NEW YORK Nucor
Corp.s disappointing first-quarter earnings reflected an
overall weakness in the steel sheet market that will likely
last into 2013, but improving demand for long products could
make up for it, chief executive officer and president John
Ferriola told investors on a conference call.
"We see 2013 to be slightly
better in terms of volume and pricing in all of our products
with the exception of sheet," Ferriola said.
The U.S. steel sheet market is
facing overcapacity issues, leading to short lead times and
depressed margins. "The amount of overcapacity in the sheet
market is phenomenal right now," Ferriola said. "Its
clearly an oversupply market, and that problem is amplified by
the surge of imports that have come in over the past year (or)
year and a half. ... Imports continue to be an anchor around
the neck of the entire industry."
Ferriola said that promising
signs in construction markets pointed toward better long
product volumes for the rest of the year, despite a
year-on-year decline in shipments in the first quarter of
"As we look forward into 2013,
we see a slightly better nonresidential construction
environment. We use the word cautiously
optimistic," Ferriola said. "When you look at residential
construction, housing starts are up over 1 million units
annualized (for) the first time since 2007 or 2008. So there
are some encouraging signs that things are getting better in
nonresidential construction (as well)."
Ferriola added that Nucor
customers in construction end markets were "more positive than
weve seen them in a long time," and that the Charlotte,
N.C.-based companys Vulcraft division, which produces
finished construction products, had seen backlogs and margins
improve. "On long products, we are seeing some slight
improvement, and we anticipate seeing that as the year plays
out," he said.