American Steel Companies Optimistic About Industry's Future
Using words such as “recovery,” “strategic” and “exciting” to describe the current state of U.S. steelmaking — the COVID-19 pandemic notwithstanding — the group painted an upbeat portrait of an industry that is investing strategically and readying itself for the future.
“I don’t think I’ve ever been more excited for the industry or for SDI ourselves. In all honesty, we’re an industry in incredible transition. It’s a new era for American steel,” said Steel Dynamics Inc. chief executive Mark Millett, who spoke alongside his peers from Nucor Corp., Big River Steel, United States Steel Corporation and Cleveland-Cliffs Inc. during the Town Hall Forum.
The Town Hall Forum is an annual “fireside chat” with the industry’s top decision-makers. It is traditionally held during AISTech, AIST’s annual conference and exposition, but with the cancellation of AISTech 2020, the association recast the Town Hall Forum as an online, stand-alone event.
It also coincidentally followed Monday’s blockbuster announcement that Cleveland-Cliffs would acquire substantially all of ArcelorMittal USA for US$1.4 billion in cash and stock, a move that will reduce the number of U.S. blast furnace operators to two and open a potential path to further capacity rationalization within the domestic industry.
Cleveland-Cliffs chairman and chief executive Lourenco Goncalves, who participated in this year’s Town Hall Forum, could not yet speak to those plans, but he noted that his company is mere weeks away from another industry-changing event, the start of its hot briquetted iron (HBI) plant in Toledo, Ohio, USA.
The output from that plant will help make steel mills more competitive, and cleaner, he said.
“With the introduction of HBI, we’re going to have, by far, the lowest coke rate in the entire world.”
Cleveland-Cliffs isn't the only steelmaker with a major project underway. In fact, each of the companies represented in this year’s Town Hall Forum have at least one major capital project in progress or nearing completion.
Big River Steel, for example, is nearing completion of the Phase II expansion of its Arkansas sheet mill. Chief executive David Stickler said the project is set for completion on 18 November.
“My five favorite words on any large capital project are ‘ahead of schedule and under-budget.’ Sitting here today, I’m proud to say these are the words I will be saying (to the board of directors) on 18 November.”
Also, Nucor has nearly US$4 billion in projects on its books, including its US$1.3 billion plate mill in Kentucky. U. S. Steel is nearing completion of a new electric furnace in Alabama, and Steel Dynamics is progressing on what is the single largest investment in its history, the construction of its US$1.9 billion Sinton, Texas, USA, sheet mill.
The projects have prompted much recent debate as to whether the U.S. industry is overbuilding and, by extension, setting itself up for a period of excess supply and low prices. One securities analyst has even trademarked a phrase, Steelmageddon, to describe the scenario.
But Millett on Wednesday pushed back against those fears.
“We are rationalizing and consolidating our industry,” he said, pointing to the Cleveland-Cliffs announcement. “We have a relatively new, assertive leadership that isn't burdened by the legacy of the past. They’re looking to improve their businesses. It’s a pretty exciting time,” he said.
Look for additional coverage of the Virtual Town Hall Forum in an upcoming issue of AIST's Iron & Steel Technology.