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 another question.
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 materialize.
"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 hold.
"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 statement.
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.