On Thursday, Portland, Oregon-based steel recycler and steel producer Schnitzer Steel Industries announced its outlook for fiscal Q3 2012. In a press release, Schnitzer said that during the quarter, global demand for recycled metals remained soft and the tepid US economic recovery, together with lower than normal spring scrap flows, has contributed to tighter supplies. Margins have compressed from Q2, as a slight increase in average gross ferrous selling prices has been more than offset by higher costs of both raw materials and freight.
In the Metals Recycling Business, ferrous sales volumes are expected to be in line with fiscal Q2 2012. Operating income per ferrous ton is expected to be $8 to $11, approximately 35 percent lower than Q2. Auto Parts Business revenues are expected to increase 2 to 4 percent over Q2 of fiscal 2012 and operating margins are expected to be 14 to 15 percent.
In the Steel Manufacturing Business, sales volumes are expected to decline slightly while average sales prices and utilization are expected to be in line with Q2, resulting in operating performance which is slightly below breakeven.