Stock Research and Analysis

by Elizabeth Collins, CFA

Bulls Say

Scrap-based electric arc furnace steel production has become a more prevalent method relative to raw iron ore-based blast furnace technology compared with a decade ago.
A focus on energy efficiency and reduced carbon emissions in China has caused the world's largest steelmaking country to strive for greater substitution of scrap for less environmentally friendly steelmaking inputs.
Access to deep-water ports gives Schnitzer a greater ability to access the best price for its scrap sales. Read more 

Bears Say

Mini-mills are developing new technologies to use more iron units and less scrap metal in their raw material mix.
The U.S. scrap market is vulnerable to volatile demand trends in China. Longer term, economic development within China could cause scrap demand growth to decelerate.
There is a risk of too much available shredding capacity in the market as the rate of added shredders has increased with rising scrap prices, but tight scrap flows have kept the returns low. Read more 

Management

CEO Tamara Lundgren took the reins in late 2008, just as U.S. steel production was starting to plummet as the global recession unfolded. This set up the company for several quarters of dismal profits, but management continued to invest in the business,  Read more 

Profile

Schnitzer is one of the largest ferrous and nonferrous scrap metal recyclers in the U.S. and is a primary exporter of scrap metal to other parts of the world. The company   Read more 

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