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 Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 300 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 Alternative Materials

Depending on the end use, steel products compete with goods made from concrete, aluminum, plastics, wood, and composites.

Competition From Imports

Imports account for about 25% of the US iron and steel market.

Industry size & Structure

The average iron or steel mill employs about 273 workers and generates about $310 million annually.

    • The iron and steel mill industry consists of about 300 companies that employ 82,600 workers and generate about $93 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 Metals, and Steel Dynamics. Some large companies have foreign operations.
                              Industry Forecast
                              Iron & Steel Mills Industry Growth
                              Source: Vertical IQ and Inforum

                              Coronavirus Update

                              May 17, 2022 - Steelmakers’ Profits Rise
                              • A rebound in demand and rapidly rising prices for steel are boosting profits for US steelmakers. Strength in the market is helping the nation’s steel producers offset rising raw materials costs, triggered by the conflict in Ukraine. Steelmakers in April said demand is rising after a slump earlier this year, driven by strength in the commercial construction and heavy equipment industries, and gradually expanding automotive production, according to The Wall Street Journal. “Overall, the end markets that we serve, the underlying demand remains incredibly robust,” Leon Topalian, CEO of Nucor, told the Journal in April. Rapidly rising steel prices allowed companies to turn in better-than-expected profits despite higher costs for raw materials in the first quarter.
                              • March 2022 steel shipments rose 8.3% versus February and were up 3.3% year to date versus 2021, the American Iron and Steel Institute (AISI) reported in May. A comparison of shipments year-to-date in 2022 to the first three months of 2021 shows the following changes: corrosion-resistant sheet and strip, up 2%, hot rolled sheet, down 3%, and cold rolled sheet, down 6%. Imports of steel to the US rose 32% in March versus February, according to preliminary US Census Bureau data. The US imported a total of 3,091,000 net tons (NT) of steel in March 2022, including 2,498,000 NT of finished steel (up 31.6% and 35.8%, respectively, versus February 2022).
                              • US steel companies are looking to Brazil, India and elsewhere for pig iron, which is in short supply following Russia’s invasion of Ukraine, The Wall Street Journal reports. Russia and Ukraine ranked among the top 10 global suppliers of pig iron, a raw form of the metal used in steel production, prior to the conflict. Two-thirds of the 6 million metric tons of pig iron imported to the US in 2021 came from the two countries, according to the US Census Bureau. Pig iron and scrap prices are surging, helping to reverse the recent decline in the US steel market.
                              • The invasion of Ukraine by Russia has resulted in global sanctions and bans on purchases of Russian iron and steel. The move has tightened global supply and prices are skyrocketing. Before the invasion, steel industry analysts were expecting 2022 to be a year of normalization and downward pressure following a year in which US hot-rolled coil prices reached an all-time high, according to S&P Global. Russia is a major supplier of iron and steel to the world market. As power prices climb, European steel plants are cutting production, which is further tightening supply. Producer prices for iron and steel were up 71.3% in 2021 and 67.8% year over year in January 2022, and 25.7% year over year in April 2022.
                              • Employment at iron and steel mills rose 1.2% year over year in March 2022 but was still 6.8% below the pre-pandemic March 2020 level.
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