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Cascade's rebar sales up in 2d qtr. but total revenues down

Keywords: Tags  Schnitzer Steel Industries, Tamara Lundgren, rebar, merchant products, construction, ABI, steel sector, earnings steel

NEW YORK — Schnitzer Steel Industries Inc.’s steel manufacturing unit, which operates as Cascade Steel Rolling Mills Inc., logged a profitable fiscal second quarter on the back of improved rebar sales, even as it saw total steel sales drop 16 percent year over year as a result of easing coiled product demand and import competition.

Although Portland, Ore.-based Schnitzer’s steel sales fell to $71 million in the second quarter ended Feb. 28 from $85 million in the same period last year, the company expressed optimism about the burgeoning West Coast construction market during an earnings call with investors April 3.

"We’re seeing the green shoots of construction demand strengthen on the West Coast, and we think the mill is well positioned to benefit from that as that takes hold," president and chief executive officer Tamara Lundgren told investors on the call.

Rebar sales, a reflection of construction bookings, sustained Schnitzer’s steel unit in the period, rising 13.7 percent year over year to 58,132 tons in the second quarter. At the same time, coiled product sales volumes fell 42.4 percent to 32,130 short tons for the quarter, accounting for most of the unit’s sales decline. Merchant product sales were largely flat at 5,355 tons.

Improving bids for residential construction, measured by an Architectural Billings Index (ABI) that has remained positive for seven months in a row, are beginning to translate into higher sales, although the company hasn’t seen the full uptick yet, Lundgren said.

"The spring activity hasn’t really taken place yet. But ... we are seeing order books strengthen from our customers," Lundgren said. "This is really a function of seven months of strong ABI performance input from our customers that indicate high bidding activity and (the) pickup that we’ve seen in rebar sales."

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