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 its 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 weve
seen in three years? No. Nonetheless, the numbers are
Any upswing in demand, however,
could be a subtle one. "(It could be) incremental improvement
that you dont know you have until after its
happened," she said. "Thats whats 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.
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. Im getting orders from
people I never expected to getcoming from Canada, for
heavens sake. I expect 2013 to be a really good
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 dont 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. Theres 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. Lets hope it keeps them