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Getting better?

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As 2015 gets under way, the only thing that seems clear about the near-term future of the metals sector is that while business should improve there is no overwhelming consensus on what factors will move it, at least judging by the views put forward in AMM’s annual survey of executives.

While it’s true that an optimistic view prevails as the new year begins, certain aspects of the various metal sectors still remain uncertain, according to survey respondents.

"The most common comment that I hear about 2015 is that it will be slightly better than 2014. Increased cheap imports are going to have a negative impact on steel prices in 2015 unless demand increases quite a bit," one survey respondent said, echoing a view expressed by many.

The concerns stemmed from many sources: The continuing mistrust of President Obama among business leaders, the slow growth of the overall U.S. economy as it still struggles toward a fuller recovery, worry that the U.S. government isn’t functioning in a healthy manner, the lack of foreign markets bouncing back dramatically, and unknown elements regarding where important segments of the economy—such as construction—might be headed.

Throughout 2014 at conferences and roundtables, at corporate meetings and in countless interviews, metal executives and analysts discussed all of these issues and more as they struggled to find ways to interpret signs and signals from the business world.

These views from leading metal players and AMM readers carried over in the annual survey in terms of what might lie ahead. The results of the poll offer a glimpse into what people are generally thinking about issues affecting the metals industry. For instance, despite their concerns only 9 percent of survey respondents said they were less optimistic about business heading into 2015.

The majority said that business should improve this year, with the auto and energy sectors leading the charge. And more than one-third of respondents indicated that recent political events would make the year ahead more certain, especially with the midterm elections giving Republicans more power in Congress. Perhaps that is why about 42 percent of respondents expect the economy to turn around significantly during 2015.

In addition to the results of our annual survey, on the following pages analysts and experts from a variety of metal businesses shared their views on what fortunes—or misfortunes—might lie in wait.

And to get a more in-depth look at the steel industry’s prospects, AMM again will host two annual conferences in January and March.

AMM’s 20th Annual Mexican Steel Forum is scheduled for Jan. 28-30 in Cancun. As existing steel industry players continue to build up their businesses in Mexico and new producers, service centers and distributors look to expand into the market, the event will provide a glimpse into that world.

Consumer demand for steel, led by a flourishing automotive sector, is continually growing, and the Mexican government seems determined to support the sector and implement investment-attracting reforms. Discussions are scheduled to include the shift in global automotive production from the United States and Asia; energy reform by the Mexican government and the opportunities this creates for the steel industry; new projects in oil, gas and infrastructure; and a focus on logistics, distribution and raw materials.

Hundreds of senior-level decision makers along the entire supply chain are scheduled to attend the forum. Delegates at the 2014 conference represented commodity providers, Mexican and foreign steel producers, service centers, distributors, processors, original equipment manufacturers, and leading construction and automotive industry players.

AMM’s 8th Steel Tube and Pipe Conference is scheduled for March 10-11 in Houston. As one of the largest such gathering’s for the steel tube and pipe industry, the conference will be particularly important as the dust settles from the trade case that favored domestic oil country tubular goods (OCTG) producers. Prices are expected to continue to gain ground, giving the U.S. market a healthy competitive boost. Meanwhile, Canadian officials have started an investigation into OCTG arriving from foreign producers, and the U.S. International Trade Commission in December voted unanimously to proceed with an investigation of welded line pipe from South Korea and Turkey.

More than 400 delegates representing more than 240 companies attended the 2014 conference to discuss hot topics in the industry, and another large turnout is anticipated in March. Technology workshops will be featured more prominently than in previous years, and—in addition to trade cases—supply and demand dynamics, raw material costs, the end-user perspective and shale play prospects also remain key topics.


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