Industries asking for a piece of the economic stimulus package are frantically making their case to Congress, the President, the media and the general public. And although the package still has to go to the Senate for them to modify, the largess in the bill passed by the House of Representatives Wednesday will likely dole out some serious cash in an attempt to turn the US economy around (.xls file of types of project by state available here). It’s no surprise that the steel industry is waiting in line for help like everyone else. And although they’ve made some headway in pushing for infrastructure projects, which obviously use a lot of steel, they’re publicly expressing disappointment at the composition of the House passed package:

“I was horribly disappointed with the amount of hard dollars going into infrastructure,” Keith Busse, chairman and chief executive officer of Steel Dynamics Inc., Fort Wayne, Ind., said. “Out of an $850-billion package, the rumors of $90 billion, $100 billion, $110 billion worth of spending is pathetically low.”

Other steel company execs, like Nucor’s CEO Daniel DiMicco, are urging patience (registration required):

“Our philosophy is that time will have to pass. We have to be patient,” he said, but it’s “unclear whether government actions will lead to meaningful improvement. We hope (the) leadership takes aggressive action to stem the actions that created (the) crisis” and develops “long-overdue policies to rebuild energy infrastructure and restore the balance of trade. We need to invest in America (and develop) a better U.S. economy that actually makes things.”

DiMicco noted that when the economy and steel orders rebound, Nucor could ramp up production in just hours.

Even when I predicted that “volatility” was the operative word for metals markets, I didn’t expect steel’s slide to be so swift and dramatic. But that’s where we are - in a market where steel producers went from enjoying record profits to the same companies waiting in line for a government bailout in just six months.

In the mean time, how should steel buyers adjust to the timing of the stimulus?

One interesting provision that steel companies are REALLY pushing for is a “buy American” clause, which would require all infrastructure to be build with US-produced materials. If that survives negotiations between the House and Senate, it will be a huge boon to domestic steel producers at the expense of mills in other parts of the world. Obviously depending on the timing and size of the infrastructure projects (as well as the level of demand and exchange rates), this could have implications for steel buyers, who could themselves be priced out of buying American.

Metals buyers should exercise diligence to ensure that they benefit from the excessive declines in this and other major cost drivers. No relief appears to be on the immediate horizon for steel producers, as steel analysts foresee no real recovery of demand in the first half of 2009. Similar pricing trends are occurring in other metals markets such as copper, aluminum, nickel and zinc. Buyers waiting for the bottom to act on the movement in the raw materials markets should act fast to take advantage of the current lows in steel and other metals markets.

Mike Petro is the Senior Category Manager for Metals in Ariba’s Global Services Organization. Previously, Mike analyzed supply chain options and competitive pricing for US Steel and Timken Latrobe Steel.