“Buy America” – Cost of Capital Is at Its Lowest in Decades
Steel Dynamics Inc., Hopes to Make U.S. More “Steel Sufficient” with Construction of its New Steel Mill
Continued Focus on Training and Education Will Be Key for Greater Usage of Metal
METALCON Co-Founder and CEO, Frank A. Stasiowski, FAIA, in partnership with the Metal Construction Association and Rob Haddock, CEO and Founder of S-5! Metal Roof Innovations, continued to highlight “Build Back Better” with a special focus on steel with guests Brian Smallwood, Market Manager-Construction for Steel Dynamics, Inc., and Marines Hagemann, Director of Client Experience for Allied Steel Buildings.
Highlights from Frank Stasiowski, METALCON Co-Founder and CEO
- Cost of capital is lower than it’s been in decades; large companies are borrowing money, mortgage applications have increased 18% and refinance rates have dropped to a low of 2.5-3%.
- High unemployment rates continue which some economists say is bad, and Frank believes it will continue in double digits through the end of the year but then level out at around 7-9%.
- It’s “Buy America” time for supply chain industry; strong opportunities are available for companies to borrow money and look at ways to expand.
- The nation is finding ways to re-open and re-start the economy while still managing the virus.
- His current concerns include consumer confidence, timing of vaccine and HERO Bill which could potentially lengthen unemployment.
Highlights from Rob Haddock, CEO and Founder of S-5! Metal Roof Innovations
- Concurred with Frank’s updates and his forecasts, but has a more conservative view of borrowing money as it relates to business strategy.
- S-5! Update: In-bound orders have tapered off of up to 50% over the last 2- 1/2-3 months but seeing slight uptick in inbound orders over the last couple of weeks; plant continuing to work at full capacity on backlog, year-over-year YTD up 30%.
- Starting to experience challenges with consistently enforcing safety precautions and employee compliance at plant.
- He provided a global update: Australia and Asia are coming back online similar to the U.S., Latin America is now seeing the worst of the virus so struggling at the moment, “The Big 5” Construction show has announced they have rescheduled for September in Dubai, and virtual meetings and exhibit shows are taking off.
POLLING QUESTIONS (“live” questions asked during event to poll participants)
PQ #1: Do you agree it will be a V-curve recovery compared to a gradual long incline recovery? V-Curve – 33%; Long Gradual Recovery – 67%
PQ #2: Do you agree that now is the best time in history to borrow money to grow your company into 2021 and beyond? Yes – 71%; No – 29%
PQ #3: Do you agree that 2021 will be better than what everybody is saying right now? Agree – 82%; Disagree – 18%
Highlights from Brian Smallwood, Market Manager-Construction for Steel Dynamics, Inc. (SDI), one of the largest steel producers in North America. With 40 years in the steel industry, Brian’s entire career has been focused on the role of Flat Rolled Steel in all types of construction.
- U.S. is “steel short.”
- Consumption in U.S. is 105 million tons; domestic industry produces about 80 million tons leaving a 20-25 million ton shortfall which is made up by shipping steel into the U.S., accounting for high shipping, freight and fuel overhead costs.
- SDI believes the U.S. should be as “steel sufficient as possible.” To do this, we should have “highly efficient, modernized technology, environmentally friendly, geographically strategic steel plants in order to meet the steel demands in the U.S.”
- SDI currently ships to Mexico, Texas and California at high freight costs and are seeing growing demands in those areas.
- Based on years of research and the demands of the Southwestern U.S. along with Mexico, SDI purchased 3,000 acres and built their new steel mill campus in Sinton, TX, an area just outside of Corpus Christi.
- Specifics on the new mill:
- Will cost approximately $1.9 billion to build
- Estimated to produce 3 million tons of flat-rolled steel
- Will be the most technologically advanced mini-mill in the world
- Will produce 1” thick 84” wide coiled hot-rolled (enormous) to meet some of Steel Dynamics demand in the energy market and for line transmission of fuel
- Partners on campus will be able to cut it to normal plate length
- Expecting to create 600 jobs of varying levels along with “ripple-effect” in the surrounding area
- About one-year away from being able to service clients from this mill
- When complete, SDI will be able to produce approximately 11 million tons of flat-rolled steel annually from all of its combined mills.
- Impact to construction industry will be significant especially to state of Texas; Texas currently consumes more painted galvalume for roofing, siding, IMPs and pre-engineered metal buildings than any other state in the U.S. but has never had their own flat-rolled mill in the state.
- This new steel mill will make it easier for the design industry to specify more steel. Since this will be the first time this type of metal will be available in the U.S., design professionals will need to “dial into some new dimensions and new strength levels” in construction.
- Texas location will be able to service the Southern U.S. and Mexico more effectively with better freight and rail rates; it will also broaden the company’s overall footprint allowing for its existing plants to better service the Northern states.
