No one in the steel industry will deny that 2009 was rough. Last year’s West Coast Steel Dinner was fraught with worry and fear of the unknown, but 2010 is a new year, a new decade, and full of new hope.
The West Coast Steel Dinner, co-hosted again by SteelOrbis and the American Institute for International Steel (AIIS), was held Wednesday, Jan. 27, in Long Beach, California. It began with a boisterous cocktail reception, full of smiles, hearty laughter, and a flurry of handshakes and business cards exchanged by movers and shakers in the
US and international steel industries.
After a stellar sit-down steak dinner, Dave Phelps of AIIS took the podium and spoke of “green sprouts”—new growth just emerging in the steel markets, as well as other “critical commodities” such as wood and food.
Later, Murat Askin, General Manager of SteelOrbis Americas, noted an increase in attendees, including many new faces, which itself seemed to be an indication that 2010 was already starting off better than 2009. He introduced the guest speaker of the evening, Vicente Wright, CEO of California Steel Industries (CSI). Before taking the helm of CSI in July 2008, Mr. Wright held the positions of Executive Vice President, Finance and Chairman of the Board for the company.
Mr. Wright began his speech with an analogy of optimism, describing two brothers on Christmas morning. The pessimistic brother gets a brand new bicycle and only worries about the injuries it might cause, while the optimistic brother receives a box of horse droppings and rejoices because he got a pony. “2010 depends on outlook,” said Mr. Wright, and during the Q&A session afterward, he said he was determined to “ride that pony” in the New Year.
Mr. Wright gave a brief summary of CSI, and explained how the company weathered the economic storm by maintaining a high level of customer service. He was also proud to announce that in its 25-year history, the company had not laid off a single full-time employee, and did not cut full-time pay during the recent crisis. Therefore, CSI will be prepared personnel-wise for the market turnaround soon to come, and ready to react to customer needs and face competition.
Mr. Wright was happy to note that the international steel industry has already demonstrated much recovery, due to growing production in emerging economies such as China. As for the
US, the third and fourth quarter of 2009 already showed improvement.
While he agreed that a “prevailing level of uncertainty” is reflecting buying habits, Mr. Wright questioned accusations of an “excess of optimism” by listing positive developments in the economy. He said auto sales were up, and while housing starts were low due to winter conditions, building permits were up for the upcoming spring. His overall advice was to be cautiously optimistic, not overreacting to false starts, but warned against being blind to the signs of recovery.
Two major issues Mr. Wright advised to watch out for were high unemployment and the problem of demand not yet driving recovery. However, he predicted that the steel industry is heading for the incline of a “V” shaped recovery, and after all, he noted, “V is for victory.”
The defining message of the night was that this is a new world now, a new reality. The steel industry can never go back in time and operate as it did before the recent economic crisis. All it can do is adapt and prepare for the future, which is looking brighter every day.