Radius loses money, says merger on track

Portland, Oregon-based Radius Recycling Inc. has reported a net loss of $33 million in its fiscal year 2025 second quarter, which ran from Dec. 1, 2024, to Feb. 28 of this year.

The company, which operates scrapyards, auto dismantling facilities and an electric arc furnace (EAF) steel mill, cites “tight scrap flows exacerbated by particularly challenging winter weather conditions” as one reason for its unprofitable financial quarter.

The $33 million loss in the quarter compares with a $34 million net loss one year earlier.

“On a year-over-year basis, operating performance in the second quarter of fiscal 2025 was slightly lower primarily due to lower global ferrous and finished steel prices,” Radius says. “Ferrous average net selling prices were 14 percent lower year over year. This, together with tight scrap flows exacerbated by particularly challenging winter weather conditions, led to a compression in metal spreads compared to the prior-year quarter.”

Radius announced in mid-March that its board of directors had accepted an offer to be acquired by Toyota Tsusho America Inc. (TAI), a subsidiary of Japanese company Toyota Tsusho Corp. (TTC), which itself is part of the larger Toyota Group.

In a brief update to that announcement, Radius says its board has approved the merger agreement and “subject to the satisfaction of the closing conditions, the company anticipates the merger to close in the second half of calendar [year] 2025.”

TAI will acquire a company with recent results that have been affected by “the dampening effect from elevated levels of Chinese steel exports, partially offset by higher ferrous and finished steel sales volumes, stronger nonferrous [recycled metals] demand, and benefits from productivity initiatives,” according to Radius.

As of early April, tariffs levied by the United States and expected and announced retaliatory tariffs by trading partners raise questions about some of the firm’s bright spots, including the near-term future of nonferrous recycled metals exports and the ability of the domestic steel industry to weather economic turbulence,

In the late 2024 and early 2025 financial reporting period, Radius characterizes domestic and export market conditions for recycled steel as having diverged in the latter part of the quarter as domestic ferrous scrap prices increased sharply and mills began restocking.

“This surge supported margin expansion on domestic shipments, but also contributed to a temporary spread compression on export sales that had already been contracted for the quarter," the company says. "The impact of average inventory accounting in the second quarter of fiscal 2025 was approximately neutral, compared to a benefit of approximately $2 per ferrous ton in the second quarter of fiscal 2024.”

Radius ferrous scrap sales volumes were 12 percent higher compared with 12 months earlier while stronger nonferrous scrap demand led to 10 percent higher average net selling prices compared with the winter of 2023-24.

Regarding the firm’s EAF mill in Portland, Radius says its profit contribution was lower year on year primarily because of a decline in average net selling prices of 9 percent, although finished steel prices began to rise in the latter part of the quarter.

The company says the price drop partially was offset by finished steel sales volumes it says were 15 percent higher year on year, with demand in the company’s western U.S. market characterized as healthy.

Radius says its EAF mill capacity utilization rate was 88 percent in the recently completed quarter compared with 81 percent one year earlier.