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'What's the forecast? We just don't know'.

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[ILLUSTRATION OMITTED]

Members of the North American Steel Alliance, a buying co-op of small to midsize service centers, have been brought even closer together by the current economic crisis. In a roundtable discussion Jan. 20 in Las Vegas, moderated by Metal Center News Editor-in-Chief Tim Triplett, NASA board and supplier council members shared their views of the difficult steel market and their hopes for better times in the year ahead. Following is an edited transcript.

MCN: MSCI reports that service center steel shipments were down 10 percent in 2008. Shipments were off by 30 percent in both November and December. How would you describe the market today?

Merlo: In talking to customers, they certainly project business will be down this year anywhere from 5 to 40 percent. Their build schedules are OK going out two or three months, but after that they say they really don't know. That is the issue we are facing. There is so much uncertainty because no one really knows if we have seen the full extent of what is happening to our economy. I think we have seen a bottoming of pricing as far as flat-roll goes, but demand is up in the air. With all the capacity taken out [by the mills], supply could actually be tight for a short period, but most people expect business to be soft for the balance of the year.

Prine: From what we are seeing, things are weak among our manufacturing customers. I don't think anybody really knows what to expect. I've been in this business for 42 years and I've never seen so many uncertainties. Before, customers could get credit, but now they are struggling to get cash. Without money flowing, not a lot of projects will go ahead. Few of the customers we talk to, at least in the Midwest, have any backlog at all and they don't see much order activity. In the near term, it does not look too good.

Kane: We have seen a drop-off in line with the MSCI reports. For the OEMs we deal with, specifically in November and December, we saw a complete stop of buying. It was inventory rationalization on the their part. They are uncertain about their build rates going forward into 2009. We saw a small bounce-back, which is traditional for our business in January, but on a seasonal basis it's nothing that excites me.

Nordhues: A fair amount of our business is related to energy, in particular wind energy. With some of the larger wind projects, credit has been a major negative. But it could turn around fairly quickly if banks loosen credit and developers have the ability to finance projects again. Certainly the new administration is for alternative forms of energy and infrastructure projects.

MCN: So is money unavailable to everyone or just the less creditworthy?

Nordhues: I would...

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