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Markets on the Upswing: CRU 2014 North American Steel Conference
11/26/2014 - Each year, CRU holds its North American Steel Conference in Chicago, Ill., USA, featuring the latest updates from new and established market players, market and pricing forecasts, and the latest on the international trading front.
Attendees of the 2014 conference, held 10–12 November, heard updates from Big River Steel and USS-POSCO Industries, the latest on the U.S. and Chinese steel markets from CRU analysts, and presentations covering an array of topics, including steel futures; raw materials; and the automotive, construction, energy, plate, pipe and logistics markets.
On 10 November, a workshop was held for conference attendees, covering steelmaking cost competitiveness, technology competitiveness, non-cost competitiveness drivers, economic drivers and trade competition. An opportunity for networking was held at the opening reception later that evening.
On 11 November, Mark Bula, chief commercial officer of Big River Steel, opened the conference with a keynote address explaining why his company is building a new steel mill in the U.S. He provided an update and overview of the project in Arkansas, of which SMS is the main equipment supplier. Big River plans to produce hot, cold and galvanized sheet products in phase 1, and then expand into grain-oriented and non-grain-oriented electrical steels in phase 2. Bula admitted that making advanced high-strength steels and electrical steels will not be easy, so Big River plans to invest heavily in R&D and product application sciences.
Josh Spoores, CRU’s principal consultant — steel, provided CRU’s view on the flat rolled steel markets, noting very positive demand in the market this year. Future arrivals of sheet imports are set to remain uncomfortably high, he said, as there is little price risk for importing steel into the U.S. right now, with U.S. price premiums excessively high.
Another keynote was given by Michael Obermire, director of sales for USS-POSCO Industries, speaking on the West Coast steel market. The view of the 2015 marketplace in the west is encouraging, he said, predicting improvement in demand across all segments going into 2015 and 2016.
CRU’s China consultant, Kevin Bai, addressed the current situation in the Chinese steel industry, noting problems of severe air pollution and excessive capacity, and predicting restructuring and consolidation of the industry, and a focus on stronger steel exports and value-added products.
Kunal Shah, senior consultant at Roland Berger Strategy Consultants, challenged conventional wisdom in steel, providing a new approach for an old industry. He said steel companies need to rethink profit and loss, capacity utilization and commoditization, and focus on being in the business of making money, not just in the business of making steel.
To finish off the first day of the conference, panel discussions explored current issues in international markets and trade, futures and pricing, and the outlook for steelmaking raw materials including coal, iron ore and zinc.
Day two of the conference focused on the steel end-use markets. For the automotive sector, Richard Hilgert of Morningstar Inc. said conditions are positive for continued demand recovery in 2015. On construction, Kermit Baker from the American Institute of Architects noted that the recovery has been painfully slow, with the non-residential sector still in its early days of recovery. A CRU consultant predicted that U.S. long product production growth will soon begin to keep pace with demand growth, noting that the premium which U.S. long product prices have over global prices will also start to narrow. A presentation from Chris Ovsenar of SSAB revealed a positive outlook for the plate market, with demand driven by the energy, storage tank and rail car markets. Paul Vivian of the Preston Publishing Co. noted concern about what will happen when new capacities of OCTG come on-line over the next few years. He predicted continued trade cases in the pipe and tube sector. Shale gas will continue to be a core resource for many years to come, according to a Macquarie Bank analyst, who forecasted strong gas production growth to remain a dominant future in the marketplace.
CRU’s 2015 North American Steel Conference will be held in Chicago, 25–27 October 2015. For more information, visit www.crugroup.com.
Article written by Laura Miller, AIST’s industry news editor.
On 10 November, a workshop was held for conference attendees, covering steelmaking cost competitiveness, technology competitiveness, non-cost competitiveness drivers, economic drivers and trade competition. An opportunity for networking was held at the opening reception later that evening.
On 11 November, Mark Bula, chief commercial officer of Big River Steel, opened the conference with a keynote address explaining why his company is building a new steel mill in the U.S. He provided an update and overview of the project in Arkansas, of which SMS is the main equipment supplier. Big River plans to produce hot, cold and galvanized sheet products in phase 1, and then expand into grain-oriented and non-grain-oriented electrical steels in phase 2. Bula admitted that making advanced high-strength steels and electrical steels will not be easy, so Big River plans to invest heavily in R&D and product application sciences.
Josh Spoores, CRU’s principal consultant — steel, provided CRU’s view on the flat rolled steel markets, noting very positive demand in the market this year. Future arrivals of sheet imports are set to remain uncomfortably high, he said, as there is little price risk for importing steel into the U.S. right now, with U.S. price premiums excessively high.
Another keynote was given by Michael Obermire, director of sales for USS-POSCO Industries, speaking on the West Coast steel market. The view of the 2015 marketplace in the west is encouraging, he said, predicting improvement in demand across all segments going into 2015 and 2016.
CRU’s China consultant, Kevin Bai, addressed the current situation in the Chinese steel industry, noting problems of severe air pollution and excessive capacity, and predicting restructuring and consolidation of the industry, and a focus on stronger steel exports and value-added products.
Kunal Shah, senior consultant at Roland Berger Strategy Consultants, challenged conventional wisdom in steel, providing a new approach for an old industry. He said steel companies need to rethink profit and loss, capacity utilization and commoditization, and focus on being in the business of making money, not just in the business of making steel.
To finish off the first day of the conference, panel discussions explored current issues in international markets and trade, futures and pricing, and the outlook for steelmaking raw materials including coal, iron ore and zinc.
Day two of the conference focused on the steel end-use markets. For the automotive sector, Richard Hilgert of Morningstar Inc. said conditions are positive for continued demand recovery in 2015. On construction, Kermit Baker from the American Institute of Architects noted that the recovery has been painfully slow, with the non-residential sector still in its early days of recovery. A CRU consultant predicted that U.S. long product production growth will soon begin to keep pace with demand growth, noting that the premium which U.S. long product prices have over global prices will also start to narrow. A presentation from Chris Ovsenar of SSAB revealed a positive outlook for the plate market, with demand driven by the energy, storage tank and rail car markets. Paul Vivian of the Preston Publishing Co. noted concern about what will happen when new capacities of OCTG come on-line over the next few years. He predicted continued trade cases in the pipe and tube sector. Shale gas will continue to be a core resource for many years to come, according to a Macquarie Bank analyst, who forecasted strong gas production growth to remain a dominant future in the marketplace.
CRU’s 2015 North American Steel Conference will be held in Chicago, 25–27 October 2015. For more information, visit www.crugroup.com.
Article written by Laura Miller, AIST’s industry news editor.
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