Schnitzer Steel Industries, Inc. reported results for its third quarter of fiscal 2023 ended May 31, 2023.
Stronger demand for recycled metals from improved global steel demand and inventory restocking led to higher net average selling prices and an expansion of metal spreads in the quarter. Metal margins also benefited from shipments contracted before market prices began to soften in the second half of the quarter. Supply flows improved seasonally but remained tighter than a year ago.
Average net selling prices for ferrous and nonferrous products increased sequentially 13 percent and 2 percent, respectively. Ferrous sales volumes decreased sequentially by 8 percent compared to the prior quarter, which had benefited from a drawdown of inventories. Nonferrous sales volumes were up 26 percent sequentially, driven by stronger nonferrous flows and higher production and recovery from the Company’s advanced nonferrous processing technologies. Sales volumes for finished steel products increased 30 percent, benefiting from seasonally stronger demand for finished steel. Rolling mill utilization reached 97 percent in the quarter. Finished steel average net selling prices were lower sequentially by 2 percent.
Commenting on the company’s third quarter results, Tamara Lundgren, chairman and chief executive officer, said, “Our financial and operating performance this quarter reflects stronger market conditions than we experienced earlier in the fiscal year, improved operating efficiencies from our productivity initiatives, and benefits from the advanced metal recovery technology systems which have been commissioned to date.”
Lundgren continued, “While the near-term economic environment is showing some signs of slowdown, the long-term structural demand for recycled metals remains positive, supported by the increased focus on decarbonization, the transition to low-carbon technologies, and the anticipated demand associated with the Infrastructure Investment and Jobs Act and the Inflation Reduction Act, including Buy Clean provisions.”