Strong as Steel

Every year, 64 countries account for the world’s total steel production – a figure that in 2022 was 1,878.5 million metric tons, according to the World Steel Association. Of that amount, between 20–25 percent leaves its country of origin.

That is what is known as trading volume, and for Macsteel International Trading CEO Tom Keller, that’s the number of most interest.

“Our pie, or the market pool that we swim in, is 400+ million [metric] tons,” he tells The CEO Magazine. “And our percentage of that is very small.”

As traders, Macsteel buys steel from around 200 suppliers in over 30 countries and then sells it to more than 500 customers in over 50 countries.

“We focus on large international customers and suppliers that are leading in their markets, and they know how the importing–exporting game works,” he explains. “We have long-term and short-term relationships with suppliers, so it’s a good mix.”

Nine main offices – four ‘hub’ offices in Dubai, Hong Kong, New York and Melbourne, and five ‘liaison’ offices in Shanghai, Mumbai, Delhi, Nairobi and Johannesburg – provide the business with a global presence and round-the-clock information flow that allows it to track and act on market changes.

“Our 24-hour market intelligence for day-to-day trading in our commodity product is unparalleled,” Keller enthuses.

A Proven Model

It’s a model that has enabled Macsteel to trade through difficult times such as the 1997 Asian financial crisis, the global financial crisis and, most recently, the COVID-19 pandemic and the Russia–Ukraine war.

And after successfully navigating its way through these challenging world events, Keller is now eyeing off a greater slice of the pie.

“We have a pretty aggressive five-year plan that not only focuses on volume, revenue and profit but also on how to build on the foundation and culture, which will allow that growth to be sustainable well beyond five years,” he explains.

What the trials of the last few years have shown Keller, however, is that the goal may be fixed, but the way of getting there isn’t.

“Strategies change shot by shot,” he says, drawing an analogy with a favorite sport, golf. “You might be aiming to hit a ball 300 yards [274 meters] down the middle of the fairway and all of the sudden a wind comes up and takes it left.

“You have to pivot. It’s the same with medium and long-term goals. The hole stays the same but the strategy changes.”

An Emerging Market Business

Never was this more evident than during the pandemic and the shift to remote working. Keller recalls a meeting with a supplier in the months leading up to the pandemic where one of the discussion points was Macsteel’s strategy if its employees couldn’t travel to the office.

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“I remember talking about how we would probably have to get a McKinsey study on it,” he says. “It was something we filed away before moving onto another critical thinking scenario.”

Little did he know that six months later, all 165 of his staff would be working from home almost overnight – leaving no time or indeed need for external consultants and lengthy reports.

Keller explains how Macsteel’s flat trading and operating structure allows for quick decisions and pivoting. “We empower people to do their job,” he says. “Our key leaders can be reached at any time, not because their phone is on all the time, but because they really like what they are doing.”

Now, as he faces the current challenge of market volatility, this agility is again being called upon. “Twenty or 30 years ago, we were dealing with economies that were quite stable. You could read it. Today you can’t,” he says.

Not only is there geopolitical instability to navigate, but there’s always the threat of steel tariffs changing at short notice, leaving businesses scrambling to react. “Our role is to manage that risk,” he explains. “That challenge is a serious one, but it’s also an incredible opportunity because not a lot of companies do what we do well.”

Macsteel has a hidden advantage, which comes from its positioning as an emerging market business, with around 80 percent of its volume going to these markets. “We see the markets around the world from the bottom up, not from the top down,” he says. “Market volatility is good for us because we’re better at what we do than any of our competitors.”

Keller should know, having spent his entire career in steel trading. And his passion for the industry is showing no sign of fading. “We deal with literal day-to-day changes in the world,” he says. “That’s pretty fascinating stuff.”