RWR 2017 discusses new political landscape and its effect on the US longs market
The 8th annual SteelOrbis Rebar & Wire Rod conference was held at Caesar’s Palace in Las Vegas, Nevada on January 16, 2017, attended by almost 150 registered attendees from 10 different countries.
Backed by an expert panel, the event facilitated a lively and informative discussion that focused on key aspects of an industry marked by transition in the US government. Industry thought leaders included Philip Bell, President of the Steel Manufacturers Association (SMA); Chris Casey, Executive Director of the Independent Steel Alliance (ISA); and Eileen Bradner, Nucor’s Senior Director and Counsel – Federal Government Affairs. The panel discussed prepared questions from moderator Katie Memmel, Content Manager of SteelOrbis Americas.
In light of the recent presidential administration change in Washington, political and regulatory considerations occupied a central theme of the ongoing discussions. Nucor’s Eileen Bradner voiced strong optimism that the Trump administration would benefit the US steel industry in light of actions already taken to retain manufacturing and bolster infrastructure spending.
Mr. Bell also noted the importance of the commitment to publically fund infrastructure investments and limit the role of interest-bearing financing which at times restricts the long-term perspective. Long-term projects of the magnitude needed may not immediately provide sizable benefits but can greatly support US commerce in the long run, Bell said.
The potential steel industry benefits of President Trump’s proposed infrastructure bill—and the overall emphasis upon buying American made products—were duly noted throughout the conference. Simultaneously, the importance of maximizing consumer welfare by maintaining the availability of fairly traded imports was also noted by Mr. Casey. While the panel concurred that the North American Free Trade Agreement (NAFTA) was largely successful, they also noted that it required adjustments 20 years after its original implementation.
The controversial southern border wall—a project proposed repeatedly throughout the campaign by Trump as a means of enforcing existing immigration laws—was also briefly discussed. Despite any potential industry benefits, notably substantial demand for steel products, the panelists suggested that any long-term benefits stemming from this hypothetical project seem negligible. As a more viable and attractive alternative, panelists emphasized the importance of innovation as a means of combating imports and gaining market share.
The discussion also focused on the ability of US producers to meet domestic steel demand. While members of the panel agreed that US producers possess sufficient capacity to satisfy domestic demand, they also noted that capacity utilization ratios—in the 60-70 percent in some product mills and as low as 30-50 percent in others—need to be around 80 percent to assure long-term profitability, employment growth, and investment in R&D.
In terms of domestic policies to benefit the US steel industry, panelists echoed the importance of introducing free market principles, permitting inefficient firms to fail, and of scaling back counter-productive Environmental Protection Agency (EPA) and Occupational Safety and Health Administration (OSHA) regulations.
After the panel session concluded, the audience was invited to ask panelists questions and many focused on the upcoming preliminary results in the antidumping/countervailing investigation against rebar imports from Turkey, Japan and Taiwan. While Ms. Bradner said that her office was “working diligently” with government officials, the panel as a whole was reluctant to make predictions. However, Mr. Bell suggested that just because a recent review of the 2014 rebar import trade case again found no subsidies from Turkey, the result would not likely have an impact on the current case.