Final Thoughts

Having said that, I was very happy with the reception our conference had with those attending, and I look forward to seeing all of them at our 2020 SMU Steel Summit Conference, which will also be held in Atlanta.

I continue to encourage suggestions and comments – both positive and negative – as it is always my goal to provide the “perfect” conference for all attendees. This is probably an impossible task, but it is the way I think about everything we do. You can send your comments to Info@SteelMarketUpdate.com or directly to me at John@SteelMarketUpdate.com

I have had conversations recently with traders regarding the amount of foreign steel coming into the country and what we should anticipate in the coming months. I heard from them, and from multiple speakers at the conference, that we should not anticipate any further reductions in imports. About 75 percent of the imports arriving are not subject to tariffs. They are coming from Canada, Mexico, Brazil, South Korea, Australia and Argentina. Those countries either do not have tariffs (Canada, Mexico and Australia) or have quotas (Brazil, South Korea, Argentina). The balance of the imports are products that cannot be produced here in the United States or are going to areas that are not easily reached by the domestic steel mills. So, we can expect finished steel imports to remain around the 2 million net tons per month level going forward.

During an interactive session of the conference, I asked those in attendance if they had moved foreign steel purchases made in 2018 to the domestic steel mills during 2019? We found 55 percent had moved orders to the domestic mills, while 45 percent reported they were still buying foreign steel. This, I think, matches up with what I have been learning from the traders as well as individual steel buyers over the past couple of months. Essentially, the domestic mills have reached the bottom of the foreign steel barrel. Any gains from here will have to be made by providing those products not available.

During the conference, we witnessed steel execs specifically discussing new mills being built in order to provide products not available through U.S. producers. Mark Millett, CEO of Steel Dynamics, was passionate about adding capabilities that would take market share in the energy sector away from foreign competition. Cesar Jimenez, CEO of Ternium Mexico, also pointed to his company’s additional rolling capacities being aimed specifically at products not produced in Mexico. In the case of SDI, their new mill will be melting new steel from scrap. Ternium Mexico will be utilizing slabs produced by what was the former ThyssenKrupp mill in Brazil.

Our October Steel 101: Introduction to Steel Making & Market Fundamentals Workshop is sold out. In fact, I met someone at the conference who asked if he could attend, so I bumped myself or one of my instructors from the Nucor Gallatin tour in order to accommodate him. For me, it is important to provide this training to the industry, and I am quite proud of the value our instructors provide. It was nice to see some of our past Steel 101 attendees at the SMU Steel Summit Conference. Only instead of being the “newbies,” they had become the newest middle managers and “up-and-comers.” That is what we strive for, working with the leaders of tomorrow, today.

It will be what we strive for in my next adventure, which is to put together a new conference focused on attracting and retaining young people into the steel and manufacturing industries. I met a number of young people during the conference who wanted to volunteer their energies in assisting in putting together a quality program. That is exactly what I am looking for. If you have suggestions or would like to be part of a team to assist in putting together this new conference, please contact me at John@SteelMarketUpdate.com

After the October 2019 Steel 101 workshop, the next one will be held in Ontario, Calif., on Jan. 7-8, 2020. We will be touring the California Steel Industries (CSI) steel mill in Fontana. I hope to have registration up and running yet this week.

For those interested, the 2020 SMU Steel Summit Conference will begin on Monday, Aug. 24 through Wednesday, Aug. 26. Our economists all forecasted slowing business conditions in 4Q 2019 and into the first half 2020, but activity should be picking up by the time our conference rolls around. Dr. Alan Beaulieu has already committed to speak at the 2020 event, when I will have him opening the conference on Tuesday morning. Mark your calendars, put us in your budgets for 2020 now, and look for us to begin accepting registrations right around the first of the New Year.

The 2020 conference will be our 10th and I anticipate we will make it “extra” special (I am learning that the word “extra” is a new way of saying special all by itself).

As I look out the window at gray skies and trees whipping in the wind, I think about how the steel industry and the relationships I have developed with many of you has made my life “extra” in so many ways. It is an honor for me to share my thoughts, ideas, experiences and what I have learned both in the past or in the last conversation I just had…

As I look out the window and wonder how the folks in the Bahamas are holding up, and what the next 24 to 48 hours will hold in store for those of us here in South Florida with Dorian just a few miles away, I am looking forward to talking to you on the other side….

As always, your business is truly appreciated by all of us here at Steel Market Update.

John Packard, President & CEO