LAS VEGAS While the steel
long products trading community has suffered much in recent
years due to a grim economic and political climate, a
turnaround may be seen in the near term, according to John
Foster, president of Kurt Orban Partners LLC and chairman of
the American Institute for International Steel.
"If theres an overriding
theme at the core of what Im going to say ... its
the seemingly ever-present air of uncertainty settling as a
cloud many of us have been seeing since early Q1 of last year,"
he said at SteelOrbis Rebar and Wire Rod Conference in
Las Vegas. "Slowly but surely, however, some life is coming
back into the economy and showing a heartbeat in critical areas
in our business, such as the housing market."
The National Association of
Realtors reported last month that sales of existing homes in
2012 rose to its highest level in five years, with overall home
sales up 9.2 percent from 2011. Single-family home sales in
December were 11.5 percent above those in December 2011.
Many sources have said that
non-construction demand usually picks up some eight to 12
months after residential building.
But the road ahead is a
challenging one for steel traders, particularly as traditional
bright spots, such as the energy sector, are now proceeding
with a "buy what you need" mentality.
"Were waiting to see what
happens in the post-fiscal cliff and now post-debt ceiling
discussions. What seems clear is that our elected officials in
Washington keep finding uncertainties," Foster said.
Steel imports have plummeted in
recent months due to challenging economic times, he said,
noting that softening domestic prices put "significant downward
pressure on import activity."
Another drag on the long
products sector, Foster said, is the high U.S. unemployment
rate, which is around 7.9 percent. That, coupled with sluggish
growth in gross domestic product figures and lackluster
domestic demand, may mean a significant turnaround may be
delayed until later this year.
"The way its started out,
this is going to be a back-end-loaded year," Foster said.