On Monday afternoon executives from the American Iron and Steel
Institute provided an update on the state of the steel industry.
After Thomas Gibson, president and CEO of AISI, welcomed everyone,
Dan DiMicco, AISI chairman and CEO of Nucor Corp., began with the
latest industry data.
DiMicco started off by saying that they are seeing positive
signs that the economy continues on a slow but steady recovery,
with steel shipments at approximately 22 million tons in the first
quarter of 2011. With an expectation to see a strengthening of
demand for the second quarter and the second half of the year, the
estimate is for a shipment of 95 million tons in 2011, an increase
of roughly 14 percent over the 83 million tons the industry shipped
in 2010. DiMicco also mentioned that domestic capacity utilization
rose to 75 percent in the first quarter, a five percent improvement
from the first week of January, similar to the positive improvement
that was experienced in the first quarter of 2010.
DiMicco reported that finished import market share is currently
at 21 percent, the same level as in 2009 and 2010. Yet the most
recent steel import monitoring and analysis data from the March
recorded a sharp rise in finished imports, bringing it to the
highest level since January 2009.
In terms of AISI's policy priorities, safety remains a top
priority for the industry, DiMicco said. AISI also supports a
strong pro-manufacturing strategy that will assist U.S.
manufacturers in competing in today's global economy. With a
primary focus and support to see the government avoid excess
regulation that reduces industrial competitiveness, the need to
keep trade laws strong and strictly enforced remains important.
Additional policy priorities include addressing China's currency
manipulation and encouraging the development of energy efficiency
and breakthrough technologies.
Mario Longhi, AISI director and president and CEO of Gerdau
Ameristeel Corp., offered the AISI's energy policy perspective
saying that the steel industry offers both opportunities and
challenges in regards to energy. Presently the energy sector is a
strong source of steel demand, and it is expected to remain strong
throughout the decade. All areas of energy--oil pipelines and
offshore drilling, natural gas extraction and transport, clean
fuel, nuclear power, wind, solar--require large amounts of steel.
Representing 7 percent of steel demand and along with the
continuing resurgence in the automotive sector, the energy sector
is an important market, Longhi said.
Longi continued, saying that natural gas is a strategic domestic
source that can help drive economic recovery. Government policy
should support the further development of natural gas resources and
the climate and energy policy must take into account international
competitors and how the cost of compliance with government policy
can alter the competitive balance in the marketplace. Longi went on
to say that Congress must act to prevent the misguided plan of the
EPA's regulation of greenhouse gases from undermining efforts to
promote economic growth and job creation.
While the U.S. steel industry has achieved a 30 percent
reduction in energy intensity per time of steel produced since
1990, making it a global leader as compared to steel industries in
other nations, the challenge is to continue to make further
reductions through the use of completely new technologies, which
the U.S. lags far behind. Longi said that government incentives to
further energy efficiency goals should be part of an effective
natural energy policy.
John Surma, AISI director and Chairman and CEO of the United
States Steel Corp., said that to strengthen the economy and
competitiveness, the manufacturing sector needs to grow. The
government's approach to trade policy is critical to AISI's ability
to support this goal. Priorities are to withstand rules-based
trade, keeping strong the trade laws against unfair trade and
injurious surges, strictly enforcing trade agreements and combating
Chinese currency manipulation and other protectionist foreign
government policies. Surma said that the AISI continues to urge
Congress to pass legislation to address China's currency
undervaluation, by passing the Currency Reform for Fair Trade
Act.
Regulo Salinas, AISI vice chairman and vice president of Ternium
Mexico, reported that the NAFTA region is also experiencing a slow
but steady recovery. In Mexico, economic growth is expected to be
in the range of 4 to 5 percent this year. While the automotive
market has been a solid source of steel demand, construction
continues to lack throughout the NAFTA region. A NAFTA-wide
infrastructure conference is scheduled to be held in Washington,
D.C., on June 7.
Following the reports from the executives, a short
question-and-answer session was held.