NEW ORLEANS The Port of New Orleans is seeing renewed growth in steel imports due to the strengthening housing and automotive sectors.
"Steel has been very good for us in the past two years, and 2012 was better than 2011," Robert M. Landry, chief commercial officer of the port, told AMM on the sidelines of the Critical Commodities Conference hosted by the American Institute for International Steel and the Port of New Orleans. "Its not where we should be (historically), but with the good trends were seeing, we think this bodes well for the future."
The port earlier this week said that it had seen steel imports grow 38 percent to 1.92 million tons last year from 1.39 million tons in 2011.
Much of the steel that arrives at the port is reinforcing bar, steel pipe and steel coil. While the energy sector has remained strong and automotive has rebounded, construction was hit particularly hard during the recession.
"In 2008, things fell off a cliff. ... Our imported steel (figures) dropped from around 3.5 million tons to under 1 million tons," Landry said. "Were seeing very encouraging signs in the housing market, which is good, and were also seeing appliances being built. Much of the coil we get, particularly from Japan, is loaded onto barge and goes upriver to the automobile plants."
Looking ahead, the market remains difficult, particularly as foreign steel has looked less attractive to buyers amid soft U.S. prices and short lead times, according to industry players.
"I think well continue to see steel increase. From what Ive been told, the market is just so fragile right now. Margins are very thin and inventories are very thin," Landry said. "Weve even talked to pipe manufacturers who can name different projects that need pipe, but they will not put any pipe on the water because they fear (some uncertainty). Most people are very cautiously optimistic."
The Port of New Orleans last month gave its approval for work to begin on an intermodal railyard, expected to help intermodal container transfers become more efficient (amm.com, March 25). While the upgrade should have an immediate impact on containerized cargo, it also will help the movement of general cargo, such as steel, become more efficient, Landry said.
The Lower Mississippi River port is one of the few shipping hubs in the United States that has easy access to the inland barge system, providing cost advantages over traditional import-heavy hubs.