Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Steelmakers and scrap companies are announcing changes to their H2 2020 guidances, with some withdrawing their projections for the period.


Global metals recycler Sims Metals Management noted it was withdrawing its previous outlook for the remainder of 2020 due to COVID-19’s economic impact. In a note to the Australian stock exchange ASX, the company said it previously projected a $40-60mn ($23.8-35.7mn) EBIT, while also acknowledging the risks posed by COVID-19 spreading.


In an overview of current market conditions, Sims said that limited ferrous scrap liquidity in the Asian markets was offset by demand in the Middle East, Turkey, and the Americas. However, scrap prices in these regions were lower than in Asia and, furthermore, non-ferrous metal demand has returned to China.


According to Alistair Field, managing director and chief executive officer of Sims, the company entered the year with a balance sheet so strong that it could weather these uncertain times, provided it proceeded cautiously. 


On the other hand, German steelmaker thyssenkrupp, which also withdrew its 2020 outlook, said the health and safety of its workforce was imperative, even as it tries mitigating the adverse impacts COVID-19 could have on its balance sheet. The company stated it would not be prudent to provide an outlook at this time because of the rapid changes the pandemic is causing.

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