Sims shares slide after non-binding iron scrap supply agreement
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The news: Metal recycling firm Sims shares were down in morning trade after announcing the signing of a non-binding memorandum of understanding (MoU) to supply iron scrap to Alter Steel’s proposed electric arc furnace planned for operation in Pinkenba, Queensland in 2028.
The numbers: Under the memorandum of understanding with Equest Steel, which trades as Alter Steel, Sims will exclusively supply up to 550,000 tonnes of ferrous scrap annually.
At 10:44am AEST, shares in Sims had slipped 3.5% to $15.52.
The context: Sims would also manage Alter Steel’s scrap inventory on a just-in-time basis, and provide access to port and rail infrastructure via the $215 million staged development of Sims’ Pinkenba site, located about 1km away from Alter’s proposed electric arc furnace, which is used to produce steel using electricity.
Sims has previously signed an MoU with BlueScope Steel subsidiary New Zealand Steel to supply at least 200,000 tonnes of scrap per annum to the Glenbrook electric arc furnace, which is expected to be operational in early 2026. That deal has an initial five year term plus a five year extension option.
What they said: “This MoU represents a strategic milestone for Sims. It reinforces our position as a key partner to ANZ’s growing domestic steel sector,” Sims chief executive and managing director Stephen Mikkelsen said.
“The MoU provides a potential pathway to long-term volume certainty for both parties, supported by efficient logistics through the Pinkenba hub.”
The source: ASX
