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Article Excerpt
Metal Center News Editor Tim Triplett moderated a panel discussion Jan. 27 in Tampa, Fla., with members of the North American Steel Alliance. Following is an edited transcript:
PANELISTS:
* David Deinzer, Denman & Davis, Clifton, N.J.
* Mark Dillon, Tampa Bay Steel, Tampa, Fla.
* Miles Donovan, NASA Vice President, Elgin, Ill.
* Jeff Eisen, Pemco Steel Sales Ltd., Pembroke, Ont.
* Mike Emerson, Huntington Steel, Huntington, W.Va.
* Orlando Garcia, Everglades Steel Corp., Miami, Fla.
* Tom Harrington, DuBose Steel, Roseboro, N.C.
* Charlie Hurches, Scion Steel, Warren, Mich.
* Larry Liebovich, Liebovich Steel & Aluminum, Rockford, Ill.
* Rick Matalone, Industrial Metal Supply, Sun Valley, Calif.
* Rich Merlo, Northern Industries, Crestwood, Ill.
* Paul Schlatter, Art Iron, Toledo, Ohio
* Lonnie Terry, NASA President, Los Angeles
* Joe Tulley, NASA Director of Marketing, Los Angeles
MCN: Describe the current business conditions. Please break it down to specifics in terms of markets and products.
Deinzer: The East Coast has picked up. We're still concerned about the small machine shops that have disappeared to China. We're not sure they will ever come back. But the OEM business seems to have picked up a little bit. I'm hearing from some customers that their big inquiries are coming from China. So what goes around comes around.
The power generation market has picked up. The blackout in August emphasized [the problem] and pushed things forward. We've seen a huge demand for turbine blade material, which was dead for 24 months.
Hurches: In Detroit we haven't felt the strong demand I've heard about [from other members]. We've had to deal with the [tight] supply issue, by loading up, and I'm concerned about when it will go out the door.
MCN: Is this an automotive issue? Demand in your area must have been pretty good the last couple of years. They've certainly made a lot of cars.
Hurches: Yes. Everything is related to automotive in one way or another. [It has been good] for those in production, making stampings and that sort of thing. But we're in a capital-expenditure market. When the automotive companies are spending money inside their plants it's good, but they've been pretty conservative of late. We're hoping the demand will start to pick up ... to the level of how I've had to buy inventory, just to be on the sale side.
Matalone: Charlie, that's interesting. We're on the West Coast, and normally the West Coast trails four or five months. All of us are smiling more today compared with six months ago. But the demand on the West Coast is certainly not what I'm hearing from guys on the East Coast and Midwest.
Deinzer: A lot of that has to do with your customer base. In the Mid-Atlantic, we sell to contractors or fabricators. Construction activity up and down the East Coast is driving demand for structural products.
Garcia: In the Florida market, we sell to small- to medium-sized OEMs, and we've seen a significant increase in the last 90 days in phone activity, order activity and shipments.
MCN: Anybody else still waiting for the demand?
Schlatter: In Indiana and Ohio, we're starting to see a lot more business. My greatest concern is the domino theory--that low inventory at the mills and low inventory at the service centers will spark [artificial] demand and panic buying by some of our customers. At the same time, those jobs that still remain in the country and haven't gone to China or Mexico are slowly picking up. A few [companies] in our region are starting to hire people, though not a lot. They are going to be very conservative for a while, because they fear [the economy] can go down just as fast as it goes up.
Deinzer: A lot of it has to do with the weaker dollar. There are pros and cons to the weaker dollar. We have one large OEM customer who manufactures in Sweden, the U.S and also Asia. They're bringing work from Sweden back into the U.S. because the exchange rate has changed.
Garcia: Down in Miami, we do a lot of exporting. Some of these smaller countries and islands normally use suppliers in Europe, but they can no longer get the material there. Because the dollar is weaker, they are coming to us with very large orders, which we can't even quote on because we can't get our hands on a that much steel. We've seen more activity from export accounts that normally don't ask for this material.
Liebovich:...
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