Metals, Financial

Photo by Vicki Jeromos

BlueScope cites US growth as critical strategy

Australia-based steel producer BlueScope has reported fiscal year 2022 net profits after tax of AU$2.81 billion ($1.97 billion), which its CEO calls “a record performance in BlueScope’s 20-year history as a listed company.” The company also disclosed it has purchased Milliron Recycling, a scrap yard in Mansfield, Ohio, which was owned and operated by Grant Milliron. The deal was for about $80 million.

According to a statement from BlueScope to Recycling Today, the Milliron acquisition provides the company supply surety for a large portion of key feed product for its North Star minimill in Delta, Ohio. BlueScope says Milliron also has a presence and expertise in prime and obsolete scrap processing, which helps the steelmaker increase its participation in the circular economy.

The company says this acquisition enables the North Star facility to improve the quality and quantity of obsolete scrap it uses and to reduce the mix of more costly prime scrap. BlueScope says this acquisition also will help the company to achieve additional scrap self-sufficiency.

BlueScope Managing Director and CEO Mark Vassella says the annual profits represent a 135 percent ($1.14 billion) increase compared with profits in fiscal year 2021. “This was an outstanding result, with tremendous performances across our business portfolio,” he says.

Vassella continues, “We saw continued strong demand for our steel products and solutions despite recent macroeconomic and geopolitical volatility. It’s truly heartening to see our people continue to step up, to serve our customers and to operate safely and with great resilience. This record result is their record result.”

Commenting on high-profile activity in the United States, he says, “Operating cash flow, after capital expenditure, including on the North Star expansion, was AU$1.71 billion ($1.2 billion). From this, investments of AU$1 billion ($700 million) were made in the U.S. acquiring the MetalX ferrous recycling business and the Coil Coatings business. These were well-considered and well-executed investments in our U.S. growth plan.”

In its report to shareholders, BlueScope calls its recently completed fiscal year, which ended June 30, “a year of major achievement and progress for BlueScope in the U.S.”

The firm continues, “Construction is substantially complete on our biggest single capital project, to add capacity of 850,000 metric tons per annum to the North Star minimill in Delta. The first coil was produced in June 2022, and we are commencing the 18-month ramp-up to full run rate, at which point North Star will account for around 5 percent of total annual U.S. flat steelmaking production.”

Regarding its entry into the scrap market, the company writes, “In December, BlueScope established BlueScope Recycling and Materials, or BRM, by acquiring the ferrous scrap steel recycling business of MetalX in Waterloo, Indiana, and in Delta, Ohio, for approximately $220 million.”

In its report to shareholders, BlueScope adds, “BRM gives us a crucial presence and expertise in scrap processing. The new business unit will enable North Star to improve the quality and quantity of obsolete scrap it uses and reduce the mix of higher cost, prime scrap.”

Photo courtesy of Nucor Corp.

Nucor to add furnace capacity in Arizona

Charlotte, North Carolina-based steelmaker Nucor Corp. has announced it will add a new melt shop at its bar mill in Kingman, Arizona. The anticipated $100 million melt shop will have the capacity to produce 600,000 tons of raw steel annually. Construction of the melt shop is expected to take two years, pending permit and regulatory approvals, the company says.

“This investment in a new melt shop at our Arizona bar mill is part of our strategy to grow our core steelmaking business and will help us maintain our market leadership position in steel bar production,” Nucor President and CEO Leon Topalian says. “Adding new melt shop capacity will help meet the growing demand for steel bar products in the western region, which is one of the fastest growing areas in the United States.”

Steel production in the West lags that of other regions, according to figures from the Washington-based American Iron and Steel Institute (AISI). In the week ending July 30, for example, 64,000 tons of steel were made in the AISI Western region, while 728,000 tons were made in its Southern region, 562,000 in the Great Lakes region, 207,000 in the Midwest region and 166,000 in the North East region.

One of the last mills in California, an electric arc furnace (EAF) mill in Rancho Cucamonga last operated by Commercial Metals Co. (CMC), was idled in late 2020, with the land sold off last year. CMC has attempted to shift some of that capacity by expanding its EAF output in Mesa, Arizona. Nucor will now try to boost western U.S. output with the Kingman project.

Nucor has 15 bar mills in the U.S., four of which focus on special bar quality and wire rod products.

© Andrii Yalanskyi | stock.adobe.com

Sims doubles profits in fiscal year 2022

Australia-based Sims Ltd. says in its 2022 fiscal year, which ended June 30, the company saw its sales revenue rise by more than 56 percent compared with the previous year, while its underlying earnings per share (EPS) rose by 104.5 percent.

“Fiscal year 2022 was a very strong year,” CEO and Managing Director Alistair Field says. “I am proud that we delivered the strongest underlying EBIT [earnings before interest and taxes] result on record and significant trading margin and volume increases.”

He continues, “We made significant progress on our business strategy: successfully completed several strategic acquisitions, continued to deploy enhancement technologies in ferrous and nonferrous and opened new feeder yards in the metal business. In Sims Lifecycle Services (SLS), we launched new service offerings and invested in engineering and technology to continue driving innovation and build capacity to scale up operations quickly when the supply chain challenges ease.”

In a news release announcing its earnings, Sims executives point to what they call “improved safety metrics” and “strong progress” toward sustainability goals in the recently completed fiscal year.

On the operations side, the company points to its acquisitions of Pennsylvania-based Alumisource and Maryland-based Atlantic Recycling Group as new volume contributors going forward. In Australia, Sims is undertaking a deep-water port facility project in Brisbane it says will include “best-in-class design for shredder processing.”

In the U.S., Sims also points to its partnership with California-based SA Recycling as contributing to “record EBIT growth with significant trading margin expansion and sales volume growth.” Referring to shredded metal markets, the company adds, “Margins were further enhanced by higher zorba selling prices.” It also points to SA Recycling’s acquisition activity, saying it has “continued to create value through successful M&A integration.”

In its SLS business unit, the company says a recent global market share study showed SLS is now at 3.2 percent market share, more than doubling from its 1.5 percent status in 2019.

Looking at fiscal year 2023, now underway, Sims Ltd. says in its presentation, “Softer economic conditions have impacted our markets in the short term. ... We remain very confident in the medium and long-term fundamentals of the business.”

In the ferrous market, Sims writes, “Ferrous prices peaked at around $700 per metric ton in March 2022 but have subsequently fallen to trade between $320 to $400 per metric ton at the start of fiscal year 2023.”

Regarding the next 12 months, the company’s executives conclude, “Fiscal year 2023 results will depend on how quickly and to what magnitude global markets recover from the interest-rate-hike-induced slowdown.”