Schnitzer Steel: Metals spreads expansion in ‘higher price environment’ limited

Recycled metals demand and selling prices strengthened throughout the quarter in both the export and domestic markets amid stronger global steel demand, tight availability of scrap, strong rebar demand in Turkey, and inventory restocking. Sequential performance benefited from higher sales volumes and average net selling prices for recycled metals. The expansion in metals spreads in the higher price environment was limited by the tight supply flow environment. Compressed metal spreads on shipments contracted before the increase in market prices during the second half of the quarter offset the benefit from average inventory accounting of approximately $8 per ferrous ton. "Our performance benefited from productivity initiatives and cost reductions to SG&A expense, which were partially offset by charges for various legal matters of approximately $3M," noted Schnitzer Steel.