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Steel demand growing, but in baby steps: ASD

Keywords: Tags  steel, steel distribution, steel supply, steel demand, steel prices, ASD, Association of Steel Distributors, Lisa Goldenberg Delaware Steel

CHICAGO — There are some bright spots for steel as signs point to growth in the automotive, agricultural equipment, oil and gas, and mining markets, but the extent to which demand improves this year remains to be seen, market players say.

Economic indicators "point to very strong growth, whether it’s automotive, agricultural equipment, certainly anything to do with oil and gas, and mining," Lisa Goldenberg, president of Delaware Steel Co., Fort Washington, Pa., said during an AMM-led roundtable at a recent Association of Steel Distributors meeting in Detroit. "Has anyone called up and given us the largest order we’ve seen in three years? No. Nonetheless, the numbers are there."

Any upswing in demand, however, could be a subtle one. "(It could be) incremental improvement that you don’t know you have until after it’s happened," she said. "That’s what’s so tricky about this recovery. At no point is (business) awesome. But incrementally, industry by industry, it is better."

Even housing—"the runt of the litter"—is doing better, Goldenberg added.

Automotive-centric Voss Industries Inc. is "entering 2013 with a bang," Tony Butera, president of the Taylor, Mich.-based toll processor, said. "Our order book and backlog are super. I’m getting orders from people I never expected to get—coming from Canada, for heaven’s sake. I expect 2013 to be a really good year."

Mike Dallek, president of MD Metals Inc., Bedford Park, Ill., is seeing equipment being built, such as heavy forklifts, to service "booming shale gas projects," as well as increased fabrication work for construction projects, he said.

"Everyone says (natural gas drilling) is a game-changer. Apparently, it is," he said.

On the other hand, those bright spots don’t disguise the fact that excess steel supply exists, Jim Gerth, executive vice president of commercial at Bedford Park-based Alliance Steel LLC, said.

"Look at the strength of the mill order book tied to automotive, and then look at mini-mill lead times. There’s the story," he said. "I think there is too much steel."

Although auto demand "is great," where producers actually make money is when business picks up at small and mid-size manufacturers.

"Right now, they are not in the market," Bill Feniger, president of Universal Metals LLC, Toledo, Ohio, said. "Outside of automotive-grade steels, you can get anything you want really quickly. That is not a good sign. Raising prices is great. Let’s hope it keeps them from sliding."

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