Construction, already suffering from a labor shortage, is getting hammered by staffing issues brought on by the highly contagious COVID-19 variant. Nearly 8.8 million construction workers have been sick since December.
This week, I was able to attend the SMU Steel Summit in Atlanta, GA. This conference is attended by over 1,000 individuals, primarily from the flat-rolled side of the steel industry. However, some of the same producers in the long products category are also at the forefront of the group.
From some of the presentations, there are some very interesting and useful nuggets of information that reflect the kinds of questions that I frequently get as I visit with independent fabricators and rebar industry supplier-partners.
So, I thought I would share some of these pieces of industry insight with you, not in any particular order…
On the topic of Section 232 tariffs
Quick Facts
- From Thomas Gibson, AISI
- Total steel shipments were 4.8% higher in 2018 than 2017, and are up 1.9% in first half of 2019 (vs 2017).
- Steel imports have decreased 45% since Sec. 232 took effect. However, imports of finished goods (not subject to Sec. 232) remain high, however below 20% (according to the U.S. Census Bureau).
- Raw steelmaking capacity utilization peaked at over 82% in Q1-2019, and remains just above 80% thru the end of Q2-2019.
Attendee Survey Questions
“Have you moved foreign steel purchases made in 2018 to domestic steel mills during 2019?” (379 responses)
- Yes – 55%
- No – 45%
“Have the Section 232 tariffs on steel & aluminum hurt or helped your business?” (422 responses)
- Hurt – 61%
- Helped – 39%
“Would you like to see the Section 232 tariffs removed for all countries?” (430 responses)
- Yes – 45%
- No – 55%
On the topic of (new) mill capacity
Quick Facts
- Steel mill employment is nearly 9,000 below the peak of December 2014. However, imports are only one part of the equation. Newer, modern mill capacity requires far fewer employees by leveraging newer technology and automation.
“Will the new mill capacity over the next two years have any impact on steel prices?” (422 responses)
- It will drive prices higher – 3%
- It will drive prices lower – 84%
- No impact at all – 13%
On the topic of general business conditions
Quick Facts
- Economic growth (in terms of real GDP) is decelerating, but still positive, forecast to hit +2.6% for 2019 (down from 2.9% in 2018, a year generally considered to be an anomaly).
- S. steel shipments are up 1.9% for the first half of 2019, over the same period in 2018.
“How is your company forecasting business conditions in 2020 compared to 2019?” (434 responses)
- Better – 26%
- The same – 51%
- Worse – 23%
About Steel Market Update
Steel Market Update, part of the CRU steel research analyst group, provides important analysis and evaluation of the steel industry, with a particular emphasis on the flat rolled steel markets, both domestic and international. The SMU Steel Summit is an annual 3-day event that showcases some of the industry’s leading voices among producers, buyers, distributors and brokers. Click here to visit SMU’s website.
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