CHICAGO Executives at
Olympic Steel Inc. expect flat-rolled pricing to stay
relatively flat this year, but they hope to counter that with
higher inventory turns as volumes continue to rise due to
improved demand and deeper market penetration.
The company forecasts scrap
prices will rise in March, probably matching the level where
they were in January after having retreated $9 to $10 in
February, chief financial officer Rick Marabito said during the
distributor and processors Feb. 21 earnings call.
"We see flat prices for the
year, and were just in that flat-priced mode right now,
so we dont see much deflection on the pricing in the
first quarter," he said.
Nonetheless, Olympic has
"reasons to be optimistic," president and chief operating
officer David Wolfort said. "January marked a rebound in order
activity, likely the result of some pent-up demand owing to the
fourth-quarter downturn in volume and pricing," he said.
"We are encouraged by firmer
pricing, which should help margins. Compounding the price
effect is the fact that we have moved through much of our
higher-priced inventory, thus lowering the average per-ton cost
of current sales," he added.
coupled with better inventory management and "pricing
disciplines for small and niche orders," will lead the
companys financial performance to improve "in 2013 and
beyond," Wolfort added.
"The financial health of our OEM
(original equipment manufacturer) customers appears to be
robust," Marabito noted.
Although the Bedford Heights,
Ohio-based company saw OEM orders and shipments stall in
October, "we have seen that come back in January," Wolfort
"Its not an even flow;
there are surges in the marketplace," Wolfort said. "But the
tonnage has repaired itself, and we look to 2013 for some
nominal growth in terms of market share as we bring on new
facilities and as our OEM customers (consume steel) at a pretty
even pace throughout the year."