b'14BREAKBULK QUARTERLY ajot.comSteel prices soften,Breakbulk cargo industry faces challenges bucking inflation to efficiency and profitabilityAdvocacy efforts and out-of-the-box thinking help this industry thrive.By Phillip M. Perry, AJOTSteel buyers rejoice: Prices for the metal shouldBy Debra Phillips, AJOTcontinuetheirlong-termdeclineoverthecomingThebreakbulkcargoindustryfillsavaluablehours.Additionally,disparatetax,environmental, months, falling some 24% below current levels toneed by transporting equipment needed for farms,and other policies hinder interstate commerce.reach $710 per ton by the end of 2024. If currentmanufacturingfacilities,andutilities,productsIt takes much more time in permitting and can, trends continue, prices will be down for the thirdthat do not fit standard shipping containers. Whileat times, add days of delays, said Mike Brovont, year in a row, which is historic, said Josh Spoores,demandishighfortheseservices,ongoingchal- Project Manager for Buckingham Transport. There Head of Steel Americas Analysis at CRU, a marketlengeslimitefficiency,delayshipments,andaddare increased costs due to overtime pay for employ-analysis and forecast outfit. coststospecializedtransportationprovidersandees,timewithequipmentsittingidle,inabilityto Steel is an essential component for the construc- ultimately their customers. The primary challengesmove on to the next paying job, and additional costs tion industry, and any price reduction is welcome.includeregulatoryrequirements,aginginfrastruc- for arranging police escorts.But what gives? Why is steel getting cheaper whileture, and access to freight facilities. This is not a new problem. In 2013, the Specialized costs for other materials are rising?Crane&Rigging Association,SC&RAcollaborated Themostimmediatereasonisthepeculiarr egulaToryr eQuiremenTsa ddd ays and with the American Association of State Highway and natureofthepost-pandemicmarket.SteelpricesC osTs forh eavyh aulers Transportation (AASHTO) officials to create more har-skyrocketed after COVID restrictions were lifted asA lack of national uniformity in state regulationsmony among state permitting procedures.a spike in demand choked on kinks in the supplyforpermittingoversizedandoverweightOS/OWIt has been more than a decade since the states chain. We just couldnt get enough steel to fill theproducts makes it difficult to transport across stateunanimously supported the changes we developed orders, said Spoores. It took multiple quarters tolines. For example, two states that border each othertogether, said Chris Smith, Vice President of Trans-work off those shortages, and were now seeing acould have opposing policies. While one state onlyportation, SC&RA. Only 60% of the states have slowing of momentum as the market moves towardallows heavy loads to move at night, its neighboractually made the changes they agreed to make.a steadier state. As America continues to replenishmay require all heavy loads to move during daytime(FACEScontinued on page 18)its inventories, steel prices are bound to soften.s uPPly andd emandAnotherimportantdriveroflowerpricesis Chinaspost-pandemiceconomy,whichisrecov-ering more slowlyand thus using less steelthan expected. The U.S. domestic construction industry isfollowingsuit.Despitetheincredible demand for housing, high interest rates have kept a lid on construction of single-family homes, said Larry W. Williams, Executive Director of the Steel Framing Industry Association. High interest rates and remote working arrange-ments are also putting a damper on the commercial construction sector that would normally be soaking up more steel. Developers are putting many proj-ects on hold while waiting for more favorable rates and more certainty in domestic and global politics, said Williams. Constructions one bright spot is the industrial sector, which is being supported by fund-ingassociatedwithTheBipartisanInfrastructure Law and Inflation Reduction Act.All of this lackluster steel demand is coming at a time when China is unloading excess product on the global market at very low prices. While the Biden administration is responding with higher tar-iffs on Chinese imports, the move is not expected to add much to the metals price. Thats because China accounts for only 2% of steel imported to the U.S. (Canada accounts for 24.5%; Mexico for 15%; and Brazil for 14%).U.S. steelmakers are also adding to the excess supply situation by returning to a market long domi-nated by imports. Steel production has been rising faster than demand as manufacturers build new mills and enlarge old ones, said Spoores. As a result, we should start to see imports fall off.Industry representatives echo the forecast. The Americansteelindustryhasthecapacitytomeet the need for more steel to build our clean energy economy, said Kevin Dempsey, president and CEOHEAVY LIFTINGof the American Iron and Steel Institute. Our com-panies are continuing to invest in new and upgradedDONE RIGHTcapacity specifically designed to meet the needs of power producers and EV manufacturers.n ewT eChnologyBut wait a minute: Steel is a fuel intensive prod-uct with famously dirty blast furnaces. And the new U.S.-basedmillsareutilizingmoreadvancedandOur cargo-handling capabilities save time and money. costlierelectric arc furnace (EAF) technology whichLet the port thatworksboastsofsuperioremissionscontrolasitproduces be your gateway to North America and beyond. new material from recycled product. Why arent those higher costs being passed along to steel buyers? They would be, except for the fact that EAF tech-nology also provides steel makers with a production1000 Foust Road, Brownsville, TX 78521flexibility that helps save substantial money. You can essentially run the EAF mill like the dimmer(956) 831-4592(800) 378-5395switchinyourdiningroom,explainedSpoores.portofbrownsville.comYou can slow it down, speed it up or turn it off. In contrast, a blast furnace needs to run at least 70% (SOFTENcontinued on page 16)'