Nerds of Steel

Here’s a shortened version of a presentation I made last week to the MSCI Economic Summit: Forecast 2009 meeting in Chicago. It’s a great event if you get the chance to go.

The essence of what I said was 1) China’s continued growth will underpin the pricing of raw materials and that will provide a floor to steel product pricing 2) Absent a(n unlikely) rapid change in the value of the $, US steel exports will be sustained and imports will remain in relative check 3) The changing structure of the industry (consolidation, integration & cross-border ownership) supports a disciplined approach to capacity management & formation making any softness in pricing likely to be temporary and relatively shallow. 4) Above all, not all commodities will behave in exactly the same way. The fundamentals for steel are still very good – even if prices go down, margins can be sustained and perhaps even enhanced. This may not come through in this shortened version but that’s what I meant.