Schnitzer Steel Impacted by Hugely Deteriorated Recycled Metals Market

The company’s Auto and Metals Recycling (AMR) segment operating income is likely to remain in the range $21-$22 million.

SEATTLE (Scrap Monster): Schnitzer Steel Industries declared preliminary results for fourth quarter fiscal 2019 ended August 31, 2019. It must be noted that the company had reported robust Q3 results, beating all estimates.

The Q4 earnings from continuing operations are likely to range between $0.37 and $0.42 per share, significantly down from third quarter reported earnings of $0.56 per share. The adjusted earnings for the quarter are projected to remain in the range of $0.38-$0.43 per share, as compared with $0.65 per share in the prior quarter. The reported and adjusted earnings had totalled $2.08 and $2.11 per share respectively in the corresponding Q4 last year.

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According to Schnitzer Steel, the markets for recycled metals remained weak in Q4. The markets deteriorated sharply in August and September. The selling prices for ferrous products dropped to levels last seen in 2017, mainly on account of weak export and domestic demand. The market prices for nonferrous products too continued to decline during the fourth quarter. The prices of zorba witnessed drastic decline.

Also, the average finished steel prices are expected to post a decline by over 10% from its peak reached earlier this year.

The company’s Auto and Metals Recycling (AMR) segment operating income is likely to remain in the range $21-$22 million. The Cascades and Steel Scrap (CSS) segment quarterly operating income is likely to drop to approximately $6 million, primarily due to lower average net selling prices for finished steel products.

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