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Oversupply, uncertainty bog down beams: despite the relatively strong economy and high steel prices, the beam market continues to suffer from an oversupply of product and lagging nonresidential construction.

Article Excerpt
Due to persistently lackluster nonresidential construction in most regions of the United States, demand for structural steel has not been nearly as strong as domestic producers had hoped. Nevertheless, despite the market's oversupply, one major producer has announced it may increase its production capacity.

Though it has made no final decision, Fort Wayne, Ind.-based Steel Dynamics Inc. is considering the addition of another rolling mill at its structural steel and rail plant in Columbia City, Ind., to produce lighter structurals and bar shapes, says Jim

Wroble, sales and marketing manager. Should the board approve the expansion, SDI could start construction later this year and begin shipping product in about two years.

Although Wroble admits there is a plentiful supply of structural steel, "We think we can bring more to the market place" than just an expanded SDI product line, he explains. "It also demonstrates an optimism about the future of the [structural steel] market from our perspective."

Due to its dependence on office and commercial construction, which have been hampered by a high vacancy rate in existing buildings, the beam market has not experienced the same boom as other steel sectors, though most mills and service centers are hopeful this market will soon show some improvement.

Indeed, demand at the mill level has been "crazy," well outpacing actual demand for construction products, says Peter Wright, director of marketing for TXI Chaparral Steel Inc., Midlothian, Texas. Last summer, mills were operating at over 100 percent of capacity. During winter, production slowed to less than 70 percent. "Now it is recovering, not because of market demand, but because service centers think there might be a price increase and are starting to buy again," Wright says.

Joe Stratman, vice president and general manager of Nucor-Yamato Steel Co., Blytheville, Ark., sees signs of a true recovery in...

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