First Annual SteelOrbis Steel Trade Conference & Trading Workshop a great success

Smiling and satisfied faces were bountiful at the closing of SteelOrbis' first event in the US, making it clear that this gathering was the start of a yearly tradition for many steel professionals to meet, network, learn and enjoy each others' company in sunny San Diego.

SteelOrbis’ 1st Annual Steel Trade Conference & Trading Workshop in association with IREPAS was held from July 10 through 12 at the Omni Hotel in San Diego, marking both SteelOrbis' and IREPAS' first conference held in North America.

SteelOrbis kicked off the first day of the Trade Conference on Thursday, July 10 with an optional Trading Workshop which gathered an array of attendees from a variety of segments of the steel sector, all of whom aimed to learn something about the steel trade that they didn’t know before.

Subjects covered at this one-of-a-kind workshop included: Steelmaking and Steel Products, presented by SteelOrbis Americas’ General Manager, Murat Askin; Steel Trading, presented by Bernd Neuenkirchen, Coutinho & Ferrostaal Inc, James Perdiue and Trey Duoto of Duferco Steel.

Some highlights included the presentation of Frederick P. Waite and Kimberly Young of Vorys, Sater, Seymore Pease LLP, which educated workshop participants on all of  the various ins and outs of steel trade legislation, as well as the presentation from The Mid-Ship Group representatives, Bob Diamond, Anton Posner, and Brian Kostef, which provided attendees with detailed information on the world of steel shipping and logistics.

The final presenter of the workshop, Paul Shellman of NYMEX, shared his company’s perspective on one of the most controversial topics in the steel market: steel futures. Actually, the majority of Mr. Shellman’s time at the podium was spent fielding challenging questions that the audience had on this hotly contested issue.

Aside from gaining knowledge from the informative presentations, workshop attendees were also encouraged to learn from one another, as each attendee was given the opportunity to “take the mic” and briefly introduce themselves, share what they wished to learn from the workshop, and share the area of their own expertise that they could answer questions about later. Lively question and answer sessions were also held following each presentation, giving workshop attendees ample time to interact with the speakers and with each other.

At the end of the workshop, participants were tested on their steel trade knowledge with an open book quiz. The top performers’ test results were announced at the Gala Dinner on Friday. Top honors went to Dale Derishebourg, Tree Island Industries, and Greg Rojik, New Steel Distributors, both of whom answered all 24 questions correctly.

After the workshop, attendees got to relax and network at the Welcome Cocktail reception, sponsored by Port of San Diego.

On Friday and Saturday, attendees enjoyed many informative and discussion-provoking presentations during the conference’s General Session.

Topics discussed during the two-day session included: the economy, trade legislation, market trends for various products, steel futures, and steel logistics. Although not all presenters shared the same point of view on every issue, particularly not on controversial topics like government intervention in international steel trade and the role that financial futures should play in the steel market, the one thing that everyone seemed to agree upon is that the steel market faces significant challenges going forward.

Session speakers included: Wilfried von Bulow of MAN Ferrostaal AG; David Phelps, President of the American Iron and Steel Institute; Thomas Danjczek, President of Steel Manufacturers Association; John Foster, COO of Coutinho & Ferrostaal Inc.; Henry Pankratz, President of Coutinho and Ferrostaal Ltd., Canada; Bill Upton, CEO of Vulcan Steel Products; Mark Hennings, President of Harris Supply Solutions; JR Meyers, CEO of Totem Steel; Alan Gin, Professor and Economist at the University of San Diego; Tom Solomon, Founder & President of Marian Shipping Ltd. as well as executives at MacSteel International USA Corp. (Tom Keller, Executive VP), Ancon Transportation (Carole Wink, Senior VP), the London Metal Exchange (Lotta Ulfsdotter, Steel Market Executive), and Tamco Steel (Andrew Martin, VP of sales and marketing).

Two issues which seemed to take front and center in many of the speakers’ and attendees’ minds were the struggling US economy and the skyrocketing costs of everything from raw materials and oil, to labor and insurance.

Regarding the US economy, Professor Alan Gin delivered a mostly optimistic view, telling the audience that although the US’ GDP grew by only a paltry 1 percent in the first quarter, he believes that the weak economy will help curb inflation, and he in fact expects to see some pick-up in the economy by the second half of 2008, followed by some solid growth in 2009. He expects that housing starts may start to rise again after Q3, and that interest rates may also start trend upwards again by year-end. Mr. Gin also pointed out that the falling value of the US dollar will keep US exports more competitive in other markets.

Mr. Wilfried von Bulow struck a slightly different note in his presentation; Mr. von Bulow said that while the US economy will be helped by the energy boom and the renewal of the country’s crumbling infrastructure, the dollar depreciation will add to inflationary pressures, and that raising interest rates would be too risky of a move for the Fed to make in such a shaky economy. Mr. von Bulow predicts that for at least the rest of the year, US steel prices will continue to rise, but that the economy will only grow at an anemic pace.

As regards the seemingly relentless rise of the costs for both steelmaking raw materials and steel transportation, Mr. Tom Danjczek of the Steel Manufacturers’ association predicted in his presentation, "North American Steel Industry Challenges," that raw material costs will continue to surge in 2009 and steel prices will continue rising as a result. Mr. Tom Keller of MacSteel International USA also predicted that scrap will continue to rise, for at least six months, and that raw material and other costs will continue to be passed along to customers.

Not all of the speakers agreed, however, that customers will continue paying for the rising costs. JR Meyers of Totem Steel expressed in his frank, straightforward presentation on his view from the flat rolled trading side of the business, that prices are rising "too much, too fast", and that the end-users may not be able to bear the brunt of the rising prices much longer. Carole Wink of Ancon Transportation discussed the effect of high fuel prices on the steel transportation sector, which is significant indeed as many trucking companies are going bankrupt because of it.

Other conference highlights on Friday and Saturday included a cruise of the San Diego Port and Bay as well as a Polynesian-themed reception and Gala Dinner, complete with fire dancers and live music.

Conference sponsors included The Unified Port of San Diego, The MID-SHIP Group, Ancon Transportation, and the Breakbulk Transportation Conference & Exhibition.