Steel execs to distributors: 2011 will be another tough year

Monday, 25 October 2010 08:51:17 (GMT+3)   |  
       

The impressive lineup of speakers at the ASD (Association of Steel Distributors) Fall Conference in Las Vegas, NV provided unique insights and updates of their respective companies while all echoing similar sentiments- 2011 will be another tough year and probably beyond.

Speakers during the weekend event included: Mike Williams, Senior Vice President of North American Flat Roll Products for US Steel; Rick Blume, Director of Sales and Marketing for Nucor Steel; Keith Busse, Chairman & CEO of Steel Dynamics; Doug Everhart (ASD 2009 Steel Man of the Year award recipient), President of Greenpoint Metals; and Dan DiMicco (ASD Captain of the Industry award recipient), President & CEO of Nucor Steel.

Other than the forecasts that indicate levels of steel demand will not increase adequately enough, due to a continuation of unmanageably high unemployment figures, especially in the manufacturing sector, another underlining theme during the conference was that the support of free trade is vital to the growth of the steel industry, as long as the trade policies are adhered to by foreign parties. "Every country stands to gain by engaging in free trade by playing by the rules," stated Williams. He continued to elaborate that perhaps more importance and priority has to be placed on engaging in and protecting these free trade policies though. "It's time to think of global trade policies" in terms that steel producers due regarding safety. Free trade policy talks inevitably lead to passionate comments regarding China and the current valuation of their currency. Busse commented "They [China] do not get to make all the rules regarding their currency... they should be trading around five to one and not seven to one."

Regarding the growth of the US economy, Blume commented that 2011 will still be inadequate; however, that the key demand drivers remain in the long run, such as growing population. Nevertheless, that the US needs a GDP growth rate of 2.9-3.0 percent to sustain economic growth, and the expected 2010 GDP growth is only at 2.4 percent, the same percentage as 2009. Furthermore, Blume stated that "according to the American Society of Engineers, we [US] need $2.2 trillion over the next five years invested in infrastructure improvements to improve our current ‘D' rating."

But above all other forecasts and analysis, the two ASD award recipients (DiMicco and Everhart), personally challenged the conference attendees to take action to avoid the steel industry from suffering preventable downfalls, specifically relating to foreign trade policies and financial regulations. DiMicco poignantly urged distributors in the room to "take action now" at as many levels as possible, whether it be local, state, or even federal, to ensure that the US domestic steel industry does not become victim to unfair or illegal practices. Everhart closed the award ceremony and consequently the conference by imploring the attendees to "use your imagination" to come up with new ideas to help the domestic steel industry progress and thrive during a time where regression is possible. New ideas will improve some older now flawed ones.