“[Flows of scrap to recycling operations] have eased and ebbed a little. The reduction of flow will mitigate any substantial decline in scrap prices,” chairman, president and chief executive officer Mark Millett said on Thursday October 20 in a call to discuss SDI’s third-quarter financial results.
Millett noted that SDI’s flat-rolled mills are in good shape as far as sourcing prime scrap and alternative irons.
“Supply is not an issue for SDI,” he said, adding that the company is sufficiently supplied with pig iron well into 2023.
The Fort Wayne, Indiana-headquartered steel producer and metal recycler will also benefit from sourcing prime scrap from Mexico, where it owns scrap assets, Millett said.
With regard to recycling investments, Millett said the company is not eyeing acquisitions. He said SDI is focused on improving its segregating and separation technologies at existing operations.
Third-quarter earnings for SDI’s metals recycling division were driven lower due to a decrease in ferrous and non-ferrous shipments and less favorable prices.
The metals recycling division’s operating income fell by 78.89% year on year on a 19.59% drop in sales for the quarter ended September 30.
“The company’s realized average ferrous scrap pricing declined almost 30 percent during the third quarter,” SDI said in an earnings release on October 19.
The metals recycling unit earned $9.9 million in operating income on $472.1 million in sales for the third quarter, down from $47 million in operating income on $587.1 million in sales in the year ago period.
The company as a whole earned $918.5 million on $5.65 billion in sales for the third quarter compared with $1 billion in earning on $5.08 billion in sales in the same year ago period.
Third-quarter ferrous scrap shipments totaled 1,320,117 gross tons, a 3.72% drop from 1,371,126 gross tons shipped in July-September 2021.
Non-ferrous shipments in this year’s third quarter totaled 257.7 million lbs, 5.02% below the 271.3 million lbs shipped in the third quarter of 2021.