Whether due to his plans to retire as CEO of Nucor at the end of this year, or because he has a naturally "off-the-cuff" type of personality, Dan DiMicco did not mince words during his presentation at AMM's Steel Success Strategies conference on June 19. Instead of starting his speech as planned, he spent the first several minutes passionately refuting much of what the "Developing World" panel before him discussed, primarily their take on the overcapacity issue permeating the global steel industry.
US-based steel businesses have a fundamentally different philosophy, according to DiMicco, lambasting countries producing steel far in excess of what their domestic market consumes. Turkey, he pointed out, exports two-thirds of its total steel production to a global market that is oversupplied by 600 million metric tons. "That doesn't make any financial sense," DiMicco said. "And thank god China doesn't share the same sentiment."
Nevertheless, DiMicco proclaimed the US to be "the world's dumping ground" for steel primarily from foreign steel companies that are either directly state-owned, or benefiting from government subsidies. In fact, government-run steel enterprises--which he estimated make up 60-70 percent of the global steel industry--are "the bane of our existence," said DiMicco. "They are not market-driven; they are politically-driven," which does not make the world steel market a level playing field on which to compete.
As for a solution, DiMicco wished he could just wave a magic wand and talk with Chinese President Xi Jinping, and tell him to quit exporting steel until the country gets its overcapacity issue under control. Then, humorously, he faked such a conversation over the phone, adding that he was not surprised Xi was listening in. "You've got to have a sense of humor in this business," said DiMicco, before challenging industry members in the audience, who hailed from around the world, to "get its [act] together."
"You must be a realist in the present day and an optimist in the long-term," he said. Competition stemming from market-driven steel policies will improve the market overall, he added, closing with another challenge: "Beat your competitors, but do it in a way you can be proud of."