NEW YORK Schnitzer Steel
Industries Inc. is gearing up to start its new shredding
operation near Vancouver, British Columbia, within the next
three months, and anticipates a sequential improvement in its
fiscal second-quarter earnings results, the company said Feb.
Schnitzers metals recycling business in February
"successfully commenced the testing of its newly constructed
shredder," which is "expected to be operational in the (fiscal)
third quarter," the company said in an outlook for the fiscal
second quarter ended Feb. 28.
Ferrous scrap export selling
prices strengthened throughout the quarter, with prices for
February shipment about $40 per gross ton higher than at the
end of its fiscal first quarter. Domestic selling prices
weakened slightly toward the end of the quarter, Schnitzer
Scrap supply continues to be
constrained by low U.S. gross domestic product growth,
resulting in high raw material costs, which will temper the
overall improvement in margins. During the fiscal second
quarter, average ferrous scrap net selling prices increased
slightly from the fiscal first quarter and volumes rose between
15 and 20 percent.
The combination of higher
selling prices and volumes is expected to generate operating
income from its ferrous scrap division of approximately $12 per
tondouble that of the first quarter.
Average selling prices for
nonferrous scrap are expected to finish in line with fiscal
first-quarter results, while volumes are expected to increase
about 10 percent, the company said.
Higher commodity prices,
stronger car purchases and an incremental volume contribution
from acquisitions are expected to result in a
quarter-on-quarter revenue increase of about 10 percent in
Schnitzers auto parts business.
In the companys steel
manufacturing business, average selling prices are also
expected to increase slightly from the fiscal first quarter
while sales volumes are expected to drop nearly 25 percent.
Higher costs for raw materials, a lower utilization rate
resulting from planned maintenance and a typical seasonal
slowdown in demand are expected to result in operating income
of about $1 million for its steel manufacturing business,