Prices are stronger in March after moving sideways in January-February. Midwest ferrous scrap up $40 ton. All other markets up slightly and firm.
Metalico is now in compliance with all loan covenants and conditions. They expect to now remain in compliance throughout 2013.
They expect to exceed ferrous and non-ferrous weighs in 2013.
$23 million in equipment was purchased during the year and the debt only $2 on that equipment, the was paid using cashflow. There are very equipment purchases planned in 2013. They upgraded all their shredders already.
Three scrapyards were purchased to support the Buffalo shredder. Late in the year they bought another scrapyard in the Rochester, NY area also.
In December, through a joint venture, they started a ferrous yard in the Cleveland, Oh area.
They will continue to make acquisitions in the markets where they have a presence to enhance operations and gain economy of scale in operations. Carlos Aguerro was looking at acquisitions today and not present at the EC.
Available scrap resources are tight and are expected to remain tight throughout the year and foreseeable future. They are attempting to obtain more contracts through demolition companies and of course, acquisitions of scrapyards.
Markets Outlook 2013:
1. Supplies will continue to be tight and, ferrous scrap pricing will be volatile. Thus, prices should rise.
2. The steel market makers will be characterized by overcapacity, which could cause importers to be more competitive which may impact scrap demand.
3. Metalico will ship higher volume in ferrous scrap.
4. Non-ferrous volumes are expected to remain strong, especially aluminum for automakers.
5. Base metal pricing will continue to be soft as long as the US dollar is strong.
6. PGMS is expected to be flat from 2012.
7. Lead operations should continue to be bright spot. Scarcity of old batteries should support even higher prices over 2012, which was a good year for lead.