Sinking Scrap Metal Prices to Drag on Sims Metal's Earnings

SEATTLE (Scrap Monster): Sims Metal Management fears that the first half-yearly loss is likely to range between $20 million and $30 million, primarily on account of the sharp decline in scrap metal prices during this period.

According to company announcement, the metal recycling regions are likely to see substantially lower margins and volumes. The subdued price levels for scrap metals will impact the company’s results during H1 this year.

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Alistair Field, chief executive, Sims hoped that the company will be able to navigate the market volatility with its strong balance sheet. Furthermore, he expects that the company is likely to return to profit in the second half of the year. He foresees the earnings to range between $50 million and $70 million during this period.

Meantime, the profit warning led to rampant dumping of company shares by investors.