Opening session of "Steel in the Raw" conference

Monday, April 3rd in Milan, over 150 people in the steel industry from around the world gathered at the Excelsior Hotel Gallia in Milan for SteelOrbis' and Irepas' Steel in the Raw Conference to discuss the latest industry trends and share their visions of what is in store for this dynamic industry in the coming years. In the opening session of the conference, traders and producers addressed the audience. Speakers included representatives from CELSA (Spain), Duferco (USA), Federacciai (Italy), and Al-Tuwairqi Group of Companies (Saudi Arabia). Ricardo Hugas of CELSA discussed in his presentation the macroeconomic and steel consumption situation, citing the two most significant steel industry trends in the recent years – the new era of rapid-fire growth in emerging countries such as China and India, and the significant consolidation that is taking place in the industry. As far as steel production and consumption is concerned, CELSA predicts that in order to feed the global appetite for steel, crude steel production will continue to grow at the rate of 5 percent per year, reaching a global annual output of 2 million metric tons by the year 2015. The company predicts that long product consumption will continue to grow at a particularly fast rate compared to other sectors of the steel industry. Bernd Neuenkirchen of Duferco in his presentation shared with the attendees his view of the US long product market situation, specifically, for rebar and wire rod. Mr. Neuenkirchen said that the rebar market in the US is very strong right now, as it is benefiting from the booming non-residential construction sector. Most US rebar producers have full order books, and a price increase of 20 per net ton is expected in May. Mr. Neuenkirchen said that while the wire rod market in the US is not quite as strong as the rebar market, wire rod consumption is also benefiting from the construction boom, especially mesh grade. Looking forward, Mr. Neuenkirchen predicts the Highway Transportation bill and the rebuilding of New Orleans and the Gulf states will continue to keep the long products market strong in the coming years. Dr. Franco Audino of Federacciai discussed with the audience his view of the EU long products market. Dr. Audino said that while world steel production declined in 2005 from the previous year, production is now trending up in 2006. Dr. Audino's graphs showed that steel consumption in the EU is growing at a modest rate, especially long product consumption for construction-related applications. Lastly, Sudarshan Singh of Al Tuwairqi Group of Companies shared his presentation on the Middle East long products market. Mr. Singh believes long and flat product production in the Middle East will continue its upward trend through 2009, assisted by the following favorable conditions: low taxes on imports, less bureaucracy, low power and gas costs, deep water ports, and supportive local governments for industrialization. Mr. Singh also discussed steel production methods, telling the audience that while the most popular steel production routes globally are now production by blast furnace, DRI, and electric arc furnace, the popularity of the Corex, hi-smelt, and Romelt production methods could grow in the future. Overall, the traders and producers session provided a very positive and accurate market forecast for long products.