PITTSBURGH The scrap metal market is heading toward a quiet period due to an absence of near-term volatility, Commercial Metals Co.s (CMCs) top executive said.
Our expectation over the (coming) quarter is sideways to slightly up, chairman, president and chief executive officer Joseph Alvarado said during the Irving, Texas-based companys fiscal second-quarter earnings call with analysts March 27.
However, Alvarado cautioned that prices could be negatively impacted if the export market runs cold because coastal scrap earmarked for export will make its way inland to domestic mills.
The political unrest in Ukraine could also potentially dampen domestic opportunities to export. If there are disruptions in production, which we really havent heard or sensed, that could make scrap available for better prices for the Turks and take them out of the United States, Alvarado said.
The companys Americas Recycling segment logged an operating loss of $863,000 for the three months ended Feb. 28 in contrast to an operating profit of $2.2 million in the same period a year earlier on sales that fell 2.6 percent to $342.3 million from $351.3 million. CMC attributed the loss to a 5-percent decline in ferrous metal margins as costs for ferrous materials rose 7 percent, outpacing a 4-percent increase in ferrous selling prices.
The segment shipped 573,000 tons in the quarter, nearly flat with the 574,000 tons shipped a year earlier.