But the Los
Angeles-based service center, the largest in North America,
thinks metal pricing and demand this year should benefit from a
steadily improving U.S. economy, according to commentary
earnings data Feb. 20.
volume increased 21.4 percent to nearly 5.4 million tons in
2013 but average selling prices dropped 10 percent to $1,713
per ton from $1,903, the company said. Sales for the three
months ended Dec. 31 jumped 38.7 percent from a year earlier to
1.4 million tons, but average prices slid 11.4 percent to
$1,645 per ton from $1,857.
The drop in
fourth-quarter prices was unexpected, "significantly reducing
our overall profitability in both the fourth quarter and the
year," Reliance chairman and chief executive officer David H.
Hannah said in the earnings commentary.
The fourth quarter
also saw a typical seasonal slowdown, although less pronounced
than in the past, Hannah said, suggesting that overall demand
continues to improve.
Reliance does not
expect any end markets to experience "outsized" growth in 2014,
although it forecasts continued strength in the automotive
sector. Solid results also are expected in sectors as diverse
as energy, semiconductors and aerospace, Reliance said. But
while aerospace demand is forecast to improve, prices could
drop because of "excess mill capacity" and a glut of aluminum
plate in the sector.
aerospace outlook echoed Kaiser Aluminum Corp.s concerns
about an inventory overhang of aerospace plate dragging into
2015 and pushing down prices (
amm.com, Feb. 19).
While aerospace plate
prices may take a hit, the long-beleaguered nonresidential
construction market should see a "slow but steady recovery" and
modest improvement in 2014, Reliance said. In addition, heavy
industry is performing "reasonably well" and should also see
better times in 2014.