NEW YORK Edgen
Group Inc. expects steel prices have bottomed out after its
earnings were crimped recently by low sales tags for its steel
"We really have had a
very difficult market for steel prices in the last 18 months
and quite frankly we were surprised this year at the continued
decrease that weve seen," executive vice president and
chief financial officer David Laxton told attendees Aug. 15 at
Jefferies & Co. Inc.s Global Industrial and Aerospace
and Defense Conference in New York. "Our (supplying) mills are
not working at very high capacity," he added. "Theres not
enough demand currently across those mills. As a result,
theres not enough price tension."
The Baton Rouge,
La.-based distributor sells plate, sections, pipe and tube, and
pipe and tube components and valves. Its suppliers include U.S.
Steel Corp., Tenaris SA and TMK Ipsco, according to a company
Lower prices were
particularly felt in the companys oil country tubular
goods (OCTG) segment, where falling tags crimped net sales by
$43 million in the first half of 2013 vs. the same period a
year ago, even as volumes were essentially flat, according to
However, he said
prices for steel products are now likely at a "trough," with
the recent filing of a trade case against nine countries
importing OCTG and an anticipated pickup in demand from large
down- and upstream projects expected to buoy tags.
Edgen distributes OCTG
through its Bourland & Leverich business segment.
The company recorded a
$268,000 net loss in the second quarter on continued pricing
pressure (amm.com, Aug. 9)