14 Nov 2013

Steel & Tube says signs economic activity rising

7:44 am on 14 November 2013

Steel & Tube says there are clear signs that economic sentiment and activity levels are rising.

Chairman Sir John Anderson told the steel products company's annual shareholders' meeting that, despite the improving outlook, the industry remains intensely competitive and the company does need to find a way to improve its profit margins.

Speaking after the meeting, managing director Dave Taylor said improving margins will be difficult until global conditions in the steel industry improve.

He said steel demand is still approximately 20% down on pre-global financial crisis levels and the industry is still incredibly competitive which means that margins are squeezed.

Mr Taylor said if construction activity kicks in in the second half of the financial year, as anticipated, the full-year results should reflect this.

That's as long as construction industry changes don't undermine the steel supply chain.

It's just over a year since Steel & Tube's former majority shareholder, Arrium, sold its stake to institutional and retail investors.

Mr Taylor said the sell-down has improved trading volumes in the company's shares and the degree of interest in his company among the investment community.