We Rode the Bull, and We Succeeded: 2021 SMU Steel Summit Conference Wrap-Up

With the exception of the second half of the opening between Michael Cowden and myself (including me receiving this year’s hat courtesy of Chris Shipp and the Priefert team – see photo which includes Tim Triplett, David Schollaert, Michael Cowden and myself), all of the content was recorded with equipment we had on site and is available on the SMU Steel Summit 2021 platform (www.smusteelsummit2021.com).

By Tuesday morning, the transformer on the roof of the GICC had been replaced, and the show went on without a hitch.

First, the numbers. This year’s event was the second largest we have ever had in our history with a total of 1,069 registered attendees. Of those, 853 were at the live event and 216 registered to be virtual. We had as many as 780 people accessing the virtual platform, and during the peak we had more than 300 people watching the event live through the platform. I want to thank everyone who attended the event either in person or virtually. The platform will remain open for at least the next couple of weeks for those who would like to review a specific speaker or panel, download presentations, or interact with other attendees.

There is no doubt in my mind, we will have 1,300-1,500 at next year’s conference on Aug. 22-24, 2022.

This Year’s Conference – Not One Bad Speaker or Panel

Every year as I put together the conference agenda, I look out many months into the future to see what the critical issues for the industry will be at the time of the event. Then I think about who can handle those subjects by providing quality content in an engaging fashion.

There were no weak links at this year’s conference. Each program was targeted and effectively communicated. We had intra-panel discussions. Every mill speaker was engaging, each with their own personalities and blend of humbleness and humor.

One way I can tell how effective our program was: the size of our audience, and how much “drift” we had during the day. This year, the seats were occupied, and we did not have people leaving the room during presentations.

During the power outage on Monday afternoon, we had some of the virtual attendees who lived in the local area drive to the venue. Now that’s a strong program!

For those of you who did leave early on Wednesday afternoon to catch flights back home, I highly recommend you get on the platform and watch the Electric Vehicle and Transportation programs as they were both well worth seeing.

I expect the next SMU conferences (we have two – Summit ‘22 and Tampa Steel Conference on Feb. 14-16) will also be informative, exciting and worth attending.

The SMU Steel Summit Audience Price Forecast had the majority predicting prices above $1,000 per ton ($1,000-$1,500 per ton) when we meet in Atlanta on Aug. 22, 2022. That’s well above the forecasts provided by Josh Spoores of CRU and John Anton of IHS Markit, both of whom were below $1,000 per ton.

Nucor’s Leon Topalian met our audience in person for the first time since he became CEO on Jan. 1, 2020. (COVID-19 prevented an earlier meeting.) He was asked whether benchmark hot rolled prices would be higher or lower than $1,200 per ton on April 1, 2022. He answered higher. When pressed, he wouldn’t answer any other pricing questions (nor would any of the other CEOs).

We had a dynamic steel users panel with Barry Zekelman of Zekelman Industries, Rick Marabito of Olympic Steel, and Chris Shipp of Priefert. The consensus was that domestic steel mills needed to supply their companies with enough steel or risk losing their business to imports.

There was much discussion during breaks of foreign steel potentially flooding into the country because of the huge spreads that exist between foreign offers and current domestic pricing. With domestic mills saying they were pretty much sold out through the balance of the year, the potential risk of buying foreign is minimal. (And yet most companies want to remain domestic buyers).

I had breakfast with one steel buyer who told me they asked domestic mills to quote on some of their needs last week only to be told by every supplier they had no steel available.

Today, I spoke with one of our attendees who told me they believe their business is going to be tough next year. “If someone comes to me with 1,000 tons of toll processing for next year, I can’t take it. I can’t take it due to labor issues. I can’t find employees.”

The labor issues were a common theme with all the attendees. Only the steel mills, who are paying their employees over $100,000 in salaries and benefits (and well over that this year due to profit sharing) were not suffering labor issues.

Gregg Troian, the president of PGT Trucking, told the audience that his company spent $3.5 million to attract drivers and were able to get 317 – only to lose 326.

We are in the throes of new contract negotiations, which will be quite painful for many manufacturing companies that have had fixed price contracts or agreements tied to indices that never pushed their prices anywhere near the $1,900+ per ton levels we are seeing on hot rolled coil right now in the spot markets.

We heard from one OEM today who reported to us that their company has told one of their suppliers they cannot accept the price increases being proposed, and that there are mills out there willing to sell for less. It’s too early to tell exactly whether that is a harbinger of the “bursting of the bubble” John Anton referred to in his comments during our conference. But one thing is certain: We will all need to watch the markets carefully over the coming weeks.

A Note About My Schedule

On Sept. 1, 2021, I will be taking an extended leave from my duties here at Steel Market Update. I will return to my office on Oct. 1, 2021. In my absence, please direct your questions/comments to Tim Triplett (Tim@SteelMarketUpdate.com) or Michael Cowden (Michael@SteelMarketUpdate.com).

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

John Packard, President & CEO