As previously reported, Morgan Stanley analyst Piyush Sood downgraded Schnitzer Steel to Underweight from Equal Weight and cut his price target to $26 from $38 as he believes the impact of China's import duties on nonferrous scrap doesn't seem priced in yet. China's tariffs and import restrictions have caused an 8-14% price decline in zorba - the residual metal mixture left over after scrap shredders have extracted all high purity metal from end-of-life vehicles and white goods- since April, noted Sood, who also believes there are limits on how much scrap shredders such as Schnitzer can lower their buying costs. The company could face a roughly $40M annual EBITDA headwind from zorba, estimated Sood.