Final Thoughts
Final Thoughts
Written by John Packard
June 9, 2021
Infrastructure, Energy, Wind Farms, Tanners, Summit Conference, Imports.
If you are watching the news, you are aware of the Biden administration’s push for a large (at least $1 trillion) infrastructure bill. There is a lot of discussion about what infrastructure entails in light of the current economy. It’s not your father’s economy. There is need for traditional infrastructure: roads, bridges, and water and sewer lines. There is also a need for new infrastructure: broadband internet, a new energy grid, and solar and wind farms. And disagreements over what exactly constitutes infrastructure are complicating negotiations in the Senate. The bottom line (in my opinion) is the investment is decades past due.
Speaking of infrastructure, I was speaking to someone recently about the proposed offshore wind farms expected to be built over the next decade. Conservatively, the amount of plate steel alone needed to build wind mills able to produce 3.5 gigawatts of power (and plans calls for 5 GW) is 1.5 million tons. That would essentially use up all the production expected to come out of the new Nucor plate mill in Kentucky.
And if that figure doesn’t catch your attention. How about this one: T 
he AISI told us during one of our SMU Community Chat webinars that every billion dollars of infrastructure spend generates approximately 50,000 tons of steel demand. Yes, most of that steel would be long products (rebar and beams). But there would also be plenty of demand for plate (used in bridges) as well as some for flat rolled. And if we end up with an infrastructure bill of around $600-$900 billion that would be 30 million to 45 million tons of new steel demand.
Oh, and what if oil prices move past $70-$80 per barrel and the energy market begins to hum? FYI – Oil closed above $70 per barrel today.
As for our webinars, we had the second highest attendance ever for an SMU Community Chat thanks to Timna Tanners, the metals and mining analyst for Bank of America. She is also the author of the theory that steel prices will crater when all the new capacity comes online (Steelmageddon®, which is a registered trademark of Bank of America). Steelmageddon® has not gone away, it’s just been delayed. (See the article on her presentation in tonight’s issue. You can also view a recording of yesterday’s webinar by clicking here.)
Our next SMU Community Chat Webinar will be held on Wednesday, June 23, with Charles Schmitt, President of SSAB Americas. You can register to attend this free webinar by clicking here.
Imports at Multiyear Highs
We did a little research today, and here is what we discovered regarding foreign steel imports into the United States for the month of May. Imports are at a multiyear highs for:
- Hot rolled at 226k net tons – highest since October 2018
- Galvanized at 254k tons – highest since January 2019
Looking at broader product categories from the Department of Commerce, here are some more records for May 2021:
- Flat rolled at 1.01 million net tons, the highest since January 2019
- Finished imports at 1.89 million net tons, the highest since April 2019
- Pipe & tube imports at 340k net tons, the highest since May 2020
So maybe it’s not just capacity at home that we should be looking at but capacity abroad too.
2 
021 SMU Steel Summit Conference – Update
A note to those who are interested in attending the 2021 SMU Steel Summit Conference. We will have many forecasts from various points of view about the economy in general. We’ll also look specifically at the automotive, construction, and energy markets. Tanners and Josh Spoores, principal analyst at CRU, will be providing their steel forecasts. (And Tanners will offer an update on Steelmageddon®). You can join us in Atlanta on August 23-25 by clicking here or going to https://www.events.crugroup.com/smusteelsummit/home to learn more about our agenda, speakers, costs to attend, discounts being offered, the NexGen Leadership Award nomination process, and how to register.
Over the past few days, we had the following companies register (those with an * means more than one attendee is coming from that company): Advance Steel Company, Bahler Management, Carrier, Cooper Consolidated LLC, MAAS Hansen Steel, MiTek USA, Inc.*, Precision Bevel LLC, Service Steel & Pipe, Inc., Sukup Mfg, Sure Steel, inc., Webco Industries*, West Walker Steel*. Adding more executives to their registrations were Nucor* and Worthington Industries*. Not showing as totally registered but bringing 12 executives is Steel Dynamics* and seven executives is Alliance Steel*.
You can join the hundreds of companies and nearly 600 executives already registered by clicking here.
To those of you in Canada, I understand our governments are working on an agreement to allow travel. I expect the travel restrictions to be dropped on June 21st when the existing restrictions expire.
And public service announcement, everyone: Don’t forget to get vaccinated as a courtesy to everyone attending (and yourself)!
The hotels at the Gateway Center (where the GICC is located) are beginning to fill up. My understanding is the Renaissance and the Marriott Gateway are sold out. The SpringHill Suites and AC Hotel (which is brand new Marriott property) still have rooms. We do not have a room block for this year’s conference. If the price of the hotels in the Gateway complex are too high, I suggest you book the Atlanta Airport Marriott, which is located a couple of miles away. I checked online this afternoon, and the rate for rooms for August 22-25 was $179 per night. SpringHill Suites at Atlanta Airport Gateway was $198 per night, and AC Hotel at Atlanta Airport Gateway was $311 per night. If you procrastinate expect those rates to increase.
The next Steel 101 workshop will be held virtually on July 20th and 21st. You can learn more and register by clicking here.
As always, your business is truly appreciated by all of us here at Steel Market Update.
John Packard, President & CEO, John@SteelMarketUpdate.com
John Packard
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