On Wednesday, January 13, SteelOrbis hosted its second SteelOrbis Webinar: Key Issues Affecting Steel Minimills, presented by Thomas Danjczek, President, Steel Manufacturers Association (SMA).
Mr. Danjczek provided attendees of the online event with an overview of the main factors currently impacting North American minimills, and his outlook for the near-term. A brief Q&A session followed Mr. Danjczek's 20-minute presentation. Attendees were able to join the free SteelOrbis Webinar by logging in online or calling in.
US steel production has been and continues to be negatively affected by the recession and other factors, though it is slowly recovering, said Mr. Danjczek. Historically, US steel production has averaged about 100 million tons per year, Mr. Danjczek noted. In the first half of 2009, the US produced about 25 million tons, producing at 45 percent capacity, while in the second half production totaled 36 million tons with producers operating at 62 percent capacity. For the full year of 2009, US steelmakers produced about 63 million tons. More optimistic predictions have US steel output recovering by about 19 percent this year, to reach 78 million tons in 2010, though a US poll predicts only a slight recovery to 69 million tons.
Compared to the rest of the world, North American steel production has been more severely impacted by the global financial crisis. In 2009 over 2008, global steel production dropped by a total of 16.4 percent, and excluding China, global production was down 30.9 percent. During the same time period, North American steel production dropped by a much steeper 45.1 percent. North American auto production remains deeply depressed, and while service center inventories are at multi-year lows, reduced demand is delaying restocking activity. North American steel imports have dropped off by about 50 percent as a result of the crisis, though the decline in North American manufacturing jobs, which began in 2007, has shown no signs of abating and US policymakers have yet to adequately address this issue, said Mr. Danjczek.
Some other key issues/concerns facing US electric arc furnace (EAF) producers discussed according to Mr. Danjczek include included scrap, China's steelmaking overcapacity, currency and trade policies, a looming energy shortage, cap and trade legislation, the and US' dire infrastructure needs. In Mr. Danjczek's opinion, the United States is not doing enough to address US steelmakers needs as regards raw materials, energy, China, or trade.
Mr. Danjczek concluded by saying that the US steel industry is in the midst of a severe down cycle, although it is in a better position to manage the current down cycle as compared to previous ones, due to improvements in consolidation, inventory control and cost control. Concerns with China, raw material needs and the other abovementioned issues remain challenges, but there are good reasons for long-term, meaningful optimism.
Stay tuned to www.steelorbisevents.com to find out the details of the next SteelOrbis Webinar.