Sims' long-term outlook bright, sees tariffs boosting US scrap demand

The company noted the premium for US sales is expected to extend from fiscal year 2025 (which ended on June 30) into FY’26.

At the same time, globally, Sims said long-term fundamentals remain strong.

“EAF capacity and scrap demand continue to grow, underpinned by decarbonization, government policies supporting onshoring, and general market support,” the company said.

Additionally, it said growing AI adoption is “creating sustained demand for non-ferrous materials and repurposed units.”

However, Chinese exports are still the greatest headwind: “Record-high Chinese steel exports are expected to keep ferrous prices muted in markets outside the USA.”

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.

NAM, SA Recycling

The company’s North America Metal operations had sales of Australian $4.5 billion (US$2.89 million) in FY’2025 ended June 30, up 0.5% year over year. Underlying EBIT swung to a profit of A$80.1 million vs. a loss of A$12.6 million in the same comparison.

Sales volumes totaled 4.8 million metric tons, off 4.8% from a year earlier.

Meanwhile, its Orange, Calif.-based SA Recycling joint venture had underlying EBIT of A$259.5 million for the year ended June 30, a 19% increase from the previous year. Sales volumes stood at 5.4 million mt, up 7.3% y/y.

SA Recycling is a 50/50 JV between Sims and the Adams family. 

“In the US, North America Metal and our joint venture SA Recycling provide a well-balanced footprint across primary regions,” CEO and Managing Director Stephen Mikkelsen said in a statement.

Company-wide results

The overall company had sales of A$7.49 billion in FY’25, up 4.1% from the previous year. And underlying EBIT was A$174.9 million, up 198% from A$58.7 million in the prior corresponding period.

Sales volumes fell 1.2% y/y to 10.4 million mt.

“Ferrous market conditions were particularly difficult, with global oversupply of finished and semi-finished steel, soft macroeconomic conditions, trade policy uncertainty, and tight scrap supply placing pressure on the sector,” Mikkelsen said.

However, he added that favorable structural drivers that included strong non-ferrous markets, good US steel spreads, and growing EAF demand, “provided a degree of stability.”