LOS ANGELES Domestic
steel coil prices may have "reached bottom," but cheaper raw
material costs in other parts of the world continue to leave
U.S. tubular producers at a disadvantage when it comes to
competing with imports, Northwest Pipe Co.s top executive
President and chief executive
officer Scott Montross said the Vancouver, Wash.-based producer
of tubular products and water transmission pipe didnt see
the same kind of first-quarter "runup" in coil prices that has
characterized the market in recent years, and this has resulted
in "significant downward pressure" on steel prices.
He noted that a major coil price
index during the first quarter was more than $100 per ton below
where it was during the same period last year and $180 per ton
below where it was in the corresponding period of 2011.
As a result, it appears coil
prices could be nearing a floor, he said, although that
doesnt mean a recovery is in sight.
"I think theres going to
be some continued pressure on coil" throughout the year,
Montross said during the companys quarterly conference
But despite weak coil prices,
domestic tubing producers might not fully benefit from reduced
raw materials costs because U.S. coil prices are "still pretty
high" when compared to the rest of the world, he said.
Northwest Pipe and other tubular producers have complained
about U.S. market share being captured by lower-priced pipe and
tube imports for well over a year (
amm.com, Aug. 8).
While its not unlikely that steel prices could improve
"briefly" this year with such sectors as automotive showing
strength, Montross said markets arent in place
"structurally" to support a sustained upward move in hot-rolled
band prices. Overall construction activity has picked up but
continues to improve only slowly as nonresidential construction
still lags, he said.