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Economic Recovery Remains Elusive in Europe, U.S., Steel Industry Leaders Say

by wireworld on 06/24/2012 - 06:07 pm

Tag: Press Releases

The head of ArcelorMittal announced that European governments should use the United States' example in prioritizing public policies that boost economic growth instead of taking a sharp focus on austerity.   While fiscal restraint may be part of a long-term solution, company Chairman and CEO Lakshmi Mittal said those policies won't work if they stymie growth.



During the Steel Success Strategies XXVII Conference, Mittal said the current situation in the world economy is the most serious since the 2008 global financial collapse. He said a recent edition of The Economist featuring a sinking ship was appropriate to describe Greece's economic and political challenges, struggling Spanish banks needing assistance and a falling growth rate in India.



“Not a very encouraging analogy,” said Mittal, who leads the world's largest steel company. “But then we are not looking at a pretty picture.”   Mittal was one of the keynote speakers during the key international steel industry gathering.



Mittal praised Federal Reserve actions, the Obama administration's stimulus program and the restructuring in the automotive industry for boosting flagging economic activity in the United States. One measure he said was particularly helpful was the “Buy American” provision requiring U.S.-produced iron and steel to be used in federally funded or procured public projects.



U.S. Rep. Pete Visclosky, D-Merrillville, added the provision to the American Recovery and Reinvestment Act that Congress passed in 2009.



Although Mittal agreed with forecasts that global steel demand will rise in 2012 and 2013, he said significant challenges must be addressed if countries want to preserve their manufacturing bases. While China is making moves to manage growth in its economy, others such as India need to embrace foreign investment to sustain growth in the country, he said.



For United States Steel Corp. Chairman and CEO John Surma, the key to bolstering the U.S. manufacturing base is in responsible domestic energy exploration. Surma said energy reserves, especially in natural gas, have the ability to do for industry what coal and oil development did for companies in the 19th century.



However, these exploration efforts shouldn't be deterred by heavy-handed federal regulation, he said.  “Extraction of this vital resource cannot be obstructed,” Surma said.  U.S. Steel produces pipe and tube products, but also is seeking to increase its natural gas use in its blast furnaces.



The head of Pittsburgh-based U.S. Steel described the global economic recovery as one that takes two steps forward, then one step back. The recession brought marked change to the global industry, and sluggish growth in many countries remains a lingering effect, Surma said.



Surma also lent his support for passage of a bill sponsored by U.S. Rep. Tim Murphy, R-Pa., which uses federal revenue generated from offshore oil and gas exploration to fund needed infrastructure projects.



Trade publication American Metal Market and steel consulting and information company World Steel Dynamics are hosting the three-day Steel Success Strategies conference at the Sheraton New York Hotel and Towers.