We're live blogging Commodity EDGE today and tomorrow. If you can't join us at the event, join us virtually on Spend Matters and MetalMiner.
Please click here and here for the initial posts on Rick Blume's keynote at Commodity EDGE. Blume concluded with an outlook for the steel market, including sharing implications for the broader manufacturing economy. Regarding the future outlook for steel, Blume noted that we should expect a challenging year ahead. However, he did suggest that we should "expect demand to slowly improve" in an environment where buyers "will remain cautious." The entire value chain, from OEMs to lower-tier suppliers and distributors to producers is expected to practice "strict inventory management" in this environment.
Factoring into this decision is undoubtedly an environment where the cost of raw materials (from coking coal to iron ore to scrap, depending on production method) is likely to remain high. Looking forward, Blume sees a number of demand drivers impacting growth, including general population growth, increasing steel intensity per capita (here, Blume notes that "consumption of steel per person hit a new record high of 220.8 kilograms in 2010 and is likely to grow) and overall growth in emerging economies.
As Nucor looks to thrive in this environment, they, like many Global 2000 companies, plan to focus on maintaining a strong balance sheet. But at the same time, they intend to remain a "low cost producer," serving "diverse products, markets, and geographies" while above all prioritizing the importance of "taking care of customers." Perhaps most important, Spend Matters expects Nucor to continue to place significant emphasis on driving overall innovation in steel production ranging from incremental improvements on the site level to broader investment in new technologies and manufacturing, energy and related areas.
Blume didn't have the chance to share Nucor's full story during his talk. Here at Spend Matters and MetalMiner, we are huge fans of Ken Iverson's legacy not only to the steel industry, but also the broader manufacturing future climate in the US. He was not only a visionary who changed the domestic steel market -- he brought a philosophy of decentralized production, disruptive innovation and labor empowerment that represents our manufacturing future. Someday, we'll spend some time covering this history and exploring the broader procurement, production and supply chain implications for the domestic manufacturing market.
Stay tuned as our live coverage of Commodity EDGE continues.