Metals

Steel production shows modest increase in 2016

The World Steel Association (Worldsteel), Brussels, reports that global steel production topped 1.63 billion metric tons in 2016, a 0.8 percent increase from 2015’s production total.

Worldsteel’s members include more than 160 steel producers, which account for 85 percent of world steel production.

Leading the way in 2016 was Asia, which increased 1.6 percent to 1.13 billion metric tons. Production of crude steel in China, the world’s largest steel producer, reached 808.4 million metric tons, a 1.2 percent increase from 2015. With the increase, China is now producing 49.6 percent of the world’s steel.

India’s 2016 crude steel production was 95.6 million metric tons, up by 7.4 percent from 2015, while South Korea produced 68.6 million metric tons, a 1.6 percent drop.

2016 crude steel production in Europe reached 162.3 million metric tons, a 2.3 percent decline from 2015. Germany produced 41.1 million metric tons for the year, a decline of 1.4 percent; Italy produced 23.3 million metric tons, a 6 percent increase; and Spain produced 13.7 million metric tons, a 0.8 percent drop.

North American production held at 111 million metric tons, though U.S. production fell by 0.3 percent to 78.6 million metric tons.

South American production dropped by 10.6 percent to 39.2 million metric tons, with production in Brazil declining by 9.2 percent to 30.2 million metric tons.

CIS (Commonwealth of Independent States) countries produced 102.4 million metric tons in 2016, 0.8 percent more than in 2015. Russia’s production fell 0.1 percent, while Ukraine’s increased 5.5 percent.

CMC subsidiary acquires seven OmniSource recycling yards

Owen Steel Co., Columbia, South Carolina, a subsidiary of Commercial Metals Co. (CMC), headquartered in Irving, Texas, has signed a definitive asset purchase agreement for certain assets from OmniSource Corp., a wholly owned subsidiary of Steel Dynamics Inc., Fort Wayne, Indiana. The asset sale consists of seven recycling facilities in the Southeast, which are near CMC’s minimill in Cayce, South Carolina.

The companies say the transaction is expected to close in the first quarter of 2017 and is subject to customary closing conditions.

On its website, OmniSource lists eight locations in South Carolina: Anderson, Clinton, Columbia, Greenville, Greenwood, Liberty and two in Spartanburg.

“The signing of the asset purchase agreement for the acquisition of these facilities continues CMC’s focus on supporting our mill operations with a reliable, low cost source of raw material,” says Tracy Porter, executive vice president, CMC operations. “These locations will support our Cayce, South Carolina, minimill, and we expect to realize synergies with our existing operations in the region.”

Owen Steel is a structural steel contractor with a fabrication facility in Columbia.

OmniSource operates more than 70 scrap yards in the U.S.

Schupan & Sons makes strategic acquisition

Schupan & Sons Inc., Kalamazoo, Michigan, has announced the purchase of a majority interest in Trinity Metals, an Indianapolis recycler of ferrous and nonferrous metals, magnesium and specialty metals, electronic scrap, fiber and plastics.

Marc Schupan, president of Schupan & Sons, says he is extremely pleased to have the talented employees of Trinity join the Schupan team. He adds that the acquisition of Trinity fits the Schupan growth strategy for its recycling division.

Schupan & Sons says it expects the partnership to allow for a more diverse product offering while broadening and simplifying its service area for existing key accounts.

Schupan says Trinity Metals is one of the largest postconsumer magnesium scrap processors in the United States. The company produces custom-made, mill-ready magnesium scrap that can be direct charged into aluminum furnaces. Trinity also offers a range of alloying products for aluminum producing plants. A spokesperson for Schupan adds that along with Trinity’s history in the magnesium market, Schupan has strong relationships with consumers of magnesium.

Like Schupan Electronics Recycling, Trinity Metals is an R2 / RIOS (Responsible Recycling / Recycling Industry Operating Standards) certified facility for electronics recycling. Together, both companies say they will have a stronger presence in metals and will provide an additional service to increase value to customers.

“I am very excited about the opportunity for Trinity to join forces with the Schupan team,” says Wade Conner, president of Trinity Metals. “Trinity has done business with Schupan for many years; I have great respect for Marc Schupan and his management team. It is my firm belief that Schupan is an excellent fit for Trinity, both culturally and strategically.”

Trinity Metals, founded in 2008, will continue its current operations at the Indianapolis location. The company will operate under the larger umbrella of Schupan & Sons and will remain a separate entity.

Conner will remain president of Trinity, and his role with Schupan will be collaborative in a number of market areas, the company says.

Schupan & Sons has 14 facilities in Michigan, Ohio, Indiana and Illinois and operates three different companies: Schupan Aluminum & Plastic Sales, Schupan Recycling and Schupan Industrial Recycling.

Schnitzer’s Auto and Metals Recycling division benefits from improved market conditions

The Auto and Metals Recycling (AMR) division of Schnitzer Steel Industries Inc., headquartered in Portland, Oregon, delivered its best first-quarter performance since fiscal 2012 in the first quarter of fiscal 2017, which ended Nov. 30, 2016, according to the company. Schnitzer credits the improved performance to higher benefits achieved from the successful execution of cost reduction and productivity initiatives and improved market conditions.

The company’s Steel Manufacturing Business (SMB) division saw continued pressure from low-priced imports on finished steel selling prices and volumes, combined with the higher operating costs associated with a major equipment upgrade and maintenance downtime, which adversely affected results as compared with the 2016 fiscal year and its fourth quarter.

Overall, Schnitzer has reported a loss per share from continuing operations of 5 cents for the first quarter of fiscal 2017 and an adjusted loss per share from continuing operations of 3 cents. Reported and adjusted first-quarter results include an adverse impact on operating costs in the SMB of approximately $2.5 million, or 9 cents per share, resulting from outages related to the equipment upgrade and maintenance downtime. In comparison, the company had a loss per share from continuing operations of 19 cents in the first quarter of fiscal 2016 and an adjusted loss per share from continuing operations of 13 cents.

Schnitzer says it currently expects its AMR operating income for the second quarter to increase sequentially and year over year driven by continued improvements in market conditions for recycled metals. AMR’s second quarter performance is expected to reflect higher ferrous average selling prices and sales volumes and an anticipated favorable impact from average inventory accounting, as well as continued benefits from previously announced cost reduction and productivity initiatives, the company says.

Schnitzer says it anticipates SMB second quarter performance to be slightly improved from the first quarter in light of higher selling prices.