Service center execs nervous about steel supply risks

Jan 25, 2010 | 11:05 AM | Corinna Petry

Although demand for steel products is still largely weak compared with levels seen prior to the Great Recession, members of the Association of Steel Distributors (ASD) said they must consider what might happen with both supply and pricing if demand grows beyond current expectations.

"I believe the risk is substantial right now" for there to be shortages of material in the supply pipeline, "possibly greater than during the past few demand cycles," Joseph W. Darragh, vice president of sales at Charter Steel Trading Co. Inc., Chicago, told AMM in a roundtable discussion.

"The (inventory) pipeline is nearly dry. If there was a significant increase in demand, there would be a great risk of steel shortages and supply disruption. That risk is mitigated now by the fact that demand is strengthening in only a couple of core markets, including automotive. If we saw strengthening in any significant market (other than automotive)—construction, consumer durables—it would put an extreme amount of pressure on the steel supply chain," he said.....

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