While the several hundred women who attended the 2012 Association of Women in the Metals Industry (AWMI) conference in Denver, Colorado last week were eager to network and share their experiences working in a traditionally male-dominated field, they were also excited to hear exclusive perspectives on market trends from industry leaders and economic insiders.
US Steel General Manager Mike Meyers spoke of global economic trends within the steel market during the session’s metals panel on Friday. “The business is dominated by carbon flat rolled,” he said. “If you are in the flat rolled business, for the short term, you’re likely taking a little more blood pressure medication and are seeing an uptick in your wine consumption due to the slowdowns in Europe and the even slower growth in China. These are some of the most challenging conditions I’ve seen in 30 years, and we need to focus on how to make our way through these challenges.”
Meyers touched on how to address developing export strategies to satisfy the middle class in countries such as Asia. “Asian growth rates impact all of our businesses significantly,” he said. “Sustained long-term global demand for steel will be impacted by the growth of the global middle class. Infrastructure spending will increase and as these people become consumers, they will buy appliances and cars.” Current growth will be modest, he said, with greater focus needing to be placed on long-term growth trends.
Later that afternoon, Bank of America Merrill Lynch Research Analyst Timna Tanners spoke about global supply and demand. Most notably, the current problem is being driven by over-supply. Shorter lead times have led to greater uncertainty and lower steel utilization is what leads to lower steel prices. Service center managers are avoiding over capacity. They are holding less inventory and doing more spot deals.
“Construction has been weak,” she said. “Auto has been stronger. Recovery has been forecasted but improvement will be incremental.” Another key component in terms of impact to the US market will be whether a domestic or overseas buyer moves forward with purchasing ThyssenKrupp’s Alabama mills. A domestic buyer might have more discipline in terms of volume, whereas an outside buyer who has nothing to lose could be more aggressive with capacity and pricing.
“I think it’s going to be a tough industry for a while,” she said. “Some of the companies are saying they are just waiting for demand to get better and I think that is a poor business model.