NEW YORK Metals industry
participants who were hoping a change in power at the White
House would stimulate fundamental change in the marketplace may
have to reconsider their next moves.
On Tuesday, the
nationincluding many metal-heavy manufacturing states,
such as Ohio and Pennsylvaniare-elected President Barack
Obama over former Massachusetts Gov. Mitt Romney.
In the weeks and months leading
up to Tuesdays election, some market participants had
said they were reining in capital spending as they awaited the
results of the raceand subsequent clarity on the future
of the regulatory climate (
amm.com, Oct. 31). But while the outcome of the
election is now a reality, any newfound clarity may not be
enough to stimulate activity after all, some market players
"We now know what the government
looks like. I suppose part of the uncertainty is gone," said
David Phelps, president of the American Institute for
International Steel. "The second part, however, about the tax
and regulatory structure and how companies and employers can
make decisions, that uncertainty hasnt changed."
And while some had previously
said that buying patterns and metal demand likely would pick up
after the election, many agreed Wednesday that the outlook is
"I told our people that if Obama
got re-elected, there would be a major change to the way we did
things. We have to hunker down (since) selling steel at next to
nothing makes no sense," said a source at one steel
distributor, noting that it doesnt yet appear the outcome
of the election will have much impact on buying activity. "As
far as I can see, no one is buying steel. I dont think
anyone was buying before the election and I certainly
dont think anyone will buy now because of it."
Overall, players in the metals
sector were mixed on how the Presidents re-election would
impact the sector.
"I hate to be too dramatic, but
nothing that comes out of Obama is good for steel. Theres
a lot of steel that goes into the coal business ... and
Obamas view of the automotive business doesnt
really include the steel industry either," Gary Stein,
president of Triple-S Steel Supply Co., Houston, told
AMM Wednesday. "Im not very optimistic, and I
think the fiscal cliff is a mess."
But others said they were less
concerned, especially having already lived four years under
"The fact is that when I look at
where my business and my industry is as opposed to four years
ago, things are significantly better," a source at one aluminum
service center said. "It might not be under the leadership that
people are happy with, but clearly things are moving in the
right direction. I do think this will help the metals industry
in the long term."
"Impartially, the Obama
presidency has been pretty good for business," a nickel trader
said. "Its certainly been good for investors."
A steel trader said he remains
cautious but believes that the worst of the recession may be
behind us. "As long as the United States doesnt go into
default, I think things will be fine," he said. "I assume the
fiscal cliff will get dealt with in some fashion. I think the
economy is continuing to heal and continuing to get better.
With it, steel demand should also get better."
Thorsten Schier, New York,
contributed to this article.