Final Thoughts

My colleague David Schollaert has a good article today on construction industry employment trends. Construction is seeing strong demand and is expecting even better demand once infrastructure spending kicks in.

The problem: what should be robust construction activity is being held back because firms can’t find enough material or labor, or can’t get either on time.

I mention my own run in with the supply chain because we too often talk about these things as if they are some sort of far-off thing or hazy trend. But it’s not just big construction firms and auto producers facing these issues – its trickling down to everyone, even to small repair shops.

Here’s how I spent my morning: The rental car agency called and said they had a replacement vehicle ready. I get to the repair shop. The estimator did his thing. And then it turned out that there wasn’t anyone available to do repairs until… the end of April.

Could they do that? I looked more closely at the authorization forms I had signed, which contained a few sentences about how the pandemic and “supply chain challenges around the globe” meant that the repair industry was “experiencing numerous delays regarding parts and materials.”

The language was almost the same as that used by automakers when they announce assembly plant downtime: “This, coupled with labor shortages, are having a longer than usual negative impact on our repair times.” Just how long? “Given today’s environment, your car repair may very well extend past 30 days, which would in turn impact rental coverage.”

That in theory means my modestly damaged car won’t get into the shop until the end of this month. And it might not be repaired until sometime around Memorial Day – during which time I might have to pay a lot for a rental car, probably more than the repairs would cost.

The other guy’s insurance is paying for this. But the damage really isn’t that bad. And maybe by the end of this month I’ll be used to looking at it, which would free up some labor and parts.

I mention this because, as I noted on Tuesday, I’m starting to think that the biggest threat to demand isn’t rising prices. It already looks like hot-rolled coil prices are moderating as we get over the initial shock of the war. The problem is that we can’t seem to get the right people and the right stuff in the right place at the right time no matter the price.

I would hope that big construction firms are more committed to their projects than I am to having my car repaired. But sometimes I wonder.

2022 SMU Steel Summit

Finally, a note from our founder, John Packard, who wants to make sure all of you are aware of the latest developments for our big event in August.

The following companies registered for the 2022 SMU Steel Summit Conference over the past few days. An asterisk means more than one executive is attending from that company: ANDRITZ Metals USA, Inc.*, BMO Harris Bank*, Central Plains Steel Co., Klauer Manufacturing Company*, Ohio Pickling & Processing*, Steel Technologies Inc.*.

We are on track to meet our goal of having 1,200 executives representing decision-makers in manufacturing, steel distribution, steel mills, trading companies, fabricators, logistics experts, analysts, and many others associated with the greater steel community. You can learn more about this year’s conference, costs to attend, and how to register by going to: https://events.crugroup.com/smusteelsummit/home

We are encouraging companies to send younger executives to the conference this year. We will be rolling out special pricing for young people who register to join the SMU NexGen Community. There will not be any fees associated with joining the NexGen Community, and there will be benefits for both the company and the individuals who participate in the group. We will be unveiling much more about the NexGen Community in the coming days.

Under the banner of the NexGen Community will be the SMU NexGen Leadership Award. Nominations are now open. You can find more information about the award, past winners, nominee criteria, and how to nominate someone from your company (or yourself) on our website: https://events.crugroup.com/smusteelsummit/awards

Lourenco Goncalves, CEO of Cleveland-Cliffs has volunteered to participate as the mentor to this year’s SMU NexGen Leadership Award winner.

Later this month, SMU is hosting one of our very popular Introduction to Steel Hedging Workshops (used to be called Hedging 101) with our primary instructor, Spencer Johnson of StoneX Financial. The dates of this virtual event are April 26-27 (half day instruction each day). You can learn more about the agenda, instructors, costs to attend, and how to register by going to: https://events.crugroup.com/steel101/about-steel-hedging-101

Thanks, everyone, for your interest in Steel Market Update.

By Michael Cowden, Michael@SteelMarketUpdate.com