Banner
Editorial

Recovery redux

Written by By Corinna Petry

November 2016 - Spot prices for carbon flat-rolled steel took a bit of a drubbing during third quarter and contract prices had yet to settle as of this writing. Steelmaking executives like to put the best face on things, however, and see reasons to be hopeful as they peer into the next few months. 

What underscores their hopes are the investments they’ve made in new products, acquisitions and greenfield expansions. We listened in as executives spoke with investors during late October. 

“We believe we are at the bottom of the trough and that prices are positioned to recover yet again,” AK Steel Corp. CEO Roger K. Newport said. Demand trends are stable to positive. “Early estimates suggest North American light vehicle build rates will remain strong through next year.” The company developed a line of next-generation lightweight grades for automotive applications and commissioned a new tube plant in Mexico to meet the needs of the fast-growing automotive market there. 

Nucor Corp. experienced a 12 percent decline in both shipments and capacity utilization rate during third quarter and fourth-quarter earnings are expected to shrink. However, “[There are] a number of positive factors that should benefit the steel markets moving into 2017,” said CFO Jim Frias. “Service center inventories are low, residential construction is robust, while nonresidential construction activity is expected to continue improving. More vigorous enforcement of trade laws has begun to reduce the flow of illegally traded imports into the U.S.”

Chairman, President and CEO John Ferriola outlined Nucor’s investments. In August, the company purchased Joy Global’s steel plate mill in Longview, Texas, which has since doubled its production rate. In September, Nucor agreed to acquire Independence Tube Corp., which “will be a value-added channel to market Nucor’s hot-rolled sheet steel.” 

The company also launched a $230 million project to build a specialty cold-rolling complex at its Arkansas sheet mill. With annual capacity of 500,000 tons, it will be operational in about two years. Nucor will” “cold reduce to both lighter gauge and much higher strength levels, to meet [automotive] customers’ lightweighting goals [and] broaden the automotive capability of our galvanizing lines at our Alabama and South Carolina sheet mills,” Ferriola said.

Steel Dynamics Inc. also reported a falloff in shipments and operating rates across all divisions during third quarter. “2016 has certainly provided a changing landscape to the domestic steel market,” commented President and CEO Mark Millett. “Demand from the automotive and construction sectors remains positive. But demand relative to heavy equipment, agriculture and energy—while not deteriorating further—is still anemic.”

One bright pocket is SDI’s mill in Columbus, Mississippi, which “has been producing at historically record rates.” A new $100 million, 250,000-ton paint line will begin shipping product during first-quarter 2017, primarily to the southern U.S. and Mexican markets.

Like Newport, Millett expects “the pricing environment to continue to stabilize. We have a constructive view on directional 2017 steel consumption. Domestic automotive production may be coming off record levels but we believe total 2017 NAFTA automotive steel consumption will be steady as Mexico grows production.” There will be additional growth in construction. especially for the larger public sector infrastructure projects, he predicted. “We can also see some improved activity within the energy sector next year.” MM

Banner

Company Profiles

AIR FILTRATION

DEBURRING/FINISHING

NESTING SOFTWARE

SOFTWARE

Camfil APC - Equipment ATI Industrial Automation Metamation Inc. 4GL Solutions
Camfil APC - Replacement Filters Lissmac Corp.

PLASMA TECHNOLOGY

Enmark Systems Inc.

ALUMINUM

Osborn Messer Cutting Systems Inc. Lantek Systems Inc.
Richardson Metals, Inc. Supermax Tools

PLATE

SecturaSOFT

BEVELING

Timesavers Churchill Steel Plate SigmaTEK Systems LLC
Steelmax Tools LLC

IRONWORKERS

Peddinghaus

STAINLESS STEEL

COIL PROCESSING

Trilogy Machinery Inc.

PLATE & ANGLE ROLLS

Heyco Metals
Braner USA Inc.

LASER TECHNOLOGY

Trilogy Machinery Inc.

STEEL

Burghardt + Schmidt Group AMADA AMERICA Inc.

PRESS BRAKE TOOLING

Alliance Steel
Butech Bliss MC Machinery Systems Inc. Rolleri USA North American Steel Alliance
Red Bud Industries TRUMPF Inc.

PRESS BRAKES

TITANIUM

The Bradbury Group

MATERIAL HANDLING

MC Machinery Systems Inc. STS Metals
Tishken Fehr Warehouse Solutions Inc.

PUNCHING

TUBE & PIPE

CONVEYOR SYSTEMS

Steel Storage Systems Hougen Manufacturing BLM Group
Mayfran International UFP Industrial

SAWING

Prudential Stainless & Alloys

COPPER & BRASS

MEASUREMENT & QUALITY CONTROL

Advanced Machine & Engineering

WATERJET TECHNOLOGY

Concast Metal Products Co. Advanced Gauging Technologies Behringer Saws Inc. Barton International
Copper and Brass Servicenter Association

METAL FABRICATING MACHINERY

Cosen Saws Flow International Corporation
Farmers Copper Cincinnati Inc. DoALL Sawing Products Jet Edge Waterjet Systems

 

LVD Strippit HE&M Saw Omax Corp.

 

Scotchman Industries Savage Saws

ZINC

 

Trilogy Machinery Inc.

SERVICE CENTERS

Jarden Zinc Products

 

 

Admiral Steel

 

 

 

Alliance Steel

 


BPA_WW_MASTER.jpg