Steel capacity, imports hurt industry: Reliance

Oct 27, 2011 | 06:15 PM | Corinna Petry

Tags  Reliance Steel & Aluminum, David Hannah, Gregg Mollins, Karla Lewis, steel mill capacity, steel demand, Corinna Petry

CHICAGO — Benchmark hot-rolled coil and steel plate prices will continue to fall through year-end as sheet mill production capacity grows, leading distributors to keep curtailing their stocks, Reliance Steel & Aluminum Co. executives predict.

"Steel prices began softening in spring and have continued to do so," Reliance president and chief operating officer Gregg Mollins said. "With the addition of new capacity and imports, there is more pressure on pricing throughout the supply chain."

And this price pressure is hurting service centers’ bottom lines, according to North America’s largest service center operator.

Mollins cited additional production volume from three mills in particular—RG Steel LLC, Sparrows Point, Md.; ThyssenKrupp Steel USA LLC, Calvert, Ala.; and Severstal Columbus LLC, Columbus, Miss.

"It is difficult for demand to be able to absorb that much volume increase," Mollins said. "I have heard (reports that) there is not overcapacity. I beg to differ. That’s insanity. There is a problem with overcapacity."....