NEW YORK Ferrous scrap prices in the United States will
fluctuate by between $10 and $20 per gross ton over the next
few months, the top executive of Commercial Metals Co. (CMC)
These price fluctuations will likely vary by
region, CMC chairman, president and chief executive
officer Joseph Alvarado told analysts on a March 28 earnings
call, noting that current demand for scrap is steady in the
United States but weak internationally.
Scrap prices will remain somewhat volatile over the next few
months, which will continue to adversely impact the recycling
industry, Alvarado added, calling scrap price volatility the
industrys biggest challenge.
For me, at least, when I look back over the last few
months, the recycling business (biggest) issue is one of
consistency. The volatility isnt necessarily good when
its down or when its up and down, he told
I think for the time being, because were expecting
continued volatility, the recycling business will be
challenged. And until global demand improves, including in
particular Europe more consistently, its going to
contribute to that volatility.
The volatility is I think what hurts us all the
most, he reiterated.
CMCs scrap metal recycling business is split evenly
between a retail sales operation and scrap for consumption by
its own mills, which allows the company to achieve some balance
in challenging markets, he said.
For the companys second fiscal quarter of 2013 ended Feb.
28, CMCs Americas Recycling segment recorded an adjusted
operating profit of $2.2 million, down from an adjusted
operating profit of $6.4 million in the corresponding 2012
Ferrous scrap selling prices dropped 7 percent to $336 per ton
in the same comparison, while ferrous and nonferrous margins
also fell during the quarter.
Alvarado said the recycling segment remained profitable
in the second quarter of 2013 despite weaker demand than
anticipated, which created pressure on pricing and
CMCs chief financial officer and senior vice president
Barbara Smith told analysts CMC shipped a total of 515,000 tons
of ferrous scrap during it second quarter, down 6 percent from
the previous years second quarter.
Average sales prices on nonferrous scrap were $2,815 per short
ton during the quarter, which was comparable to the
same quarter in 2012, Smith said. The company shipped 59,000
tons of nonferrous scrap in the period, which was down 5
percent from last years second-quarter shipments.