Schnitzer Steel Shares Surge On Analyst Upgrade

NEW YORK (AP) — Shares of Schnitzer Steel Industries Inc. rose Friday after an analyst upgraded the company on prospects for increasing demand for scrap steel, especially from China and other Asian end markets.

UBS analyst Timna Tanners raised her rating to "Neutral" from "Sell" and increased her share price target to $54 from $42.

"Schnitzer has uniquely large exposure to China's growing appetite for raw materials," she wrote in a client note.

Sales of scrap to other countries is expected to rise, too, she said.

"We expect scrap demand continues to grow above average global growth, since we expect faster industrial production growth in prime scrap consuming countries, such as China, Turkey, South Korea, and Taiwan," Tanners wrote.

That growth should help offset expected continued challenging volumes in U.S. and Europe, she added.

Tanners also raised her earnings-per-share estimate for fiscal 2010.

In afternoon trading, shares rose $3.39, or 6.6 percent, to $54.95. The stock has ranged from $16.45 to $70.20 over the past year.