Steel Products

Stelco's Alan Kestenbaum Gets Candid with SMU
Written by Becca Moczygemba
August 27, 2022
Stelco Inc. CEO Alan Kestenbaum got candid with Steel Market Update’s (SMU) Michael Cowden during the third fireside chat of the 2022 SMU Steel Summit conference. This year was Kestenbaum’s first time speaking at the Summit.
Forecasting For the Near Future
Though we’ve already seen prices skyrocket and dip back down, Kestenbaum clued us in on where to watch to get a better grasp on where prices are headed. “Demand is decent and is holding, but there is a lot of supply. When considering the impact of cost, the most important thing to look at is scrap; scrap is a great predictor. EAF producers drive price, they buy scrap and hold conversion prices,” he said.
As prices continue to drop and everyone wonders where the floor is, Kestenbaum is confident we will see increases soon. He noted the slowdown in industrial production and the imminent increase within the next 2-3 months. Nucor and Cleveland-Cliffs seem to have gotten a head start, but as Kestenbaum pointed out, those increases are symptomatic of their own costs.
On the same hand, he said European mills are struggling due to rising electricity costs, with some shutting their doors. With a worldwide supply shrink and a necessity for raw materials, costs are adding up quickly, including labor costs.
Labor Negotiations
The Canadian flat-rolled steelmaker recently renewed its collective bargaining agreements with its union employees and avoided a strike. Situations like this may be inevitable, but how they’re handled is what matters.
Kestenbaum expressed that under circumstances like that, it’s essential to keep everything out of the press. “They are members of the family. Things have radically changed. The biggest change is people are being directly impacted by inflation. You have to understand where the anger comes from,” he said.
“Workers have choices, especially for skills that are in short supply. They don’t have to work in a steel mill,” added Kestenbaum.
He also expressed the immense pride individuals in the steel industry have, and that he would not be surprised if there were some stoppages here and there due to negotiations.
Long-Term Plans
Like everyone in the industry right now, Stelco is looking to take advantage of immediate opportunities, but that doesn’t mean sacrificing strategy.
With Evraz being up for grabs, it could be an option for the Stelco brand. Kestenbaum, however, does not envision going in that direction. “No, it’s not a great fit. They’re a downstream producer, and it historically hasn’t been a great business. Unless I can add value and there are synergies, I can’t see going in that direction,” said Kestenbaum.
“It’s an EAF, that’s not the route we typically go, it doesn’t fit Stelco’s goals,” he added.
Whatever direction Stelco decides to go, it appears remaining true to self is integral to the company’s success.
By Becca Moczygemba, Becca@SteelMarketUpdate.com

Becca Moczygemba
Read more from Becca MoczygembaLatest in Steel Products

Global steel production falls to near two-year low in September
World crude steel output declined for the fourth-consecutive month in September, slipping 3% from August to an estimated 141.8 million metric tons (mt), according to the latest figures from the World Steel Association (worldsteel).

Market sources say regional activity is dictating plate demand
Demand for plate on the spot market remains soft by comparison to years past. However, this week regional demand variations grew more pronounced.

Battery #14 at USS Clairton to restart on Oct. 23
U.S. Steel plans to restart battery #14 at the Clairton Coke Works plant on Thursday, ending its idling period. Battery #14 was hot idled following the explosion at coke oven batteries 13 and 14 on Aug. 11. The Mon Valley Works Clairton plant has completed the necessary repairs. It expects the battery to restart during […]

Findings from Clairton investigations prompt USS to revise safety protocols
U.S. Steel (USS) said it’s been strengthening its safety protocols as findings from investigations into the causes of a deadly explosion at USS Clairton Coke Works on Aug. 11 materialize. The Pittsburgh, Pa.-headquartered steel producer stated that an independent investigation conducted by the Environmental Design & Testing Corp (EDT) produced findings aligned with the company’s […]

Active rig counts rise in US and Canada
Drilling activity increased in both the US and Canada last week, according to the latest oil and gas rig count data released by Baker Hughes.