Final Thoughts: Highlights from this year's SMU Steel Summit

I decided I’d try to recap what we learned in the three days we gathered in Atlanta. But it’s almost too much to put into one column. So, let’s just say these are some quotes and themes that stood out to me. (No doubt I’m missing a few.)

Stronger for (even) longer 

For a while, the consensus was that the market might peak in September and then slide into Q4. That’s no longer the consensus among respondents to our flat-rolled steel market surveys. Nearly 60% don’t see a peak until Q4 or later. And that was the consensus among some of you along the sidelines of the event as well.

A lot of that is driven by tight supply. Jodi Parnell, president and CEO of O’Neal Steel, summed it up nicely: “I don’t remember ever seeing it this tight for this long. Even Covid didn’t feel like this,” she said, seemingly referring to the late 2020-2021 steel boom.

And of course it’s been clear for a while now that it’s not just a supply squeeze. But better demand is also a big reason why we’ve seen prices moving steadily upward for the last 10 months.

CRU Research Principal Josh Spoores predicted US steel demand would grow by roughly 2.2 million short tons next year—enough to absorb tons from Nucor’s new sheet mill in West Virginia as it continues to ramp up. But if imports continue to rise, increased supply might slightly outstrip that growth, he said.

It’s worth noting here both speakers and conference attendees told me they were buying imports, even if reluctantly. “All things being equal, we’d prefer not to import,” said Ryerson President and CEO Eddie Lehner. But, he added, the company has to service customers and at the same time “reckon with reality, where we have a record number of past-due tons” from domestic mills.

But while supply and demand might balance out later this year or early next, it remains a sellers’ market. And both speakers and conference attendees said pricing power would give mills leverage in contract negotiations (some of which have started early). That power is likely to be reflected in narrower contract discounts as well as narrower min-max volume ranges.

What a change from Steel Summit last year, when sentiment among conference attendees was bearish. Oregon Steel Mills (OSM) President Doyle Hopper put it well. He recalled mills “chasing customers around” at Summit last year. This year, it’s the opposite. Mills are “getting chased down from every avenue.”

Canada announces retaliation, while our trade panel is live 

The big news heading into the conference was trade talks between the US and Canada collapsing. I wrote in Final Thoughts last week that when it seemed like a deal might be imminent, I wouldn’t wager on the matter. After all, any deal would require approval by President Trump, who remains predictably unpredictable.

Each side blamed the other for the talks falling apart. (As best as I can tell from what I’ve heard and what’s been publicly reported is divisions within the administration played just as much of a role as animosity between Washington and Ottawa.) Canadian Prime Minister Mark Carney late last week pledged that Canada would retaliate “dollar for dollar” against the US tariffs.

We learned, while our trade panel was live on stage, that Canada would indeed retaliate. As far as metals go, that means a 50% tariff on US exports of steel and aluminum. They’ll go into effect on Sept. 8, which in theory leaves time for a deal. But talking to some of you along the sidelines of the event, it seemed like, while there were some hopes for a last-minute accord, consensus was that a deal was unlikely until after fall elections in Canada and after midterms in the US.

Steel Manufacturers Association (SMA) President and CEO Philip K. Bell, on learning the news of Canada’s retaliation on stage, reacted. “That’s really unfortunate,” he said. “Because let’s not get it twisted. Sure, we sell steel to Canada all the time. But Canada needs to export their steel to the US. We don’t need to export our steel up there.”

Zekelman’s zingers, and more tariffs?

A host of domestic steel industry voices called for maintaining or expanding Section 232 tariffs. When it comes to the latter possibility, I took note when Barry Zekelman, chairman and CEO of Zekelman Industries, said he would like to see product-specific Section 232s—perhaps targeting imports of the steel tubing his company makes.

That’s worth paying attention to. Zekelman said he wanted to see changes to downstream Section 232 tariffs at the Tampa Steel Conference in February. And in April, we saw pretty much what Zekelman suggested become official policy.

Given how uncanny the development with the downstream 232 was, I asked Zekelman whether he had President Trump’s cell. Zekelman: “No. I’m sure he could get me if he wanted to, but I can’t get him.” What would happen if Trump did call? “I think I’d pick up pretty quick.”

And does Zekelman, who is Canadian, have the Batphone to Canadian Prime Minister Mark Carney? His response: “Well, no, I don’t think he’d want to talk to me.” This could be modesty. It could also be because Zekelman assessed Canada’s prospects of Ottawa winning a trade war against Washington: “I think Canada’s got to be prepared to walk away with a black eye and not get their head caved in.”

Zekelman also had a pithy assessment of the potential for trade action against imports from South Korea: “Korea is in for it”; of electric-vehicle mandates: “All that (stuff) is stupid”; and of a former competitor: “Guess what? Who owns it now? (Bleeping) me!” (Editor’s note: Zekelman did not actually say “stuff” or “bleeping”.)

Despite sometimes harsh rhetoric, many speakers voiced their support for an eventual “Fortress North America” trade policy. And several said they’d like to see more certainty on the trade front. “Uncertainty is the worst for development in industries such as ours, where investment cycles are long,” said tk accelis CEO Ilse Henne.

Let the good times roll

The good news, repeated by speakers on stage and along the sidelines of the event, is that demand remains strong—especially in non-traditional markets such as the border wall and data centers (including the infrastructure to support them).

Zekelman estimated the border wall with Mexico would consume approximately 1.6 million to 1.7 million tons of steel through the end of this year and into 2027, much of it steel tubing. The orders will “drip into ‘28. But largely it’ll be over by then” because the wall will have been built, he said.

As for data centers, John Anton, a director at S&P Global Market Intelligence, predicted capacity additions would keep rising throughout 2027 before peaking in 2028. He warned, however, that the sector, which has driven so much steel demand, could “start to crash” in 2029-31.

But while there might be clouds on the horizon, the mood at Summit was very much optimistic. These days, if you have steel, you have money. And so it was good cheer all around.

“Folks in the steel industry, we walk around on a beautiful sunny day looking for the dark clouds,” OSM’s Hopper said, paraphrasing an industry veteran. “I think this market we’re in and what we’re seeing … It’s setting us up for a really good, long run.”

Cheers to that.