Global recycler Sims Metal Management expects to benefit from new US steel and aluminum tariffs after pivoting US ferrous sales from the export market to domestic outlets in the first half of their fiscal year.
US president Donald Trump on 9 February announced global 25pc import tariffs on steel and aluminum, effective 12 March.
The tariffs could drive increased demand for scrap, which Sims is well-positioned to benefit from after overhauling its North America Metal (NAM) division last year, the company said on an earnings call today.
The company shifted sales volumes significantly to the US domestic market from export to capitalize on more competitive pricing in its first half of its fiscal 2025, the six months ended 31 December.
Domestic shipments accounted for 65pc of the company's total sales volumes in February, while exports only represented 35pc of the total share.A premium of $56/metric tonne (t) for domestic free on board prices over export levels drove the large shift, executives said. Sims did not provide prior year comparison, but its portion of domestic shipments was significantly smaller when export prices were more competitive last year, according to their earnings release.
Sims is using barges on the east and Gulf coasts and Mississippi river system, as well as rail and truck access from its facilities to ship to domestic consumers, it said.
While the new duties could challenge its ANZ division, Sims' US footprint is larger, so the overall impact should be positive for the company, chief executive and managing director Stephen Mikkelsen said.
Sims expects scrap supply in the US to be stable in the second half of its fiscal year, despite slowdowns in January and February from extremely cold and wet weather.
The Australia-based company reported regionally mixed results across its metal business. Gains in its NAM division helped to offset weaker performances in its ANZ and joint venture SA Recycling (SAR) divisions.
Sims posted a A$31mn ($19.7mn) profit in the half, down by 69pc compared with the same period in 2024.
NAM posted an A$46.7mn ($29.6mn) increase in earnings before taxes during the period, compared to A$8.8mn loss the prior year half. Sims' focus on increasing unprocessed volumes, buying at source, and shifting sales between the domestic and export markets helped to drive the gains, the company said.
ANZ earnings before taxes fell 25pc to A$38mn ($24.1mn) compared to the prior year because of reduced volumes and lower ferrous prices.
Intake volumes for the company's total metals segment — including NAM, ANZ, SAR and global trading and brokerage divisions — fell by 2pc to 5.03mn metric tonnes (t) from the prior year in the same period. Scrap sales volumes for these divisions increased by 1pc to 5.1mn t.
Unprocessed scrap accounted for about 71pc of the company's total scrap intake volumes. The increase helped drive an uplift to it shredder utilization across its divisions by 1.3pc to 59pc for the period.
