Iron & Steel Mills
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 260 iron and steel producers in the US process iron ore, scrap metal, and other raw materials into semi-finished steel products. Products include iron ore, steel sheets (cold or hot rolled), strips, bars, plates, pilings, and rails. Major customers include fabricators, manufacturers, intermediate steel processors, and service centers that convert semi-finished steel into finished goods. Some companies are vertically integrated and may own facilities to produce raw materials and/or finished steel products.
Competition From Imports
Imports account for almost 25% of the US iron and steel market.
Competition From Alternative Materials
Depending on the end use, steel products compete with goods made from concrete, aluminum, plastics, wood, and composites.
Industry size & Structure
The average iron or steel mill employs about 320 workers and generates about $453 million annually.
- The iron and steel mill industry consists of about 260 companies that employ 83,000 workers and generate about $118 billion annually.
- The industry is highly concentrated and dominated by large companies. The top 20 companies account for 89% of industry sales.
- Some companies are vertically integrated, and may own facilities to produce raw materials and/or finished steel products.
- Large domestic steel manufacturers include US Steel, Nucor, Commercial Metal Company (dba CMC), and Steel Dynamics. Some large companies have foreign operations.
Industry Forecast
Iron & Steel Mills Industry Growth
Recent Developments
Jul 23, 2024 - Prices Tumble Amid Weak End-User Demand
- Producer prices for iron and steel mills sank 15.4% in May compared to a year ago after falling 18.5% in the previous annual comparison, according to the latest US Bureau of Labor Statistics data. The price of steel has tumbled about 40% since the start of 2024 due to slowing construction spending and manufacturing activity. It is also way down from unprecedented highs reached a few years ago when demand for the metal surged after the pandemic. Employment by iron and steel mills shrank 2.8% in May year over year. However, average wages at primary metals manufacturers continue to climb, rising 5.5% in June to $29.41 per hour, BLS data show.
- In a statement, the American Iron and Steel Institute welcomed President Biden’s closing of the loophole that allowed steel made outside of North America to evade tariffs by being shipped to Mexico for further processing before being exported to the US, but urged the administration to take additional actions to address “the many schemes by steel traders to circumvent and evade US trade laws.” To prevent China from avoiding import taxes by routing steel and aluminum through Mexico, the US imposed a 25% tariff on Mexican steel that is melted or poured outside North America before being turned into a finished product. Previously, that steel would have entered the US duty-free under the Section 232 exclusion.
- To reduce their carbon emissions, steelmakers and other industrial companies may someday rely on heat-storing batteries to fuel their operations, The Wall Street Journal reports. Investors are pouring hundreds of millions of dollars into startups developing heat batteries (thermal batteries) that use renewable energy to heat blocks, rocks, or molten salt that release heat to power industrial processes. California start-up Antora Energy is developing batteries made of carbon blocks that discharge heat on demand at temperatures as high as roughly 2,750 degrees Fahrenheit, per WSJ. Antora and other heat-battery startups say thermal batteries can cheaply store days' worth of renewable energy using such an approach. Currently, industrial processes like cement and steelmaking burn fossil fuels to generate heat, with heat released from industrial processes accounting for about a fifth of global energy use and roughly 10% of greenhouse gas emissions, according to WSJ.
- The Committee on Foreign Investment in the US (CFIUS) is reviewing the deal to sell US Steel to Japan’s Nippon Steel, Fortune reports. CFIUS is a US Treasury-led interagency panel that has the power to recommend the president block deals if they pose a threat to national security. Coming in an election year, the sale of an iconic US industrial company to a foreign operator has political and policy implications for the Biden administration, which has sought to expand the definition of national security to include safeguarding the economy. The United Steelworkers union opposes the sale, saying it will cost members jobs. Short of blocking the deal, the administration could require the steel companies to agree to certain terms, including that the merged entity maintain steel-production capacity or protect manufacturing techniques, according to The Wall Street Journal. The deal is expected to close in late 2024.
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