In a presentation at AMM’s annual Steel Success Strategies conference in New York this week, Nucor President, CEO and Chairman John Ferriola said it’s a “good time to be making steel.”
It’s a “time of optimism,” Ferriola said, and time to “see and evaluate opportunities. In order to “capitalize on this upcycle,” Ferriola said Nucor plans to move up the value chain, acquire assets that complement the business, and expand into underserved markets.
Ferriola also pointed to indicators showing 2018 markets looking strong.
Production in the US automotive industry is expected to trend sideways this year after falling in 2017, but production remains “at record high levels.”
Ferriola expects construction activity to continue the 2017 uptrend this year, with moderate growth in value put-in-place for non-residential construction, and continued recovery in residential construction as the single-unit segment outpaces the multi-unit segment. Infrastructure construction was down in 2017, Ferriola said, but a “substantial long-term infrastructure program could provide a material boost to demand in 2018 or later.”
Ferriola said the machinery and equipment sector is expected to continue its recovery in 2018 after mixed expectations for heavy equipment categories in 2017.
Investment in the energy sector is expected to return from low levels as oil and gas prices trend higher, although “sustainability of the rebound in 2018 is a concern.”
As for inventory levels, Ferriola said a modest correction is expected in 2018 after inventories increased in 2017 amid rising domestic and import supply.
Ferriola also spoke about NAFTA, saying that while NAFTA has been successful for steel in the US, Canada and Mexico since being enacted 24 years ago, the agreement “needs modernizing,” including policies regarding rules of origin, trade law enforcement, and treatment of state-owned enterprises.
A new and improved NAFTA that is updated for a 21st century global economy will be a “model for all future trade agreements,” Ferriola said, adding that he is “optimistic” about the eventual results of ongoing NAFTA renegotiations.