Speaking at the 53rd annual meeting of worldsteel (World Steel Association) held in Monterrey, Mexico, on October 14-15, John Ferriola, chairman, CEO and president of US-based Nucor Corporation, described the current situation in the US as a very complicated one, with a lot of uncertainty, which, he said, is never good for markets. While agreeing that there are a lot of problems in the US and also remarking there is a lot of gloom and doom about what is taking place in the United States today, particularly in the media, he stated that, while certainly pricing has been challenged in the US in a good way, demand has been relatively strong, though not as strong compared to 2018. Demand in the first half of 2019 was certainly not as good as in 2018, he said, but, comparing it to 2015 and 2016, it has been a pretty good year. He commented that, internally at Nucor they say that, if it was not for 2018, they would be pretty happy with 2019; but having had 2018, all of a sudden 2019 looks like a horror show. He said that, looking at overall demand in the US, it differs by sector, but overall, there is relatively strong demand, particularly in Nucor’s downstream businesses. Looking at it sector by sector in the US, he pointed out that the construction markets, certainly residential, multi-family residential, is a bit down, but infrastructure is up, by three to four percent, and non-residential construction is up. Automotive is certainly down, he added, but is still pretty good compared to 2015 and 2016.
So while overall things are down from 2018, the Nucor boss said that he is happy with the situation relative to the period since the beginning of the great recession. He went on to say that, going forward, it is going to be very challenging to predict what is going to happen in 2020, an election year in the US, one which is going to be a very interesting year because there is so much political strife in the US today. He predicted that, in his view, what we are going to see in 2020 is one party that will be striving hard to maintain a good economy. In the US like in most of the world, he said that people vote with their wallet, asserting that right now the US economy is relatively good and unemployment is at its lowest level in 50 years. He claimed that in 2020 in the US one party will be striving hard for the economy, while the other one will be looking to have the economy weaken a little bit so that their party looks better.
Turning to the issue of infrastructure, Mr. Ferriola said that everybody is waiting to see what happens with the election. He stated that infrastructure in the United States is in a horrific condition and that a huge infrastructure build is necessary. Of about 550,000 bridges in the US, he said 10 percent of those bridges are deemed unsafe to travel. Everyone knows this, he said, but, no one is going to do anything about it until after the election. He added that he believes that after the election, particularly in 2021, a major construction build will be seen, which will be good for steel. Another key factor, he said, is what happens with the USMCA, which he described as a huge factor. He predicted that the USMCA will be passed by the end of this year, saying this is absolutely necessary. If that happens, he said, there will be a better outlook for Mexico, Canada and the United States for 2020.