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Mills, distributors size up market prospects

Keywords: Tags  Metals Service Center Institute, steel, Ladd Hall, Nucor, Carl Parker, Samuel Son, Gary Stein, Triple-S Steel Catherine Ngai

BONITA SPRINGS, Fla. — Domestic steelmakers likely will see some bright spots in 2013, but they must keep a close eye on potential challenges in the form of global competition, ensuring access to affordable energy, and the pace of technological advancements.

Steel executives participating in a manufacturing roundtable at the Metals Service Center Institute’s Carbon Conference in Bonita Springs agreed that several key markets are finally seeing a steady pickup.

"Many of our markets have done well and continue to do well. Automotive isn’t a surprise to anyone. Our heavy equipment (sector) has slowed down a bit, while energy and pipe and tube (sectors) continue to do well," said Ladd R. Hall, executive vice president of Charlotte, N.C.-based Nucor Corp. "If the government doesn’t overkill with regulation, we have a lot of great opportunities. We see a little light at the end of the tunnel. 2013 may be a little bit of a different year ... at least we can hope."

Other roundtable participants affirmed that the automotive and energy markets remain a bright spot, particularly as the U.S. population grows and low-priced natural gas attracts companies back to the United States. They noted that nonresidential construction also has seen a pickup.

"We are seeing a little bit of a slowdown across the board coming through February," said Carl Parker, chief procurement officer at Hamilton, Ontario-based Samuel, Son & Co. Ltd. "I expect we’ll see a better back half (of the year) than the first half. Construction is starting off a little better and some people expect it will continue through the rest of the year."

Participants pointed out that ongoing technological advancements and innovation are key if the steel industry is to grow and thrive in the global marketplace.

"The markets are continuing to force mills to change," Hall said. "The CAFE (corporate average fuel economy) standards are demanding lighter, stronger and more ductile material. We continue to go down that road and develop a significant amount of high-strength steel." He noted that the agricultural equipment industry also is seeking lighter, more-efficient material.

"We continue to see automation grow in our businesses. I think that’s how the North American economy will compete—in technological innovations," Parker added.

Roundtable participants cautioned that the relatively rapid migration of the automotive production industry to the South and Southeast as well as into Mexico could pose a competitive challenge in the future.

One solution to ensuring steady growth, panelists said, is reaching out to local politicians and taking advantage of the opportunity to make a difference on Capitol Hill. Engagement, they argued, is the best way to ensure the best result for U.S. businesses.

"We have to stay engaged (and) we have to get engaged in communicating (to the government) what’s important to us," said Gary Stein, president and chief executive officer of Triple-S Steel Holdings Inc. "That starts with supporting their campaigns."

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