US recycler Metalico expects domestic ferrous scrap pricing to remain under pressure until the American scrap export market improves, it said Thursday.
First-quarter US scrap exports were at an eight-year low, leading domestic exporters to offer significant tonnage typically bound for overseas markets inland this year instead, depressing prices in the process.
"Pricing should remain pressured until export market prices rebound," Metalico said in an earnings statement. "Scrap buying prices being paid by domestic mills have weakened by the abundant supply offered by export yards. Export scrap is normally loaded on ships and leaves the North American market."
The company said mill demand and scrap buying prices have weakened because of imports of finished steel.
Metalico posted a Q1 net loss of $4.2 million on revenue of $135 million, compared to a net loss of $1.2 million on revenue of $138 million in the year-ago quarter. In Q4 2013, Metalico reported a net loss of $3.3 million on revenue of $127 million.
Ferrous scrap shipments were relatively stable, moving up 3% from the year-ago quarter and 1% from the prior quarter.
"Despite all the weather-related problems, we maintained comparable unit shipments," Metalico CEO Carlos E. Aguero said. "We maintained comparable unit shipments, but would have shipped more if not for disruptions to transportation networks. The warmer weather has brought improved scrap flows, but also softer selling pricing for most commodities."
