Schnitzer Steel Industries, Portland, Ore., has reported a loss of $7.8 million for its fiscal first quarter, which ended Nov. 30, 2009. The results compared with a loss of $34.4 million for the same time a year earlier. Revenue for the quarter was $394.3 million, down 17 percent compared to one year ago.
“This is our second consecutive quarter of profitability from continuing operations and it marks an improvement in our results on a year-over-year basis,” says Tamara Lundgren, president and CEO of the company.
The company’s metals recycling business generated operating income of $16 million for the quarter, compared with a loss in the first quarter of the prior year.
Ferrous scrap prices rose toward the end of the quarter after a sharp drop in late October and early November of 2009. The increase reflected strengthening demand, particularly in the export markets. Nonferrous prices also rose during the quarter.
Schnitzer predicts a slight increase in ferrous net sale prices in the second quarter compared with the first quarter of fiscal 2010. Nonferrous markets also are improving, which should support higher prices for nonferrous metals compared with the first quarter of the fiscal year.
Normal seasonal declines associated with the winter months will affect the flow of material. As a result, Schnitzer says it foresees increasing raw material purchase costs. However, the rising sales price environment and increased sales volumes will more than offset the purchase cost increases, according to the company.
As most in the auto recycling business hope, that scrap steel prices will continue to rise.