

Driven by seasonal improvements in supply flows, ferrous sales volumes climbed 4% quarter over quarter and 2% year over year to 1.14 million long tons.

While domestic demand and pricing ticked higher in March due to mill restocking, the company noted that “prices decreased significantly in the remainder of the quarter on macroeconomic uncertainty.”

Export markets were weaker overall, Radius noted, with rising Chinese steel exports and continued global economic softness putting pressure on demand.

Nonferrous volumes surged 23% quarter over quarter on strong domestic demand and improved recovery rates, according to the company.

Rolling mill results

The utilization rate at Radius’ bar and rod mill, Cascade Steel Rolling Mills in McMinnville, Ore., surged to 107% in fiscal Q3, up from 88% in both the prior quarter and the same period last year. The sharp rise helped expand the company’s margins, Radius noted.

Finished steel sales volumes rose 15% sequentially to 151,000 short tons, “driven primarily by seasonally stronger construction activity amid continued healthy demand in the Company’s Western markets,” the company said. Average selling prices for finished steel were up 4% from the previous quarter.

Merger with Toyota Tsusho America

Radius’ merger with Toyota Tsusho America — announced in March and approved by shareholders on June 5 — is expected to be finalized in the second half of the year. Upon closing, Radius will become a wholly owned subsidiary of Toyota Tsusho.