Following SteelOrbis' first-ever Trading Workshop held Thursday, July 10 (see SteelOrbis kicks off Trade Conference in San Diego with first-ever Trading Workshop), attendees of SteelOrbis' First Annual Steel Trade Conference in San Diego, California enjoyed many informative and discussion-provoking presentations during the conference's General Session, held Friday and Saturday.
Topics discussed during the two-day session included: the economy, trade legislation, market trends for various products, steel futures, and steel logistics. Although not all presenters shared the same point of view on every issue, particularly not on controversial topics like government intervention in international steel trade and the role that financial futures should play in the steel market, the one thing that everyone seemed to agree upon is that the steel market faces significant challenges going forward.
Session speakers included: Wilfried von Bulow of MAN Ferrostaal AG; David Phelps, President of the American Iron and Steel Institute; Thomas Danjczek, President of Steel Manufacturers Association; John Foster, COO of Coutinho & Ferrostaal Inc.; Henry Pankratz, President of Coutinho and Ferrostaal Ltd., Canada; Bill Upton, CEO of Vulcan Steel Products; Mark Hennings, President of Harris Supply Solutions; JR Meyers, CEO of Totem Steel; Alan Gin, Professor and Economist at the University of San Diego; Tom Solomon, Founder & President of Marian Shipping Ltd. as well as executives at MacSteel International USA Corp. (Tom Keller, Executive VP), Ancon Transportation (Carole Wink, Senior VP), the London Metal Exchange (Lotta Ulfsdotter, Steel Market Executive), and Tamco Steel (Andrew Martin, VP of sales and marketing).
Two issues which seemed to take front and center in many of the speakers' and attendees' minds were the struggling US economy and the skyrocketing costs of everything from raw materials and oil, to labor and insurance.
Regarding the US economy, Professor Alan Gin delivered a mostly optimistic view, telling the audience that although the US' GDP grew by only a paltry 1 percent in the first quarter, he believes that the weak economy will help curb inflation, and he in fact expects to see some pick-up in the economy by the second half of 2008, followed by some solid growth in 2009. He expects that housing starts may start to rise again after Q3, and that interest rates may also start trend upwards again by year-end. Mr. Gin also pointed out that the falling value of the US dollar will keep US exports more competitive in other markets.
Mr. Wilfried von Bulow struck a slightly different note in his presentation; Mr. von Bulow said that while the US economy will be helped by the energy boom and the renewal of the country's crumbling infrastructure, the dollar depreciation will add to inflationary pressures, and that raising interest rates would be too risky of a move for the Fed to make in such a shaky economy. Mr. von Bulow predicts that for at least the rest of the year, US steel prices will continue to rise, but that the economy will only grow at an anemic pace.
As regards the seemingly relentless rise of the costs for both steelmaking raw materials and steel transportation, Mr. Tom Danjczek of the Steel Manufacturers' association predicted in his presentation, "North American Steel Industry Challenges," that raw material costs will continue to surge in 2009 and steel prices will continue rising as a result. Mr. Tom Keller of MacSteel International USA also predicted that scrap will continue to rise, for at least six months, and that raw material and other costs will continue to be passed along to customers.
Not all of the speakers agreed, however, that customers continue paying for the rising costs. JR Meyers of Totem Steel expressed in his frank, straightforward presentation on his view from the flat rolled trading side of the business, that prices are rising "too much, too fast", and that the end-users may not be able to bear the brunt of the rising prices much longer. Carole Wink of Ancon Transportation discussed the effect of high fuel prices on the steel transportation sector, which is significant indeed as many trucking companies are going bankrupt because of it.
To see all of the presentations and photos from the conference, please visit www.steelorbisevents.com. (Attendees will receive a user name and password which will allow them access to download the presentations).
Other conference highlights on Friday and Saturday included cruises of the San Diego Port and Bay as well as a Polynesian-themed reception and Gala Dinner, complete with fire dancers and live music.
Conference sponsors included The Unified Port of San Diego, The MID-SHIP Group, Ancon Transportation, and the Breakbulk Transportation Conference & Exhibition.