NEW YORK Key construction
industry metrics, including spending, have shown marked
improvement in recent months, but whether the steel long
products sector has seen the benefit in its order books is
Most sources supplying the
sector said business was improving and order books appeared
stronger month on month, but many said dramatic changes have
yet to arrive, even as spring activity starts to set in.
"Weve seen an uptick, but
not (as much as we hope) we will," said an Illinois-based rebar
distributor who supplies contractors. States that begin public
construction projects in mid-April are getting ready for more
activity, but business might remain subdued until then, he
said. "I think about a week before (our) April 15 opening,
well see projects getting off the ground," he said.
A rebar mill source agreed that
the expected seasonal boost to construction demand had yet to
"We havent seen the spring
bump," the mill source said. "Our volumes are trickling along
(but) we havent seen any sustenance for (further) price
increases at this point. Were getting what were
getting and its chugging along, but its not what I
would call a feeding frenzy."
Several rebar mills reported
selling higher volumes in March, especially after a $25-per-ton
increase in the rebar list price announced in mid-March for
April 1 shipments appeared to bring some would-be buyers in off
the sidelines. The uptick, however, was not universal, and many
players in the sector say they are still holding out for more
noticeable improvement in construction activity as April takes
"Its just been a wet, cold
winter, so a lot of work is being pushed back. A lot of people
expect things to pop up here when the ground thaws," a second
mill source said. "I was looking at a couple of job sites, but
they have to wait for the ground to thaw."
But while many steelmakers say
demand hasnt been much to write home about, the data
suggests things are, in fact, on the mend. For example, total
seasonally adjusted construction spending in February totaled
$885.13 billion, up 7.9 percent from February 2012 levels, led
by a 19.2-percent year-on-year spike in residential
construction spending, U.S. Census Bureau data show.
"There is little doubt that
construction of new houses and apartments will continue to boom
in the next several months," Associated General Contractors of
America (AGC) chief economist Ken Simonson said in a
At the same time, nonresidential
construction spending was up 2.6 percent year over year in
February, marking a slowerbut still welcomereturn
for the recently lagging sector.
"Theres also been an
improvement in some of the steel-intensive nonresidential
sectors, such as power and manufacturing construction,"
Simonson told AMM.
And after a slow start to the
year on the construction front, any uptick is a good uptick,
steel producers and distributors maintained.
"The first couple of months have
really been impacted by weather. ... Weve been
inundated," said a South Carolina-based wire fabricator. "(But)
were optimistic that all the indicators, even
non-res(idential construction), are picking up."
"People are ready to pop the
champagne corks, but it hasnt translated yet," said the
first rebar mill source added.