Steel orders set to rise as scrap bottoms: SDI

Jul 24, 2012 | 05:04 PM | Anne Riley

Tags  Steel Dynamics Inc, SDI, Mark Millet, Dick Teets

NEW YORK — Falling scrap prices kept many would-be steel buyers on the sidelines in the second quarter and into July, but order activity may bounce back in the second half of the year as scrap prices appear to have reached their floor, according to Steel Dynamics Inc. (SDI) chief executive officer Mark Millett.

"Steel backlogs have drawn down to a small degree since March ... as buyers have stayed out of the market in anticipation of lower scrap prices or have taken the opportunity to realign their inventories, particularly in the SBQ (special bar quality) arena," Millett told analysts during an earnings conference call Tuesday.

"Buyers continue to watch scrap intently and, given the downturn in the scrap market the last three months, they’ve been hanging out, they’ve been waiting to order, and hopefully with the stabilizing of scrap prices ... we’re going to start seeing a strong order input rate," he said, calling any apparent pullback in activity "more procurement-driven than fundamental-underlying-demand driven."....

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