Published by: Christian Willbern<>
25 Feb 2025 @ 20:18 UTC
Multinational recycling company Sims Ltd expects the 25% US import tariffs on steel products to overall benefit the country and to have a positive effect on the company given its larger US businesses, chief executive officer Stephen Mikkelsen said during an earnings call on Tuesday February 25.The announcement of the steel and aluminium tariffs in the US has already changed that market by raising steel and scrap prices, Mikkelsen said.
US President Donald Trump imposed 25% tariffs on all imported steel and aluminium goods on February 10.
Within two weeks, the daily assessment of Fastmarkets’ steel hot-rolled coil index, fob mill US Midwest, had jumped by $5.42 per hundredweight ($108.40 per short ton), to $43.38 per cwt ($867.60 per short ton) on February 24.
US domestic scrap prices also rose in both January and February, with the benchmark Chicago No1 busheling consumer buying price and the Chicago shredded scrap price increasing by $70 per gross ton through the two months.
The monthly assessments of the steel scrap No1 busheling, consumer buying price, delivered mill Chicago, and the steel scrap shredded auto scrap, consumer buying price, delivered mill Chicago, were $450 and $430 per gross ton respectively on February 10.
Australia-based Sims expected additional US scrap demand to come, with US scrap consumption expected to outpace scrap supply until 2030, with new electric-arc furnace (EAF) capacity set to come online in the US, the company said during the earnings call. The half-year covered by the relevant report was June-December 2024, the first half of Sims’ financial year.
Sims said that the US tariffs would probably benefit its operations in North America and its jointly owned SA Recycling business. But it also said that the tariffs could create potential challenges for its Australia-New Zealand division.
This, along with cheaper China-origin steel imports, could put further pressure on the wider ferrous complex.
It’s hard to see China cutting steel production in the short term, and thereby lowering exports, Mikkelsen said. This will continue to damp global ferrous scrap and steel prices.
Sector results Underlying earnings before interest and taxes (EBIT) in the North America division were reported at A$46.7 million (US$29.7 million) in the company’s fiscal first half, up by A$8.8 million year on year.
The company attributed this success largely to a shift toward US export sales because US domestic prices during the first half remained subdued amid lackluster finished steel prices.
It also said that the increase in unprocessed scrap intake increased its sales volumes of zorba because it drove better utilization of the shredders and non-ferrous capturing capabilities.
Total sales volumes in North America reached 2.5 million tonnes in the first half, roughly flat from the corresponding period a year before.
SA Recycling’s underlying EBIT fell to A$47.4 million during the first half, down year on year from A$59.6 million amid inflationary pressures, the company said.
SA Recycling’s sales volumes reached 2.5 million tonnes in the half, up from 2.4 million tonnes in the first half of the 2024 year.
Underlying EBIT in the Australia-New Zealand operations fell to $37.9 million, down by roughly 20% in the same comparison.
Meanwhile, Australia-New Zealand sales volumes fell to 754,000 tonnes from 883,000 tonnes the year before.