Released May 15, 2017 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--How will the steel-manufacturing industry fare during the Trump presidency? That was the question posed to the panel at the AISTech 2017 Town Forum, held last week in Nashville, Tennessee. When asked to provide one word describing the sense of the American steel industry 110 days into the Trump presidency, the panelists answered as follows:
China has said it will cut 150 million to 200 million tons of capacity by 2020, but still has numerous projects coming online. It produced 72 million metric tons of steel in March 2017, up about 1.8% from the same month last year and a record amount. Chinese mills are in the process of adding $62 billion worth of new steel mill projects, according to Industrial Info's Metals & Minerals Business Intelligence Platform.
Wilbur Ross Poses National Security Question for Steel Leaders
U.S. Secretary of Commerce Wilbur Ross addressed the town hall via recorded video: "As you know, the Department of Commerce recently initiated a Section 232 investigation on the impact of steel imports on national economic and defense security. I would like to ask you how your company views its specific role in ensuring national security of our country; further, how has this role been impacted by imports in recent years?"
Ross continued: "Also, if steel imports continue to impose closure of U.S. facilities, how will that adversely impact national security? Finally, what is the most effective way to deal with global overcapacity?"
Nucor's Randy Skagen responded: "We support and are happy to see the initiation of Section 232. It's very important for the national security of the U.S., and not just from a military perspective. Nucor has invested over $8 billion since the great recession and over $3 billion in acquisitions. Some of those projects include manufacturing of military equipment, but that's not the whole issue for national security. National security is also about jobs and people. For every dollar spent, two dollars of other economic activity is created. For every job in the steel industry, there are seven supporting jobs created. The U.S. steel industry supports over 1 million jobs. National Security is also about infrastructure."
Skagen added, "When it comes to national security, do we want to depend on American steel in times of need, or do we want to depend on China, Russia, Korea or Turkey?"
When the question was posed should the U.S. leave North American Free Trade Agreement (NAFTA), the panel unanimously supported and saw the benefit of NAFTA, but said modifications are needed to improve the 25-year old program to bring it up to date.
Anand Sen, president of Tata Steel (Mumbai, India), questioned the panel via recorded video: "How are U.S. companies restructuring to meet steel demand of 2 billion tons? What technological changes are needed?"
U.S. Steel's Jim Dudek responded: "We are focused on the Carnegie Way transformation, which really is designed to take a look at how we approach our people, our processes and our products, with the end goal of being economically profitable. U.S. Steel's Asset Revitalization program is a $1 billion effort to improve quality, reliability and product capability at existing North American flat-rolled assets. Largely, these are small projects."
The panelists were optimistic regarding the market in 2017. Randy Skagen said that Nucor expects the residential construction market to grow 5% to 6% in 2017. The infrastructure bill, if it is implemented, probably would not impact the market until 2018. Automotive sales have tapered off after a record year in 2016 of 17.8 million vehicles, but are generally still strong. Rig counts have doubled, supporting demand for steel.
Generally, the panel viewed the potential rollback of the Corporate Average Fuel Economy (CAFE) standards, which have driven light-weighting initiatives in the automotive industry, as a non-factor. Other important topics that could affect the steel industry, including tax reform, regulatory reform and an aging workforce, were all addressed by the panel in an invigorating exchange.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
- Randy Skagen, vice president and general manager of Nucor Corporation (NYSE:NUE) (Charlotte, North Carolina): "Optimism"
- John Brett, president and chief executive officer for ArcelorMittal USA (NYSE:MT)(Chicago, Illinois): "Optimism Abounds"
- Barbara Smith, president and chief executive officer of Commercial Metals Company (NYSE:CMC)(Irving, Texas): "Hopeful for change"
- Jim Dudek, vice president Asset Revitalization & Manufacturing Excellence for United States Steel Corporation (U.S. Steel) (NYSE:X) (Pittsburgh, Pennsylvania): "Opportunity and encouraged"
- Ted Lyon, managing director of Hatch Associates (Mississauga, Ontario): "Relief"
China has said it will cut 150 million to 200 million tons of capacity by 2020, but still has numerous projects coming online. It produced 72 million metric tons of steel in March 2017, up about 1.8% from the same month last year and a record amount. Chinese mills are in the process of adding $62 billion worth of new steel mill projects, according to Industrial Info's Metals & Minerals Business Intelligence Platform.
Wilbur Ross Poses National Security Question for Steel Leaders
U.S. Secretary of Commerce Wilbur Ross addressed the town hall via recorded video: "As you know, the Department of Commerce recently initiated a Section 232 investigation on the impact of steel imports on national economic and defense security. I would like to ask you how your company views its specific role in ensuring national security of our country; further, how has this role been impacted by imports in recent years?"
Ross continued: "Also, if steel imports continue to impose closure of U.S. facilities, how will that adversely impact national security? Finally, what is the most effective way to deal with global overcapacity?"
Nucor's Randy Skagen responded: "We support and are happy to see the initiation of Section 232. It's very important for the national security of the U.S., and not just from a military perspective. Nucor has invested over $8 billion since the great recession and over $3 billion in acquisitions. Some of those projects include manufacturing of military equipment, but that's not the whole issue for national security. National security is also about jobs and people. For every dollar spent, two dollars of other economic activity is created. For every job in the steel industry, there are seven supporting jobs created. The U.S. steel industry supports over 1 million jobs. National Security is also about infrastructure."
Skagen added, "When it comes to national security, do we want to depend on American steel in times of need, or do we want to depend on China, Russia, Korea or Turkey?"
When the question was posed should the U.S. leave North American Free Trade Agreement (NAFTA), the panel unanimously supported and saw the benefit of NAFTA, but said modifications are needed to improve the 25-year old program to bring it up to date.
Anand Sen, president of Tata Steel (Mumbai, India), questioned the panel via recorded video: "How are U.S. companies restructuring to meet steel demand of 2 billion tons? What technological changes are needed?"
U.S. Steel's Jim Dudek responded: "We are focused on the Carnegie Way transformation, which really is designed to take a look at how we approach our people, our processes and our products, with the end goal of being economically profitable. U.S. Steel's Asset Revitalization program is a $1 billion effort to improve quality, reliability and product capability at existing North American flat-rolled assets. Largely, these are small projects."
The panelists were optimistic regarding the market in 2017. Randy Skagen said that Nucor expects the residential construction market to grow 5% to 6% in 2017. The infrastructure bill, if it is implemented, probably would not impact the market until 2018. Automotive sales have tapered off after a record year in 2016 of 17.8 million vehicles, but are generally still strong. Rig counts have doubled, supporting demand for steel.
Generally, the panel viewed the potential rollback of the Corporate Average Fuel Economy (CAFE) standards, which have driven light-weighting initiatives in the automotive industry, as a non-factor. Other important topics that could affect the steel industry, including tax reform, regulatory reform and an aging workforce, were all addressed by the panel in an invigorating exchange.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
