Steel market growth eyed in 2012—with caveats

Jan 31, 2012 | 07:00 PM | Gregory DL Morris

Tags  OCTG market, steel tube and pipe market, Aldo Mazzaferro, auto market, construction market, Gregory DL Morris

Last year signaled large gains for the steel industry’s recovery, but there’s still work to be done before it reaches pre-recession levels, according to Aldo Mazzaferro, managing director and senior analyst for steel, metals and mining at Macquarie Capital USA Inc.

Tube and pipe, especially, could be among the strongest end-use markets for the steel industry this year, along with aerospace, oil and gas. The overlap in the oil and gas markets with the tube and pipe markets—particularly with oil country tubular goods (OCTG) as well as gathering systems and transportation pipeline—could be the key to renewed strength for steel in 2012, Mazzaferro said. He also sees strong demand for high-strength steel for pressure vessels, including reactors and storage tanks for processing plants and railroad tank cars.

“Overall there continues to be a backlog in aerospace and in oilfield equipment, especially pressure tubing, OCTG and process plant equipment such as reactor vessels and heat exchangers,” Mazzaferro said. “There is also a huge backlog in aerospace.”....