The 15th annual SteelOrbis RWR conference took place on Monday January 22nd at the Caesars Palace Hotel and Casino in Las Vegas, Nevada. Approximately 120 traders, executives, and market players from companies throughout the globe registered for this year’s event, which focused on the construction outlook and rebar / wire rod market forecast for the next 12 months.
This year’s presenters included keynote speaker and panelist Michael Uhrich, former American Iron and Steel Institute Chief Economist, Brad Martin, President and CEO of Kratos Building Products, and Patricio Pimentel, Global Steel Sourcing Director at the Heico Companies.
The event was once again moderated by SteelOrbis Americas Content Manager and 14-year veteran staff member Katie Memmel.
Starting off the conference session was Mr. Uhrich, who spoke about whether a recession may still be on the horizon, along with trends in construction spending, both of which can impact demand for longs products.
“Where are we at with the next recession? If you were to ask an economist if a recession is coming, well there is always one coming,” he said. “We just don’t know when.”
Unemployment has leveled out recently and it’s at the lowest rate it’s been in decades, he continued, adding that this may be a point of concern.
“Unemployment is low and steady, but it falls during economic expansion, then it levels out, and then it spikes at the start of a recession.”
On the other hand, residential construction is on an upswing. Non-residential construction, most of which is infrastructure related, may be leveling off for now, he said, but it’s expected to do pretty well in the upcoming years as federal infrastructure projects get approved, funded, and break ground.
Panelist Martin noted that while the federal infrastructure bill passed about 2 years ago, getting projects off the ground has been slow-going.
“There is a lot of red tape and long-story short, those funds are not getting out there fast enough,” he said.
Uhrich said he does not expect that the US will reach full spending on these types of projects until 2027.
Shifting to new capacity, Memmel asked how the industry will plan to deal with all of the new longs capacity that’s set to come online in the US. Whereas Mr. Martin said he believes that this will put downward pressure on prices, Mr. Uhrich said he feels the additional capacity will help offset imports.
Memmel also commented on how Section 232 has changed the landscape for the domestic longs markets, such as who the major offshore players are when it comes to imports.
Algeria, Egypt, and Mexico are currently among the most prominent exporters to the US, she said, whereas import volumes of Turkish rebar have lessened.
Turning to Mr. Pimentel, Memmel asked if he believed that if the US were to strike a trade deal with the EU with regard to Section 232, if he believed that Germany, who was a major player in that market before the tariffs were enacted, would return to its former status.
“Probably not,” he responded. “They are struggling with the same cost issues at every angle. Labor costs, energy costs, scrap availability, the same as everyone else.”
Memmel closed out the speaker session by asking if the panelists believed that rebar prices would ever fall back to the low $30s, or whether higher prices were likely to sustain into the future.
“Although I think we’re going to operate in a higher priced universe for a while, I don’t think we’ll go back to levels in the low $30s,” said Pimentel. “I do think that before the pandemic, there was a smaller delta between steel production input costs and [the price of finished steel.] I do think there is still quite a bit to give in the current delta, and there is still a good amount of fat that’s built into that delta that could be shaved off.”
The dates for the next RWR conference will be announced toward the end of the year.