Irving, Texas-based steel manufacturing and recycling company Commercial Metals Company (CMC) announced Tuesday a net loss $46.2 million for the quarter ended February 28, 2011 (Q2). For the same quarter last year, CMC recorded a net loss of $173.3 million.
For the Americas Recycling segment, CMC had an adjusted operating profit of $10.9 million in fiscal Q2 2011, compared to an operating loss of $6.8 million in last year's Q2.CMC said that "ferrous scrap pricing rose steadily during the quarter due to ongoing export demand, lower seasonal flows, stable US mill operating rate, and low user inventories, reaching levels last seen pre-recession." Additionally, the average ferrous scrap sales price for Q2 was $353/nt, a 38 percent increase from Q2 2010.
CMC's Americas steel mills segment had an adjusted operating profit of $6.9 million in Q2 2011, compared to an operating loss of $18.5 million in Q2 2010. Meanwhile, the mills ran at 73 percent of rolling capacity during the quarter, up from 58 percent in Q2 2010.
CMC's fabrication segment however reported an adjusted operating loss of $49.6 million in fiscal Q2 2011, compared to an adjusted operating loss of $57.3 million in Q2 2010.
CMC Chairman, President and Chief Executive Officer Murray R. McClean commented, "Our Americas Recycling and Americas Mills segments exceeded our projections due to the favorable price environment. Our Americas Fabrication segment was faced with higher steel input costs, which resulted in losses."
In closing, McClean said, "Looking ahead there appears to be more optimism in world metal markets. As the spring construction season begins, pricing should see a shift from cost push to demand driven. Effective sales prices should rise as previously implemented increases take effect; with scrap pricing stabilizing, metal margins should improve. In this environment, our Recycling segment should continue to do well and our Americas Mills should significantly improve. While our fabrication operations should get some relief, it may not be enough to achieve profitability."