The AIIS 59th Annual Dinner and Conference held on November 9 at the Hilton New York, in New York City, brought together many of the steel industry's most successful and influential traders, economists and executives, to ponder the current status and future prospectus of their respective markets.
Unlike last year's event, most attendees this year were in a less pessimistic mood. This is not to say that there was much optimism floating around the room; however, most attendees by now have had a year to deal with the harsh market and have since altered their business projections and expectations. Nevertheless, the current lack of activity amongst most ferrous steel products, both domestically and overseas, created an inquisitive audience, comprised of mostly traders, for the speakers at the conference to address.
Patrick A. McCormick, Managing Partner, World Steel Dynamics, kicked off the conference with his presentation, "Riding the Wave in 2010," providing a more optimistic view of the trading market than some of the other speakers. While Mr. McCormick acknowledged the downturn of the past year in just about every phase of the market; prices, inventories, shipments, he also pointed out that the overall market is improving, albeit at a slow pace. Mr. McCormick explained that according to the MSCI (Metals Service Center Institute), even though inventories have begun to slightly increase since late summer, they are still at historically low levels. Furthermore, scrap prices are expected to increase within the first couple months of 2010, due to a "winter stocking rally." Regarding finished steel products, prices are likely to begin experiencing an uptick by late first quarter and heading into the second quarter, on the heels of an expected scrap price rebound and improved export shipments.
Charles Bradford, Partner, Affiliated Research Group, followed Mr. McCormick, with a more pessimistic view. Mr. Bradford likened the current recession to the 1982 recession, citing comparable unemployment rates, and although interest rates are nowhere near the 15 percent recorded in 1982, Mr. Bradford contests that the US government will be forced to begin raising interest rates, most because the US dollar continues to devalue. Moreover, he opposed Mr. McCormick's claim that scrap prices will rebound in the near future. While Mr. Bradford mentioned that the US population growth of an estimated one percent will eventually lead to more steel demand, he said that the steel industry is "in a bathtub that will take about four years to get out of."
Meanwhile, the conference session keynote speaker, Daniel R. Pearson, Vice Chairman, International Trade Commission, touched on some of the recent antidumping (AD) and countervailing duty (CVD) cases, as well as safeguard measures. Mr. Pearson's overall message was that new AD and CVD claims are likely to continue surfacing mostly due to global steel markets being more dynamic, and that trade laws will evolve as the international economy grows.
Once the conference session concluded, attendees were treated to a networking cocktail session, followed by the annual dinner. This year's keynote dinner speaker was John Ferriola, COO, Nucor Corporation. Mr. Ferriola greeted the guests at the dinner with the resounding statement that Nucor endorses free trade; however, that "free trade equals fair trade," and rules and regulations must be enforced for the benefit of the global steel industry. Furthermore, Mr. Ferriola insists that the US government must address the US infrastructure issues and the issuing of stimulus funds to a greater degree.
The AIIS Annual Dinner and Conference provided attendees an opportunity to network with current and prospective clients, as well as discuss the trends of the US and global steel industries. Steel markets are still dismal compared to 2008 levels; however, 2010 should provide a little improvement over this year. Everyone needs a little optimism heading into 2010.