Dear Valued Customers and Partners,
The first quarter of 2023 was characterized by terrible weather and gloomy economic predictions. I hope that all of you avoided damage from the flooding across much of California, and that business has not been held up too much by the floods or market uncertainty. At Cal-Sierra, we found it challenging to deliver because of delays on jobsites and muddy conditions. The good news is that the sun is shining, the ground is drying, and we should have a lot of pent-up demand about to break loose in April.
Q1 2023 Recap
The first quarter of 2023 was much slower than the first quarter of 2022. The main factor was the persistent rainstorms, but it was made worse by a continued slide in steel prices. Distributors continued to operate in inventory-reduction mode and there was plenty of cheap material available. Cheap inventory will continue to arrive into April, however, I predict a gentle rebound in cost that will hold across all categories for four months or more.
2023 Market Outlook
Cal-Sierra’s cost on inbound import inventory orders booked through July will be, on average, 2% higher each month. I believe our competitors will have the same cost trend, which means that as current inventories sell through, if demand holds, market prices will rise.
These market conditions paint a fuzzy picture for the rest of 2023 and it will be difficult to forecast inventory needs. With uncertainty about costs and volumes going forward, I advise that you make use of your distributor partners. Buy only what you need and keep your inventories lean. We are well positioned to cover our entire mix of stock items, with strong quantities arriving each month. You may see some scarcity in late summer if demand holds strong, but that is not likely. You should be able to get anything you need, and cost increases will be moderate from month to month.
I hope you find this information helpful. I’m looking forward to sunny days and no more flooding.
Cal-Sierra Pipe, LLC