January 26, 2007

Drop in demand in 2006 doesn't deter Montreal steel producer

MONTREAL

Novamerican Steel Inc. said it’s optimistic about the coming year despite a drop in demand in the latter part of 2006 that depressed sales and profits in the company’s fiscal fourth quarter.

The Montreal-based company, which processes and distributes steel from locations in Canada and the United States, said its fourth-quarter results reflected the impact of an inventory oversupply that affected the North American steel industry in the latter part of 2006.

It added that steel prices appear to have stabilized and the company’s management is “cautiously optimistic” about 2007.

Novamerican’s fiscal first quarter appears poised for a slight increase in demand relative to the fourth quarter as warmer weather in the U.S. Northeast and inventory replenishment have combined for better than expected shipments early in the new year, the company said.

Steel consuming industries such as industrial and commercial construction, energy, heavy equipment, railcar and infrastructure spending are forecasting stable demand in 2007, it added.

CANADIAN PRESS

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