Search Copying and distributing are prohibited without permission of the publisher
Email a friend
  • To include more than one recipient, please separate each email address with a semi-colon ';', to a maximum of 5

  • By submitting this article to a friend we reserve the right to contact them regarding AMM subscriptions. Please ensure you have their consent before giving us their details.

Steel distributors wary of Big River project

Keywords: Tags  Association of Steel Distributors, Esmark, Lapham-Hickey, Hiedtman, SDI, Big River, IHS, James Bouchard Tim Berra

PALM DESERT, Calif. — Service center sources say they are somewhat less sanguine than some industry analysts at the prospect of another major entrant into the domestic flat-rolled steelmaking market.

The impact of steelmaking veteran John D. Correnti’s proposed Big River Steel LLC project in Arkansas might not be as benign as IHS Global Insight Inc. has indicated, members of the Association of Steel Distributors (ASD) said at its recent annual convention. Analysts at Lexington, Mass.-based IHS recently wrote that the U.S. market can likely absorb output from the $1.1-billion, 1.7-million-ton-per-year flat-rolled facility, provided additional capacity doesn’t also come onstream (, March 26).

While distributors say they are generally positive about the outlook for steel demand, and many agree that manufacturers are actually returning to the United States, they’re not altogether confident the reshoring trend will be sufficient to soak up domestic production capacity anytime soon—even without Big River Steel in the picture.

"Do I see manufacturing coming back? Yes," said James P. Bouchard, chairman and chief executive officer of Sewickley, Pa.-based Esmark Inc. "But will it keep pace with the amount of (steel) product being produced here? I don’t think so."

Bouchard said that despite the shutdown of former steelmaker RG Steel LLC’s Sparrows Point, Md., and Warren, Ohio, furnaces, "there hasn’t even been a blip" in terms of competition easing among producers. Existing mills are determined "to hold their (market) share," he said, and that doesn’t account for such proposed new players as Big River.

Moreover, another steel industry shakeout could be in the cards "capacitywise," said William M. Hickey, president of Lapham-Hickey Steel Corp., Chicago. He compared today’s domestic steel environment to the first years of the new century, when steelmaking was plagued by excess capacity and populated with "weak sisters," which resulted in massive restructuring and bankruptcies that forced the disappearance of some of the industry’s oldest names. This time, said Hickey, he wouldn’t be surprised if "every legacy producer in North America won’t have to go through some reorganization process."

Keith Busse, chairman of Fort Wayne, Ind.-based producer Steel Dynamics Inc. and a panel moderator at the ASD conference, said the best way to promote greater domestic steel demand is through both reshoring efforts and a return to annual increases "north of 3 percent" in the U.S. gross domestic product (GDP), especially after GDP rose just 2.2 percent in 2012. But even given these conditions, and despite the loss of industrial capacity in recent decades, the United States is "still the place to be" for manufacturing in the future, Busse said.

Meanwhile, Heidtman Steel Products Inc. president Tim Berra noted that, with service center customers increasingly seeking "one-stop shopping," the Toledo, Ohio-based company is "partnering more with our competition." For example, he noted that Heidtman invited fellow distributor Steel Warehouse Co. to set up shop on its campus in Cleveland.

"Why? They were coming anyway," he said about the South Bend, Ind.-based distributor’s move to Cleveland, pointing out that each firm performs a specialized role for customers in that market. "They do the cut-to-length and we do the pickling."

Have your say
  • All comments are subject to editorial review.
    All fields are compulsory.

Latest Pricing Trends


Are you stocking more inventory today than 18 months ago?


View previous results