Transcript Slide 1

SFSA Annual Meeting
Changing Times in Steel – Safety & Markets
Thomas A. Danjczek
President
Steel Manufacturers Association
September 13, 2011
SFSA Annual Meeting
Outline
•SMA
•Safety
•Changes
•Steel Demand Drivers & Forecasts
•Raw Materials
•What the U.S. Needs to Do
•Final Thoughts
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SFSA Annual Meeting
About the SMA
-Composed of 35 North American electric arc furnace (“EAF”)
steel producing Member Companies, and 123 Associate
Member steel industry suppliers
-Today, roughly two-thirds of U.S. steel production comes from
the scrap-based EAF process, up from just 10% in the early
1970s
-SMA Members account for approximately 80% of total
domestic steel capacity
SFSA Annual Meeting
SMA Safety Overview
Key Drivers to the SMA Safety Committee Success
• Safety Committee Meetings
• SMA Safety Website
• Safety Statistics Benching
• Upstream/Downstream Safety
Marking
Awareness
• Fatality Prevention Initiative
• Education & Outreach
• Workplace Specific Safety
• First Hand Governmental
Surveys
• Sharing of Site-Specific Best
Practices
Compliance Awareness
• SMA Safety Awards
SFSA Annual Meeting
Key to SMA Safety Committee Success
Key Drivers to the SMA Safety Committee Success
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Need within our industry (2003)
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14 fatalities…
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Strong initial leadership
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Board top down directives (at every meeting)
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Involved core industry members (i.e. 4 leaders plus 6
additional) in planning, soliciting, “boots on the
ground”
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Inclusive
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Awards and Recognitions
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OSHA involvement
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More focus on industry specific
process and procedures versus
governmental regulations
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Costs
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None additional to SMA
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Union and non-union
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Modest hotels
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Companies and suppliers
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Cohesive and full schedule, all
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Safety professionals , safety committees, production
managers, and “hourly” employees
work…
SFSA Annual Meeting
SMA Safety Committee Meetings
- Meetings are held in the spring and fall each year
- Attendance averages around 100 members, associate members, and
guests
- Opportunity for sharing information on best practices and new safety
tools and protection
- Includes a presentation from an OSHA representative
- OSHA Director Dr. Michaels addressed group in fall 2010 in Arlington,
VA
- Usually include an optional plant tour
SFSA Annual Meeting
Spring 2011 SMA Safety Meeting
Held on March 2011 in Jacksonville, Florida
•141 Attendees (member company representatives and associate members)
• OSHA Update from Compliance Assistance Specialist
• Optional plant tour of Gerdau Jacksonville Mill
• Agenda Items Included
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Addressing Contractor/Trucking Fatalities
Truck Driver Fall Protection
Mobile Equipment Lock Out and Maintenance
Pedestrian Pathways
Electrical Safety NFPA 70E Compliance
Surviving an OSHA Inspection
Industrial Hygiene: Hex Chrome and Crystalline Silica
Aging Workforce
First Aid
Emergency All Call Systems
Unsafe Act Audits
Duel-Hearing Protection
SMA Members voluntarily report monthly data on number of
recordable cases, lost workday cases, days lost, and hours worked.
Compiled year-to-date data is circulated to members as a
spreadsheet each month.
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Lost Time
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Recordables
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First Aids
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Company A
Company B
Company C
Company D
SMA’s safety documents do not provide an industry standard,
and do not set industry best practice.
These surveys and guides are intended as tools to assist
individuals and companies in their efforts to prevent injuries in
the steel industry.
The purpose is not to take the place of an individual company
policy or procedure, but rather to provide general procedures
and practices to assist member companies in developing safe
procedures as part of a comprehensive safety program.
Addresses Six (6) critical areas:
1.
2.
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Confined Space;
◦ operator visibility and
attentiveness;
Fall Protection; LockoutTryout;
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Mobile Equipment
4.
Material Handling; and
5.
Rail
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Cranes (Completed in 2011)
Fatality Prevention Initiative
Focusing on five priorities
in addressing crane
fatalities:
◦ maintenance;
◦ fall hazards;
◦ charging the EAF/ladle
handling; and
◦ non-routine procedures
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Videos to be completed by
the end of summer and
introduced to the SMA in
October 2011
Regular questionnaires distributed by member request to address specific safety
topics – anonymous results shared with all members
-Topics have included:
 prescription medication,
 aerial lifts/permits,
 cellular phone policies,
 heat illness/fruit program,
 hot works permit/fire prevention,
 protective eyewear/sealed eyewear,
 lifting and rigging/inspections,
 motivational safety speakers,
 safety incentives,
 hearing protection/NRR/sized ear plugs
 kevlar FR jackets,
 measuring annual safety performance
www.steelsafety.org
-Notes and presentations from Committee meetings, 2002-2011
-Safety survey results, grouped by date and topic
-Meeting notes grouped by date
-Presentations from meetings grouped by date and topic
-Catalogue of company incident and near miss reports
-Fatality Prevention – document, audit tools, and videos
-Radiation safety resources
SMA members have many contractors that work on our sites exposing
the facility to higher exposure to risk. Improving the safety of the
industry means that we must also improve contractor safety on our
sites.
