The Sims Ltd (ASX: SGM) share price leapt higher on open today and kept attracting buyers. The Sims share price closed the day up 7.8%, putting it atop the leader's board of the S&P/ASX 200 Index (ASX: XJO). By comparison, the ASX 200 gained 1.1% today.
Year to date, the Sims share price remains down 21%, having yet to fully recover from the trouncing it took during the post COVID-19 market rout. From 19 February through to 23 March, the Sims share price crashed 48%.
Since the March low, however, Sims shares are up nearly 48% to $8.48 per share. That gives the company a current market capitalisation of $1.7 billion.
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What does Sims do?
Formerly known as Sims Metal Management, the company was founded in 1917. Since then, Sims has become the largest scrap metal and electronics recycler on Earth. Sims employs 6,000 people in 230 global locations, including Australia, the United States, New Zealand and the United Kingdom.
The company buys a variety of ferrous (containing iron) and non-ferrous metals from a large range of sources. It also processes ferrous metals for resale to end users including steel mills, foundries and metals brokers.
Sims shares began trading on the ASX in 1999.
Why did the Sims share price gain strongly today?
There was no specific news released by the company to drive the Sims share price up almost 8% today. But investors may be cottoning on to the fact that the company's shares remain down around 28% from their 22 January high in a market with strong growth outlooks.
According to Brandessence Market Research, as reported by Scientect today, the metal recycling market is valued at roughly US$52 billion globally, with growth predicted to be 7.1% over its forecast period of 2020-2027.
The metals that Sims recycles include copper and aluminium. And both metals have seen sharp upswings in their prices. Copper is trading for US$6,789 per metric tonne, its highest price since mid-2018. Aluminium is at US$1,798 per metric tonne, putting it back at its January 2020 levels and up 23% since 15 May.
With copper demand in China seeing the nation import record levels in July and near record levels in August, copper prices are likely heading higher. And with the demand for aluminium and recycled steel likely to ramp up as well, the Sims share price is one to watch.
