Will Hurricanes’ Aftermath Be Good for Business?

Written by Tim Triplett

Steel buyers are evenly split on how their businesses will be affected by the cleanup from Hurricanes Harvey and Irma. About half (48 percent) of respondents to Steel Market Update’s latest steel market trends questionnaire expect the hurricanes and flooding in Texas and Florida to have a significant impact on their businesses and steel demand over the next three months. The other half (52 percent) expect a modest or delayed effect. Following are some of their more insightful comments.

Some anticipate a big impact:

· “There will be strong demand in many business sectors due to storm.” Manufacturer

· “It will affect demand for steel, specifically the auto industry and construction industry.” Service Center/Wholesaler

· “Positively, for infrastructure, durable goods and auto replacement.” Service Center/Wholesaler

· “There will need to be replacement for all those affected, from cars to the little staples used for new carpets.” Service Center/Wholesaler

· “We’re expecting increased demand for housing-related steel products, such as entry/garage doors, as well as HVAC.” Trading Company

· “Metal building, roofing and siding customers are already building inventories. Tubers and other manufacturers are doing the same in preparation.” Service Center/Wholesaler

· “We do construction-related steels and they will be needed for reconstruction.” Trading Company

· “With hundreds of houses being damaged or destroyed, there is a need to remodel or rebuild. We have been asked to ramp up.” Service Center/Wholesaler

Some expect more effect from the storms further down the road:

· “There will be some business from this, but likely in 3-6 months due to the insurance timing.” Manufacturer

· “It may affect some of my metal building business, but I’m not sure how quickly. It may be more like in six months. But there will be some impact for some time after that.” Trading Company

· “There will be an effect, but not overwhelming. It will take a while to begin the [insurance] compensation process. Demand will jump a bit now, but only for stopgap construction.” Steel Mill

· “Our impact will take longer than three months to be felt.” Service Center/Wholesaler

· “We are not expecting to see business improvements. They will be further in the future as rebuilding efforts progress.” Manufacturer

Transportation is a common concern:

· “Transportation may be tight.” Service Center/Wholesaler

· “Truck availability and freight rates will be a negative.” Service Center/Wholesaler

· “We have experienced some delays in both truck and rail raw material deliveries.” Service Center/Wholesaler

· “Inbound and outbound freight have been difficult. Rail damage has been an issue bringing material into the Gulf Coast region.” Manufacturer

· “We have customers in the Houston area that will be impacted. We expect transportation costs to be higher and availability of trucks to be less due the combination of demand for reconstruction, the holiday season and new regulations (ELD, hours allowed) taking effect in the trucking industry.” Manufacturer

A few expressed worries about steel availability:

· “We’re expecting a pick-up in demand on certain types of products. We also expect that some service centers lost at least some inventory due to the weather issues.” Service Center/Wholesaler

 · “The loss to stocks and the need for rebuild [of inventories] will create more demand and some reduced availability.” Steel Mill

· “If the mills reduce production in the fourth quarter, there could be a squeeze with limited foreign availability. I understand Europe is hot, so foreign mills can raise prices, as well.” Service Center/Wholesaler

Forecasting the aftermath is understandably difficult as the historic nature of the storms means no one has lived through this before. “I’m still clueless as to the impact, be it good or bad in both Texas or Florida,” admitted one manufacturer.

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