U.S. Steel sees no slowdown

By Steve James

NEW YORK (Reuters) - U.S. Steel (X.N: Quote, Profile, Research, Stock Buzz) does not see any evidence of an economic slowdown and is instead hearing from customers that they are having a good year thus far, the company's chief executive said on Monday.

"Most of our customers are having a very good year and that's a good thing for us," John Surma told the Reuters Global Mining and Steel Summit in New York.

He did note, however, that rising inventories at service centers -- metal distributors who buy from manufacturers and process steel for specific customer needs -- are something of a concern. But he said the industry is not anywhere close to the excess inventory issues that plagued it in 2004.

"We do see service center inventories are up a little bit. Not to high levels yet, but higher than they were and higher than we would like." Asked if this was a sign of economic slowing, Surma said he saw no evidence.

Earlier, at a central bankers' panel discussion, Federal Reserve Chairman Ben Bernanke said the Fed needs to be vigilant to make sure inflation stays under control as the U.S. economy starts to show a slower pace of growth.

"Until I read it on my Blackberry on the way here, that Bernanke predicted we're having a slowdown, I wouldn't have guessed that just from talking to our customers," said Surma.

He said that during a recent conference of the service center industry, which accounts for about 40 percent of U.S. Steel's business, there was "a generally positive mood.

"Their interest was to have additional volume from us available to continue to fill their customers orders. And if they are saying business is pretty good, I tend to believe them," said Surma.  Continued...