| |
 |
 |
|
 |
Steel buyers will see more imports in 2009 but growth still uncertain
11/14/2008
By Tom Stundza -- Purchasing, 11/13/2008
Global metalworking activity has weakened, setting the stage for excess steel supply in the months ahead. And if the dollar continues to strengthen, as some analysts suggest, more imports could flow into the U.S., putting further downward pressure on transaction steel prices.
With steel orders slowing worldwide and credit lines reduced, steelmakers in many parts of the world are planning to reduce production to damp supply. Still, it takes time to bank furnaces and reduce processing schedules. So, entering 2009, there still may be enough steel choking the warehouses of service centers, processors and traders to depress market pricing.
Analyst Mark Parr says steelmakers, especially sheet mills, "are living 'hand-to-mouth' and are unwilling to predict when demand will return." The managing director of KeyBanc Capital Markets in Cleveland adds its "unclear how long it takes the recently announced global supply cuts to effectively tighten up the supply/demand balance in the marketplace."
Worldwide, steel purchasing is collapsing under the weight of the U.S. housing recession, credit-market turmoil, high raw materials costs and inflation pressures. In North America, even if steel mills grind to a 25% halt in production by year's end, as forecast by independent analyst Michelle Applebaum, excess stocks still could be evident in January.
The lack of steel buying has coincided with a sharp decline in world steel prices with the North American price collapse occurring faster than anticipated.
"This likely will result in a sharp decline in shipping volumes in the fourth quarter of this year and well into 2009," says analyst Michael Willemse at CIBC World Markets in Toronto. "A significant increase in the U.S. dollar and a sharp decline in global freight rates have further contributed to negative sentiment towards global steel prices," he says.
World steelmaking has expanded by 6% this year through September although reduced output is probable in the fourth quarter as the world steel market "is demonstrating rapidly changing circumstances," according to Ku-Taek Lee, chairman of the World Steel Association and CEO of Posco in South Korea. Although he admits "the market now is in a period of high economic uncertainty," he believes 2008 will be another year of steel demand growth and continues to expect growth in 2009. Economists aren't so sure—but they do agree with the 15–20% reduction in world steel production this quarter.
Analyst Michael Gambardella at J.P. Morgan Securities in New York estimates that planned downtime this quarter at U.S. mills "will cut sheet supply by at least 23%." However, supply could expand in 2009 because of the financial need to run factories at better-than-breakeven operating rates at home and abroad.
Some early analyses suggest that steel demand globally will slide in 2009 after a decade of consecutive annual growth as businesses rethink capital investment projects, consumers curtail purchases of capital goods and businesses back off buys of commercial goods. Upshot: World steel prices could slide by as much as 30% next year while demand drops 20% or more. This could make more steel available to price-shopping buyers in North America.
|
|
|
Thoughts for Today
1/1/2006
The desire to succeed means nothing without the will to
prepare.
Commit to the Lord, whatever you do, and your plans will SUCCEED!
Prov. 16:3
“Unless we know what we're willing to die for, we may never figure out what we're living for.”
Unknown Source
|
|
|
| |
|
|
| |
 |
|
| "It takes time to write a letter of recommendation for a company and I don't write many. In your case I feel this is justifiable" |
| Glenn Wauligman, President |
| Performance Construction |
| Cincinnati, Ohio |
|
|
|
| ...the truss experience of Ed French, Greg Moburg, and Troy Lutgens will rival any steel components manufacturer in the country! |
| Dave Dunbar, PE, National Sales Manager |
| Alpine TrusSteel |
| Haines City, Florida |
|
|
|
| "I have personally enjoyed the relationship with everyone at Tri-State, you have assembled the "dream team" of the metal truss industry. Keep up the good work and competitive pricing. I hope to do business with all of you for years to come." |
| Dennis J. Harding, Vice-President |
| Wal-Tron Interior Systems |
| Mason, Ohio |
|
|
|
| "Your staff was very professional, responsive, and cooperative from inception to completion. Their attention to details and emphasis on the Owner's satisfaction was a welcome change." |
| Frank Avis, President |
| AM Contracting, Inc. |
| Louisville, Kentucky |
|
|
|
| "To date in my career, this is my first experience of a truss job that was not plagued by problems with the shop drawings and fabrication. It has been a pleasure working with you." |
| Jim Valentas, Project Engineer |
| Corna/Kokosing Construction |
| Columbus, Ohio |
|
|
|
| "We were awarded this project at the last minute and your trusses were delivered ahead of schedule. The communication between your office and ours was impeccable. We called and you answered." |
| Mike Will, Project Manager |
| Acoustic Ceiling & Partition |
| Dublin, Ohio |
|
|
|
| "Your services rendered before and after the sale of the product were excellent. Your trusses were of the highest quality and were delivered in a timely manner. the technical assistance which you gave us was exactly what was needed." |
| Keith Parker, Pre-Construction Manager |
| Circle B Construction |
| Indianapolis, Indiana |
|
|
|
| "We appreciate the professional and cooperative manner in which you operate. It makes life a lot easier for us all." |
| Dan Jones, President |
| Danco Construction |
| Evansville, Indiana |
|
|
|
| |
|
|
|
