Sims Metals Management, the leading metals and electronics recyling company, is getting so much competition from China that it has sounded a profit warning.
Its shares closed 19% down to $7.76.
CEO Galdino Claro says the company faces extreme challenges.
“Volumes and prices of secondary metals are at the lowest level of the last decade,” he told the company’s AGM.
“Slowing Chinese finished steel demand resulted in lower steel, iron ore, and secondary metal domestic prices. In response, Chinese steel producers have increased exports of finished and semi-finished steel into the markets of many of our traditional customers, leading to lower global demand for secondary metal.”
Ferrous prices have fallen 30% since August when the copmany reported an 88% fall in full year statutory profit to $109.9 million.
Sims forecasts flat first half earnings and now expects a $230 million impairment charge during 2016.
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