Final Thoughts

Final thoughts

Written by Ethan Bernard

May 19, 2024

Sometimes, even in a bit of chaos, there is complacency. And it seems that since March 2020, “a bit of chaos” has been the order of the day. That means in the world at large, and in steel specifically. Since 2020, we’ve been lurching from crisis to crisis. Whether it’s a pandemic, or war in Ukraine, and now in the Middle East, a company’s job is to manage risk and always chart a course with profitability in mind.

Lourenco Goncalves, Cleveland-Cliffs’ chairman, president, and CEO, raised the bar a bit while addressing the American Iron and Steel Institute’s (AISI’s) annual general meeting in Washington on Tuesday. He is also currently chairman of AISI.

Looking at the current geopolitical situation in hotspots in Asia, Europe, and the Middle East, he compared the situation to 1930-40. “You connect the dots. We are at war already,” he said.

That really got people’s attention.

“And at this point in time, it’s time for the United States to really understand our role in the world. And by understanding our role in the world, understanding the role of steel in a situation like that,” he added.

Immediately, this brought to mind images of Liberty Ships and Rosie the Riveter, a US economy that got on a war footing and used extensive manufacturing as one of the keys to victory in World War II.

I was able to ask Goncalves about this further at a press conference following the remarks. That is, if the entire US economy could soon change, and there could be a massive uptick in demand for steel, as there was in the US in WWII.

“Yes, absolutely… I agree with your conclusion and your assessment,” he said. Unfortunately, that was something I would’ve rather been wrong about.

“I believe in the 1930-40 time frame, the world was repositioned, countries, that is in terms of who was friends with whom,” he added.

He went on to give the example of how a country like the Soviet Union was our ally in WWII but soon became our enemy afterward. Germany (West Germany until reunification), in contrast, soon became an American ally.

The world is much more interconnected than it was in 1939. Technology, in the sense of things like the Internet, AI, and intercontinental ballistic missiles, means 21st-century conflicts could look like a lot different than mid-20th-century conflicts.

One thing that hasn’t changed is the need for steel. Whatever the next month, six months, or five years bring, steel will be crucial for our nation’s future. The question is, with the future so uncertain, what added steps do we need to take to prepare?

Ethan Bernard

Ethan Bernard is managing editor for Steel Market Update. He previously worked for American Metal Market as a copy editor in the New York office for two years, starting in 2008. Later, he copy edited AMM’s monthly magazine on a freelance basis from 2015 until 2017. With experience in financial copywriting and textbook publishing, he holds a BA in Comparative Literature from UC Berkeley, and an MFA. in Creative Writing from New York University. He can be reached at ethan@steelmarketupdate.com or 724-759-7871.

Read more from Ethan Bernard

Latest in Final Thoughts

Final Thoughts

Even before the news about Mexico, I didn’t want to overstate the magnitude of the change in momentum. As far as we could tell, there hadn’t been a frenzy of new ordering following President Trump’s announcement of 50% Section 232 tariffs. But higher tariffs had unquestionably raised prices for imports, which typically provide the floor for domestic pricing. We’d heard, for example, that prices below $800 per short ton for hot-rolled (HR) coil were gone from the domestic market – even for larger buyers.