CHICAGO Carbon steel pricing is expected to hold
fairly stable this year despite the rising pace of imports,
especially in steel plate, Reliance Steel & Aluminum
Co.s top executives said.
Price increases were announced, as were
discounts, president and chief operating officer Gregg
Mollins said on an earnings call with investors Thursday.
But prices were not significantly up or down.
Carbon flat-rolled and tubing products have seen
modest increases in price year to date, (and) alloy prices are
seeing modest surcharge increases, (but) we dont expect
to see any major swings going forward, he added.
The expectation of stable steel pricing comes despite an
apparent influx of offshore material.
Reliance is seeing imports coming in at a rate seen in
2008. Thats not a good thing but you cant stop
it, Mollins said. In response, some domestic producers
are willing to sell at foreign-fighter levels, he
They support us, recognizing that when imports come in
at that level and we dont participate, they must provide
us with a competitive price. Because if we lose market share,
they lose market share, he said.
At the same time, demand looks poised to slowly rise this
year in most markets, with a more rapid recovery expected in
automotive, aerospace and energy.
Reliance has meaningful exposure to industries that
promise growth in the future, chairman and chief
executive officer David H. Hannah said during the quarterly
Mollins agreed, citing a number of bright spots among
Reliances customer base. We are optimistic about
oil and natural gas. Aerospace has record backlogs, and the
companies supporting it are going gangbusters. Industries
including transmission towers, barges, railcars, mining and
agricultural equipment are getting better. Nonresidential
construction is showing signs of life, for industrial
construction especially, Mollins said.
Meanwhile, a number of the companys other product
segments, including aluminum products, are also showing some
signs of strength.
Midwest (aluminum) spot ingot is trading in a narrow
range. Heat-treated aerospace plate has 16- to 18-week lead
times, and a 5-percent price increase has been accepted,
Some customers are on unofficial allocation while producers
are running at 85 percent of capacity or higher, he said.
General engineering aluminum plate has 13- to 16-week
lead times. Common alloy sheet has a six- to eight-week lead
time. We like what we see in aluminum, Mollins said.
On stainless steel products, nickel surcharges are not
nearly as volatile as they were in 2011, he said.
Producers got half of a 4-percent price increase announced in
January and announced another hike this month. We hope
that will stick, Mollins added.