SMU Data and Models

Steel Summit Poll Results: More of the Same?

Written by David Schollaert

Once again, we’ve kept SMU’s Steel Summit conference tradition alive – gauging the mood in the room with our annual polling questions. As we’ve done for the past four years, we’ve sought to measure how those in attendance see the steel market developing over the next year.

This year, the 13th annual edition of our Summit, we polled more than 1,450 attendees about where prices and demand would be come August 2024.

Though certainly not a scientific or analytical discovery process for forecasting purposes, our collective track record, average at best, does serve as an indication of industry sentiment. And while in 2020 and 2021, collectively, we proved to be less than stellar at predicting – due to a Black Swan event here or there – we saw solid improvement in 2022.

In all, you could easily make a case that the Steel Summits in 2020 and 2021 were marked by historically opposite market dynamics and sentiment. If 2020 marked peak bearishness, 2021 was peak bullishness.

And while the overall pricing consensus was off by just about $50 per ton from 2022’s poll vs. 2023 actual results, this year’s results seem to show that polls, in general, are more psychological than scientific. While we all agree prices will ebb and flow over a 12-month period, our best speculative guess is that prices will largely mirror each other year over year (see Figure 1).

For the past four years, we’ve ultimately speculated that today’s prices are most likely next year’s prices. What we’re seeing today we’ll see 12 months from now – save for the unexpected curveball.

In 2020 hot-rolled coil (HRC) prices were averaging $485 per ton. The consensus result was that prices would be at or below $400 per ton. We were just $1,515-per-ton off that mark. In 2021, HRC tags were $1,915 per ton, and 51% of Steel Summit’s delegates believed prices would hover around $1,200 per ton on average 12 months later. Results were off by roughly $450 per ton.

I digress. Let’s get back to the polls. So, without further ado, here are 2023’s Steel Summit poll results:

With a nearly 50% response rate from the 1,450-plus registered attendees at the 2023 SMU Steel Summit, 49% anticipate HRC prices to range between $600-800 per ton this time next year. Another 39% of attendees expect prices to be slightly higher.

In all, nearly 90% of this year’s Summit poll participants expect HRC prices to hover around $800 per ton on average, varying just $100-150 per ton from where they are now.

There were those on either end of the spectrum as well. Roughly 9% are bullish and see prices reaching or exceeding the $1,000-per-ton mark, while less than 5% are bearish and see prices coming down below the $600-per-ton mark by the time we meet again next year.

Not surprisingly – based on the pricing poll results – 40% of those who responded, expected demand (Figure 2) to be flat/similar or up by less than 10% come next August.

A solid 20%, though, do expect demand to be down a bit from where it is today. Overall, more than two-thirds think demand will at best flat or up by the time August 2024 comes around.

I guess only time will tell if our collective track record in predicting HRC prices and steel demand has improved from wild Black Swan-induced swings, or if our present sentiment ultimately dictates speculative sense when it comes to future sentiment. But rest assured, we’ll be certain to compare our most recent results with you versus next year’s reality.

As extra credit, we asked the audience to tell us whether they believed the United Autoworkers (UAW) union would strike against Detroit’s Big Three – Ford, General Motors, and Stellantis – next month. A little more than two-thirds of those at Steel Summit believed a strike is imminent, with the balance believing a deal would be reached before the current contract expires on Sept. 14.

Speaking of next year, mark your calendars for the industry’s premier event of 2024. Plans are already underway for the 14th annual edition of the SMU Steel Summit Conference. It’s slated for Aug. 26-28 at the Georgia International Convention Center in Atlanta, just as it’s been for the past half dozen years.

To see us sooner, you can always join us and register for the 35th annual Tampa Steel Conference. This industry event is a partnership between Steel Market Update and the Port Tampa Bay. It will be held between Jan. 28-30, 2024, in Tampa, Fla. It already has the billing as the second-best conference in our industry.

David Schollaert

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