Scrap metal recycler Sims Metal Management expects a lift in first half profit but says scrap intake will be slower.

Mr Dan Dienst CEO of Sims Metal Management told the company's annual general meeting that scrap intake had been remarkably resilient in the first few months of the financial year despite economic challenges in Sims' developed markets.

He said that however high prices for unprocessed scrap were putting pressure on margins, particularly in the North American and UK markets. He added that prices in deep sea ferrous markets have dropped by as much as around USD 60 per tonne in recent times.

Mr Dienst said that in non ferrous metals, the copper price in particular has retreated and the volatility in base metals remains extraordinary. He added that "Against the backdrop of falling ferrous prices and seasonal factors, we expect scrap intake in the remainder of the first half of fiscal 2012 to be slower. We expect a tough trading environment at least through the balance of this calendar year, although we expect the current half year to outperform the prior corresponding period."

Sims reported revenue of USD 3.95 billion in first half of the 2010-11 financial year and net profit of USD 49.3 million.

Mr Dienst said he was optimistic Sims would generate significantly higher margins and returns on capital as and when economic conditions improve. He added that "The current tenuous attitude pervasive globally will perhaps wane as we pass the western and eastern new years."

(Sourced from AAP)