consumersfrom service centers to stampers to
manufacturersare offering a mixed view of demand for
The outlook is positive among
steel-consuming companies in the auto sector, but less so for
those supplying small and midsize general manufacturing
businesses, according to sources. Demand for mining, energy and
agricultural equipment might level off, but it should rise for
construction equipment as housing starts and home sales finally
begin to improve.
Long-term pricing forecasts both
for long and flat steel products are clear as mud, with buyers
suggesting that any monthly increases wont hold very long
unless demand gains ground.
"We see hot-rolled coil pricing
staying in the $640- to $660(-per ton) range and not going up,"
one distribution network executive said, largely because
service center inventories remain long. "Its rare to see
prices fall in the first quarter, so we would assume pricing
will be stable or up slightly. But by April or May, we are not
sure." In terms of demand, "some areas are a little better,
like western Canada, and our automotive numbers are holding up
A source at a Chicago-area coil
processor hasnt yet found a bright spot. "Forecasting for
January looks dismal. Customers expect greater than a
10-percent decrease from 2012," he said.
An Indiana steel distributor
source said hes building a little backlog for January and
he expects forecasts to clear up if federal budget issues are
"Construction has finally gotten
off the basement floor," said a Detroit-area service center
operator, who also described January bookings as solid.
A source at a western Ohio
distributor said agricultural and ranching equipment demand
"has been holding up pretty well," but "general industrial has
very low demand."
On the long product side, "we
are seeing little confidence in the market," a Midwest cold
finisher source told AMM. "First-quarter bookings are
not as strong as in past years."
A northern Ohio bar processor
agreed. "There is definitely a downturn right now, but
its nothing we havent seen before. Imports offer
more competition and are draining from domestic tons," he
Customers of one East Coast bar
supplier have been holding off on placing orders until January,
but a manufacturer of products that use engineered bar sees
bullish outlooks from automotive and medical equipment
A source at a manufacturer of
heavy equipment for defense and mining applications has
continued buying for current projects but isnt
anticipating any rise in volume in 2013.
"Our mining customers, with coal
being unpopular these days, are not optimistic," an executive
at a Great Lakes bar distributor said.
A source at a Mid-Atlantic
master distributor agreed. "Mining seems to have slowed.
Ag(riculture) equipment and heavy truck are going to be very
weak in the first half. The forgings market is weak as
But not everyones forecast
was downbeat. A stamper, a metalformer and a fastener
manufacturer each said theyve won new business that will
keep their machines running throughout 2013.
"We have good things happening at the behest of contract
manufacturers in the auto industry and others," the stamper
said. "The trend across the world is down, especially in
Europe," but "we are hoping to hold it together."