- He shared, “in all of his years in the steel industry, this ‘hot mill’ will be the first to produce an enormous range of steel from 18 gauge 047 up to 1 inch.”
- Steel Dynamics will exhibit at METALCON 2020 and will have a model of what the mill will look like after construction.
Highlights from Marines Hagemann, Director of Client Experience for Allied Steel Buildings, who design, engineer and manage both pre-engineered and structural steel projects globally.
- Allied has set out to “innovate” the way the end user is serviced and has developed a seamless design experience that integrates all parts of the construction industry.
- As it relates to SDI’s new steel mill and the increased amount of steel that will be produced in the U.S., Allied sees increased education being the key driver to getting the industry to use more steel in design and construction.
- Allied has seen a reduction in volume due to the virus but also has experienced larger companies spending money to meet deadlines; also has seen an increase in design and engineering services. “Savvy customers” know the design & engineering process is about 75% of the overall project timeline so they are taking advantage of this downtime time to get prepared for when they are ready to move forward.
- Closures in offices have delayed the process, but Allied expect projects to move forward when people return to work.
- As it relates to 2021, Allied is hopeful the virus won’t have a “boomerang” effect; next 12 months are shaping up to be some of the busiest.
- The nature of Allied’s clients is currently more in the multi-story structures in cities vs. suburban construction; will be interesting to see how the pandemic effects this building trend in the long-term.
Prior to wrapping up, Frank took a live question from a participant: As it relates to “Build America” and the overseas tariff situation, will U.S. steel manufacturers be more competitive than overseas manufacturers have been over the years? Brian commented, “I think SDI is one of the lowest steel producers in the world from a cost perspective. The U.S. steel industry has been getting more competitive year-over-year.”
ACCESS THIS AND PREVIOUS METALCONLIVE! RECORDINGS – METALCON PODCAST CHANNEL
MCA begins its Virtual Summer Meeting on Monday, June 15-17! It is FREE to anyone who would like to participate. REGISTER HERE.
MBCEA’s Virtual Annual Conference is underway and is offering one-hour sessions on Tuesday and Thursday through June 19. REGISTER HERE.
METALCONLive! returns next Wednesday, June 17 with a SPECIAL LAS VEGAS EPISODE!
Join us on June 17 from 1:00 – 2:15 PM EST for this special LIVE and ONLINE Las Vegas Episode of METALCONLive! when we answer questions about the 30th annual summit of metal construction professionals, METALCON 2020.
Your health and safety is our #1 priority. With the help of a certified event health and safety expert, the METALCON leadership team has created comprehensive plans for food and beverage handling, seating, personal space and more–all to ensure we exceed the new health and safety standards and you enjoy the cleanest and healthiest conditions possible.
In this live online broadcast featuring the COO of the Las Vegas Convention and Visitors Authority and others, we answer your questions about the venue, explain the safety measures we’ve implemented, how we enforce them and reveal what you can expect when you arrive.
Special Guests include:
Brian Yost – Chief Operating Officer, Las Vegas Convention and Visitors Authority
Gordon Prouty – Vice President of Public & Community Relations, Westgate Las Vegas Resort & Casino
Dana Freker Doody – Vice President, Communications & Public Relations, The Expo Group
Kalyn Burke – Trade Show/Event Specialist & World Health Organization Certified for Public Health Preparedness for Mass Gatherings and Events, PSMJ Resources/METALCON
Moderated by: Judy Geller, VP Tradeshows, PSMJ Resources/METALCON
Receive a complimentary copy of the PSMJ A/E/C Market Forecast monthly supplement by answering this brief 2-minute survey.
For more information about Rob Haddock, check out his recent articles: “Accept the Things You Cannot Change” in Modern Metals Magazine and “Seize The Opportunity Presented By These Uncertain Times” in DesignandBuildwithMetal.com.
Click HERE for a list of S-5!’s upcoming FREE Webinars, with two coming up next week beginning on Monday, June 15.
Want answers on how to “re-open” your business? Download Frank’s Handout: “38 Questions to Ask-and Answer-When Designing Your Reopening Plan.”
Download Danny Kerr’s “Corona Virus Leadership Playbook” – https://www.btacademy.com/download2020/ – Use Code: MC0429. Danny Kerr was our special guest during our May 6 METALCONLive! and has appeared at several METALCON shows as a guest speaker.
#metalcon #metalconstruction #metalbuilding #metalroofing #sustainability #greenbuilding #metalbending #standingseam #sheetmetal #steelbuildings #lightsteelframe #steelframing #civilengineering #metalpanels #commercialconstruction #residentialconstruction #retrofit #generalcontractors #contractor #architecture #coldformedsteel #rollforming #metalforming #customfabrication #cncmachine #architecturalmetals #construction #contech #constructiontechnology