Steelmakers should see improving conditions

2013-09-24T12:00:00Z 2013-12-31T10:30:11Z Steelmakers should see improving conditionsJoseph S. Pete joseph.pete@nwi.com, (219) 933-3316 nwitimes.com
September 24, 2013 12:00 pm  • 

Steelmakers that run mills in Northwest Indiana have struggled to make money this year, but the American Iron and Steel Institute's chief executive officer said they should end the year on a more positive note.

The recovery remains tepid, but the steel industry should fare better in the second half of the year, said chief executive officer Thomas Gibson during a conference call last week. Growth is slow but real, and auto sales and pipeline projects have been bright spots.

Last year, steelmakers fared well in the first half but stumbled in the second. They have since been building back and are poised to have a strong second half, Gibson said. The auto and energy sectors in particular have driven demand.

American Iron and Steel Institute estimates already show an improvement. Production at U.S. mills was down 6 percent by the end of June, as compared to the first six months of 2012.

By the end of last week, the gap was down to 3.6 percent less production than during the same period of last year.

Steelmakers should continue to benefit from an improving economy unless the federal government shuts down for an extended period of time, Gibson said.

Such a shutdown could have an effect on gross domestic product and consumer behavior, he said. Steelmakers would suffer if people bought fewer appliances, cars and other products filled with a lot of the metal.

"We need to keep the economy moving forward," he said.

The industry continues to have challenges, including a global overcapacity of 600 million net tons, currency manipulation in China and imports that have penetrated about 23 percent of the U.S. market, Gibson said.

Import penetration is as high as 50 percent for some products, but pending trade cases could protect the domestic industry against dumping.

 

 

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