Metalico (AMEX:MEA), Schnitzer Steel (NASDAQ:SCHN), Sims Metal (NYSE:SMS) Look Strong in Scrap Sector

The recent increase in iron ore prices by Rio Tinto (NYSE:RIO) may indicate a strong scrap industry, and companies like Metalico (AMEX:MEA), Schnitzer Steel (NASDAQ:SCHN) and Sims Metal (NYSE:SMS) are among the favorites of Canaccord.

In the steel industry they like Horsehead Holding (Nasdaq:ZINC) and GrafTech International (NYSE:GTI).

Canaccord said, "We remain bullish on the scrap industry. We reiterate our BUY ratings on Metalico, Schnitzer Steel Industries, and Sims Metal Management. We also continue to recommend two stocks that will benefit from improving conditions in the steel industry: Horsehead Holding, a leading processor of electric arc furnace dust and producer of zinc, and GrafTech International, a major supplier of graphite electrodes to electric arc furnace steelmakers worldwide."

Metalico was trading at $5.43, up $0.13, or 2.45 percent as of 11:57 AM EST. Schnitzer Steel Industries was trading at $62.25, up $1.03, or 1.68 percent. Sims Metal was at $20.05, up $0.45, or 2.30 percent.

Horsehead Holding was trading at $12.31, up $0.12, or 0.98 percent, as of 12:00 PM EST. GTI increased to $20.46, up $0.54, or 2.71 percent.