Steel producer and recycler Schnitzer Steel shipped higher nonferrous volumes in its fiscal third quarter, but decreased ferrous volumes combined with lower ferrous and nonferrous revenues weighed on profits.
The company's ferrous scrap profits totaled $31/gt in the quarter ended 31 May, down by 44pc from a year earlier but up by 23pc from the prior quarter.
Schnitzer's auto and metals recycling division reported $280mn of ferrous scrap revenue, down by 23pc year over year. Average sales prices decreased by 13pc to $292/gt from the same period a year prior.
The Argus assessment for HMS 1/2 80:20 cfr Turkey averaged $310/t during Schnitzer's third quarter, a 13pc drop from the same period a year ago.
The company's recycling division shipped 938,000gt (around 313,000 gt/month) of ferrous scrap in the quarter, a 5pc decrease from the same quarter of 2018.
Nonferrous revenue dropped by 11pc to $113mn from a year ago as sales prices dropped by 16pc to 62¢/lb. The Argus assessed price for nonferrous shred zorba cif China averaged 53¢/lb during Schnitzer's third fiscal quarter compared with 69¢/lb in the same quarter for 2018.
Nonferrous sales volumes increased by 9pc sequentially and by 5pc year over year to 154mn lbs, in part because of higher purchase volumes.
Schnitzer plans to spend $10mn of a $65mn-75mn upgrade to existing nonferrous processing equipment through the remainder of 2019.
Vehicles purchased for the Pick-n-Pull automotive recycling subsidiary dropped to 102,000 from 109,000 a year ago, a 15pc increase from the previous quarter sequentially.
Operating income for the auto and metals recycling division fell by 47pc to $29mn from the third quarter 2018.
Schnitzer's finished steel sales volumes dipped by 7pc in the third quarter to 130,000st. Rolling mill utilization rates ticked up to 98pc from 91pc during the same quarter a year ago, and up from 76pc in the second quarter 2019 because of drier conditions and seasonal weather improving.
Average net sales prices for finished steel held flat at $703/st compared to the third quarter 2018, but dropped by 5pc from the $737/st price during the second quarter.
Schnitzer's Cascade Steel and Scrap division posted an $8mn profit, down from $11mn a year earlier.
Schnitzer's overall profit declined to $24.5mn, a 52pc drop compared with fiscal the third quarter a year ago.
