Schnitzer Steel Industries Inc’s (SCHN) profit during the course of the first-quarter has dropped by a remarkable 61%, with the metal-recycling company placing the blame on a slowdown in demand for their products as the European debt crisis leads to the market tightening.

Chief Executive Tamara Lundgren claims that conditions in the market have deteriorated as steel manufacturers looked to scale back on raw material purchases due to the expectation that the global economy may be heading towards another recession.

Lundgren commented “Despite the short-term volatility, all indications are that long-term demand fundamentals in our export markets remain strong, primarily due to expectations for further growth and increasing urbanization in developing economies, and increasing usage of recycled metals globally.”

The drop marks the end of an encouraging period for the company, in which they had seen their revenue growing in recent quarters, and it seems that the the immediate future of the company will very much depend on the state of the economy in the coming months.