Data drive boosts Sims’ chip recycling

The need for bigger and better chips to support the insatiable drive for artificial intelligence (AI) and cloud data technology is benefiting Sims, the metal recycling giant.

The group’s latest financial report, covering the second half of 2025, points out the growing requirement for the latest DDR5 AI chips is boosting demand in secondary markets for used DDR4 chips. Sims Lifecycle Services (SLS) is said to be well-positioned to benefit from a significant increase in DDR4 prices.

The observation comes in the report’s outlook section, which notes that the group’s sales revenue of US$ 3 778.6 million (EUR 3262 million) is up 3.7% from the prior corresponding period.

The underlying EBIT of US$ 121 million is up 65.9%, driven by ‘exponential’ SLS growth and improvements in North American Metal, US joint venture SA Recycling and corporate costs.

Tariffs

Commenting on scrap trade, the outlook adds: ‘Non-ferrous markets are expected to remain strong, continuing to deliver significant trading margin contributions across our NAM, ANZ, and SA Recycling operations.

‘Long-term ferrous scrap fundamentals are expected to remain strong: EAF capacity and scrap demand are expected to continue to grow, underpinned by decarbonisation, and government policies supporting onshoring.’

The group has benefitted from US tariffs: ‘Tariffs are expected to continue to protect domestic steel and aluminium industries, supporting local demand for ferrous scrap. The premium for domestic shred sales is expected to continue to benefit NAM and SA Recycling’s margins.’

Headwind

However, Chinese exports are said to be producing strongest headwind. ‘Record-high Chinese steel exports are expected to keep ferrous prices muted in markets outside the USA. This will challenge NAM, ANZ, and SA Recycling ferrous exports, as well as ANZ’s domestic market.

‘While pricing pressure is likely to persist, further significant declines from current levels appear limited, with prices having approached apparent market floors.’

The report also reflects on the failure of Unimetals in the UK last year. Sims sold its UK operation to investors in 2024, after which the business was rebranded. But Unimetals went under before making all the payments to Sims and this is reported to have cost it US$ 42.5 million.