Stability in the construction markets, marked by stronger
bidding activity, might be a positive sign for the steel
market, according to Commercial Metals Co.s (CMCs)
better bidding activity, particularly in the Sun Belt," Joseph
Alvarado, chairman, president and chief executive officer of
the Irving, Texas-based steelmaker and metals recycler, said
during the companys fiscal first-quarter earnings call
"When that bidding
activity ... materializes into orders being booked, that means
more stability," he said, adding that CMC has seen a little
less cyclicality and more stability in bidding.
hasnt always been uniform, senior vice president and
chief financial officer Barbara R. Smith said.
While private bidding
has outpaced public bidding, "some public spending is coming
back," she told analysts, adding that funds released into
certain parts of the country are at higher levels of bidding
than CMC has seen in the past few quarters.
However, much of the
growth for construction in 2014particularly in the
nonresidential market, where steel is a major factorwill
depend on developers confidence in the market,
particularly if they can get occupancy rates that justify the
investment, Alvarado said.
That confidence will
depend on the U.S. government, including how taxes, health care
and midterm elections will play out in the coming months.
"We have a better
sense of projects moving forward. Certainly in Texas and
Florida, and even in California now," he said. "Some of that
confidence has returned and projects are moving forward a
little more aggressively. (But) all the places in between that
were a big part of nonresidential demand is fairly tepid. We
need the rest of it to strengthen ... we keep monitoring
(activity) and its reflected in the bid tons. But the bid
tons arent necessarily ordered."
Imports continue to be
a threat to CMCs markets, the company said. While imports
of reinforcing bar fell in December, Alvarado estimated that up
to 100,000 tons of the product could hit U.S. shores in
"It doesnt bode
well," he said.