Service centers fear a cloudy second half for 2012

Jun 30, 2012 | 07:00 PM | AMM staff

Tags  service centers, service center outlook, Metals Service Center Institute, Lourenco Goncalves, Metals USA

The voices of service center players have not been as buoyant in the second quarter of 2012 as they were during the first. Witness:

“Demand sucks; there is none.”

“Everyone is cautious right now.”

“The reality is that there’s decent demand and there’s too much capacity.”

“You have too many suppliers chasing too few orders.”

“The mills are saying they cannot afford to go lower (on prices).”

“The summer lull (came) early for us this year.”

“(Some) people loaded up in the first quarter and are working their way through that.”

These are all statements from service center executives during the second quarter, reflecting a growing unease with the direction of demand for carbon steel and stainless steel products.

As the second half of 2012 gets under way, recent falls in some steel prices and a still-stagnant construction market have some service centers worried that things might get worse—or, at best, remain relatively flat—before they get better, an idea they were not entertaining six months ago, when more robust times appeared to be on the horizon.....