CHICAGO While some
suppliers of special bar quality (SBQ) steel products say
theyre seeing tepid demand from several end-use sectors,
Gerdau Special Steel North America is experiencing strong
business, according to its top executive.
"All three of our mills are
booked to near capacity," president Jack Finlayson told
AMM in an e-mail. "We are seeing robust demand from
the markets that we serve, which are heavily weighted in
transportation equipment, such as passenger cars, light trucks
and commercial vehicles."
The automotive sector has been a
notable exception in an overall environment of lukewarm demand,
several suppliers have said (
amm.com, Jan. 14). But the automotive
industrys comeback reflects the return of U.S.
manufacturing in general, Finlayson said.
"We are now seeing more
localization of formerly imported components, such as
transmissions, engines and other parts," he said. "There are a
number of reasons for this trend, but the primary driver is
that the United States is now considered a low-cost
Some SBQ segments arent
quite as strong right now, including oil and gas and service
centers, Finlayson said. "However, we expect to see growth in
both sectors throughout the year," he added.
First, the United States is
positioned to become a low-cost energy producer, which Jackson,
Mich.-based Gerdau Special Steel NA, a division of Brazilian
steelmaker Gerdau SA, said will drive more rig activity.
Second, "we also expect to see more service center activity to
support energy and general economic and industrial growth in
2013," Finlayson said.
Unlike in 2011 and through the
first half of 2012, lead times from Gerdaus three SBQ
millsJackson; Monroe, Mich.; and Fort Smith,
Ark.have returned to more traditional levels. Consistency
in deliveries is a goal for the steelmaker, he said.
"One of the reasons we are
increasing our capacity at the Monroe, Mich., mill is to
support our customers who require consistent lead times as we
expect demand to continue increasing over the next five years,"
Gerdau has finished building a
continuous caster at Monroe and will begin installing a vacuum
degasser later this year. Work on Monroes existing bar
rolling facilities will include the installation of six
additional rolling mill stands and a walking beam reheat
By 2014, Gerdau also expects to
have increased capacity on its straightening and quality
In addition, "we recently
completed construction of a fifth quench and temper line at our
downstream steel processing facility in Huntington, Ind.,"
Finlayson wrote in the e-mail. Up next is the installation of
new equipment for steel bar turning and inspection, induction
heat treating, straightening and cuttingall part of an
overall $27-million investment at Huntington (
amm.com, March 15).
The bar processing facility
upgrades should be complete by the second quarter.
Gerdau competitors either
declined to discuss their business, citing quiet periods before
earnings season, or were unavailable for comment.