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Rebar, wire rod output to inch higher: Kerkvliet

Keywords: Tags  rebar, wire rod, residential construction, nonresidential construction, Gerdau Long Steel, Jim Kerkvliet, Samuel Frizell

LAS VEGAS — The burgeoning housing and nonresidential construction markets will boost rebar and wire rod production in 2013 and 2014, according to Jim Kerkvliet, Gerdau Long Steel North America’s vice president of sales and marketing.

The rebar market will grow 4 to 4.5 percent in 2013, with wire rod expected to grow 3 percent on a boost in the construction sector, Kerkvliet said at SteelOrbis’ Rebar and Wire Rod Conference in Las Vegas.

"When you look at the residential and the multifamily residential (market’s growth), it’s going to have a big impact for those people that make mesh, those people that make rebar for slabs and slab on grade," Kerkvliet said.

Single-family residential permits totaled between 475,000 and 515,000 at the start of 2012, and permits this year have already reached 957,000, Kerkvliet said. Multifamily residential starts last year grew 29 percent from 2011, and that trend is likely to fuel growth in the coming year, he added.

Signs are promising for large, market-driven construction projects in the next two years, Kerkvliet said. Industry analysis shows that the nonresidential housing market is expected to grow 6.4 percent this year.

Residential housing starts are a 12- to 16-month leading indicator for nonresidential construction, so actual nonresidential construction growth might not be seen until the end of 2013 or into 2014, Kerkvliet said, adding that rebar and wire rod growth in 2014 is expected to be 11 percent and 10 percent, respectively.

"Everything is starting to line up there," he said. "We see a little more positive move in the economy."

Possible downsides to the growth, however, include tighter municipal, state and federal spending as debt-ceiling fears rein in government expenditures and limit big infrastructure projects, he said. And despite rosy nonresidential construction forecasts, most projects are likely to be on the smaller side.

"I think the only thing that’s probably a challenge for us as a producer of both rebar and structural is that the institutional standpoint and nonresidential (construction) is going to be geared toward six-story, eight-story (buildings)," Kerkvliet said. "There’s still going to be some higher-story buildings being built, but that’ll probably come toward the end of 2013 (or) 2014."

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