It takes 14 hours to fly
non-stop from New York's JFK International Airport to Japan's
Narita Airport outside Tokyo-time enough to knock off two
movies, a crime novel and three in-flight meals served complete
with hot towels and green tea.
The flight was virtually turbulence free,
and for all practical purposes so was WorldSteel 44, which drew
some 300 participants from 134 companies and organizations in
Over the course of two days in October,
some 25 presenters moved seamlessly through a program
structured around the theme "Building a Sustainable Recovery."
Topics explored on stage at the Hotel Okura and in two early
morning press briefings ranged from a much-anticipated
short-range outlook for steel demand delivered by Daniel
Novegil, the World Steel Association's economics committee
chairman and Ternium SA chief executive officer, to other,
more-prosaic subjects such as seismic design in the steel
industry, automotive and new-generation vehicles and energy
efficiency and new technology trends.
Hastily revised at a meeting held a month
earlier in Rio de Janeiro, WorldSteel's short-range outlook
counted as what might be described as a rising sun against an
otherwise lunar-like landscape marked by gray uncertainty and a
nagging concern over the potential of a double dip in the
global economy. More dawn than dusk, the forecast emerged as
the most upbeat among a number of assessments delivered during
the Tokyo conference by various executives and officials from
the host country and a panel of steel industry chief executives
drawn from around the world.
Big picture, the short-range outlook is for
a stronger-than-expected recovery in 2010, led by China and
developing economies. "Steel demand in 2011 is expected to grow
at healthy rates, with a slowdown in China and continuous
growth in developing countries," the concluding slide stated.
"Steel demand in developed countries to remain below pre-crisis
levels in the short term."
Novegil and his colleagues on the economics
committee hedged their forecast both upside and downside by
identifying various risks/factors that could influence the
course that world and regional economies take in 2011. "Ifs"
that would move the 2011 economic outlook for steel deeper into
positive territory include a higher steel intensity in China,
investment coming from excess corporate cash and stronger
recovery in developed economies. Potential counterweights in
the form of downside risks range from the early withdrawal of
stimulus packages and excessive budget tightening to conflict
over exchange rates and excessive household, government and
company financial leverage.
For all their gravity and implied
consequences on the global economic stage, those three factors
and four risks fall far beyond the purview and abilities of the
world steel industry to control. On a less-cosmic scale, the
industry faces collective challenges in arenas where it does
have the wherewithal to make a difference.
Perhaps no one is in a more strategic
position to assess those challenges than Ian Christmas,
director-general of WorldSteel, who intends to leave that post
next August after spending a dozen years with the
In the closing minutes of what amounted to
a farewell address, Christmas confronted the powers-that-be in
the global steel industry with a list of five key challenges,
the first of which is safety. "There is nothing inherent in the
production of steel which requires anyone to be injured or
killed in the workplace," he said.
"The second challenge is business
profitability, which requires moving away from a tonnage
mentality to an even sharper focus on value," Christmas said.
"There is also a great risk of steel companies being caught
between strong customers."
The third challenge increase R&D
expenditures. "This should include research within the
industry, but also a greater spend and collaboration with
universities worldwide," Christmas said.
Challenge number four create a level
playing field for competition around the world. "There are
still too many subsidies and state aid used in the industry,
which distort competition, and there are too many artificial
barriers to competition internationally," he said.
"Lastly, there is climate change, which
requires all steel users to step up to the challenge and ensure
that we are seen as part of the solution and not the problem in
moving man towards a greener future."
WorldSteel 45 is scheduled to take place in
Paris next October. If all goes according to plan, the
association will have a new director-general. If history holds
true, the challenges will remain.