Ledgers sporting mostly black ink.

Recent financial reports from recyclers and the basic industries they serve present a mixed picture of economic health, with much dependent on where a company sits in the supply chain.

Schnitzer Steel Industries Inc., Portland, Ore., has reported net income of $12.2 million on revenues of $128.4 million for its fiscal quarter that ended Nov. 30, 2003. In comparison, the company reported net income of $2.9 million on revenue of $90.7 million the same time the previous year.

In the news release accompanying its earnings report, Schnitzer noted that its Metals Recycling Business earned the bulk of that income, reporting operating income of $9.9 million in the first quarter of fiscal 2004, an improvement of $6.8 million (or 221 percent) over the same quarter last year. "The higher operating profit was primarily caused by improvements in both sales volumes and average selling prices, which rose by 39 percent and 37 percent, respectively, over the first quarter of fiscal 2003," the company noted.

Schnitzer Steel CEO Robert W. Philip noted that China's steel industry was a key factor in the company's 2003 results. "In early December, China's Bureau of National Statistics announced that with one month to go before yearend, China had already become the first nation ever to produce more than 200 million tons of raw steel in a single year," said Philip. "This growing steel production is directly increasing demand and prices for recycled ferrous metal."

Even away from the West Coast, scrap recyclers point to China as the driver of industry activity. Shares of Industrial Services of America Inc. (ISA), Louisville, Ky., rose to their highest level in more than six years in February. ISA points to "rising metals prices and China's insatiable demand for steel" as helping the company to post higher sales and profits in its latest quarter.

Steelmakers are the ones paying the higher prices for scrap, and the strain is showing on earnings reports. Nucor Corp., Charlotte, N.C., reported consolidated net sales for its fourth quarter increased 4 percent over its third quarter. Fourth quarter earnings were $20.6 million, compared with $16 million the same time the previous year.

Nucor's average sales price per ton increased less than 1 percent.

In its accompanying comments, Nucor noted that the average scrap cost per ton purchased increased $65 (57 percent) from December 2002 to December 2003.

Mill services firm Harsco Corp., Camp Hill, Pa., reported gains in income and sales for its fourth quarter. Harsco noted that for its mill services division, fourth quarter sales increased 24 percent to $227 million from $183 million the same time the previous year.

On the nonferrous side, Imco Recycling Inc., Irving, Texas, reported fourth quarter net earnings of $456,000. and net earnings for the full year totaling $3.9 million.

Imco says its domestic aluminum segment incurred a loss of $2.4 million compared with income of $8.1 million in 2002's fourth quarter resulting from the write-off of a closed Utah plant, a write-down in property held for sale and a 7 percent decrease in material processed.