Schnitzler Steel forecasts stronger 3Q scrap metal prices with lower volume

14 April 2007 | 07:05 Code : 13318 Geoscience events
Steel recycler Schnitzer Steel Industries Inc. on Monday forecast "rob.....
Steel recycler Schnitzer Steel Industries Inc. on Monday forecast "robust" international markets for scrap metal in its fiscal third quarter, marked by higher selling prices but lower volumes.Schnitzer said average selling prices in the third quarter should rise to "record levels," averaging about $40 to $50 per ton higher than the prior period. Second-quarter sales prices of ferrous recycled metal averaged $233 per long ton in the domestic market and $238 in the export market.Scrap metal volume, however, is expected to fall from the second quarter by 100,000 to 150,000 tons. The company reported sales volume of 1.1 million long tons of processed metal last quarter.Metals recycling is Schnitzer's primary business.In its smaller auto parts segment, the company expects to see revenue growth compared with the prior and year-ago quarters and wider margins. The steel manufacturing division should see stronger demand and prices – and roughly flat volume versus the second quarter.Analysts surveyed by Thomson Financial project earnings of 92 cents and sales of $570.7 million for the third quarter ending in May.Schnitzer Steel posted a 35 percent increase in 2Q profit as sales jumped by half on stronger volumes in its metals recycling segment.For the three months ended Feb. 28, net income rose to $28.4 million, or 93 cents per share, from $21.1 million, or 68 cents per share. Revenue grew to $604.4 million, up 50 percent from $403.3 million.Sales in Schnitzer's metals recycling business climbed 65 percent to $486 million, while its autoparts segment saw 20 percent growth to $60 million. The steel manufacturing division posted a 10 percent sales increase to $99 million.Schnitzer shares rose $3.83, or 9.4 percent, to $44.56 in premarket trading.

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