PITTSBURGH U.S. scrap prices are expected to gain some strength during the current quarter despite a sluggish start to the market in 2013, according to Commercial Metals Co. (CMC) chairman, president and chief executive officer Joseph Alvarado.
The optimism stems from the historical trend, with Alvarado noting during a conference call on the companys fiscal first-quarter earnings results that scrap prices for January are ranging from flat to slightly up.
The coastal regions of the country are showing stronger prices, whereas the central United States is shaping up to be sideways.
"Coastal seems to be impacted more from export," Alvarado said, adding that theres no clear visibility on next months prices. "(They are) off to somewhat of a slow start in January and we fully expect it to improve, but it is too early to call that right now."
Lower demand, weaker selling prices, and fewer ferrous and nonferrous scrap shipments hit the Irving, Texas-based companys scrap division during the fiscal first quarter.
The Americas Recycling segment posted an adjusted operating profit of slightly less than $4.5 million for the three months ended Nov. 30, down 78.4 percent from a $20.8-million operating profit in the same year-ago period, on sales that declined 15.2 percent to almost $352 million from $414.8 million.
Americas Recycling segment shipments totaled 562,000 short tons during the quarter, down 36,000 tons from the same year-ago period. Of that, ferrous shipments dropped 10 percent year on year to 503,000 tons and nonferrous shipments eased 2 percent to 59,000 tons, the company said during the call.
Ferrous scrap prices averaged $322 per ton, down 8 percent year on year during the quarter, and nonferrous shipments fell 4 percent to an average of $2,798 per ton.