Outlook For Steel in 2013
Unless you are in the energy or healthcare sectors, flat growth is what is in store for 2013. The steel industry is no different, as demand is unlikely to improve. While the US economy has seen some improvements over the past two years, in a historical context, the economy is far off from where it used to be. This is not the best news, but steel companies can still find opportunities in the market to thrive.
Lower industrial production and reduced investment in infrastructure projects in the U.S. are partly to blame. Moreover, there is not enough growth in developed and emerging markets. Many experts are singing a similar tune (Moody’s, Equifax, US Institute of Supply Management, and others).
Due to the weak demand for steel, excess capacity will remain the most significant issue in the industry. Many global steel producers average capacity utilization rates below 80%. Steel prices have weakened significantly in the last few months driven by imports and a multitude of steel service centers fighting for a much smaller pie.
Opportunities for profits will come from offering more value, gaining productivity, and the old standby of cost reductions. Our focus has been on improving our people, process, and technology whenever we can. Growth will come again and we need to position ourselves for future growth.
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