NEW YORK Supply
constraints that lent support to previous flat-rolled steel
price hikes have been resolved, but the market has seen little
impact thus far, according to Reliance Steel & Aluminum Co.
president and chief operating officer Gregg Mollins, noting
that the sustainability of recent hikes is unclear.
"We have not
necessarily seen an increase in metal out there today," Mollins
said during a July 25 earnings conference call. "The last
increase by both AK (Steel Corp.) and Severstal (North America
Inc.)that has a chance to stick (in the short term). How
long that can stick with capacity (coming back), imports, I
A return of capacity
would need a while to filter into the market and could lead to
a price fall when it does, he said. "There is that potential
and were going to be very guarded about that," Mollins
said, noting that the Los Angeles-based distributor will
continue to run lean inventories in line with supply-demand
should generally run ahead of the first half. "We certainly
dont expect the kind of decreases weve seen over
the first half of the year," chairman and chief executive
officer David H. Hannah said during the conference call.
Reliance has seen a
surprising pickup in business in July, even after a June that
was its best shipping month since May 2012, he said.
But the company
expects only slight improvements in demand and generally flat
pricing in the third quarter due to global economic
uncertainty, it said in its second-quarter earnings report (
amm.com, July 25).
One of Reliances top priorities during the quarter was to
integrate recently acquired Metals USA Holdings Corp.
"Weve been concentrating on their inventory position; in
our opinion it was high," Mollins said, adding that Reliance
has been moving material from Metals USA sites to its other
locations, reducing inventories to the tune of $66 million as a
process went a lot smoother than weve ever seen in any
major acquisition," Mollins said.
hungry for acquisitions, with Hannah saying that the company is
"ready, willing and able" and has proven that it can "grow
profits ... not just volumes" with its recent buys.