NEW YORK The steel
industry stands to see an uptick in demand due to the effects
of Hurricane Sandy, but the boost will likely not be felt
anytime soon, according to market sources.
However, automobiles, buildings
and infrastructure were all damaged during the storm, and with
the amount of steel that is used by the automotive and
construction sectors, steel will be a likely beneficiary of
increased demand due to replacement and rebuilding efforts,
"Natural disasters do tend to be
good for the steel business," one service center source told
AMM. "Mother Natureit tends to be more longer
term, when the rebuilding begins."
Steel products that feed into
the construction sector will likely see the largest jump in
Sandy-related demand, sources said.
"Theres a lot of projects
youll start seeing," a second service center source said,
running through a list of steel products that are likely to see
increased demand, including fencing products, sheet piling,
plate, sheet and rebar.
Not everyone has had to wait to
see a post-Sandy bump in business.
"I hate to say this ... but the
storm really helped us. We service a lot of the hardware
manufacturing companies," a third service center source said.
"Sandy wiping out all the power poles in the Northeast brought
a lot of orders in our direction. We had big orders and we have
a pretty quick turnaroundall of that left us with a great
Steel Manufacturers Association
(SMA) president Thomas Danjczek echoed that sentiment, but said
such increases arent likely to last.
"There is short-term steel
consumption dealing with emergency needs. But those are short
term; those are blips. The longer-term items that go into
bridges, highways, buildingsthey need to be designed; the
money needs to be approved and required permits need to be
obtained," he said, adding that as a result, the real impact
will be felt by steel companies anywhere from one to
two-and-a-half years after the storm.
"A lot of project and repairs
are in design and planning phases. We dont expect any
significant uptick for at least another five or six months,"
one mill source told AMM, although he noted that his
company received an order immediately from one steel
Automotive sector demand for
steel might be greater, particularly for coated sheet products,
but how muchand how quicklyremains to be seen.
"We do think there is some
upside in new (car) sales. Some of that will spill over in
2013," Charles Chesbrough, senior economist at Englewood,
Colo.-based IHS Automotive, said.
IHS has increased its 2012 U.S.
automotive forecast to 14.4 million new car sales, up by
100,000 units, due to the storm, he said, but noted that the
increase in car sales might not immediately translate into
significant demand for new steel.
"I dont know that it will
be a substantial change in orders from the OEMs (original
equipment manufacturers)," Chesbrough said. "They were already
pretty optimistic on the year. And inventories have been
strong. Itll be marginal at best."
Catherine Ngai, New York,
contributed to this story.