Many SMA members utilize contractor management systems that allow
host steel companies to only allow contractors on-site who have
demonstrated past positive safety performance, and have the safety
programs in place to ensure safe job performance
Contractors are frequently invited to participate in and contribute to
company safety committees
Spring 2011 meeting included a focus on Contractor Safety
SMA partnering with the Association for Iron & Steel Technology
to fund Don B. Daily Memorial Fund to promote steel industry
safety and health
Will challenge North American university teams (students and
professors) to submit proposals for grant funding in the theme
area of safety and health awareness within the steel
manufacturing industry
Dual objectives: promote safe workplaces for the steel
manufacturing industry, and increase the number of students
studying health and safety awareness relative to the
manufacturing environment
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SMA Board of Directors
recognizes outstanding
safety performance through
the annual Don Daily SMA
Achievement in Safety
Award.
◦ 2011 recipient:
 Chris Bullard and the
Logistics Team Gerdau
Ameristeel Midlothian
SMA members have made great strides, and will be relentless
in pursuit of continuous improvement until we achieve zero
injuries in our workplaces
SMA members have benefited from relationship with OSHA,
including speakers at meetings, training resources, and
cooperative programs
The SMA, through its members, has been a driving force in
improving safety performance
SFSA Annual Meeting
Deeper
Recession
Variable
Cost Control
Scrap Prices
High
Unemployment
Labor
Intensity
Inventory
Levels
Changes
China
Foreign
Ownership
Consolidations
Safety
Customer
Requirements
Environmental
Regulations
Engineers
Transportation
Costs
Ore
Prices
Energy
Costs
Currency
State-Owned
Enterprises
Other Factors…
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SFSA Annual Meeting
Steel Changes
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SFSA Annual Meeting
Raw steel capacity utilization may reach
75% in 2011
Capacity Utilization (%)
100%
90%
80%
70%
60%
50%
40%
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011F
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SFSA Annual Meeting
Finished steel demand drivers in US
Actual
Fitted
Three variables drive demand:
• NA auto build
• Non-residential construction
• Appliance shipments
R² = 85%
Source: First River
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SFSA Annual Meeting
U.S. finished steel demand forecast
Forecast
Actual ADC
Source: CSM, FW Dodge, AHAM, First River
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SFSA Annual Meeting
Auto build & non-res construction expected to
recover, but not to previous peak
NA Auto Build
(Million Units)
Source: CSM Worldwide, FW Dodge
Forecast
Non-Res Construction
(Million Sq. Feet)
Forecast
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SFSA Annual Meeting
SFSA Annual Meeting
U.S. net imports expected to remain lower
US Imports & Exports
(Million Tons)
Net Imports & US Dollar
Imports (%)
$ Index
Net Imports as % of demand
(3 year rolling average)
Source: AISI, First River
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SFSA Annual Meeting
Comments on Current U.S. Production
• Recovery underway, but slow
• Increased exports and imports (5mmt of semi’s
imports) YOY
• Not normal cycle of recession, overcapacity
• Relative strong demand in auto; construction lagging
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SFSA Annual Meeting
Raw Materials
Raw Material Cost and Availability is #1 Issue for
NAFTA Producers
• Many countries continue to impose a variety of restrictions on exports of vital raw
materials
– Export prohibitions
– Export duties
– Export quotas
– Other measures
• Trade-distorting restrictions on exports of raw materials
– Give domestic producers in the exporting country an unfair advantage
– Increase worldwide costs of production
– Place a heavy burden on steel industries in developing countries that do not have substantial iron
ore reserves or steel scrap supplies
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SFSA Annual Meeting
World Scrap Supply and Consumption, By Region
World Scrap Supply, 2008
120
Million Metric Tons
100
80
Domestic Supply
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Apparent Consumption
40
20
0
EU
Turkey
CIS
NAFTA
Latin America
China
Japan
Other Asia
Source: World Steel Association
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SFSA Annual Meeting
While China Restricts Exports of Scrap, U.S.
Exports to China Have Surged
U.S. Scrap Exports to China - 2004 - 2009
Total Quantity Exported (Metric Tons)
7,000,000
6,000,000
5,000,000
4,000,000
3,000,000
2,000,000
1,000,000
0
2004
2005
2006
2007
2008
2009
Source: U.S. International Trade Commission - Dataweb
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SFSA Annual Meeting
What does the U.S. need to do?
• Assume a Pro-Manufacturing Agenda
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Business Tax Reform
Border Adjustable Taxes
Currency Adjustments
Energy Independence
Reasonable regulatory measures (Environment/Labor)
Climate for investments (Jobs, Jobs, Jobs) and Infrastructure
• Solve the structural problems that caused the recession - Real
Foundation
– Bad loans and securities on bank balance sheets
– Reduce huge trade deficits
• Policy incrementalism is not sufficient
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SFSA Annual Meeting
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Final Thoughts
Ultimately, the world needs greater total supply of scrap and steel
U.S. is in a traffic jam, moving slightly forward, but don’t know other consequences.
Don’t look to Washington, DC for help
Environment of uncertainty and volatility will continue in U.S. industry until economic
fundamentals are in equilibrium
In U.S., dissatisfaction/perception that U.S. Government is not tackling the right
issues (i.e. “It’s the economy, stupid.”)
Reasons for optimism in steel in U.S.:
– Scrap-based, 70% of cost – local supply
– Low cost on global basis (energy is neutral, labor less than 10%, others have
higher transportation costs)
– Relatively strong U.S. market and U.S. resiliency
– Better U.S. company balance sheets
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