Metal distributors' outlook brighter for ’13 but optimism tempered

Dec 31, 2012 | 07:00 PM | Corinna Petry

Tags  service centers, metal distributors, Reliance Steel & Aluminum, David H. Hannah, Grand Steel Products, Jim Barnett, steel shipments, Corinna Petry

Service centers are upbeat on the coming year, but have tempered the enthusiasm they expressed a year ago about the metals demand picture, saying they won’t get fooled again.

The expectation for 2013 orders and shipments is improved from 2012, but the past year devolved into a bit of a disappointment--especially the second half--with the exception of some bright spots in the fourth quarter, distributors told AMM.

“Overall, real demand represented a solid improvement over 2011,” David H. Hannah, chairman and chief executive officer of Los Angeles-based Reliance Steel & Aluminum Co., said during Goldman Sachs Group Inc.’s annual metals and mining conference in late November. “But growth slowed, metals prices declined due to supply rather than demand issues, imports were plentiful and domestic overcapacity persisted.”

The hope of a revival in nonresidential construction has been dashed frequently. “Nonresidential is a huge catalyst and we’re waiting for it. If we got back to 2006 levels, we would add 25 to 30 percent more tons and we’d be approaching $11 billion in revenue,” Hannah said. “We would be more bullish, but we were fooled in both 2011 and 2012. Those years started out strong (for nonresidential construction) and then lost steam.”....